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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-KSB

| |     |  |                                                                                     
| | --- |  | ------------------------------------------------------------------------------------
| |     |  | (Mark One)                                                                          
| | [x] |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| |     |  |                                                                                     
| |     |  | For the fiscal year ended December 31, 2002                                         
| |     |  |                                                                                     
| | [ ] |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  
| |     |  |                                                                                     
| |     |  | For the transition period from  to                                                  

Commission file number: 0-25203

OmniComm Systems, Inc.
(Name of small business issuer in its charter)

|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                       |  | 11-3349762                       
|                                                               |  |                                  
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)

2555 Davie Road, Suite 110-B, Davie, Florida 33317
(Address of principal executive offices)(Zip Code)

Issuers telephone number: (954) 473-1254

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

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, par value $.001 per share
(Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for 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 is not contained in this form, and no disclosure will be
contained, to the best of the registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ ]

State issuers
revenues for its most recent fiscal year: $437,698 for the 12
months ended December 31, 2002.

State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days. The aggregate market value of the voting stock held by non-affiliates
computed at the closing price of the registrants common stock on March 18,
2003 is approximately $2,080,520. The common stock is traded over-the counter.
As of March 23, 2003, 12,018,719 shares of the Registrants Common Stock were
outstanding of which 1,616,120 shares were held by affiliates.

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|                                                                                                   |  |  |  |  |  |  |  | 
|-------------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|DOCUMENTS INCORPORATED BY REFERENCE                                                               
|CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION                                        
|PART I                                                                                            
|PART II                                                                                           
|PART III                                                                                          
|SIGNATURES                                                                                        
|CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
|CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
|CERTIFICATE OF AMENDT.-CERTIFICATE OF DESIGNATION                                                 
|CERTIFICATE OF AMENDT-CERTIFICATE OF INCORPORATION                                                
|CERTIFICATE OF DESIGNATION                                                                        
|EMPLOYMENT AGREEMENT/ CHARLES BEARDSLEY                                                           
|CERTIFICATION OF CEO                                                                              
|CERTIFICATION OF CFO                                                                              
|CONSOLIDATED FINANCIAL STATEMENTS                                                                 



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DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB into which the document is
incorporated: (1) any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) of
the Securities Act of 1933 (Securities Act). Not Applicable.

Transitional Small Business Disclosure Form (check one):

Yes  No X




CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

The discussion in this Annual Report on Form 10-KSB regarding OmniComm Systems,
Inc., its business and operations includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1996. This
report and the information incorporated by reference in it contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. The Company intends the forward-looking statements to be
covered by the safe harbor provisions for forward-looking statements in these
sections. Such statements consist of any statement other than a recitation of
historical fact and can be identified by the use of forward-looking terminology
such as may, expect, anticipate, estimate or continue or the negative
thereof or other variations thereon or comparable terminology. The reader is
cautioned that all forward-looking statements are necessarily speculative and
there are certain risks and uncertainties that could cause actual events or
results to differ materially from those referred to in such forward looking
statements. We do not have a policy of updating or revising forward-looking
statements and thus it should not be assumed that silence by us over time means
that actual events are bearing out as estimated in such forward looking
statements.

When used in this Annual Report, the terms  we, our, us, and OmniComm
refers to OmniComm Systems, Inc., a Delaware corporation and its subsidiaries
OmniCommerce Systems, Inc. and OmniTrial, B.V.

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

We are an Internet-based healthcare technology company that provides Web-based
electronic data capture (EDC) solutions and related value-added services to
pharmaceutical and biotechnology companies, clinical research organizations
(CROs), academic research institutions and other clinical trial sponsors.
TrialMaster®, our Internet-based software, allows clinical trial sponsors and
investigative sites to securely collect, validate, transmit, and analyze
clinical study data including patient histories, patient dosing, adverse
events, and other clinical trial information. At every research site, clinical
research data is entered electronically. All participants in the clinical
trial process are connected and have access to the data in real time. Clinical
trial sponsors can review, monitor, and analyze the data remotely and in real
time.

Medical Error Reporting System (MERS-TH) was co-developed with Columbia
University during 2002. MERS-TH provides our clients, U.S. and European based
hospitals and medical centers, a standardized system for collecting data on
medical errors, adverse events and near misses. Medical errors lead to between
40,000 and 90,000 deaths annually and cost the U.S. health care system over $33
billion annually.

TrialMaster

TrialMaster is a Web-based software application that uses Internet technologies
for EDC to conduct and manage clinical trial data from geographically dispersed
sites.

We believe TrialMaster offers the following advantages which increase the
efficiency and decrease the costs of the clinical trial process:



| |  |  | Accelerates initiation and completion of clinical trials by approximately 30%;                                    
| | - |  | ------------------------------------------------------------------------------------------------------------------
|
| |  |  | Provides real-time access to clinical trial data;                                                                 
|
| |  |  | Eliminates double data entry and paper based reports;                                                             
|
| |  |  | Decreases the cost of data collection in clinical trials by up to 80%;                                            
|
| |  |  | Provides real time connection between all participants in the clinical trial process;                             
|
| |  |  | Improves data entry accuracy by up to 80%; and                                                                    
|
| |  |  | Secures collection and storage of clinical trial data, through encryption and multilevel storage in two locations.

Market Opportunity

Clinical trials are the critical component in bringing a drug or medical device
to market. All prescription drug therapies must undergo extensive testing as
part of the regulatory approval process. Clinical trials are currently
conducted in an antiquated manner and fail to optimize the resources available
for a successful clinical trial. We believe that our solution significantly
reduces costs, improves data quality and expedites results. The data
integrity, system reliability, management control and auditable quality of
TrialMaster will aid clinical trial sponsors that want to improve clinical
trial efficiencies, speed-up results and ensure regulatory compliance.

In order for a drug or medical device to be marketed in the United States,
Europe or Japan, the drug or device must undergo extensive testing and
regulatory review to determine that it is safe and effective. The regulatory
review process for new drugs and devices is time consuming and expensive. A
new drug application (NDA) can take up to two years before it is approved by
the FDA. This is in addition to three to five years of studies required to
provide the data to support the NDA. The amount of money and time currently
spent on clinical trials is enormous. The following points are illustrative of
the dynamics:



| |  |  | It can cost as much as $800,000,000 to bring a blockbuster
drug to market.                                                             
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Drug companies lose as much as $13 million in potential
revenue for each day a trial is delayed on a blockbuster drug such
as Lipitor.

We believe TrialMaster provides us with strong market opportunities, including:
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The Clinical Trial Industry is a Large and Growing Industry.

The clinical trial industry currently represents a $57 billion a year
marketplace. The expected 10% annual growth in this industry is powered by the
development of new drugs and treatments, increasing complexity and number of
clinical trials, increasing number of patients in the average application,
aging population and strong demand for drugs to treat this aging population.

CenterWatch estimates that in 2000 $4.8 billion was spent in the United States
on clinical research data management and handling. We believe that in 2002
approximately 10%-15% of all clinical trials were conducted using Web-based
(EDC) solutions.

Industry Trends

Industry and regulatory trends have led pharmaceutical, biotechnology, and
medical device companies to increase research and development for proprietary
new drugs and medical devices. To keep pace in todays market companies must
conduct both more and increasingly complex clinical trials, develop
multinational clinical trial capability, and, at the same time, control costs.
These trends have created even greater competitive demands on the industry to
bring products to market efficiently and quickly.

Competitive Pressures

Increased competition and pressure from generic brands and increased volume of
new drug candidates from the genomics industry has forced pharmaceutical
companies to shorten the clinical trial processes to bring new drugs to market
as soon as possible. New drugs are also needed because shortened life cycles
of drugs have narrowed the window of opportunity for companies to enjoy
extraordinary returns from patented drugs. According to Accenture,
pharmaceutical companies are striving to select winning drugs earlier and to
reduce the time it takes to bring the drug to market by one-third.

Expensive and Inefficient Paper-Based Clinical Trials Compared to EDC Solution

One of the bottlenecks in the clinical trials process is in the collection,
validation and management of data. Traditional paper-based clinical trials are
an inefficient process. We believe once several clinical trial sponsors,
specifically market-leading CROs, conduct trials using our Web-based trial
solution, other sponsors will use it in order to remain competitive relative to
the costs in conducting trials and the time to completion.

Emerging Market of Web-Based EDC

Web-based EDC has been around for four years and only between 10% and 15% of
all clinical trials are currently conducted using Web-based EDC. We believe
that the move toward emerging Web-based technologies is natural since it
involves management of large quantities of trial data in different formats,
which is by definition one of the core skills and competencies of the IT
industry. While industry growth estimates vary, all predictions indicate that
EDC is anticipated to become widely accepted. For example, Forrester Research
and Frost & Sullivan each predict annual double-digit growth in the use of EDC
technologies between 2001 and 2006; Accenture predicts that by 2003, 60% of all
clinical trials will use some form of EDC.

Unique Competitive Advantages

We believe we are well positioned to succeed within the emerging EDC industry
due to our competitive strengths which include:
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A focus toward customer requirements.



| |  |  | Unlike competitors that have global solutions with standard data
fields, screens and forms, we provide a fully customized solution
to meet very specific client needs. TrialMaster V3.0 is a robust,
dynamically-driven software platform. It has been designed, based
on our past experience, to include many custom features our
clients have sought in our past engagements. Its flexible
architecture allows us to perform client specific customizations in
what we believe are industry best turnaround times. Our team of
developers and programmers ensures user acceptance and system
performance and provides customer-focused support services to
guarantee a smooth integration of technology into each sponsors
clinical trials. We assist with the design, installation, and
integration of TrialMaster with existing systems, host the clinical
trial data in a secure and controlled state-of-the-art facility,
provide customer support 24 hours a day, 7 days a week, and train
on-site personnel.
| |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Quality EDC solution offered at a discount to the market price.



| |  |  | Our business strategy focuses on the continued development,
marketing and sale of our TrialMaster product. TrialMaster V3.0
was introduced less than a year ago. As of today, we are involved
in conducting or developing multi-center, clinical trials for ten
clients. We completed a multi-center, multi-national clinical
trial with a European-based medical device company and a
European-based clinical research organization. This clinical trial
encompassed 400 patients in 42 sites throughout Canada, Western
Europe, and Scandinavia. We are in negotiations with several
U.S.-based pharmaceutical and clinical research organizations to
implement TrialMaster. During the second half of 2002 we signed
contracts with five new clients with contractual values exceeding
$1 million.
| |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Industry Background

Worldwide research and development expenditures by the pharmaceutical, medical
device and biotechnology industries reached an estimated $57 billion in 2000,
with $23 billion being spent by North American-based pharmaceutical and medical
device companies. It is estimated that pre-clinical and clinical trial costs
represent approximately one-third of the total spent on research and
development, with 8.5% of the total costs spent on data management.

Pre-clinical and clinical trials historically were performed almost exclusively
by in-house personnel at the major pharmaceutical companies. Over the last two
decades, clinical trial sponsors have transitioned to a model that includes
the outsourcing of clinical trial management to clinical research organizations
(CROs).

We believe that certain industry and regulatory trends summarized below have
led pharmaceutical, biotechnology and medical device companies to increase
research and development for proprietary new drugs and medical devices. These
trends have required companies to conduct increasingly complex clinical trials,
and develop multinational clinical trial capability, while seeking to control
costs.

Increasing Cost Containment Pressures. The increasing pressure to control
rising health care costs, and the penetration of managed health care and health
care reform, have caused changes in the pharmaceutical, medical device and
biotechnology industries.

Managed Care. Managed care providers and insurance carriers have become major
participants in the delivery of pharmaceuticals along with pharmacy benefits
organizations. These companies are seeking to depress the prices of drugs and
devices.

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Consolidation. There have been several mergers within the pharmaceutical
industry, and as a result large scale employee lay-offs and cutbacks have been
instituted.

Generic Drug Effect. Competition from generic drugs following patent
expiration, has resulted in increasing market pressure on profit margins.

Increasingly Complex and Stringent Regulation. Increasingly complex and
stringent regulatory requirements have increased the volume and quality of data
required for regulatory filings and escalated the demand for real time, high
accuracy data collection and analysis during the drug development process.

Reducing Drug Development Time Requirements. To reduce costs, maintain market
share and speed revenue production, pharmaceutical, medical device and
biotechnology companies face increasing pressure to bring new drugs to market
in the shortest possible time.

New Drug Development Pressures. To respond to the demand for products for an
aging population and for the treatment of chronic disorders and
life-threatening conditions, research and development expenditures have
increased as a result of the constant pressure to develop and patent new
therapies.

Growth of Biotechnology Industry. The biotechnology industry and the number of
drugs produced by it which require FDA approval have grown substantially over
the past decade.

These trends have created even greater competitive demands on the industry to
bring products to market efficiently and quickly.

Clinical Trial Overview

In order for a drug or medical device to be marketed in the United States,
Europe or Japan, the drug or device must undergo extensive testing and
regulatory review to determine that it is safe and effective. To support an
application for regulatory approval, clinical data must be collected, reviewed
and compiled. Clinical data is collected from case report forms (CRFs) that
are submitted to and filled out by an investigator, typically a doctor or
research assistant who is participating in the clinical trial. CRFs can be
five to several hundred pages long, and document a series of visits by patients
over a period of time.

Once information is collected by the investigator and the CRF is completed, the
investigator submits the CRF to the sponsor or the CRO. The data is then input
manually into a database. Typically, double data entry is used to resolve
errors.

TrialMaster allows participants in the clinical trial process, such as a
sponsor or CRO, to perform data collection, handling and transmission via a
direct, secure Internet connection. After the CRFs are Internet enabled and
the validation criteria encoded, the CRF forms are distributed via the Internet
from our server to the sites where the clinical trials will take place.

The TrialMaster Suite of Products

TrialMaster is an open system that is fully integratable with existing legacy
data systems such as Oracle® and Microsoft SQL®. The application utilizes a
standard browser such as Internet Explorer 5.0®. TrialMaster allows clinical
data to be entered directly from a source document, such as a patient record or
doctors notes, via computer. The clinical data is transmitted via the
Internet to a secure server where the data is validated and stored. The cost
for implementing the application is based on a data point per page/per patient
fee which increases or decreases depending on the size and length of the trial.

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Some of the features and benefits of TrialMaster include:



| |  |  | Internet-based network  no special client software required                                                         
| | - |  | ---------------------------------------------------------------------------------------------------------------------
|
| |  |  | Role-based security  data presented on basis of role in the trial (i.e., investigator, sponsor, trial manager)      
|
| |  |  | Audit trail of all transactions  all original data and changes are recorded                                         
|
| |  |  | Primary data validation  data ranges and requirements are checked upon entry of data                                
|
| |  |  | Customized reports based on clients specifications                                                                  
|
| |  |  | Messaging system  sends email notifications based upon client defined events                                        
|
| |  |  | Data export  client can export database in a variety of formats for interim analysis                                
|
| |  |  | Real time data access  clients can monitor trial progress and make go/no-go decisions                               
|
| |  |  | ASP model  uses our secure data infrastructure and can be installed utilizing client-supplied equipment as an option
|
| |  |  | Fully compliant with FDA 21 CFR Part 11 and subsequent April 1999 Guidance to Industry                               

TrialMaster is intended to enhance the clinical trial process in the following three areas:

Data Collection is Faster and Cheaper. Clinical data is collected from the
CRFs that are provided by the CRO and submitted to and filled out by an
investigator  a doctor or a research assistant  who is participating in the
clinical trial. The forms are five to several hundred pages per patient and
encompass a series of visit by patients over a period of time. Currently, the
cost to process data is approximately $7.00 to $25.00 per page per patient.
Under the TrialMaster system, the cost to process the data is approximately two
to five times less per page per patient. The time to process the data under
the current manual system can take anywhere from one to eight weeks, which is
significantly reduced utilizing TrialMaster because the data is entered in
real-time with validation occurring instantly.

Data is Collected More Accurately.Upon its submission, data is reviewed to
determine if the collected data is within the parameters of the clinical trial.
If data is outside of the clinical trial parameters or there are typographical
errors or similar data problems, the data collection process will generate an
edit query. This edit query must be submitted to the investigator for
resolution and resubmitted for data processing. Under the current manual
system, the cost to process an edit query is approximately $80 to $115 per
query; for a large trial, it is not uncommon to generate 500 to 1,000 edit
queries a week. The time to process the data for each patient under the
current manual system can take anywhere from three to eight weeks. By using
TrialMaster, the number of edit queries are significantly reduced because the
system validates data as it is input, and the cost of the queries can be
reduced by up to 80% to 85%.

