<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.  20549

                                     FORM 10-K/A
                                   AMENDMENT NO. 1
                                          TO

  X             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                        OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE
                        REQUIRED)

                       For fiscal year ended December 31, 1997

                                          OR

 ____           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

        For the transition period from ________ to _______.

                           Commission File Number:  0-22743

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

                       DELAWARE                            94-3184035
            (State or other jurisdiction               (I.R.S. Employer
           or incorporation or organization)          Identification No.)


5451 Avenida Encinas, Suite A, Carlsbad, California          92008
     (Address of principal executive offices)              (zip code)

      Registrant's telephone number, including area code: (760) 603-9120

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

                Securities registered pursuant to Section 12(g) 
               of the Act:  Common Stock, par value $.01 per share

        Indicate by check mark whether the registrant (1) has filed all 
reports required to be filed by Section 13 or 15(d) of the Securities 
Exchange Act of 1934 during the preceding 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___

        Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K is not contained herein, and will not be 
contained, to the best of registrant's knowledge, in definitive proxy or 
information statements incorporated by reference in Part III of this Form 
10-K or any amendment to this Form 10-K.  [ X ] 

        The aggregate market value of the voting stock held by nonaffiliates 
of the registrant as of January 31, 1998 was approximately $53,507,000.  For 
the purposes of this calculation, shares owned by officers, directors and 10% 
stockholders known to the registrant have been deemed to be owned by 
affiliates. This determination of affiliate status is not necessarily a 
conclusive determination for other purposes.

        The number of shares outstanding of the registrant's Common Stock as 
of January 31, 1998 was 13,422,875.


<PAGE>

THREE-DIMENSIONAL IMAGE ACQUISITION

        Vista Medical believes that 3-D visualization capability is critical in
MIM procedures such as cardiothoracic and neurosurgical procedures.  The
Company's technology for stereo visualization consists of the following
proprietary elements: the optical system, the stereo camera and the stereo
processor.  The 3-D endoscopic optical system employed by Vista Medical was
originally developed and patented by a noted optical designer, Mr. H. McKinley,
and is licensed exclusively to the Company for medical applications.  The system
is designed to replicate the exact view that the surgeon would have if the
procedures were being performed open and he or she had direct sight of the
anatomy.  The Company believes that the McKinley optical system will provide it
with a significant and enduring competitive advantage because it provides
natural depth perception, and it can be packaged with twin cameras in a very
compact design.  The twin cameras acquire the image in a manner analogous to a
human's two eyes. 

        Vista Medical's technology packages the twin cameras in two ways.  In
the first method, a micro-camera is attached to the end of a flexible or rigid
guide which can then be inserted directly into the body cavity and organs.  The
image is directly captured by the camera chips without being transmitted through
multiple rod lenses as in a conventional optical endoscope design.  The
elimination of optical surfaces produces several important advantages, including
increased image quality, improved contrast, better reliability and improved
ability to sterilize by autoclaving.  Alternatively, for applications where a
standard optical endoscope configuration remains preferable, a stereo
micro-camera can be mounted externally on a stereo endoscope.  The image
acquired by either approach is then processed for display by control electronics
developed exclusively by the Company.  The controller will also include image
management features which will contribute significantly to procedure
performance, such as zoom control, dual image presentation and
picture-in-picture. 

INFORMATION MANAGEMENT

        Medicine is an information rich discipline, but the provision of
relevant information in real-time to surgeons has not been developed to the
levels attained, for example, in military aviation.  The HMD is designed to give
the surgeon real-time access on demand to critical information, integrated with
the anatomical images generated by the Company's camera systems.  Therefore, the
surgeon will be able to command the diagnostic and monitoring information
relevant to the specific procedure while it is taking place.  In addition to
real-time display, the information can be managed (stored or transmitted) within
the hospital or to remote locations for training, advisory or administrative
purposes.  The applications software to control this flow of information is a
key element in Vista Medical's long-term product strategy, which positions
visualization within the context of a total information service to the surgeon. 

        The Company's data integration capability has been enhanced through a 
perpetual, exclusive license from GDE which has added high speed image-based 
information processing and networking software to the Company's technology 
platform.  The Company believes that its technology will demonstrate that 
real-time access to relevant information, along with enhanced visualization, 
is a critical requirement of performing MIM and other surgical procedures. 
The Company anticipates incorporating appropriate elements of this software 
package into future products.