Clinical Studies Can Be Monitored More Efficiently. Monitors are an integral
and necessary part of the clinical trial process. These individuals travel to
clinical sites to ensure that the investigators are complying with good
clinical practice standards. They make sure clinical data is collected and
submitted in a safe, timely and accurate manner. Monitoring and its associated
costs, such as travel, can exceed one-quarter of the total costs of a clinical
trial. Under the current system, the cost for a monitoring visit can vary from
$1,000 to $3,000 per visit, and a trial can require as many as three to seven
visits. The number of visits can be reduced when using TrialMaster because the
status of sites can be monitored remotely and in real-time. Under the current
system, the time for each visit is usually one to two days; utilizing
TrialMaster, we believe monitoring hours can be reduced by 50% and monitoring
visits can be more efficiently scheduled due to the availability of more
accurate and complete information on the trials.

TrialMaster Sales and Marketing

EDC services are currently used in approximately 10% to 15% of clinical trials.
We are focusing our sales efforts primarily on small and mid-size
pharmaceutical, medical device and clinical research organizations. We believe
small and mid-size companies are unlikely to have the technological resources
necessary to develop a product like TrialMaster which will offer these
companies operating efficiencies in the clinical trial process as well as
potential cost savings.

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TrialMaster can be used within any segment of the pharmaceutical, biotechnology
or medical device industries that undertakes clinical trials. We have focused
our sales and marketing efforts on the pharmaceutical industry, a $57 billion
market dominated by companies such as Pfizer, Johnson & Johnson and Eli Lilly.
We believe the following are the relevant factors for approaching this market:



| |  |  | access to validators for the market,                                                                                    
| | - |  | --------------------------------------------------------------------------------------------------------------------------
|
| |  |  | relatively standardized and advanced approach to clinical trial process,                                                  
|
| |  |  | a very competitive market with relatively short product cycles providing for a need to get products to market quickly, and
|
| |  |  | a tight group of opinion leaders within the market segment with which we have direct relationships.                       

Our marketing strategy also includes establishing relationships with opinion
leaders and decision makers within the clinical trial industry. In this
regard, we have created a Medical Advisory Board to advise us on the
development and marketing of the TrialMaster system. The Medical Advisory
Board will also provide a platform to contact these opinion leaders and to
provide information about the application. We are also using traditional
methods to market TrialMaster, including advertising in trade periodicals and
attending a number of medical conventions including those of the American
College of Cardiology, Drug Information Association and The American Heart
Association.

During fiscal 2002 CV Therapeutics accounted for approximately 44%, the
Childrens Research Institute for 13%, Guidant Cardiac Surgery for 11% and Ivax
Research for 9% of our net sales.

Medical Error Reporting System  MERS-TH

MERS-TH is a Web-based software application that uses Internet technologies.
MERS-TH is a reporting system used to collect, classify and analyze medical
events from geographically dispersed sites. MERS-TH provides the opportunity
to study and monitor actual and near-miss errors to facilitate the improvement
of the care-giving process. We developed MERS-TH in conjunction with Columbia
University during 2002.

We believe MERS-TH will improve the process of collecting, cataloging and
studying medical errors. MERS-TH provides the following benefits:



| |  |  | Standardized error classification system and reporting will
allow larger hospital and health care providers to streamline the
reporting process;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Real-time access to data;
Seamless installation into existing health care reporting systems utilizing data imports;                             
|
| |  |  | Improves existing QA systems effectiveness without creating additional layers of responsibility;                                               
|
| |  |  | Facilitates compliance with governmental mandated reporting requirements; and                                                                   
|
| |  |  | Secure collection and storage of data through encryption.                                                                                       

Medical Errors Defined

Types of Medical Errors



| |  | Diagnostic
|- |  | ----------



| |  |  | Error or delay in diagnosis;                       
| | - |  | ---------------------------------------------------
|
| |  |  | Failure to act on results of testing or monitoring;
|
| |  |  | Using outdated tests.                              



| |  | Treatment
|- |  | ---------



| |  |  | Error in the performance of an operation, procedure or test;
| | - |  | ------------------------------------------------------------
|
| |  |  | Error in administering the treatment;                       
|
| |  |  | Error in the dose or method of using a drug.                

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| |  | Preventive
|- |  | ----------



| |  |  | Failure to provide prophylactic treatment;   
| | - |  | ---------------------------------------------
|
| |  |  | Inadequate monitoring or follow-up treatment.



| |  | Other
|- |  | -----



| |  |  | Equipment failure;   
| | - |  | ---------------------
|
| |  |  | Other system failure.

A near miss is an event or situation that could have resulted in an accident,
injury, or illness, but did not, either by chance or through timely
intervention.

Market Opportunity

In November 1999, the Institute of Medicine (IOM) issued a report titled To
Err is Human: Building a Safer Health System,detailing its findings from
reviewing medical errors in the U.S. health care system. The report found that
between 44,000 and 98,000 people are killed annually from preventable medical
errors and that another one million people are injured by errors in treatment
at hospitals. Beyond their cost in human lives, preventable medical errors are
estimated to cost as much as $29 billion annually in U.S. hospitals. These
costs include; the expense of additional care necessitated by the errors, lost
income and household productivity, and disability. The report called on states
to create mandatory reporting systems, starting with hospitals. The
consequences of medical mistakes are often more severe than the consequences of
mistakes in other industriesleading to death or disability rather than
inconvenience on the part of consumers.

Most hospitals underestimate or are underreporting the number of errors and
injuries that occur due to a workplace culture that tends to punish those
making mistakes and because hospital personnel tend to regard health care
provider errors as evidence of personal carelessness. Dr. Lucien Leape of the
Harvard School of Public Health estimates that only 2 to 3% of major errors are
reported through hospital incident reporting systems. Worse yet, another study
found that 70% of adverse events found in a review of 1,133 medical records
were preventable.

A wide body of research, including studies by the Agency for Healthcare
Research and Quality (AHRQ), support the IOM conclusions. Studies conducted
during the 90s have shown that adverse events occur to approximately 3 to 4%
of patients. Another study conducted by Dr. Leape found that the average
intensive care unit (ICU) patient experienced almost two errors per day, a
proficiency level of 99 percent. However, one out of five of these errors was
potentially serious or fatal. If performance levels of 99.9% substantially
better than those found in the ICUapplied to the airline industry, it would
equate to two dangerous landings per day at OHare International Airport in
Chicago.

Other industries, e.g., aviation or manufacturing, have done a better job than
the health care industry in managing the risk level inherent in their operating
activities. Some industries, such as the aviation industry, have adopted
quality improvement, safety assurance and error reduction programs as a core
mission. A review of the experience in non-health-care industries offers some
lessons that may be applicable to reducing medical errors. Characteristics
found in industries effectively reduce errors include:



| |  |  | Development of tracking mechanisms that expose errors;                                                                                
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Thorough investigation of errors;                                                                                                     
|
| |  |  | Applying to error reduction a systems oriented approach that
combines human intervention, technical tools and organizational
remedies;
|
| |  |  | Systems solutions that are focused on fixing the problem, not the blame;                                                              
|
| |  |  | Changing organization cultures so that an environment of error reduction is embraced; and                                             
|
| |  |  | Allocating the resources necessary to fix the problems.                                                                               

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One of the problems with concluding that a chronic medical error problem exists
is that medical errors usually affect only one patient at a time; therefore,
they are treated as isolated incidents. Health-care errors are also
underreported due to liability and confidentiality concerns. Implementing a
broad-based solution that is available to the healthcare industry can help
begin to remedy the first problem. Only changing the culture intrinsic to the
industry can combat the second.

Regulatory Background

In December of 1999, President Clinton directed the Quality Interagency
Coordination Task Force (QuIC) to evaluate recommendations from To Err is
Humanand to respond with a strategy to identify prevalent threats to patient
safety and reduce medical errors. The QuIC is a multi-agency task force with
participants including the Department of Health and Human Services; Department
of Defense; and the Department of Veteran Affairs. The latter two are of
significance since they collectively manage over 1,771 health care sites
serving 11 million patients annually.

In response to the IOM report, the President directed the QuIC to prepare a set
of recommendations for specific actions to improve health care outcomes and
prevent medical errors. Specifically, the President requested that the QuIC
report:



| |  |  | Identify prevalent threats to patient safety and medical errors
that can be prevented through the use of decision-support systems;                                                               
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Identify additional strategies to reduce medical errors and ensure
patient safety in Federal health care programs;                                                                               
|
| |  |  | Evaluate the extent to which medical errors are caused by misuse of
medications and medical devices, and consider steps to strengthen the
FDAs reporting structure on these types of errors; and
|
| |  |  | Identify opportunities for the Federal Government to take specific
action to improve patient safety and health care quality through
collaboration with the private sector.                       

The IOMs report resulted in a flurry of regulatory activity. To date, almost
20 states have implemented laws making error reporting systems mandatory. The
goal of such legislation is to improve patient safety and to hold health care
organizations responsible for the quality of care they provide.

The IOM and QuIC made several recommendations in their respective reports.
Amongst their recommendations are to:



| |  |  | Create a national mandatory reporting system;                                                                                                                                     
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Include patient safety in performance standards for health care
organizations  require specific performance levels in order to retain
the rights to provide goods and services;  
|
| |  |  | Ask independent accrediting organizations to demonstrate how they
are coordinating and strengthening their patient safety standards;                                              
|
| |  |  | Identify a core set of errors reporting data;                                                                                                                                     
|
| |  |  | Identify and attempt to pool existing data sets (such as State
mandatory errors reporting data) that can be brought together to
enhance the knowledge and understanding of errors.

AHRQ and the CDC have expanded their research efforts in the area of
informatics to include initiatives aimed at developing and evaluating
electronic systems to identify, track, and address patient safety concerns.
Additional, Governmental participation especially in requiring the pooling of
data, and in setting and enforcing safety standards from its vendors is likely.
On a more global basis, establishing a national MERS-TH database will provide
useful data to study system failure points, enable benchmarking and provide
data to study the efforts that prevented near misses from becoming errors. The
errors that are cataloged will provide useful information on the causes of
health care problems. Perhaps more importantly near misses occur more
frequently than errors and reveal a greater variety of systemic problems with
processes and procedures.

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MERS-TH Description

When designing MERS-TH the following design criteria was identified as crucial
for an ideal reporting system:

Error reporting should:



| |  |  | Be confidential and non-punitive;                                                                                                      
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Be relatively easy to integrate into an existing quality assurance system;                                                             
|
| |  |  | Include near-misses and no harm events, in addition to errors;                                                                         
|
| |  |  | Classify events by what and where events happened, where and how
they were discovered, and by the underlying root causes of the errors;
|
| |  |  | Use a uniform method for recording data;                                                                                               
|
| |  |  | Include a process for analyzing data and sharing solutions; and                                                                        
|
| |  |  | Feed into a non-regulatory central system where the aggregated data can be further analyzed.                                           

Since quality assurance (QA) programs are already required by regulation, it
is vital that the design of an error reporting system be complementary to
existing QA systems to avoid employee resistance. The system therefore could
not duplicate existing QA systems, but instead needed to meet the above
criteria and still be compatible with existing QA systems.

MERS-TH provides a software-based process to sort error reports based on the
potential for risk to a patient and provides health care organizations a
consistent method for classifying the causes of events. The system has been
designed to handle high volume environments without becoming cumbersome to use
at the local hospital level.

MERS-TH has been developed with the knowledge that errors can never be
eliminated; however they can be reduced by managing, identifying and addressing
the risks inherent in health care services. MERS-TH provides a standardized
means of organized data collection and analysis of medical errors, adverse
events and near misses. Its effectiveness depends on the willingness of
individuals to report such information.

How does MERS-TH work?



| |  |  | Detection: Identify, report and record the event.                                                                           
| | - |  | ----------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Selection: Determine the extent of investigation needed.                                                                    
|
| |  |  | Investigation: Find out more about the context in which the event
occurred, and conduct a root cause analysis, if necessary.
|
| |  |  | Description and Classification: Assign standardized codes to describe the event and root causes.                            
|
| |  |  | Computation: Analyze the aggregate data to identify patterns and trends.                                                    
|
| |  |  | Interpretation: Use the results to guide organizational risk reduction efforts.                                             

Barriers to Implementation

Information systems and technical problems. To be practical, error prevention
will need to rely on sophisticated management and clinical information systems,
both as sources of data on adverse events and as a component of interventions
to reduce errors. However, information systems existent in health care
organizations today are neither sufficiently integrated nor flexible enough to
serve either of these purposes. We believe MERS-TH bridges this gap by
combining a user-friendly interface that will avoid initial user reluctance,
with an engine dynamically driven by its database that provides a flexible
system that is readily integrated into existing healthcare information
structures.

Cost and structural problems.Although considerable cost savings can be
realized by the effective reduction of medical errors, instituting such
programs will require a substantial initial investment. In addition, the
relative autonomy of departments within some health care institutions is a
potential barrier to rapid organization change and the adoption of new models
and procedures to prevent errors. We view the cultural changes needed to
implement new error reduction campaigns as the more relevant obstacle. MERS-TH
is a reasonably priced alternative for fulfilling an organizations MIS needs
in combating medical errors. Most health-care organizations have capital
expenditure budgets that dwarf the investment necessary to implement MERS-TH.

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MERS-TH Sales and Marketing

MERS-TH is currently installed and is being evaluated as part of an
approximately six month pilot study at the University of Columbia, the
University of Chicago and Cornell University. The sales and marketing of
MERS-TH will be done separately from TrialMaster and is likely to command
specialized sales personnel with risk management backgrounds. As our
co-developer in the project, Columbia University provides an extensive network
of research associates as potential clientele. Our initial target will be the
domestic market with academic institutions and private and public hospitals and
medical centers targeted equally. The European market provides an equally
attractive sales market. Illustrative of the potential market for MERS-TH is
the number of hospitals in operation domestically and in the European market.
This includes:



| |  |  | Privately run U.S. hospitals  5,565;             
| | - |  | --------------------------------------------------
|
| |  |  | Government run U.S. hospitals  1,771;            
|
| |  |  | European academic and state-run hospitals  14,000

The market for error reporting systems is in its initial stages, with few
competitors and no products currently exerting market dominance. Our internal
estimates are that error reporting systems may account for as much as a $500
million annual market. Given the likelihood that governmental regulation may
make error reporting systems mandatory; we believe that this market provides
enormous short and long-term prospects.

Systems

We provide application hosting services for our web-based clinical trial
applications utilizing a secure, medical-grade network infrastructure. We
maintain both a primary data center and a secondary disaster recovery site.
These sites utilize identical configurations with the primary site located at
our headquarters while the secondary site is located at a BellSouth co-location
facility in Atlanta, GA.

Internet communications to the data center is maintained via two high-speed
digital data communication lines; a primary and a shadow line. The shadow
monitors the primary line and automatically becomes active should an
interruption in communications occur to the primary line. These lines are
connected to a Cisco high-speed dual line router. Data is then passed from the
router to a Cisco PIX hardware firewall. The hardware firewall is capable of
providing 120 Mbps data throughput and up to 125,000 simultaneous sessions.
The two Cisco PIX firewalls located at the primary data center and at the
secondary disaster recovery site are linked via a secure, static, encrypted
virtual private network (VPN) connection. The PIX provides firewall, VPN, and
intrusion detection functions to the network. Data from the PIX is passed to
an HP high-speed data switch. The switch is capable of processing data at a
rate of 36.6 Gbps. The switch is used to connect all of our servers to the
PIX.

Our software applications were developed utilizing Microsofts Distributed
Network Architecture (DNA). Thus, the network was designed to accommodate the
security and scalability of the DNA framework. Using this approach, servers
are paired so that the production server is visible to the internet while the
database server is not. Data from the database is made available to authorized
users via our proprietary software object module running on the production
server. Communication between the servers is handled by the HP switch.

HP Netserver computers running Microsoft Windows 2000 are used in all
production and database servers. The servers are configured with dual Intel
Pentium class processors, dual power supplies, and hot-swappable RAID disk
storage for maximum availability and reliability. Database servers are
configured with one gigabyte of RAM memory and 36 gigabytes of disk storage.
Production servers are configured with 512 megabytes of RAM memory and 27
gigabytes of disk storage. All servers are capable of supporting up to one
gigabyte of RAM memory and one terabyte (1,099,511,627,776 bytes) of disk
storage. Up-time of 100% has been experienced since the deployment of these
servers.

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The current production environment employs two production/database server pairs
at the primary data center which is mirrored at the co-location facility.
Database synchronization between the primary data center and the co-location
facility is accomplished utilizing transaction replication technology via the
VPN link established between the two locations.

Research and Development

We acquired the technology, developed by Education Navigator, Inc., for our
TrialMaster product in June 1998. Since that date, our completion of
TrialMaster and its subsequent improvements and refinements have been handled
by our in-house staff of programmers. During fiscal 2002, we spent
approximately $465,000 on research and development activities, the majority of
which represented salaries to our developers. In fiscal 2001 we spent
approximately $392,000 on research and development activities. We intend to
continue to improve and broaden our product line to increase our ability to
compete in our market segment.

Competition

We compete in the EDC market. This industry can be characterized as rapidly
evolving, highly competitive and fragmented. There are other entities that
compete with TrialMaster. The principal competitors include Phase Forward
Incorporated and eResearch Technology. We believe that 25 to 30 viable
competitors in varying degrees of development exist. Many of these competitors
have significantly greater financial, technical and marketing resources, or
name recognition than we do. In addition, other companies could enter the EDC
market due to the vast size of the market opportunity. We believe that the
most significant competitive factors we face are a lack of operating history
and the poor financial results experienced during the period covering fiscal
2000 to 2002.

We believe, however, that our technical expertise, the knowledge and experience
of our principals in the industry, quality of service, responsiveness to client
needs and speed in delivering solutions will allow us to compete favorably
within this market. Further, we believe that none of the aforementioned
companies have developed an approach to the clinical trial process that is as
flexible and customizable as TrialMaster.

Government Regulation

We do not believe that we are currently regulated by the FDA or any specific
government or quasi-governmental agency. There can be no assurance, however,
that we will not become subject to government regulation in the future. See
Risk Factors below.

Intellectual Property Rights

Our success depends in part on our ability to protect our intellectual
property. To protect our proprietary rights, we rely generally on copyright,
trademark and trade secret laws, confidentiality agreements with employees and
third parties, and agreements with consultants, vendors and customers, although
we have not signed such agreements in every case. Despite such protections, a
third party could, without authorization, copy or otherwise obtain and use our
software. We can give no assurance that our agreements with employees,
consultants and others who participate in development activities will not be
breached, or that we will have adequate remedies for any breach, or that our
trade secrets will not otherwise become known or independently developed by
competitors.

We have a patent application pending with respect to our TrialMaster product.
This application was filed in May 2000 and remains pending. We are also in the
process of registering a number of trademarks including OMNICOMM SYSTEMS,
INC., and we have federally registered TRIALMASTER and OMNICOMM SYSTEMS,
as well as copyrights on any computer software applications produced by us. We
intend to make such other state and federal registrations as we deem necessary
and appropriate to protect our intellectual property rights.

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Employees

We currently have 18 full time employees, of which three are executives, two
are administrative, eight are programmers, two are technology and systems
managers and three are in sales and marketing. We believe that relations with
our employees are good. None of our employees is represented by a union.

Risk Factors

WE HAVE A LIMITED OPERATING HISTORY, WHICH MAKES IT DIFFICULT FOR YOU TO EVALUATE OUR BUSINESS.

We were incorporated in 1997 and initiated our development of TrialMaster in
August 1998. We have a limited operating history on which you can base an
evaluation of our business and prospects. Our revenue and income potential are
unproven. An investor must consider the risks, uncertainties, expenses and
difficulties frequently encountered by companies in their early stages of
development, particularly companies with limited capital in new and rapidly
evolving markets, including the Internet B2B market. These risks and
difficulties include our ability to:



| |  |  | develop our infrastructure;                                                                                      
| | - |  | -----------------------------------------------------------------------------------------------------------------
|
| |  |  | attract and maintain a base of end users;                                                                        
|
| |  |  | develop and introduce desirable services;                                                                        
|
| |  |  | provide customer support, personnel and facilities, to support our business;                                     
|
| |  |  | establish and maintain strategic relationships;                                                                  
|
| |  |  | establish and maintain relationships within the pharmaceutical,
medical device, and biotechnology industries; and
|
| |  |  | respond effectively to competitive and technological developments.                                               

We cannot assure you that our business strategy will be successful or that we
will successfully address any of these risks or difficulties.

WE ARE DEPENDENT ON A NEW BUSINESS MODEL WHOSE ACCEPTANCE IS UNCERTAIN.

We intend to derive revenues by providing web-based electronic data capture and
management application for clinical research in the pharmaceutical, medical
device, and biotechnology industries. While the market for clinical trials
data capture is well established, the market for our Web-based electronic
services is new and rapidly evolving, and there can be no assurance that our
products and services will be accepted by the marketplace. Our customers have
limited experience with Web-based clinical trials and may conclude that they
are not a desirable, efficient or cost effective method of administering
clinical trials. Failure to obtain significant customer acceptance and
satisfaction will adversely affect our revenue.

WE HAVE A HISTORY OF LOSSES, ANTICIPATED FUTURE LOSSES AND MAY NEVER ACHIEVE OR MAINTAIN PROFITABILITY.

We incurred net losses attributable to common stockholders of $5,266,265 and
$7,549,596 in fiscal 2002 and 2001, respectively. At December 31, 2002, we had
an accumulated deficit of approximately $21,897,111 and a working capital
deficit of approximately $1,516,794. We expect net losses and negative cash
flow for the foreseeable future until such time as we can generate sufficient
revenues to achieve profitability. We expect our operating cash flows to
improve in fiscal 2003, but we have little control over the timing of
contracted projects. We expect our client and contract base to expand and
diversify to the point where it meets our on-going operating needs, but this
may not happen in the short-term or at all. While we expect to achieve
additional revenue through the growth of our business, we cannot assure you
that we will generate sufficient revenue to fund our expenses and achieve and
maintain profitability in any period.

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OUR FINANCIAL STATEMENTS CONTAIN A GOING CONCERN QUALIFICATION.

Because of our significant operating losses, accumulated deficit and the
uncertainty as to our ability to secure additional financing, the report of our
independent auditors on our consolidated financial statements for the year
ended December 31, 2002 contained an explanatory paragraph indicating there was
substantial doubt about our ability to continue as a going concern.

WE HAVE HAD LIMITED REVENUES TO DATE, AND WE MAY BE UNABLE TO FORECAST OUR REVENUES ACCURATELY.

We have had limited revenues to date and do not have historical financial data
for a sufficient number of periods to accurately forecast revenues and results
of operations. Therefore, our period-to-period comparisons contained in our
SEC filings cannot be relied on as indicators of future performance. Such
future revenues are difficult to forecast with any specificity.

WE WILL LIKELY NEED ADDITIONAL FINANCING, THE TERMS OF WHICH MAY BE UNFAVORABLE TO OUR THEN EXISTING STOCKHOLDERS.

Our plan of operations will require us to raise additional working capital if
our revenue projections are not realized, and even if our projections are
realized, we may need to raise additional financing to meet our ongoing
obligations. In addition, we may also need to raise additional funds to meet
known needs or to respond to future business contingencies, which may include
the need to:



| |  |  | fund more rapid expansion;                                 
| | - |  | -----------------------------------------------------------
|
| |  |  | fund additional capital or marketing expenditures;         
|
| |  |  | develop new or enhanced features, services and products;   
|
| |  |  | enhance our operating infrastructure;                      
|
| |  |  | respond to competitive pressures; or                       
|
| |  |  | acquire complementary businesses or necessary technologies.

If additional funds are raised through the issuance of equity or convertible
debt securities, the percentage ownership of our stockholders will be reduced,
and these newly-issued securities may have rights, preferences or privileges
senior to those of existing stockholders or debt holders. We cannot assure you
that additional financing will be available on terms favorable to us, or at
all. If adequate funds are not available or are not available on acceptable
terms, our ability to fund our operations and remain in business may be
significantly limited.

WE MUST ESTABLISH, MAINTAIN AND STRENGTHEN THE TRIALMASTER BRAND TO ATTRACT USERS AND GENERATE REVENUE FROM EXISTING AND NEW BUSINESSES.

To successfully implement our business plan, we must establish, maintain and
continually strengthen the TrialMaster brand. For us to be successful in
establishing TrialMaster, pharmaceutical, medical device and biotechnology
industries must perceive it as a desirable, efficient and cost effective method
of real time data collection, compilation and validation which significantly
reduces costs, improves data quality and expedites results. If our marketing
efforts are not productive or if we cannot strengthen our brand, our efforts to
establish and maintain our brand will be unsuccessful, and we may lose
customers and be unable to attract new business.

WE FACE INTENSE COMPETITION AND WILL HAVE TO COMPETE FOR MARKET SHARE.

There can be no assurance that our products will achieve or maintain a
competitive advantage. There are currently a number of companies who market
services and products for Web-based clinical trials. Barriers to entry on the
Internet are relatively low, and we expect competition to increase
significantly in the future. We face competitive pressures from numerous
actual and potential competitors, both online and offline, many of which have
longer operating histories, greater brand name recognition, larger customer
bases and significantly greater financial, technical and marketing resources
than we do. We cannot assure you that the Web-based clinical trials maintained
by our existing and potential competitors will not be perceived by clinical
trial sponsors as being superior to ours.

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IF WE CANNOT PROTECT OUR PROPRIETARY INFORMATION, WE MAY LOSE A COMPETITIVE
ADVANTAGE AND SUFFER DECREASED REVENUES AND CASH FLOW.

We are dependent, in part, on proprietary data, analytical computer programs
and methods and related know-how for our day-to-day operations. We rely on a
combination of confidentiality agreements, contract provisions and trade secret
laws to protect our proprietary rights. Although we intend to protect our
rights vigorously, there can be no assurance we will be successful in
protecting our proprietary rights. If we are unable to protect our proprietary
rights, or if our proprietary information and methods become widely available,
we may lose any ability to obtain or maintain a competitive advantage within
our market niche.

FAILURE TO ADAPT TO EVOLVING TECHNOLOGIES AND USER DEMANDS COULD RESULT IN THE
LOSS OF USERS.

To be successful, we must adapt to rapidly changing technologies and user
demands by continually enhancing our products and services and introducing new
products and services. If we need to modify our products and services or
infrastructure to adapt to changes affecting clinical trials, we could incur
substantial development or acquisition costs. As described above, we will be
dependent upon the availability of additional financing to fund these
development and acquisition costs. If these funds are not available to us, and
if we cannot adapt to these changes, or do not sufficiently increase the
features and functionality of our products and services, our users may switch
to the product and service offerings of our competitors.

A SYSTEM FAILURE COULD RESULT IN SIGNIFICANTLY REDUCED REVENUES.

Any system failure, including network, software or hardware failure that causes
an interruption in our service could affect the performance of our TrialMaster
software and result in reduced revenues. The servers that host our software are
backed-up by remote servers, but we cannot be certain that the back-up servers
will not fail or cause an interruption in our service. Clinical trial data
could also be affected by computer viruses, electronic break-ins or other
similar disruptions. Our users will depend on Internet service providers,
online service providers and other web site operators for access to our
products. Each of these providers may have experienced significant outages in
the past and could experience outages, delays and other difficulties due to
system failures unrelated to our systems. Further, our systems are vulnerable
to damage or interruption from fire, flood, power loss, telecommunications
failure, break-ins, earthquake and similar events. Our insurance policies have
low coverage limits and may not adequately compensate us for any such losses
that may occur due to interruptions in our service.

WE MAY BE UNABLE TO ADEQUATELY DEVELOP OUR SYSTEMS, PROCESSES AND SUPPORT IN A
MANNER THAT WILL ENABLE US TO MEET THE DEMAND FOR OUR SERVICES.

Our future success will depend on our ability to develop effectively the
infrastructure, including additional hardware and software, and implement the
services, including customer support, necessary to meet the demand for our
services. In the event we are not successful in developing the necessary
systems and implementing the necessary services on a timely basis, our revenues
could be adversely affected, which would have a material adverse effect on our
financial condition.

WE ARE DEPENDENT ON THE CONTINUED CONTRIBUTIONS OF OUR KEY PERSONNEL.

We are currently dependent on our senior management and board of directors.
The loss of their services, or the services of any other individual upon which
we currently rely, may significantly adversely affect our performance and our
ability to carry out the successful development and implementation of our
business plan. Failure to retain management, directors and advisors or to
attract and retain other key employees could have an adverse effect upon our
growth and our ability to achieve and maintain profitability.

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WE MAY NOT BE ABLE TO HIRE AND RETAIN A SUFFICIENT NUMBER OF QUALIFIED
EMPLOYEES AND, AS A RESULT, WE MAY NOT BE ABLE TO GROW AS WE EXPECT OR MAINTAIN
THE QUALITY OF OUR SERVICES.

Our success will depend on our ability to hire, train, and retain highly
skilled technical, marketing and sales and customer support personnel.
Competition for these people is intense, especially for engineers and
programmers, and we may be unable to successfully attract sufficiently
qualified personnel. The pool of qualified technical people in the greater Fort
Lauderdale, Florida area is limited. We will need to increase the size of our
staff to support our anticipated growth, without compromising the quality of
our offerings or customer service. There can be no assurance we will be able
to hire, train and retain a sufficient number of qualified employees. If we
were unable to recruit and retain a sufficient number of employees, we would be
forced to limit our growth or possibly curtail our operations.

SINCE WE ARE A WEB-BASED COMPANY, OUR BUSINESS IS SUBJECT TO GOVERNMENT
REGULATION RELATING TO THE INTERNET, WHICH COULD IMPAIR OUR OPERATIONS.

Because of the increasing use of the Internet as a communication and commercial
medium, the government has adopted and may adopt additional laws and
regulations with respect to the Internet covering such areas as user privacy,
pricing, content, taxation, copyright protection, distribution and
characteristics and quality of production and services.

WE DO NOT BELIEVE WE ARE SUBJECT TO REGULATION BY THE FDA, BUT WE HAVE MADE NO
INDEPENDENT INQUIRIES.

Based upon our internal review of the relevant statutes, rules and regulations,
we do not believe that our TrialMaster product is subject to FDA review or
approval. However, because we have neither made independent inquiry of the FDA
nor have we engaged special FDA counsel to provide us with an opinion regarding
the applicability of the subject statutes, rules and regulations, our belief as
to their inapplicability may be incorrect. In that event, we could be subject
to fines and/or other sanctions which will adversely affect our results of
operations. In addition, if at some time in the future the FDA adopts rules to
which we become subject, the cost of compliance therewith may be significant to
us which would likewise adversely affect our results of operations and
liquidity.

WE MAY BE UNABLE TO PREVENT COMPETITORS FROM USING OUR INTELLECTUAL PROPERTY,
AND WE FACE THE CONTINUING PROSPECT OF POTENTIALLY EXPENSIVE PATENT LITIGATION
TO ASSERT OUR RIGHTS AND TO DEFEND OURSELVES AGAINST PATENT INFRINGEMENT CLAIMS
ASSERTED BY OTHERS.

The clinical research business is crowded and includes a number of new entrants
hoping to capitalize on advances in electronic data capture. Many of these new
entrants have secured patent protection. We presently have a patent
application pending for our TrialMaster product. The effect and extent of
patent and other protection for our intellectual property is uncertain. Legal
standards relating to the validity and scope of claims in the Internet fields
are evolving. We cannot guarantee that our patent application will be
approved. Even if it is approved, we cannot guarantee that our patent will be
broad and effective, nor can there be any assurance that we will not be
involved in litigation to protect our intellectual property and to defend
ourselves against infringement claims by our competitors.

FUTURE SALES OF SHARES BY EXISTING STOCKHOLDERS AS WELL AS THE ISSUANCE OF
ADDITIONAL SHARES OF OUR COMMON STOCK COULD RESULT IN A DECLINE IN THE MARKET
PRICE OF THE STOCK.

We have agreed to register an aggregate of 40,012,316 shares of our common
stock which are issuable upon the conversion of outstanding shares of our 5%
Series A Convertible Preferred Stock, our Series B Convertible Preferred Stock,
our Series C Convertible Preferred Stock, convertible notes and accrued
interest and outstanding options and warrants. At such time as these shares
are eligible for resale in the public market, such sales will have a dilutive
effect on the market for our common stock and will in all likelihood adversely
affect its market price.

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THE EXERCISE OF OUTSTANDING OPTIONS AND WARRANTS AND THE CONVERSION OF
OUTSTANDING NOTES WILL BE DILUTIVE TO OUR EXISTING STOCKHOLDERS.