                                     -7-


<PAGE>

RISKS AND UNCERTAINTIES

        IN ADDITION TO THE OTHER INFORMATION IN THIS ANNUAL REPORT, THE
FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING AN INVESTMENT IN
THE COMPANY.  PROSPECTIVE INVESTORS ARE CAUTIONED THAT THE STATEMENTS IN THIS
ANNUAL REPORT THAT ARE NOT DESCRIPTIONS OF HISTORICAL FACTS MAY BE
FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO RISKS AND UNCERTAINTIES.  ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM THOSE CURRENTLY ANTICIPATED DUE TO A NUMBER
OF FACTORS, INCLUDING THOSE IDENTIFIED UNDER "RISKS AND UNCERTAINTIES" AND
ELSEWHERE IN THIS ANNUAL REPORT.

        DEVELOPMENT STAGE COMPANY; SUBSTANTIAL FUTURE LOSSES AND FUTURE CAPITAL
REQUIREMENTS

        Since its formation in July 1993, the Company has been engaged in the
development of visualization and information systems and related surgical
instruments and accessories that enable minimally invasive microsurgery ("MIM")
solutions for applications in cardiothoracic and other selected microsurgical
procedures and in manufacturing and marketing limited quantities of camera
systems to customers as an OEM.  As of December 31, 1997, the Company had
incurred cumulative net losses of $30.5 million since its formation.  The
Company expects to incur substantial and increasing operating losses before it
will reach profitability, if at all.  Furthermore, the Company expects its
expenses in all categories to increase as its marketing and other business
activities expand.  There can be no assurance that the Company will achieve or
sustain profitability in the future.  Failure to achieve significant commercial
revenues or profitability would have a material adverse effect on the Company's
business, financial condition and results of operations. 

        The Company's future liquidity and capital requirements will depend 
upon numerous factors, including the following: the extent to which the 
Company's products gain market acceptance; the progress and scope of product 
evaluations; the timing and costs of filing future regulatory submissions; 
the timing and costs required to receive both domestic and international 
governmental approvals; the timing and costs of product introductions; the 
extent of the Company's ongoing research and development programs; the costs 
of training physicians to become proficient in the use of the Company's 
products and procedures; and the costs of developing marketing and 
distribution capabilities. The Company anticipates that the net proceeds from 
the Initial Public Offering completed in July 1997 and the interest income 
thereon, together with borrowings available under the $10.0 million Loan and 
Security Agreement entered into in October 1997, existing cash, cash 
equivalents and short-term investments, and product revenues, will be 
sufficient to fund its operations through 1998.  If, at or prior to such 
time, the net proceeds of the Initial Public Offering, together with 
available funds and cash generated from operations, are insufficient to 
satisfy the Company's cash needs, the Company may require additional 
financing.  There can be no assurance that such additional financing will be 
available on terms acceptable to the Company, if at all.  The Company's 
inability to fund its capital and operational requirements would have a 
material adverse effect on the Company's business, financial condition and 
results of operations.

      DEPENDENCE UPON AND UNCERTAINTY REGARDING COMMERCIALIZATION OF SERIES 8000

        The Series 8000 for minimally invasive cardiac surgery is the Company's
primary near-term product focus and is expected to account for the majority of
the Company's revenues over the next several years.  In international markets
regulatory clearance or approval is also required before the system can be
widely marketed.  There can be no assurance that demand for the Series 8000 will
be sufficient to achieve profitable operations.

        Development of certain additional peripheral components of the Series
8000 has not yet been finalized, and final prototypes have not yet been
completed.  There can be no assurance that the Company's development efforts for
these components will be successful, or that the Company's products under
development will be shown to be safe or effective, capable of being manufactured
in commercial quantities at acceptable costs, or successfully marketed.

        Evaluations of the Series 8000 conducted to date have shown that there
is a learning process involved for surgeons and other members of the surgery
team to become proficient with the use of the system.  Based on the clinical and
laboratory procedures performed to date, there can be no assurance that
visualization and information system enhancements incorporated, or to be
incorporated, in the Series 8000 will prove suitable for use by a substantial
number of cardiothoracic surgeons.  If the Series 8000 proves unsuitable for a
number of surgeons to use, the potential markets and applications for the
Company's products would be significantly limited.  Widespread use

                                       -21-


<PAGE>

primarily attributable to the continued development of corporate management 
and related support functions, the addition of new facilities and expansion 
of current facilities, expansion of the Company's information systems and the 
amortization of deferred compensation in the amount of $447,000. 

        OTHER INCOME 

        LICENSE INCOME.  License income of $1,493,000 in 1996 represents the net
amount received by the Company from a perpetual license to certain of its
technology and patents unrelated to the Company's main products and markets. The
license to Imagyn, formerly Urohealth Systems, Inc., was a unique, non-recurring
transaction that involved a license of only that component of the Company's
technology that it did not want to pursue. For this reason, the license fees
were treated as non-operating income. Prior to 1996, the Company had no license
income. No other technology is being developed with the purpose of being
licensed and the Company does not anticipate any future licensing arrangements
of any of its core technology for medical applications. 