As of March 18, 2003, we had a total of 23,053,467 shares of our common stock
underlying options, warrants and other convertible securities and 23,116,149
shares of common stock underlying convertible preferred stock. The exercise of
these warrants and options and/or the conversion of these convertible
securities will have a dilutive effect on our existing stockholders.

THERE IS ONLY A LIMITED PUBLIC MARKET FOR OUR COMMON STOCK.

There is a limited public market for our common stock. We cannot predict the
extent to which investor interest in us will lead to the development of an
active trading market or how liquid that trading market might become. If a
liquid trading market does not develop or is not sustained, it may be difficult
for investors to sell shares of our common stock.

FLUCTUATIONS IN OUR OPERATING RESULTS MAY ADVERSELY AFFECT OUR STOCK PRICE.

Historically, there has been volatility in the market price for our common
stock. Our quarterly operating results, changes in general conditions in the
economy, the financial markets or our industry segment, or other developments
affecting us or our competitors, could cause the market price of our common
stock to fluctuate substantially. We expect to experience significant
fluctuations in our future quarterly operating results due to a variety of
factors. Factors that may adversely affect our quarterly operating results
include:



| |  |  | the announcement or introduction of new products by us and our
competitors;                                            
| | - |  | -----------------------------------------------------------------------------------------------------------------------
|
| |  |  | our ability to retain existing clients and attract new clients at a
steady rate, and maintain client satisfaction;     
|
| |  |  | the amount and timing of operating costs and capital expenditures
relating to expansion of our business and operations;
|
| |  |  | government regulation; and                                                                                             
|
| |  |  | general economic conditions and economic conditions specific to the clinical trials industry.                          

As a result of these factors, in one or more future quarters, our operating
results may fall below the expectations of securities analysts and investors.
In this event, the market price of our common stock would likely be materially
adversely affected.

BECAUSE OUR STOCK CURRENTLY TRADES BELOW $5.00 PER SHARE, AND IS QUOTED ON THE
OTC BULLETIN BOARD, OUR COMMON STOCK IS CONSIDERED A PENNY STOCK WHICH CAN
ADVERSELY EFFECT ITS LIQUIDITY. OUR COMMON STOCK DOES NOT CURRENTLY QUALIFY
FOR LISTING ON THE NASDAQ STOCK MARKET AND WE DO NOT FORESEE THAT WE WILL
QUALIFY FOR SUCH A LISTING IN THE FORESEEABLE FUTURE.

If our common stock continues to be quoted on the OTC Bulletin Board, and the
trading price of our common stock remains less than $5.00 per share, our common
stock is considered a penny stock, and trading in our common stock is subject
to the requirements of Rule 15g-9 under the Exchange Act. Under this rule,
broker/dealers who recommend low-priced securities to persons other than
established customers and accredited investors must satisfy special sales
practice requirements. The broker/dealer must make an individualized written
suitability determination for the purchaser and receive the purchasers written
consent prior to the transaction.

SEC regulations also require additional disclosure in connection with any
trades involving a penny stock, including the delivery, prior to any penny
stock transaction, of a disclosure schedule explaining the penny stock market
and its associated risks. These requirements severely limit the liquidity of
securities in the secondary market because few broker or dealers are likely to
undertake these compliance activities. In addition to the applicability of the
penny stock rules, other risks associated with trading in penny stocks could
also be price fluctuations and the lack of a liquid market.

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The Nasdaq Stock Market establishes listing qualifications for companies
wishing to have their securities quoted on the Nasdaq SmallCap Market. In
addition to minimum bid price and public float requirements, among other
listing requirements in order for a security to be quoted on the Nasdaq
SmallCap Market, the issuer must have minimum stockholders equity of at least
$5,000,000. At December 31, 2002, we had total stockholders deficit of
$2,374,631. Accordingly, it is unlikely that we will meet the initial listing
standards of the Nasdaq SmallCap Market in the foreseeable future.

ITEM 2. DESCRIPTION OF PROPERTY

Our principal executive offices are located in commercial office space in
approximately 4,400 square feet at 2555 Davie Road, Suite 110B, Fort
Lauderdale, Florida, and our telephone number is (954) 473-1254. We lease
these offices under the terms of a sublease expiring in September 2003. Our
annual rental payments under this sublease are $66,900 plus sales tax.

Our secondary data site, which serves as our disaster recovery location, is
located in Atlanta, Georgia and is leased from Bell South. We lease this space
under the terms of a lease expiring in October 2004. Our annual lease payments
are $53,460.

ITEM 3. LEGAL PROCEEDINGS

In January 2001, a former employee, Eugene A. Gordon, filed a lawsuit in Dade
County, Florida alleging breach of his employment contract with us. The
plaintiff alleged we owed him more than $100,000 for back payment of salary
according to the terms of his employment contract. We disputed Mr. Gordons
allegations and vigorously defended this lawsuit. As part of our defense, we
filed a counterclaim against Mr. Gordon and a counter-suit against his wife.
The parties entered into a settlement agreement on August 19, 2002. The
parties subsequently filed and the court accepted a Joint Stipulation for
Dismissal With Prejudice on September 6, 2002.

No legal proceedings of a material nature, to which we or our subsidiaries are
a party, exist or were pending during the fiscal year ended December 31, 2002.
Except for the legal proceedings disclosed above, we know of no other legal
proceedings of a material nature pending or threatened or judgments entered
against any director or officer of OmniComm in his capacity as such.

We may become involved in claims or legal actions arising in the ordinary
course of business. In the opinion of our Management, the ultimate disposition
of these matters should they arise will not have a material adverse effect on
our consolidated financial position, results of operations or liquidity.

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

None.

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PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is traded on OTC Bulletin Board under the symbol OMCM. The
following table sets forth the high and low closing prices for our common stock
as reported by the OTC Bulletin Board for the periods indicated.

|            |  |      |      |     |  |   |      | 
|----------- |  | ---- | ---- | --- |  | - | ---- | 
|Fiscal 2001 |  | High |      | Low
|            |  |      |      |    
|1st Quarter |  | $    | 1.56 |     |  | $ | 0.38 | 
|2nd Quarter |  | $    | 0.56 |     |  | $ | 0.25 | 
|3rd Quarter |  | $    | 0.95 |     |  | $ | 0.38 | 
|4th Quarter |  | $    | 0.55 |     |  | $ | 0.21 | 

|            |  |   |      |  |  |   |      | 
|----------- |  | - | ---- |  |  | - | ---- | 
|Fiscal 2002 |  |   |      |  |  |   |      | 
|            |  |   |      |  |  |   |      | 
|1st Quarter |  | $ | 0.44 |  |  | $ | 0.16 | 
|2nd Quarter |  | $ | 0.25 |  |  | $ | 0.12 | 
|3rd Quarter |  | $ | 0.25 |  |  | $ | 0.15 | 
|4th Quarter |  | $ | 0.26 |  |  | $ | 0.14 | 

On March 18, 2003, the closing price of our common stock as reported on the OTC
Bulletin Board was $0.20. At March 18, 2003, we had approximately 402 record
shareholders; however, we believe that we have in excess of 1,000 beneficial
owners of our common stock.

Dividend Policy

We have never declared or paid any cash dividends on our common stock. We
currently expect to retain future earnings, if any, to finance the growth and
development of our business.

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

General

The following information should be read in conjunction with the Consolidated
Audited Financial Statements and Notes thereto and other information set forth
in this report.

Forward-Looking Statements

Statements contained in this Form 10-KSB that are not historical fact are
forward looking statements. These statements can often be identified by the
use of forward-looking terminology such as estimate, project, believe,
expect, may, will, should, intends, or anticipates or the negative
thereof or other variations thereon or comparable terminology, or by
discussions of strategy that involve risks and uncertainties. We wish to
caution the reader that these forward-looking statements, such as statements
relating to timing, costs and of the acquisition of, or investments in,
existing business, the revenue or profitability levels of such businesses, and
other matters contained in this Form 10-KSB regarding matters that are not
historical facts, are only predictions. No assurance can be given that plans
for the future will be consummated or that the future results indicated,
whether expressed or implied, will be achieved. While sometimes presented with
numerical specificity, these plans and projections and other forward-looking
statements are based upon a variety of assumptions, which we consider
reasonable, but which nevertheless may not be realized. Because of the number
and range of the assumptions underlying our projections and forward-looking
statements, many of which are subject to significant uncertainties and
contingencies that are beyond our reasonable control, some of the assumptions
inevitably will not materialize, and unanticipated events and circumstances may
occur subsequent to the date of this Form 10-KSB. Therefore, our actual
experience and results achieved during the period covered by any particular
projections or forward-looking

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statements may differ substantially from those projected. Consequently, the
inclusion of projections and other forward-looking statements should not be
regarded as a representation by us or any other person that these plans will be
consummated or that estimates and projections will be realized, and actual
results may vary materially. There can be no assurance that any of these
expectations will be realized or that any of the forward-looking statements
contained herein will prove to be accurate. The Company does not undertake any
obligation to update or revise any forward-looking statement made by it or on
its behalf, whether as a result of new information, future events or otherwise.

Overview

We are a healthcare technology company that provides Web-based electronic data
capture (EDC) solutions and related value-added services to pharmaceutical
and biotechnology companies, clinical research organizations, and other
clinical trial sponsors via our Internet-based software, TrialMaster®.
TrialMaster allows clinical trial sponsors and investigative sites to securely
collect, validate, transmit, and analyze clinical study data including patient
histories, patient dosing, adverse events, and other clinical trial
information. Medical Error Reporting System (MERS-TH) was co-developed with
Columbia University during 2002. MERS-TH provides our clients, U.S. and
European based hospitals and medical centers, a standardized system for
collecting data on medical errors, adverse events and near misses. Medical
errors lead to between 40,000 and 90,000 deaths annually and cost the U.S.
health care system over $33 billion annually. We phased out the systems
integration segment of our business during 2001. All of our personnel are
involved in the development and marketing of TrialMaster.

The Year Ended December 31, 2002 Compared With the Year Ended December 31, 2001

Results of Operations

Revenues

Revenues for the period ended December 31, 2002 were $437,698 compared to
$170,522 for the same period in 2001, an increase of 156.7%. We have found the
markets increasingly receptive to utilizing EDC services during the second half
of 2002. This is consistent with our expectation that the market would begin
adopting EDC services more rapidly as early adopters bring increased
credibility to the market. We built upon this momentum through the acquisition
of new clients and via repeat engagements with existing clients. We placed
additional emphasis on broadening the market segments that we market our
products to. During the latter half of 2002 we secured engagements from our
first Clinical Research Organization (CRO) and academic research organization,
Columbia University. We believe the broadened marketing horizon provides us
some insulation from downturns in any specific segment for clinical trial
services and also affords us some ability to cross-market services between our
different clients. Working with CROs brings our services to their built-in
client base and allows us to benefit from their sales efforts by bundling
TrialMaster as part of their service offerings. Conversely, we can provide the
CRO potential new clients for their non-data collection services. CROs have
become more receptive to the EDC process during 2002 and we expect their
adoption rate to continue increasing. We believe that the adoption of EDC by
CROs is a significant factor to the overall success of EDC as a data
collection tool. We expect the adoption rate to increase as clinical trial
sponsors continue seeking methods to reduce their R & D costs and more
importantly as they continue seeking a way to make the clinical trial process
more efficient. Academic research organizations provide us an attractive
opportunity due to their participation in cutting-edge projects, access to
government sponsored projects and the credibility afforded companies partnering
with institutions such as Columbia University.

The general weakness exhibited in the economy has not diminished the level of
activity in new drug therapy research since the drug and medical device
manufacturers are continuously forced to find replacements for therapies coming
under the pressures exerted by the loss of patent protection. We do believe,
however, that the broad perception that small, high-technology firms are
operating under severe financial constraints has caused slower adoption of EDC.
More specifically, we have found that potential clients are apprehensive of
doing business with us because of our going-concern issues. We believe we have
had success in addressing this issue and that our recent success in securing
new clients in conjunction with our improved financial results will lessen the
effect this has on our sales efforts.

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While industry growth estimates vary, most predictions indicate that EDC is
anticipated to become widely accepted. For example, Forrester Research and
Frost & Sullivan each predict annual double-digit growth in the use of EDC
technologies between 2001 and 2006. Web-based EDC has been around for
approximately four years and between 10% and 15% of all clinical trials are
currently conducted using Web-based EDC. Incremental growth within the
industry should continue as competitive pressures mount in the pharmaceutical
industry to replace existing prescription drugs losing their patent protection.

Our TrialMaster product is currently being sold as an application service
provider (ASP) that provides EDC and other services such as an enterprise
management suite which assists its clients in the pharmaceutical, biotechnology
and medical device industries in accelerating the completion of clinical
trials.

TrialMaster contracts provide for pricing that is based on both the size and
duration of the clinical trial. Size parameters include the case report forms
used to collect data and the number of sites utilizing TrialMaster. The client
will pay a trial setup fee based on the previously mentioned factors, and then
pay an on-going maintenance fee for the duration of the clinical trial that
provides software, network and site support during the trial. Generally, these
contracts will range in duration from four months to several years. Setup fees
are generally earned prior to the inception of a trial, however, the revenues
will be recognized in accordance with SEC Staff Accounting Bulletin No. 101
Revenue Recognition in Financial Statements which requires that the revenues
be recognized ratably over the life of the contract. The maintenance fee
revenues are earned and recognized monthly. Costs associated with contract
revenues are recognized as incurred.

We expect to begin marketing our new EDC, product MERS-TH, during 2003. The
Medical Event Reporting System (MERS-TH) is an event reporting system developed
for hospitals and medical centers to collect, classify, and analyze events that
could potentially compromise patient safety. MERS-TH provides the opportunity
to study and monitor both actual and near-miss events to facilitate process
improvement efforts. MERS-TH was developed in conjunction with Columbia
University and will be marketed by both of us to hospital and medical centers
in the U.S. and Europe initially.

Cost of Goods Sold

Cost of goods sold increased to $288,790 in 2002 compared to $194,108. Cost of
goods sold were approximately 66.0% of sales. Approximately 8.1% of the
expenses incurred in 2001 relate to our systems integration business and these
expenses were eliminated in 2002 as we continued phasing out that line of our
business. Cost of goods sold now relates primarily to salaries and related
benefits associated with the programmers, developers and systems analysts
producing clinical trials on behalf of our clients.

We expect to increase development programming labor costs on an absolute basis
as our trial revenues increase. We expect labor costs to decrease on a
relative percentage basis as we increase our trial base and develop economies
of scale with regard to trial production. TrialMaster V3.0, the latest release
of our trial-building software will improve our ability to reduce our trial
production related costs since it automates many of the trial building
functions that were manually performed in prior releases of our software. In
addition, MERS-TH will provide a sales platform with high gross margins since
we expect few client specific alterations to the basic software platform.

Other Expenses

Salaries, Benefits and Related Taxes

Salaries and related expenses are our biggest expense at 45.3% of total Other
Expenses for 2002. Salaries and related expenses totaled $1,620,663 in 2002
compared to $1,829,385 in 2001. Total salaries decreased by approximately 5.6%
versus 2001 since a portion of total payroll is now accounted for in cost of
goods sold. We currently employ approximately 15 employees out of our Davie,
Florida corporate office and have three out-of-state employees. We expect to
increase headcount by about 25% within our production function in concert with
anticipated increases in TrialMaster clients during fiscal 2003. We will look
to selectively add experienced sales and marketing personnel in 2003 in an
effort to increase our market penetration and to continue broadening our client
base.

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Rent & Occupancy Expenses

Rent expense was $153,344 for fiscal 2002 compared with $185,040 for fiscal
2001. We have diminished our rent expense by closing our development office in
Tampa in March 2001 and relocating that function to the corporate office to
provide a more effective synthesis of workflows between our R & D function and
our operations and marketing departments. During November 2001 our corporate
offices were relocated to the Ft. Lauderdale, Florida area. We believe this
market provides a better environment for technical personnel recruiting. We
were also able to reduce our rent obligations by approximately $3,300 per
month. In December 2001, we established a disaster recovery site at a Bell
South Co-Location facility in Atlanta, Georgia. This is designed to ensure
100% system up-time.

Legal and Professional Fees

Legal and professional fees totaled $178,214 in 2002 compared with $215,001
during fiscal 2001. Key components of the 2002 amounts include $90,000 paid to
our placement agent for financial advisory services, $53,058 to our accountants
for audit and tax related services, $8,891 in legal expenses related to various
matters and $26,265 that relate to accounting and legal services associated
with our obligations as a public company. We expect on-going legal and
professional fees to approximate what was experienced during 2002.

Travel

We incurred $34,548 in travel expenses during fiscal 2002 compared to $66,205
during 2001. We began reducing travel expenses during mid-2000 as a result of
the on-going working capital difficulties that we have been experiencing.
Those cost-cutting measures continued in 2001 and during the first quarter of
2002. We expect travel to increase markedly as we experience more success in
penetrating the marketplace with our sales efforts. We expect this increase to
be offset by the increase in accompanying revenues.

Telephone and Internet

Telephone and Internet related costs were reduced by $14,597 due to decreased
telephone and Internet access costs associated with the closing of our office
in Tampa, Florida, and a decrease in overall long-distance charges associated
with the closed facilities. We anticipate reducing our total
telecommunications expenses by approximately 40% during 2003 by virtue of our
change in long-distance and data line providers.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (SGA) were $224,844 during 2002.
These expenses relate primarily to costs incurred in running our office
day-to-day and other costs not directly related to other captioned items in our
income statement, and include the cost of office equipment and supplies, the
costs of attending conferences and seminars and other expenses incurred in the
normal course of business. We made a concerted effort during the second half
of 2000 to eliminate or reduce SGA expenses not crucial to the efficient
operation of our company. This effort continued during 2001 and is now
culturally ingrained. We do expect to increase the overall dollar volume spent
on SGA as we increase our revenue base and step-up our overall activity.

Interest Expense

Interest expense was $938,639 during 2002 versus $918,834 in fiscal 2001. In
December 2002, we converted our 12% Convertible Notes into shares of our Series
C Convertible Preferred Stock. This conversion lowered the conversion price of
the investors from $0.50 per share to $0.25 per share resulting in a debt
conversion expense due to the more favorable conversion terms afforded the
investors. The debt conversion expense of $646,000 was recorded as additional
interest expense, this expense is non-cash and we recorded a corresponding
increase to our additional paid-in capital.

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During 2001 we entered into a private placement of 12% Convertible Notes. We
recorded interest expense of $508,835 in connection with a beneficial
conversion feature that was deemed to exist when the conversion price of some
of the 12% Notes was issued at a discount to the prevailing market price of the
stock. This expense is non-cash and we recorded a corresponding increase to
our additional paid-in capital.

During 2001 we issued 230,700 detachable common stock warrants as additional
compensation in connection with short-term bridge loans that were used for
working capital purposes. We valued the warrants utilizing the Black-Scholes
model and recorded $124,827 as interest expense in 2001 and $165 as interest
expense in 2002.

Preferred Stock Dividends

During 2002 we issued 6,153,000 warrants to investors in a private placement of
our Series C Convertible Preferred Stock, including 3,230,000 warrants issued
in the conversion of our 12% Convertible Notes into shares of the Series C
Convertible Preferred Note. The warrants were valued at $1,411,475 utilizing
the Black-Scholes model. The net proceeds received in the Series C Convertible
Preferred Stock Unit offering were allocated to the Series C Preferred Stock
and we recognized a deemed dividend on preferred stock of $1,411,475 resulting
in a charge to retained earnings and a credit to additional paid-in capital
within our stockholders equity as of December 31, 2002.

During 2001 we issued 8,000,000 warrants to investors in a private placement of
our Series B Convertible Preferred Stock. The warrants were valued at
$3,383,168 utilizing the Black-Scholes model. The net proceeds received in the
Series B Convertible Preferred Stock Unit offering were allocated to the Series
B Preferred Stock and we recognized a deemed dividend on preferred stock of
$3,383,168 resulting in a charge to retained earnings and a credit to
additional paid-in capital within our stockholders equity as of December 31,
2001.

Dividends on our Series A Preferred Stock totaled $121,025 in 2002 compared to
$205,585 for the comparable period in 2001. This occurred as a result of our
filing an Amended Certificate of Designation for the 5% Series A Convertible
Preferred Stock. The Amended Certificate of Designation was filed with the
State of Delaware effective August 2, 2002. The Amended Certificate of
Designation changed the terms of the Series A dividend so that it becomes a
liability only when and if declared by our Board of Directors. There were
arrearages of $84,958 in 5% Series A Preferred Stock dividends, $211,256 in
Series B Preferred Stock dividends and $56,805 in Series C Preferred Stock
dividends at December 31, 2002. We deducted $301,763 from Net Income (Loss)
Attributable to Common Stockholders for the year ended December 31, 2002
relating to undeclared Series A, B and C Convertible Preferred Stock dividends.

Liquidity and Capital Resources

We changed our primary focus to providing Internet-based database applications
to the clinical trial industry in mid-1998. At that time we began phasing out
our systems integration business and we effectively completed that transition
during the first half of 2001. Since we made TrialMaster and its related
components our primary business we have experienced negative cash flows and
have relied primarily on the proceeds from the sale of debt and equity
securities to fund our operations. In addition, we have utilized stock-based
compensation as a means of paying for consulting and salary-related expenses.

Cash and cash equivalents increased by $51,851 to $194,677 at December 31,
2002. This was the result of cash provided by financing activities of
$1,284,144 offset by cash used in operating activities of approximately
$1,232,293. The significant components of the activity include a loss from
operations of approximately $3,432,003 offset by non-cash expenses of
$1,889,849, increases in cash of $309,860 from changes in working capital
accounts and approximately $1,284,144 we raised through the sale of debt and
equity securities.

We are not currently bound by any long or short-term agreements for the
purchase or lease of capital expenditures. Any amounts expended for capital
expenditures would be the result of an increase in the capacity needed to
adequately service an increase in our business. To date we have paid for any
needed additions to our capital
equipment infrastructure from working capital funds and anticipate this being
the case in the future.

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We are currently in default on interest payments owed totaling $44,586 on our
10% Convertible Notes. The terms of the notes provides a payment grace period
of thirty days in which to make required semi-annual interest payments. We
were in default effective January 30, 2002.

During 2002, we issued an aggregate of 113,100 shares of restricted common
stock to employees including three of our officers. The stock issued had a
fair market value of $22,288 and was issued for employment services rendered
during 2002 in lieu of cash payments.

In December 2002, we converted interest accrued on our 12% Convertible Note
totaling $361,756 into 1,446,306 shares of restricted common stock; accrued
dividends on our 5% Series A Convertible Preferred Stock totaling $533,904 into
2,135,616 shares of restricted common stock; $100,000 in accrued fees to our
Placement Agent into shares of our Series C Convertible Preferred Stock and
converted all of our outstanding 12% Convertible Notes totaling $1,615,000 in
principal amounts due into shares of our Series C Convertible Preferred Stock.
We issued 161,500 shares of the Series C Preferred and 3,230,000 warrants
allowing the shareholder to purchase shares of common stock at $0.25 per share.
The net effect of these transactions was to decrease total liabilities by
$2,610,660 with a corresponding increase to Shareholders Equity for the same
amount. In addition, by converting the 12% Convertible Notes we reduced our
annual interest expense burden by approximately $193,800.

Accrued payroll and related costs includes approximately $433,288 in past due
payroll taxes accrued fiscal 2002 that the Company had not paid as of December
31, 2002, but are considered legal obligations of the Company. Accordingly,
we recorded a liability of $433,288 at December 31, 2002 for federal employment
taxes. The Company made payments of $221,530 on January 6, 2003, $123,730 on
January 7, 2003 and $88,028 on March 3, 2003 that satisfied the liabilities.

On March 28, 2002 our Placement Agent, Noesis Capital, began the distribution
of a Confidential Private Placement Memorandum for the sale to accredited
investors of our Series C Convertible Preferred Stock. Gross proceeds to date
have totaled $1,461,500 which includes $100,000 in accrued expenses owed to the
Placement Agent for the Series C Convertible Preferred Stock and we have
accrued $303,356 in transaction related fees, leaving net proceeds of
approximately $1,058,144. In September 2001, we completed a private placement
of our Series B Preferred Stock that resulted in $2,000,000 in gross proceeds.

During the second half of fiscal 2002, we entered into contracts for EDC
services that exceeded $1 million in value. During this period we added five
new clients, including a clinical research organization (CRO) and an academic
research institution. These clients in particular are deemed vital to our
long-term growth since these two areas have become a point of emphasis for our
sales and marketing activities. CROs provide out-sourced clinical trial
services to pharmaceutical and medical device manufacturers and will typically
provide services to numerous clients at a time. Strategically we feel that
CROs will provide us to a wider range of potential clients and will augment
our sales efforts by allowing the CRO to add our EDC services to the menu of
services they can provide. Academic research institutions will allow us the
ability to develop a strong reputation within the clinical research community
and provide exposure to cutting edge technologies and therapies as they unfold.

We feel that the momentum established from new client acquisitions; the
development of a new EDC product  MERS-TH; and our ability to retain clients
for repeat engagements provide a good operating base from which to build during
2003. We have improved our sales staff during the latter half of fiscal 2002
and expect to increase the level of resources utilized in the sales and
marketing areas. We embarked on a cost cutting program during fiscal 2000.
That program became part of our organizations identity and remains ingrained
in our culture today. We feel that a combination of our lean operating
environment and increased success in new client acquisition, coupled with our
ability to retain our existing clients will allow us to compete effectively
within the EDC market.

Because of the losses experienced since 1999 we have needed to continue
utilizing the proceeds from the sale of debt and equity securities to fund our
working capital needs. The capital markets since mid-2000 have provided a
difficult climate for capital raising due to the decline in value of publicly
held technology stocks and the resultant apprehension on the part of investors
to invest in technology oriented firms. In addition, when available, capital
has been expensive relative to the valuations that were afforded during the
expansion of the Internet sector in 1999 and 2000. The softness in the capital
markets coupled with the losses experienced have caused working capital

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shortfalls. We have used a combination of equity financing and short-term
bridge loans to fund our working capital needs. Other than our current capital
and capital we may raise from future debt or equity offerings or short-term
bridge loans, we do not have any additional sources of working capital.

We will continue to require substantial funds to continue our research and
development activities and to market, sell and commercialize our technology. We
will need to raise substantial additional capital to fund our future
operations. Our capital requirements will depend on many factors, including
the problems, delays, expenses and complications frequently encountered by
companies developing and commercializing new technologies; the progress of our
research and development activities; the rate of technological advances;
determinations as to the commercial potential of our technology under
development; the status of competitive technology; the establishment of
collaborative relationships; the success of our sales and marketing programs;
the cost of filing, prosecuting and defending and enforcing patents and
intellectual property rights; and other changes in economic, regulatory or
competitive conditions in our planned business. Estimates about the adequacy
of funding for our activities are based upon certain assumptions, including
assumptions that the research and development programs relating to our
technology can be conducted at projected costs and that progress towards
broader commercialization of our technology will be timely and successful.
There can be no assurance that changes in our research and development plans,
acquisitions or other events will not result in accelerated or unexpected
expenditures.

To satisfy our capital requirements, we will seek additional financing through
debt and equity financings. There can be no assurance that any such fundings
will be available to us on favorable terms or at all. If adequate funds are
not available when needed, we may be required to delay, scale back or eliminate
some or all of our research and product development programs. If we are
successful in obtaining additional financings, the terms of such financings may
have the effect of diluting or adversely affecting the holdings or the rights
of the holders of our common and preferred stock.

Our ability to continue in existence is dependent on our having sufficient
financial resources to bring products and services to market. As a result of
its significant losses, negative cash flows from operations, and accumulated
deficits for the periods ending December 31, 2002, there is doubt about the
Companys ability to continue as a going concern.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States requires
management to make judgments, assumptions and estimates that affect the amounts
reported. Note 2 of Notes to the Consolidated Financial Statements describes
the significant accounting policies used in the preparation of the consolidated
financial statements. Certain of these significant accounting policies are
considered to be critical accounting policies, as defined below.

A critical accounting policy is defined as one that is both material to the
presentation of our financial statements and requires management to make
difficult, subjective or complex judgments that could have a material effect on
our financial condition and results of operations. Specifically, critical
accounting estimates have the following attributes: 1) we are required to make
assumptions about matters that are highly uncertain at the time of the
estimate; and 2) different estimates we could reasonably have used, or changes
in the estimate that are reasonably likely to occur, would have a material
effect on our financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be
determined with certainty. We base our estimates on historical experience and
on various other assumptions believed to be applicable and reasonable under the
circumstances. These estimates may change as new events occur, as additional
information is obtained and as our operating environment changes. These changes
have historically been minor and have been included in the
consolidated financial statements as soon as they became known. In addition,
our Management is periodically faced with uncertainties, the outcomes of which
are not within our control and will not be known for prolonged periods of time.
Based on a critical assessment of its accounting policies and the underlying
judgments and uncertainties affecting the application of those policies, our
Management believes that our consolidated financial statements are fairly
stated in accordance with accounting principles generally accepted in the
United States (GAAP), and present a meaningful presentation of our financial
condition and results of operations.

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Our Management believes that the following are our critical accounting
policies:

DEFERRED REVENUE

Deferred revenue represents cash advances received in excess of revenue earned
on on-going contracts. Payment terms vary with each contract but may include
an initial payment at the time the contract is executed, with future payments
dependent upon the completion of certain contract phases or targeted
milestones. In the event of contract cancellation, we are entitled to payment
for all work performed through the point of cancellation.

REVENUE RECOGNITION POLICY

OmniComms revenue model is transaction-based and can be implemented either as
an ASP (application service provider) or licensed for implementation by a
customer such as a pharmaceutical company. Revenues are derived from the
set-up of clinical trial engagements; on-going maintenance fees incurred
throughout the duration of an engagement; fees for report writing and change
orders. The clinical trials that are conducted using TrialMaster can last from
a few months to several years. Most of the fees associated with our product
including post-setup customer support in the form of maintenance charges are
recognized ratably over the term of the clinical trial. Cost of sales is
primarily comprised of programmer salaries and taxes and is expensed as
incurred.

The Company recognizes sales, for both financial statement and tax purposes in
accordance with SEC Staff Accounting Bulletin No. 101 Revenue Recognition in
Financial Statements (SAB 101). SAB 101 requires that revenues be recognized
ratably over the life of a contract. In accordance with SAB 101 the Company
will periodically record deferred revenues relating to advance payments in
contracts.

STOCK BASED COMPENSATION.

Options granted to employees under our Stock Option Plan are accounted for by
using the intrinsic value method under APB Opinion 25, Accounting for Stock Issued to
Employees (APB 25). In October 1995, the Financial Accounting Standards Board
issued Statement No.123, Accounting for Stock-Based Compensation (SFAS 123),
which defines a fair value based method of accounting for stock options. The
accounting standards prescribed by SFAS 123 are optional and we have continued
to account for stock options under the intrinsic value method specified in APB
25.

ITEM 7. FINANCIAL STATEMENTS

Our financial statements are shown as Exhibit 99.3.

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

None.

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PART III

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

The following individuals are our executive officers and the members of our
board of directors. Each director is elected at our annual meeting of
stockholders and holds office until the next annual meeting of stockholders, or
until his or her successor is elected and qualified. Our bylaws permit the
board of directors to fill any vacancy and such director may serve until the
next annual meeting of stockholders or until his or her successor is elected
and qualified. The board of directors elects officers annually and their terms
of office are at the discretion of the board.

|                  |  |     |    |          |  |                                                
|----------------- |  | --- | -- | -------- |  | -----------------------------------------------
|Person            |  | Age |    | Position
|                  |  |     |    |         
|Cornelis F. Wit   |  |     | 56 |          |  | Chief Executive Officer, President and Director
|Randall G. Smith  |  |     | 45 |          |  | Chairman and Chief Technology Officer          
|Ronald T. Linares |  |     | 40 |          |  | Chief Financial Officer                        
|Charles Beardsley |  |     | 57 |          |  | Senior Vice President Marketing and Sales      
|Guus van Kesteren |  |     | 62 |          |  | Director                                       

Cornelis F. Wit. Mr. Wit has been a member of our board of directors since
November 1999 and CEO since June of 2002. Mr. Wit was interim CEO from June to
July 2000. Mr. Wit was the President of Corporate Finance at Noesis Capital
Corp, Boca Raton, Florida from 1994 until September 2000 and currently provides
consulting services to Noesis. Prior to 1994, Mr. Wit was the CEO for DMV,
USA, the American subsidiary for Campina Melkunie, a Dutch multi-billion dollar
food and pharmaceutical ingredient company, and he also served as Vice
President International Operations for Duphar, a pharmaceutical company in
Holland. Mr. Wit graduated from Nijenrode, a business university in Holland.