        INTEREST INCOME.  Interest income represents the net amount of interest
earned by the Company on its cash and short-term investments and interest
expense on debt. Interest income increased from approximately $51,000 for the
year ended December 31, 1995 to approximately $117,000 for the year ended
December 31, 1996 due primarily to increasing average investment balances. The
Company had immaterial amounts of interest income prior to 1995. 

LIQUIDITY AND CAPITAL RESOURCES

        The Company completed its Initial Public Offering in July 1997, raising
approximately $32,700,000 net of offering costs.  Prior to the Initial Public
Offering, the Company satisfied its liquidity requirements from the private sale
of common and preferred stock, through advances from a related party, and from
the proceeds from licensing certain of the Company's technology.  
        
        In October 1997, the Company completed a $10,000,000 Loan and Security
Agreement ("Loan Agreement") to finance the placement with customers of its
Series 8000 product on a pay per procedure basis rather than through an upfront
capital payment. As of December 31, 1997 there were no outstanding balances 
under the Agreement. If the Company were to borrow funds pursuant to the Loan 
Agreement, it could borrow up to $10,000,000 at one time with an interest 
rate of prime plus one and one half percent.

        Net cash used in operating activities was approximately $3,567,000,
$6,937,000 and $15,494,000 in 1995, 1996 and 1997.  The increase in net cash
used in operating activities was primarily attributable to increasing net losses
during the such periods and investment in inventories associated with expansion
of the Company's product line.

        Net cash used in investing activities was approximately $298,000,
$1,239,000 and $20,025,000 in 1995, 1996 and 1997, respectively.  The increase
was primarily attributable to the purchase of short-term investments and the
purchase of property and equipment related to increased staffing, expansion of
manufacturing capabilities, and marketing demonstrations.

        Cash flows from financing activities were $7,090,000, $15,061,000 and 
$32,728,000 in 1995, 1996 and 1997, respectively.  The cash flows from 
financing activities in 1995 and 1996 were primarily attributable to the 
private sale of preferred stock while cash flows from financing activities in 
1997 were primarily attributable to proceeds from the Company's Initial 
Public Offering.

        The Company intends to undertake approximately $1,500,000 in capital 
expenditures in 1998 and has future lease payments relating to its facilities 
and certain equipment under operating leases of $1,624,000, of which $387,000 
is payable in 1998. 

        The Company anticipates that the net proceeds from the Initial Public
Offering completed in July 1997 and the interest income thereon, together with
borrowings available under a $10,000,000 Loan Agreement, existing cash, cash
equivalents and short-term investments, and product revenues, will be sufficient
to fund its operations through 1998.

        The Company recognizes the need to ensure its operations will not be
adversely impacted by the inability of the Company's systems to process data
having dates on or after January 1, 2000 (the "Year 2000" issues).  Processing
errors due to software failure arising from calculations using the Year 2000
date are a recognized risk.  The Company is currently addressing the risk, with
respect to the availability and integrity of its financial systems and the
reliability of its operating systems, and is in the process of communicating
with suppliers, customers, financial institutions and others with whom it
conducts business transactions to assess whether they are Year 2000 compliant.  

                                    -37-


<PAGE>
                                      SIGNATURES

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

                                      VISTA MEDICAL TECHNOLOGIES, INC.


Date:  August 21, 1998                 By:  /s/ John R. Lyon
                                           -------------------------------------
                                           John R. Lyon
                                           President and Chief Executive Officer

                                  POWER OF ATTORNEY

        Know all men by these presents, that each person whose signature appears
below constitutes and appoints John R. Lyon or Robert J. De Vaere, his or her
attorney-in-fact, with power of substitution in any and all capacities, to sign
any amendments to this Annual Report on Form 10-K, and to file the same with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that the
attorney-in-fact or his or her substitute or substitutes may do or cause to be
done by virtue hereof.

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

<TABLE>
<CAPTION>

    SIGNATURE                          TITLE                                DATE
    ---------                          -----                                ----
<S>                          <C>                                      <C>

/s/  John R. Lyon            President, Chief Executive                August 21, 1998
--------------------------    Officer and Director (Principal 
    (John R. Lyon)            Executive Officer)

/s/  Robert J. De Vaere      Vice President of Finance and             August 21, 1998
--------------------------    Administration and Chief 
    (Robert J. De Vaere)      Financial Officer (Principal 
                              Financial and Accounting Officer)

           *                 Chairman of the Board and Director        August 21, 1998
--------------------------   
    (James C. Blair)             

           *                 Director                                  August 21, 1998
--------------------------   
    (Olav B. Bergheim)

           *                 Director                                  August 21, 1998
--------------------------   
   (Nicholas B. Binkley)

           *                 Director                                  August 21, 1998
--------------------------   
    (Daniel J. Holland)

           *                 Director                                  August 21, 1998
--------------------------   
    (Larry M. Osterink)
</TABLE>


*By: /s/ Robert J. De Vaere
     ---------------------------------------
         Robert J. De Vaere, Attorney-in-fact


                                   -43-


<PAGE>

                Report of Ernst & Young LLP, Independent Auditors

The Board of Directors and Stockholders
Vista Medical Technologies, Inc.