Randall G. Smith. Mr. Smith has been an executive officer and member of our
board of directors since 1997, serving as President and Chief Technology
Officer from May 1997 until August 2000 and thereafter as our Chief Technology
Officer. From December 1995 to May 1997, Mr. Smith was Director of Operations
for Global Communications Group. Mr. Smith received a B.S. from Purdue
University.

Ronald T. Linares. Mr. Linares has served as our Chief Financial Officer since
April 2000. Prior to joining OmniComm, from 1996 until 1999, he was Chief
Financial Officer of First Performance Corp., a financial consulting firm, and
from 1992 to 1996, Mr. Linares served in various senior financial positions
within the Kenny Rogers Roasters Company including Chief Financial Officer of
Foodquest, Inc. from 1994 to 1996. Mr. Linares received a B.S. from the
University of Florida and a Masters in Public Accountancy from Barry
University.

Charles Beardsley: Mr. Beardsley has served as Senior Vice President,
Marketing and Sales since January 2003. Prior to joining OmniComm, he spent
most of his career at Rhone-Poulenc Rorer (RPR, now Aventis Pharmaceuticals),
where he served as Vice President of U.S. Marketing and Sales and later as
President and General Manager of RPR Canada. More recently, he has served in
senior level leadership roles with CB Technologies and Quintiles Informatics
involved in information technology to include electronic data capture, business
intelligence, decision-support and sales force automation and optimization. Mr.
Beardsley received his B.S from San Jose State University and his M.B.A. from
Golden Gate University

Guus van Kesteren. Mr. van Kesteren has been a member of our board of
directors since November 1999. Since 1996, Mr. van Kesteren has been an
advisor to Noesis Capital Corp. Prior thereto, he was employed from 1972 until
1996 by Johnson & Johnson in various capacities, holding the position of Vice
President International from 1985 until 1996 with responsibility for the
Australasian subsidiaries. Mr. van Kesteren graduated from Nijenrode, a
business university located in Holland.

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Committees of our Board of Directors

Our board of directors established a Governance Committee, Compensation
Committee and an Audit Committee. The Governance Committee, established during
2002, has been mandated to ensure compliance with all SEC and NASDAQ regulatory
requirements. Its primary tasks during 2003 will be the implementation of the
various requirements of the Sarbanes-Oxley Act of 2002. Mr. van Kesteren
chairs this committee, but all of the Directors in concert with our Chief
Financial Officer are involved in integrating the requirements of the various
regulatory bodies dictating public company policy into our operating structure.
The Compensation Committee administers our stock option plan and makes
recommendations to the Board of Directors concerning compensation, including
incentive arrangements, of our officers and key employees. The members of the
Compensation Committee are Messrs. van Kesteren, who serves as Chairman of the
committee and Wit. The Audit Committee reviews the engagement of the
independent accountants and reviews the independence of the accounting firm.
The Audit Committee also reviews the audit and non-audit fees of the
independent accountants and the adequacy of our internal accounting controls.
Mr. van Kesteren, as our sole independent Director is the only current member
of the Audit Committee.

Medical Advisory Board

We have formed a Medical Advisory Board whose purpose is to advise and consult
with us on the development, implementation and marketing of the TrialMaster
application. Currently, there is one member on our Medical Advisory Board;
however, we are seeking to expand its membership as we identify additional
individuals who can advise us in complimentary areas.

Dr. Gervasio Lamas.Dr. Lamas brings to us a wealth of practical and academic
experience in the design and execution of clinical trials, and many years of
experience and contacts in the pharmaceutical industry, medical device industry
and federal government. Dr. Lamas is a graduate of Harvard University (1974),
and the NYU School of Medicine (1978). Dr. Lamas completed his medical and
cardiology training at Harvard Medical School and Brigham and Womens Hospital
in Boston, Massachusetts, where he was on the faculty until 1993. He has
authored or co-authored over 100 publications and reports in numerous research
areas in the cardiovascular field, with a particular focus on the treatment of
patients with coronary disease and disorders of heart rhythm. His research has
led to first author publications in medical journals such as the New England
Journal of Medicineand Circulation. At present, Dr. Lamas serves as Principal
Investigator, Study Chairman, Co-Chairman, or National Leader in many ongoing
national and international multi-center trials in the fields of coronary
disease, congestive heart failure, cardiac pacing and preventive cardiology.
In these roles, he coordinates the activities of a network of over 200 clinical
centers worldwide.

Expansion of our board of directors

In connection with our private placement of Series B Convertible Preferred
Stock in August and September 2001, in which Commonwealth Associates, L.P.
(Commonwealth) acted as placement agent, we granted Commonwealth and the
Series B investors the right to designate one director pursuant to which Harold
Blue was appointed to our board of directors. Mr. Blue resigned from our Board
on August 19, 2002. Commonwealth retains the right to name one Director to
replace Mr. Blue through August 31, 2006. Our officers, directors and certain
of our principal stockholders have delivered an irrevocable proxy to
Commonwealth agreeing that until the later of August 31, 2006 or such time as
less than 25% of certain currently issued and outstanding securities are then
issued and outstanding such individuals will continue to vote for
Commonwealths designee a member of our board of directors.

We also agreed that all committees of our board of directors would include a
proportionate number of directors designated by Commonwealth. Finally,
Commonwealth is also entitled to appoint an observer to attend all meetings of
our board of directors, and we agreed to maintain directors and officers
liability insurance in the amount of at least $3,000,000.

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In connection with our private placement of our Series C Convertible Preferred
Stock in 2002, in which Noesis Capital Corp. acted as placement agent, we
granted Noesis and the Series C investors the right to designate two directors.
As of December 31, 2002 Noesis and the investors had not yet exercised the
right to name either Director.

Compliance With Section 16(a) of the Exchange Act

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
us under Rule 16a-3(d) of the Exchange Act during the fiscal year ended
December 31, 2002, we are not aware of any person that failed to file on
a timely basis, as disclosed in the aforementioned Forms, reports required by
Section 16(a) of the Exchange Act during the fiscal year ended December 31,
2002, other than forms filed on behalf of Messrs. Wit, van Kesteren, Smith and
Linares that were deemed deficient by the SEC because they lacked information
on the face of the Form identifying the Companys name completely. These forms
were originally filed on a timely basis and were subsequently filed within the
10 days the SEC allotted the Directors and Officers to resubmit the Forms.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth certain information relating to the compensation
of (i) our Chief Executive Officer; and (ii) each of our executive officers who
earned more than $100,000 during the three most recent fiscal years
(collectively, the Named Executive Officers).

|                                 |  |      |      |            |  |                     |         |     |  |     |        |          |  |         |     |            |  |                        |     |            |  |         |         |           |  |   |     |  |  |   |        |    
|-------------------------------- |  | ---- | ---- | ---------- |  | ------------------- | ------- | --- |  | --- | ------ | -------- |  | ------- | --- | ---------- |  | ---------------------- | --- | ---------- |  | ------- | ------- | --------- |  | - | --- |  |  | - | ------ | ---
|                                 |  |      |      |            |  |                     |         |     |  |     |        |          |  |         |     |            |  | Long term Compensation |     |            |  |        
|                                 |  |      |      |            |  |                     |         |     |  |     |        |          |  |         |     |            |  |                        |     |            |  |        
|                                 |  |      |      |            |  | Annual Compensation |         |     |  |     |        | Awards   |  | Payouts |     |            |  |                       
|                                 |  |      |      |            |  |                     |         |     |  |     |        |          |  |         |     |            |  |                       
|(a)                              |  | (b)  |      | (c)        |  | (d)                 |         | (e) |  | (f) |        | (g)      |  | (h)     |     | (i)       
|                                 |  |      |      |            |  |                     |         |     |  |     |        |          |  |         |     |           
|                                 |  |      |      |            |  |                     |         |     |  |     |        |          |  | Other   |     |            |  |                        |     | Securities |  |         |         |           |  |   |     | 
|                                 |  |      |      |            |  |                     |         |     |  |     |        |          |  | Annual  |     | Restricted |  | Under-                 |     |            |  |         |         | All other
|                                 |  |      |      |            |  |                     |         |     |  |     |        |          |  | Compen- |     | Stock      |  | Lying                  |     | LTIP       |  | Compen-
|                                 |  |      |      |            |  |                     |         |     |  |     |        |          |  | sation  |     | Awards     |  | Options                |     | Payout     |  | sation 
|Name And Principal Position      |  | Year |      | Salary ($) |  | Bonus ($)           |         | ($) |  | ($) |        | SARs (#) |  | ($)     |     | ($)       
|                                 |  |      |      |            |  |                     |         |     |  |     |        |          |  |         |     |           
|Cornelis F. Wit,
CEO/Director    |  |      | 2002 |            |  | $                   | 67,385  | (1) |  | $   | -0-    |          |  | $       | -0- |            |  | $                      | -0- |            |  |         | 190,000 |           |  | $ | -0- |  |  | $ | -0-    |    
|David
Ginsberg,                  |  |      | 2002 |            |  | $                   | 88,904  | (2) |  | $   | 20,833 |          |  | $       | -0- |            |  | $                      | -0- |            |  |         | -0-     |           |  | $ | -0- |  |  | $ | -0-    |    
|CEO/Director                     |  |      | 2001 |            |  | $                   | 312,813 |     |  | $   | 12,500 |          |  | $       | -0- |            |  | $                      | -0- |            |  |         | 750,000 |           |  | $ | -0- |  |  | $ | -0-    |    
|                                 |  |      | 2000 |            |  | $                   | 134,255 | (3) |  | $   | -0-    |          |  | $       | -0- |            |  | $                      | -0- |            |  |         | 240,000 |           |  | $ | -0- |  |  | $ | 16,759 | (4)
|Peter Knezevich
CEO/Director     |  |      | 2000 |            |  | $                   | 131,231 |     |  | $   | -0-    |          |  | $       | -0- |            |  | $                      | -0- |            |  |         | -0-     |           |  | $ | -0- |  |  | $ | 5,300  | (5)
|Randall Smith                    |  |      | 2002 |            |  | $                   | 156,000 |     |  | $   | -0-    |          |  | $       | -0- |            |  | $                      | -0- |            |  |         | 65,000  |           |  | $ | -0- |  |  | $ | -0-    |    
|President/Director               |  |      | 2001 |            |  | $                   | 138,506 |     |  | $   | -0-    |          |  | $       | -0- |            |  | $                      | -0- |            |  |         | 270,000 |           |  | $ | -0- |  |  | $ | 300    | (5)
|                                 |  |      | 2000 |            |  | $                   | 119,831 |     |  | $   | -0-    |          |  | $       | -0- |            |  | $                      | -0- |            |  |         | 2,000   |           |  | $ | -0- |  |  | $ | 6,800  | (5)
|Ronald T. Linares                |  |      | 2002 |            |  | $                   | 138,880 |     |  | $   | -0-    |          |  | $       | -0- |            |  | $                      | -0- |            |  |         | 45,000  |           |  | $ | -0- |  |  |   |        |    
|CFO                              |  |      | 2001 |            |  | $                   | 119,044 |     |  | $   | -0-    |          |  | $       | -0- |            |  | $                      | -0- |            |  |         | 300,000 |           |  | $ | -0- |  |  | $ | 150    | (5)
|Clifton Middleton
Vice President |  |      | 2000 |            |  | $                   | 100,899 |     |  | $   | -0-    |          |  | $       | -0- |            |  | $                      | -0- |            |  |         | 252,000 |           |  | $ | -0- |  |  | $ | 3,000  | (5)
|Gene Gordon
Vice President       |  |      | 2000 |            |  | $                   | 115,000 |     |  | $   | -0-    |          |  | $       | -0- |            |  | $                      | -0- |            |  |         | 2,000   |           |  | $ | -0- |  |  | $ | 6,600  | (5)

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---

|(1) |  | Mr. Wit joined our company as CEO on June 1, 2002.                                         
|--- |  | -------------------------------------------------------------------------------------------
|   
|(2) |  | Dr. Ginsberg left our employ on June 1, 2002.                                              
|   
|(3) |  | Dr. Ginsberg joined our company on August 1, 2000.                                         
|   
|(4) |  | Consisted of reimbursements for moving expenses and temporary housing
during calendar 2000.
|   
|(5) |  | Consisted of car allowance payments.                                                       
|   
|(6) |  | Mr. Linares joined our company on April 17,2000.                                           

OPTION/SAR GRANTS IN LAST FISCAL YEAR

|                |  |             |        |              |  |                   |     |            |  |   |      |  |  |  |          | 
|--------------- |  | ----------- | ------ | ------------ |  | ----------------- | --- | ---------- |  | - | ---- |  |  |  | -------- | 
|                |  |             |        |              |  | Individual Grants |     |            |  |   |      |  |  | 
|                |  |             |        |              |  |                   |     |            |  |   |      |  |  | 
|(a)             |  | (b)         |        | (c)          |  | (d)               |     | (e)       
|                |  |             |        |              |  |                   |     |           
|                |  | Number of   |        |              |  |                   |     |            |  |   |      |  |  | 
|                |  | Securities  |        | % of Total   |  |                   |     |            |  |   |      | 
|                |  | Underlying  |        | Options/SARs |  |                   |     |            |  |   |      | 
|                |  | Options/    |        | Granted to   |  |                   |     |            |  |   |      | 
|                |  | SARs        |        | Employees in |  | Exercise or Base  |     | Expiration
|Name            |  | Granted (#) |        | Fiscal Year  |  | Price ($/Share)   |     | Date      
|                |  |             |        |              |  |                   |     |           
|Cornelis F. Wit |  |             | 50,000 |              |  |                   | 6.2 | %          |  | $ | 0.25 |  |  |  | 6/1/07   | 
|Cornelis F. Wit |  |             | 15,000 |              |  |                   | 1.8 | %          |  | $ | 0.25 |  |  |  | 08/26/07 | 
|Cornelis F. Wit |  |             | 50,000 |              |  |                   | 6.2 | %          |  | $ | 0.25 |  |  |  | 12/19/07 | 
|Cornelis F. Wit |  |             | 75,000 |              |  |                   | 9.2 | %          |  | $ | 0.25 |  |  |  | 12/19/07 | 
|Randall Smith   |  |             | 15,000 |              |  |                   | 1.8 | %          |  | $ | 0.25 |  |  |  | 08/26/07 | 
|Randall Smith   |  |             | 50,000 |              |  |                   | 6.2 | %          |  | $ | 0.25 |  |  |  | 12/19/07 | 
|Ronald Linares  |  |             | 15,000 |              |  |                   | 1.8 | %          |  | $ | 0.25 |  |  |  | 08/26/07 | 
|Ronald Linares  |  |             | 30,000 |              |  |                   | 3.7 | %          |  | $ | 0.25 |  |  |  | 12/19/07 | 

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES

|               |  |                 |     |                    |  |             |     |               |  |                 |         |                 |  |  |     |  |  |   |     |  |  |   |     | 
|-------------- |  | --------------- | --- | ------------------ |  | ----------- | --- | ------------- |  | --------------- | ------- | --------------- |  |  | --- |  |  | - | --- |  |  | - | --- | 
|(a)            |  | (b)             |     | (c)                |  | (d)         |     | (e)          
|               |  |                 |     |                    |  |             |     |              
|               |  |                 |     |                    |  |             |     |               |  | Number of       |         |                 |  |  |     |  |  |  
|               |  |                 |     |                    |  |             |     |               |  | Securities      |         | Value of       
|               |  |                 |     |                    |  |             |     |               |  | Underlying      |         | Unexercised    
|               |  |                 |     |                    |  |             |     |               |  | Unexercised     |         | In-the-money   
|               |  |                 |     |                    |  |             |     |               |  | Options/SARs at |         | Options/SARs at
|               |  | Shares Acquired |     |                    |  |             |     | FY End (#)    |  | FY End ($)     
|Name           |  | On Exercise (#) |     | Value Realized ($) |  | Exercisable |     | Unexercisable |  | Exercisable     |         | Unexercisable  
|               |  |                 |     |                    |  |             |     |               |  |                 |         |                
|Cornelis Wit   |  |                 | -0- |                    |  | $           | -0- |               |  |                 | 400,000 |                 |  |  | -0- |  |  | $ | -0- |  |  | $ | -0- | 
|Randall Smith  |  |                 | -0- |                    |  | $           | -0- |               |  |                 | 671,539 |                 |  |  | -0- |  |  | $ | -0- |  |  | $ | -0- | 
|Ronald Linares |  |                 | -0- |                    |  | $           | -0- |               |  |                 | 457,000 |                 |  |  | -0- |  |  | $ | -0- |  |  | $ | -0- | 

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Employment Agreements

In June 2002, we entered into a one-year employment agreement with Cornelis F.
Wit to serve as our Chief Executive Officer and President. Mr. Wit currently
receives an annual salary of $175,000 as of January 1, 2003 payable in cash
and/or stock plus a bonus tied to our operating results. As part of the
agreement, Mr. Wit received options to purchase an aggregate of 50,000 shares
of common stock at an exercise price of $.25 per share at the time we hired
him. Additional incentive options are awardable under the agreement based upon
sales and cash flow objectives. To date Mr. Wit has received 50,000 options to
purchase shares of our common stock based on the achievement of our cash flow
objectives during December 2002. In the event that the we consummate a
transaction with a third party resulting in the sale, merger, consolidation,
reorganization or other business combination involving all or a majority of the
business, assets or stock of the Company, whether effected in one transaction
or a series of transactions due to the initiative of Mr. Wit (whether or not
during the term of the agreement) Mr. Wit will receive a fee equal to 2% of the
aggregate consideration. The agreement also provides, among other things, for
participation in employee benefits available to employees and executives.
Under the terms of the agreement, we may terminate Mr. Wits employment upon 30
days notice of a material breach and Mr. Wit may terminate the agreement under
the same terms and conditions. The employment agreement contains customary
non-disclosure provisions, as well as a one year non-compete clause if Mr. Wit
leaves the company voluntarily or a six month non-compete clause following his
termination by us.

In September 2001, we entered into a three year employment agreement with Mr.
Randall Smith to serve as our Chief Technology Officer. Under the terms of the
agreement, as compensation for his services, receives an annual salary of
$165,000 as of January 1, 2003 to be paid in the form of cash and/or stock and
he is eligible to receive a bonus based upon achieving technology related
milestones. Mr. Smith was granted an aggregate of 210,000 options under our
1998 Stock Incentive Plan. The three year options, which vest 70,000 on the
date of the employment agreement, 70,000 on September 30, 2002, and 70,000 on
September 30, 2003, are exercisable at the market price plus 10% per share.
The agreement also provides, among other things, for participation in employee
benefit plans or programs applicable to employees and executives. Under the
terms of the agreement, we may terminate the employment of Mr. Smith upon 30
days notice of a material breach and Mr. Smith may terminate the agreement
under the same terms and conditions. If Mr. Smith is terminated by us for any
reason other than for cause, we must pay him severance benefits equal to six
months salary. The employment agreement contains customary non-disclosure
provisions, as well as a one year non-compete clause following the termination
of the agreement.

In September 2001, we entered into a three year employment agreement with Mr.
Ronald Linares to serve as our Chief Financial Officer. Under the terms of
this agreement, Mr. Linares receives an annual salary of $150,000 as of January
1, 2003 to be paid in the form of cash and/or stock and he is eligible to
receive additional incentive compensation based upon achieving financial
milestones. Mr. Linares was granted an aggregate of 210,000 options under our
1998 Stock Incentive Plan. The three year options, which vest 70,000 on the
date of the employment agreement, 70,000 on September 30, 2002, and 70,000 on
September 30, 2003, are exercisable at the market price plus 10% per share.
The agreement also provides, among other things, for participation in employee
benefit plans or programs applicable to employees and executives. Under the
terms of the agreement, we may terminate the employment of Mr. Linares upon 30
days notice of a material breach and Mr. Linares may terminate the agreement
under the same terms and conditions. If Mr. Linares is terminated by us for
any reason other than for cause, we must pay him severance benefits equal to
six months salary. The employment agreement contains customary non-disclosure
provisions, as well as a one year non-compete clause following the termination
of the agreement.

Stock Option Plan

Our 1998 Stock Incentive Plan (the 1998 Plan) was adopted in January 1998,
and was amended in July 2001 by our Board of Directors to increase the number
of shares available under the 1998 Plan. This increase was approved by our
shareholders at the shareholder meeting held on November 16, 2001. As of March
18, 2003 we have outstanding options under the 1998 Plan to purchase an
aggregate of 2,785,039 shares of our common stock at exercise prices ranging
from $0.25 to $5.50 outstanding under the 1998 Plan.

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The purpose of the 1998 Plan is to provide a means through which we can attract
able persons to enter and remain in our employ, and to provide a means whereby
those key persons upon whom the responsibilities of our successful
administration and management rest, and whose present and potential
contributions to our welfare are of importance, can acquire and maintain stock
ownership, thereby strengthening their commitment to our welfare and promoting
an identity of interest between stockholders and these key persons.

A further purpose of the 1998 Plan is to provide such key persons with
additional incentive and reward opportunities designed to enhance our
profitable growth. So that the appropriate incentive can be provided, the 1998
Plan provides for granting incentive stock options, non-qualified stock
options, stock appreciation rights, restricted stock awards, phantom stock unit
awards and performance share units, or any combination of the foregoing.

We believe that the 1998 Plan encourages the participants to contribute
materially to our growth and will align the economic interests of the
participants with those of our stockholders.

General

We have reserved 5,000,000 shares of our common stock for issuance upon the
exercise of options granted under the 1998 Plan. These shares may be
authorized but unissued shares of our common stock or may be shares that we
have reacquired, including shares we may purchase on the open market. If any
options or stock appreciation rights granted under the 1998 Plan expire or are
terminated for any reason without being exercised, or restricted shares or
performance shares are forfeited, the shares of common stock underlying that
award will again be available for grant under the 1998 Plan.

Administration of the 1998 Plan

The Compensation Committee of our Board of Directors administers and interprets
the 1998 Plan. The Compensation Committee has the sole authority to designate
participants, grant awards and determine the terms of all grants, subject to
the terms of the 1998 Plan. The Compensation Committee has the full authority
to interpret the 1998 Plan and to make rules, regulations, agreements and
instruments for implementing the 1998 Plan.

Eligibility

Grants may be made to any of our employees and to any non-employee member of
the Board of Directors. Key advisors who perform services for us or any of our
subsidiaries are eligible if they render bona fide services, not as part of the
offer or sale of securities in a capital-raising transaction.

Options

Incentive stock options may be granted to employees, directors and key
advisors. Non-qualified stock options may be granted to employees, key advisors
and non-employee directors. The exercise price of common stock underlying an
option is determined by the Compensation Committee at the time the option is
granted, and may be equal to, greater than, or less than the fair market value
of such stock on the date the option is granted; provided, that the exercise
price of an incentive stock option must be equal to or greater than the fair
market value of a share of common stock on the date the incentive stock option
is granted, and the exercise price of an incentive stock option granted to an
employee who owns more than 10% of our common stock, or who is an officer or
director, cannot be less than 110% of the fair market value. Unless the
applicable option agreement provides otherwise, a participant can exercise an
option award after the option has fully vested, by paying the applicable
exercise price in cash, or, with the approval of the Compensation Committee, by
delivering shares of common stock owned by the grantee and having a fair market
value on the date of exercise equal to the exercise price of the grants, or by
such other method as the Compensation Committee approves, including payment
through a broker in accordance with procedures permitted by Regulation T of the
Federal Reserve Board.

33



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Options vest according to the terms and conditions determined by the
Compensation Committee and specified in the grant instrument. The Compensation
Committee determines the term of each option up to a maximum of 10 years from
the date of grant except that the term of an incentive stock option granted to
an employee who owns more than 10% of our common stock, or who is an officer or
director, may not exceed five years from the date of grant. The Compensation
Committee may accelerate the exercisability of any or all outstanding options
at any time for any reason.

Restricted Stock

The Compensation Committee determines the number of restricted shares granted
to a participant, subject to the maximum plan limit described above. Grants of
restricted shares will be conditioned on such performance requirements, vesting
provisions, transfer restrictions or other restrictions and conditions as the
Compensation Committee may determine in its sole discretion. The restrictions
will remain in force during a restriction period set by the Compensation
Committee. If the grantee is no longer employed by us during the restriction
period or if any other conditions are not met, the restricted shares grant will
terminate as to all shares covered by the grant for which the restrictions are
still applicable, and those shares must be immediately returned to us.

Stock Appreciation Rights

The Compensation Committee can grant stock appreciation rights (SARs) to any
participant, subject to the maximum plan limit described above. At any time,
the Compensation Committee may grant an SAR award, either separately or in
connection with any option; provided, that, if an SAR is granted in connection
with an incentive stock option, it must be granted at the same time that as
underlying option is granted. The Compensation Committee will determine the
base amount of the SAR at the time that it is granted and will establish any
applicable vesting provisions, transfer restrictions or other restrictions as
it may determine is appropriate in its sole discretion. When a participant
exercises an SAR, he or she will receive the amount by which the value of the
stock has appreciated since the SAR was granted, which may be payable to the
participant in cash, shares, or a combination of cash and shares, as determined
by the Compensation Committee.

Performance Share Awards

The Compensation Committee can grant performance share awards to any employee
or key advisor. A performance share award represents the right to receive an
amount based on the value of our common stock, but may be payable only if
certain performance goals that are established by the Compensation Committee
are met. If the Compensation Committee determines that the applicable
performance goals have been met, a performance share award will be payable to
the participant in cash, shares or a combination of cash and shares, as
determined by the Compensation Committee.

Amendment and Termination of the 1998 Plan

Our Board of Directors can at any time terminate the 1998 Plan. With the
express written consent of an individual participant, the Board may cancel or
reduce or otherwise alter the outstanding awards thereunder if, in its
judgment, the tax, accounting, or other effects of the 1998 Plan or potential
payouts thereunder would not be in our best interest. The Board may, at any
time, or from time to time, amend or suspend and, if suspended, reinstate, the
1998 Plan in whole or in part, provided, however, that without further
stockholder approval the Board shall not:



| |  |  | Increase the maximum number of shares of our common stock which may
be issued on exercise of awards under the 1998 Plan;
| | - |  | ------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Change the maximum option price;                                                                                        
|
| |  |  | Extend the maximum option term;                                                                                         
|
| |  |  | Extend the termination date of the 1998 Plan; or                                                                        
|
| |  |  | Change the class of persons eligible to receive awards under the Plan.                                                  

34



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Adjustment Provisions

In the event that certain reorganizations of our company or similar
transactions or events occur, the maximum number of shares of stock available
for grant, the maximum number of shares that any participant in the 1998 Plan
may be granted, the number of shares covered by outstanding grants, the kind of
shares issued under the 1998 Plan and the price per share or the applicable
market value of such grants shall be adjusted by the committee to reflect
changes to our common stock as a result of such occurrence to prevent the
dilution or enlargement of rights of any individual under the 1998 Plan.

Change of Control and Reorganization



| |  |  | Upon a change of control, as defined in the 1998 Plan, the
Compensation Committee may:                                                                                                                                                                                                                                                                                              
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | determine that the outstanding grants, whether in the form of
options and stock appreciation rights, shall immediately vest and
become exercisable;                                                                                                                                                                                                                                 
|
| |  |  | determine that the restrictions and conditions on all outstanding
restricted stock or performance share awards shall immediately lapse;                                                                                                                                                                                                                                             
|
| |  |  | require that grantees surrender their outstanding options and stock
appreciation rights in exchange for payment by us, in cash or common
stock, in an amount equal to the amount by which the then fair market
value of the shares of our common stock subject to the grantees
unexercised options or stock appreciation rights exceeds the exercise
price of those options; and/or
|
| |  |  | after giving grantees an opportunity to exercise their outstanding
options and stock appreciation rights, terminate any or all unexercised
options and stock appreciation rights.                                                                                                                                                                                                   

Upon a reorganization, as defined in the 1998 Plan, where we are not the
surviving entity or where we survive only as a subsidiary of another entity,
unless the Compensation Committee determines otherwise, all outstanding option
or SAR grants shall be assumed by or replaced with comparable options or rights
by the surviving corporation. In addition, the Compensation Committee may
require that grantees surrender their outstanding options in exchange for
payment by us, in cash or common stock, at an amount equal to the amount by
which the then fair market value of the shares of common stock subject to the
grantees unexercised options exceeds the exercise price of those options
and/or after accelerating all vesting and giving grantees an opportunity to
exercise their outstanding options or SARs, terminate any or all unexercised
options and SARs.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

At March 18, 2003, there were an aggregate of:



| |  |  | 12,018,719 shares of our common stock,                         
| | - |  | ---------------------------------------------------------------
|
| |  |  | 4,215,224 shares of our Series A Convertible Preferred Stock,  
|
| |  |  | 200,000 shares of our Series B Convertible Preferred Stock, and
|
| |  |  | 337,150 shares of our Series C Convertible Preferred Stock     

issued and outstanding. These securities comprise our outstanding voting
securities (Voting Securities). The holders of our shares of common stock
are entitled to one vote for each outstanding share on all matters submitted to
our stockholders. The holders of our Series A Convertible Preferred Stock,
Series B Convertible Preferred Stock and our Series C Convertible Preferred
Stock are also entitled to vote on matters submitted to our stockholders, with
one vote for each share of our common stock into which these series of our
preferred stock are convertible. Based upon the current conversion price for
each of our Series A Convertible Preferred Stock, Series B Convertible
Preferred Stock and our Series B Convertible Preferred Stock on March 18, 2003,
these holders would be entitled to 24,296,149 votes at a meeting of our
stockholders, and our common stockholders would be entitled to 12,018,719
votes, for an aggregate of 36,314,868 votes for all our currently outstanding
Voting Securities.

35



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##### Table of Contents



The following table sets forth, as of March 12, 2003 information known to us
relating to the beneficial ownership of shares of our Voting Securities by:



| |  |  | each person who is the beneficial owner of more than 5% of
the outstanding shares of our Voting Securities, aggregate all three
classes together;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | each director;                                                                                                                                   
|
| |  |  | each executive officer; and                                                                                                                      
|
| |  |  | all executive officers and directors as a group.                                                                                                 

Under securities laws, a person is considered to be the beneficial owner of
securities he owns and that can be acquired by him within 60 days from March
18, 2003 upon the exercise of options, warrants, convertible securities or
other understandings. We determine a beneficial owners percentage ownership
by assuming that options, warrants or convertible securities that are held by
him, but not those held by any other person and which are exercisable within 60
days of March 18, 2003 have been exercised or converted.

The following table, however, gives no effect to the exercise of any
outstanding options or warrants unless specifically set forth therein. We
believe that all persons named in the table have sole voting and investment
power with respect to all shares of Voting Securities beneficially owned by
them. Unless otherwise noted, the address for each person is 2555 Davie Road,
Suite 110-B, Davie, Florida 33317.

|                                                         |  |                    |           |                   |  |  |       |  
|-------------------------------------------------------- |  | ------------------ | --------- | ----------------- |  |  | ----- | -
|                                                         |  | No. of Shares      |           | Percentage of    
|Name of Beneficial Owner                                 |  | Beneficially Owned |           | Voting Securities
|                                                         |  |                    |           |                  
|Cornelis Wit (1) (9)                                     |  |                    | 774,226   |                   |  |  | 2.17  | %
|Randall G. Smith (2) (9)                                 |  |                    | 1,668,255 |                   |  |  | 4.66  | %
|Ronald T. Linares (3) (9)                                |  |                    | 496,529   |                   |  |  | 1.40  | %
|Guus van Kesteren (4) (9)                                |  |                    | 792,776   |                   |  |  | 2.23  | %
|ComVest Venture Partners LLP (5) (9)                     |  |                    | 6,000,000 |                   |  |  | 15.75 | %
|Noesis N.V. (6) (9)                                      |  |                    | 6,755,695 |                   |  |  | 17.34 | %
|Shea Venture, LLC (7)(9)                                 |  |                    | 2,000,000 |                   |  |  | 5.54  | %
|Robert Priddy (8)(9)                                     |  |                    | 2,000,000 |                   |  |  | 5.54  | %
|                                                         |  |                    |           |                   |  |  |       |  
|All Directors and Officers as a
group (four persons) (9) |  |                    | 3,731,787 |                   |  |  | 10.02 | %
|                                                         |  |                    |           |                   |  |  |       |  



---

|(1) |  | Includes 400,000 shares of our common stock issuable upon the exercise of
currently exercisable stock options, 183,150 shares of our common stock
issuable upon conversion of our Series C Convertible Stock, and 152,000
shares of our common stock issuable upon conversion of warrants.                                                                                                                                                                                                                                                                                                                                       
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes 671,539 shares of our common stock issuable upon the exercise of
currently exercisable stock options, and 20,000 shares of our common stock
issuable upon conversion of stock warrants.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(3) |  | Includes 457,000 shares of our common stock issuable upon the exercise of
currently exercisable stock options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(4) |  | Includes 230,000 shares of our common stock issuable upon the exercise of
currently exercisable stock options, 202,700 shares of our common stock
issuable upon conversion of warrants and 335,775 shares of our common
stock issuable upon conversion of our Series C Convertible Preferred
Stock.                                                                                                                                                                                                                                                                                                                              
|   
|(5) |  | Includes 3,000,000 shares of our common stock issuable upon the
conversion of shares of our Series B Convertible Preferred Stock and
3,000,000 shares of our common stock issuable upon the conversion of
outstanding warrants. ComVest Venture Partners, LLP is an affiliate of the
Commonwealth Associates, L.P. acting as placement agent for us in a
private offering. The information presented for ComVest Venture Partners,
LLP, however, does not include any holdings of Commonwealth Associates,
L.P. or its
affiliates. ComVest Venture Partners, LLPs address is 830 Third Avenue,
Fourth Floor, New York, NY 10022.

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##### Table of Contents



|(6) |  | Includes 1,600,000 shares of our common stock issuable upon the
conversion of shares of our Series B Convertible Preferred Stock,
3,859,197 shares of our common stock issuable upon the conversion of
outstanding warrants and 760,000 shares of our common stock issuable upon
conversion of our Series C Convertible Preferred Stock. Noesis, N.V.s
address is Landhuis Joonchi, Kava Richard J. Beauion z/n, Curacao,
Netherland Antilles.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(7) |  | Includes 1,000,000 shares of our common stock issuable upon the
conversion of shares of our Series B Convertible Preferred Stock and
1,000,000 shares of our common stock issuable upon the exercise of
outstanding warrants. Shea Venture, LLCs address is 655 Brea Canyon
Road, Walnut, CA 91789.                                                                                                                                           
|   
|(8) |  | Includes 1,000,000 shares of our common stock issuable upon the
conversion of shares of our Series B Convertible Preferred Stock and
1,000,000 shares of our common stock issuable upon the conversion of
outstanding warrants. Mr. Priddys address is 3435 Kingsboro Road,
Apartment 1601, Atlanta, GA 30326.                                                                                                                                
|   
|(9) |  | Includes footnotes (1) through (4) above.                                                                                                                                                                                                                                                                                                                                                                                                      

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Cornelis F. Wit, our President and Chief Executive Officer and a member of our
Board of Directors, is a consultant to Noesis Capital Corp. and served as
President of Corporate Finance of Noesis Capital Corp. from March 1995 to
September 2000. Noesis Capital Corp. has served as placement agent for us in
three private placements of securities which occurred between September 1999
and December 2002. Guus van Kesteren, a member of our Board of Directors, is
a consultant for Noesis Capital Corp.

In December 1999, we entered into a consulting agreement with Messrs. van
Kesteren and Wit, each of whom is a member of our Board of Directors, providing
that we will compensate each of these individuals for sales leads or contacts
developed by them in connection with our TrialMaster system. For the periods
ended December 30, 2001 and 2002, no compensation was earned by either Mr. van
Kesteren or Mr. Wit under this agreement. This agreement was terminated upon
mutual agreement of OmniComm and Messrs. Wit and van Kesteren effective June
30, 2002.

On April 5, 2002, Cornelis F. Wit, President and Chief Executive Officer and a
Director of the Company, invested $10,000 in a private placement of our Series
C Convertible Preferred Stock. The Series C Convertible Preferred Stock is
convertible into shares of the Companys common stock at a conversion price of
$0.25 per share and carries a stated dividend rate of 8% per annum.

On April 5, 2002, Guus van Kesteren a Director of the Company, invested $10,000
in a private placement of our Series C Convertible Preferred Stock. The Series
C Convertible Preferred Stock is convertible into shares of the Companys
common stock at a conversion price of $0.25 per share and carries a stated
dividend rate of 8% per annum.

On January 30 2002, Noesis N.V., one of our stockholders, invested $90,000 in a
private placement of our Series C Convertible Preferred Stock. The Series C
Convertible Preferred Stock is convertible into shares of the Companys common
stock at a conversion price of $0.25 per share and carries a stated dividend
rate of 8% per annum.

From time to time we have borrowed funds from Mr. van Kesteren, including:



| |  |  | between July 2000 and December 2000, we borrowed an aggregate
of $110,000 from him under two promissory notes, one of which bore
interest at a rate of 12% per annum and the other at 5% per annum.
These notes were converted into debt issued as part of a private
placement of our debt in January 2000. The private placement debt
accrues interest at 12% per annum and is convertible into
shares of our Common Stock at the holders option at a rate of $0.50
per share commencing on January 31, 2002.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  |  | between February 2001 and July 2001, we borrowed an aggregate
of $190,000 from him under promissory notes which bore interest of
12% per annum. These promissory notes were amended and restated on
August 30, 2001 with new terms which included an interest rate of 8%
per annum, and with one half of the principal payable upon the
closing of any financing by us resulting in gross proceeds in excess
of $2,000,000, and the balance of the principal together with
accrued interest payable no later than August 30, 2003.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | in September 2001, we borrowed an aggregate of $25,000 from
him under promissory notes which bore interest at a rate of 12% per
annum and had a maturity date of December 22, 2001. These notes
were converted into the Units sold in our private placement of
Series B Convertible Preferred Stock in August 2001.                                                                                                                                                                                                               
|
| |  |  | in December 2002, we borrowed $50,000 from him under a
promissory note bearing interest at a rate of 9% per annum, payable
on March 31, 2003.                                                                                                                                                                                                                                                                                                                                                                                     

In conjunction with these various loans, we have granted Mr. van Kesteren
warrants to purchase an aggregate of 70,700 shares of our Common Stock at
exercise prices ranging from $.30 to $2.25 per share.

In July 2001, Noesis Capital, the Placement Agent for our 12% Convertible
Notes, assigned $60,000 of accrued fees owed to it Cornelis Wit, a Director at
the time. Mr. Wit converted that accrued expense into the Private Placement of
our 12% Convertible Notes. The 12% Convertible Notes were subsequently
converted on December 31, 2002 into shares of our Series C Convertible
Preferred Stock.

The Company granted Randall G. Smith, Chairman of the Board and Chief
Technology Officer, warrants to purchase 20,000 shares of our Common stock at
an exercise price of $0.41 per share in connection with a pledge of real
property he made in securing a loan made to the Company by Mr. van Kesteren in
July 2001, in the amount of $100,000

On August 17, 2000, we borrowed $100,000 from Noesis N.V., one of our
stockholders. One of our Directors, Mr. Wit, was President of Corporate
Finance of Noesis Capital Corp. and remains a consultant to the Noesis. The
promissory note bore interest rate at a rate of 8% per annum and had a maturity
date of January 1, 2001. At our request, Noesis N.V. agreed to convert this
promissory note into debt issued as part of a private placement of our debt in
January 2001. The private placement debt accrues interest at 12% per annum and
is convertible into shares of our Common Stock at the holders option at a rate
of $0.50 per share commencing on January 31, 2002.

During March 2002, the Company borrowed $2,341 from Randall Smith, the
Companys Chairman and Chief Technology Officer. This amount was repaid
without interest on April 12, 2002. In addition, the Company borrowed $6,000
from Mr. Smith on November 25, 2002 and this amount remained outstanding at
December 31, 2002.

During April 2002, the Company borrowed $1,500 from Ronald Linares, the
Companys Chief Financial Officer. This amount was repaid without interest on
May 1, 2002.

During December 2002, the Company borrowed $50,000 from Cornelis Wit, the
Companys President and Chief Executive Officer and a Director. This amount
was borrowed under a promissory note bearing interest at a rate of 9% per
annum, payable on March 31, 2003.

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ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

The following documents are filed as a part of this report or are incorporated
by reference to previous filings, if so indicated:

(a)  Exhibits

|            |  |                                                                                                                     
|----------- |  | --------------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                         
|            |  |                                                                                                                     
|2.1         |  | Agreement and Plan of Reorganization dated July 22, 1998 (1)                                                        
|2.2         |  | Amendment to Agreement and Plan of Reorganization (2)                                                               
|2.3         |  | Plan of Merger (3)                                                                                                  
|2.4         |  | Agreement and Plan of Acquisition of WebIPA dated January 26, 2000 (4)                                              
|3.1         |  | Certificate of Incorporation (5)                                                                                    
|3.2         |  | Certificate of Designation  5% Series A Convertible Preferred Stock (6)                                            
|3.3         |  | Certificate of Increase  5% Series A Convertible Preferred Stock (7)                                               
|3.4         |  | Certificate of Designation Series B Convertible Preferred Stock (8)                                                
|3.5         |  | Amendment to Certificate of Incorporation (9)                                                                       
|3.6         |  | Bylaws (10)                                                                                                         
|3.7         |  | Certificate of Amendment  Certificate of Designation  5%
Series A Convertible Preferred Stock dated August 2, 2002
|3.8         |  | Certificate of Amendment  Certificate of Incorporation dated
August 2, 2002.                                       
|3.9         |  | Certificate of Designation  Series C Convertible Preferred
Stock dated March 27, 2002.                             
|10.1        |  | Employment Agreement and Stock Option Agreement between
OmniComm and Randall G. Smith (11)                          
|10.2        |  | Employment Agreement and Stock Option Agreement between
OmniComm and David Ginsberg, D.O. (12)                      
|10.3        |  | Employment Agreement and Stock Option Agreement between
OmniComm and Ronald T. Linares (13)                         
|10.4        |  | 1998 Stock Incentive Plan (14)                                                                                      
|10.5        |  | Medical Advisory Board Agreement (15)                                                                               
|10.6        |  | Standard Agreement  Proprietary Protection (16)                                                                    
|10.7        |  | Employment Agreement and Stock Option Agreement between
OmniComm and Cornelis F. Wit (17)                           

39



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|            |  |                                                                                                               
|----------- |  | --------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                   
|            |  |                                                                                                               
|10.8        |  | Employment Agreement and Stock Option Agreement between
OmniComm and Charles Beardsley, dated January 3, 2003.
|23.1        |  | Consent of Greenberg & Company, LLC, Registrants Independent
Auditors (18)                                    
|99.1        |  | Section 906 of the Sarbanes-Oxley Act of 2002 Certification of
Cornelis F. Wit, CEO                           
|99.2        |  | Section 906 of the Sarbanes-Oxley Act of 2002 Certification of
Ronald T Linares, CFO                          
|99.3        |  | Consolidated Financial Statements                                                                             



---

|(1)  |  | Incorporated by reference to Exhibit 2 filed with our Report on Form 8-K
dated March 3, 1999.                                       
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------
|    
|(2)  |  | Incorporated by reference to Exhibit 2(c) filed with our Registration
Statement on Form 10-SB dated December 22, 1998.              
|    
|(3)  |  | Incorporated by reference to Exhibit 2(c) filed with our amended
Registration Statement on Form 10-SB dated July 27, 1999.          
|    
|(4)  |  | Incorporated by reference to Exhibit 2 filed with our Report on Form 8-K
dated February 9, 2000.                                    
|    
|(5)  |  | Incorporated by reference to Exhibit 3(a) filed with our Registration
Statement on Form SB-2 dated February 6, 1997.                
|    
|(6)  |  | Incorporated by reference to Exhibit 4(b) filed with our amended
Registration Statement on Form 10-SB dated August 25, 1999.        
|    
|(7)  |  | Incorporated by reference to Exhibit 4(c) filed with our Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1999.  
|    
|(8)  |  | Incorporated by reference to Exhibit 4(D) filed with our amended
Registration Statement on Form SB-2 dated September 17, 2001.      
|    
|(9)  |  | Incorporated by reference to Exhibit 4(E) filed with our Registration
Statement on Form SB-2 dated December 27, 2001.               
|    
|(10) |  | Incorporated by reference to Exhibit 3(b) filed with our Registration
Statement on Form SB-2 dated February 6, 1997.                
|    
|(11) |  | Incorporated by reference to Exhibit 10(a)(i) filed with our amended
Registration Statement on Form SB-2 dated September 17, 2001.  
|    
|(12) |  | Incorporated by reference to Exhibit 10(a)(ii) filed with our amended
Registration Statement on Form SB-2 dated September 17, 2001. 
|    
|(13) |  | Incorporated by reference to Exhibit 10(a)(iii) filed with our amended
Registration Statement on Form SB-2 dated September 17, 2001.
|    
|(14) |  | Incorporated by reference to Exhibit 10(c) filed with our amended
Registration Statement on Form 10-SB dated July 27, 1999.         

40



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##### Table of Contents



|(15) |  | Incorporated by reference to Exhibit 10(e) filed with our amended
Registration Statement on Form 10-SB dated July 27, 1999.  
|---- |  | -----------------------------------------------------------------------------------------------------------------------------
|    
|(16) |  | Incorporated by reference to Exhibit 10(f) filed with our amended
Registration Statement on Form 10-SB dated August 25, 1999.
|    
|(17) |  | Incorporated by reference to Exhibit 10.7 filed with our Form 10-QSB for
the period ended June 30, 2002.                     
|    
|(18) |  | Incorporated by reference to Exhibit 23 filed with our Registration
Statement on Form SB-2 dated December 27, 2001.          

(a)  Reports on Form 8-K.



| |      
| | -----
| | None.

ITEM 14. CONTROLS AND PROCEDURES

Based on their evaluation as of a date within 90 days of the filing date of
this Annual Report on Form 10-KSB, the Companys principal executive officer
and principal financial officer have concluded that the Companys disclosure
controls and procedures as defined in Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934 (the Exchange Act) are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms.

There were no significant changes in the Companys internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation and up to the filing date of this Annual Report on
Form 10-KSB. There were no significant deficiencies or material weaknesses, and
therefore there were no corrective actions taken.

It should be noted that any system of controls, however well designed and
operated, can provide only reasonable, and not absolute, assurance that the
objectives of the system are met. In addition, the design of any control system
is based in part upon certain assumptions about the likelihood of future
events. Because of these and other inherent limitations of control systems,
there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions, regardless of how remote.

41



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##### Table of Contents






SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

|                       |  |                                                               
|---------------------- |  | --------------------------------------------------------------
|OMNICOMM SYSTEMS, INC.
|                      
|By:                    |  | /s/Cornelis F. WitCornelis F Wit, Chief Executive Officer     
|                      
|By:                    |  | /s/Ronald T. LinaresRonald T. Linares, Chief Financial Officer

In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

|                                       |  |                                                 |  |               
|-------------------------------------- |  | ----------------------------------------------- |  | --------------
|Signature                              |  | Title                                           |  | Date          
|                                       |  |                                                 |  |               
|/s/ Cornelis F. WitCornelis F. Wit     |  | Chief Executive Officer,
President and Director |  | April 15, 2003
|                                      
|/s/ Randall G. SmithRandall G. Smith   |  | Chairman, Chief
Technology Officer              |  | April 15, 2003
|                                      
|/s/ Ronald T. LinaresRonald T. Linares |  | Chief Financial Officer                         |  | April 15, 2003
|                                      
|/s/ Guus van KesterenGuus van Kesteren |  | Director                                        |  | April 15, 2003

42



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CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Cornelis F. Wit certify that:



|1. |  | I have reviewed this annual report on Form 10-KSB of OmniComm Systems,
Inc.;                                                                                                                                                                                                                                               
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual
report;                      
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14 for the registrant and
have:                                                                                                       



| | a) |  | Designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this annual
report is prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the Evaluation Date); and                                                                                             
|
| | c) |  | Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                  



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: April 15, 2003

/s/ Cornelis F. Wit
Cornelis F. Wit
Chief Executive Officer

43



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##### Table of Contents






CERTIFICATION OF CHIEF FINANCIAL
OFFICERPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ronald T. Linares certify that:



|1. |  | I have reviewed this annual report on Form 10-KSB of OmniComm Systems,
Inc.;                                                                                                                                                                                                                                               
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual
report;                      
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14 for the registrant and
have:                                                                                                       



| | a) |  | Designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this annual
report is prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the Evaluation Date); and                                                                                             
|
| | c) |  | Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                  



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: April 15, 2003

/s/ Ronald T. Linares
Ronald T. Linares
Chief Financial Officer

44