We have audited the accompanying consolidated balance sheets of Vista Medical 
Technologies, Inc. as of December 31, 1996 and 1997 and the related 
consolidated statements of operations, stockholders' equity, and cash flows 
for each of the three years in the period ended December 31, 1997. These 
financial statements are the responsibility of the Company's management. Our 
responsibility is to express an opinion on these financial statements based 
on our audits.

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

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the consolidated financial position 
of Vista Medical Technologies, Inc. at December 31, 1996 and 1997 and the 
results of its consolidated operations and its cash flows for each of the 
three years in the period ended December 31, 1997 in conformity with 
generally accepted accounting principles.


/s/ Ernst & Young LLP
----------------------------

San Diego, California
January 16, 1998


                                      F-2

<PAGE>

                        Vista Medical Technologies, Inc.

             Notes to Consolidated Financial Statements (continued)

2. BALANCE SHEET COMPONENTS

Inventories consists of the following:

<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                                             -----------------------------------
                                                                   1996               1997
                                                             -----------------------------------
<S>                                                        <C>                 <C>
Parts and materials                                          $      567,707        $  1,977,878
Work in process                                                     286,099             662,237
Finished goods                                                      359,019             704,852
                                                             -----------------------------------
                                                             $    1,212,825        $  3,344,967
                                                             -----------------------------------
                                                             -----------------------------------
</TABLE>

Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                                             -----------------------------------
                                                                   1996               1997
                                                             -----------------------------------
<S>                                                        <C>                 <C>
Machinery and equipment                                      $    271,747         $  1,400,892
Office computers, furniture and equipment                         352,911              839,533 
Marketing demonstration equipment                                 776,420            2,199,736     
Investment in leased assets                                             -              206,011     
Leasehold improvements                                             68,704              239,067
                                                             -----------------------------------
                                                                1,469,782            4,885,239
Less: accumulated depreciation                                   (387,679)          (1,557,956)
                                                             -----------------------------------
                                                             $  1,082,103            3,327,283
                                                             -----------------------------------
                                                             -----------------------------------
</TABLE>

Patents and other assets consists of the following:

<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                                             -----------------------------------
                                                                   1996             1997
                                                             -----------------------------------
<S>                                                           <C>                 <C>
Investment in common stock                                        $   693,000       $  271,562
Patents and other intangible assets, net                              323,241          232,811
Prepaid royalties                                                      57,500           57,500
                                                             -----------------------------------
                                                                   $1,073,741       $  561,873
                                                             -----------------------------------
                                                             -----------------------------------
</TABLE>

3.  MAJOR CUSTOMERS

Sales to individual customers exceeding 10% or more of revenues in the years 
ended December 31, were as follows: during 1995 Linvatec Corporation 
accounted for 85% of revenues; during 1996 Pilling Weck, Amco, Inc. and 
Linvatec Corporation accounted for 30%, 27% and 25% of revenues, 
respectively; during 1997, Linvatec Corporation, Medtronic, Inc. and Aesculap 
AG accounted for 25%, 19% and 10% of revenues, respectively.

                                     F-13

<PAGE>

                        Vista Medical Technologies, Inc.

             Notes to Consolidated Financial Statements (continued)

7. STOCKHOLDERS' EQUITY (CONTINUED)

The Company recorded $947,000 of deferred compensation for options granted 
during the year ended December 31, 1997, representing the difference between 
the option exercise price and the deemed value for financial statement 
presentation purposes for stock options granted to employees in 1997. The 
Company is amortizing the deferred compensation recorded in 1996 and 1997 
over the vesting period of the options and the Company recorded $1,066,000 of 
compensation expense during the year ended December 31, 1997.

1997 STOCK OPTION PLAN/ STOCK ISSUANCE PLAN

In February 1997, the Company adopted the 1997 Stock Option Plan/Stock 
Issuance Plan (the "1997 Plan") and reserved 2,820,000 shares for issuance 
thereunder. The 1997 Plan incorporates the outstanding options under the 1995 
Plan and no further options will be granted under the 1995 Plan.

At December 31, 1997, 1,227,824 options were available for future grant.

The following tables summarizes stock option activity under the Plan:

<TABLE>
<CAPTION>

                                                                                         WEIGHTED 
                                                                                          AVERAGE
                                                         NUMBER OF        PRICE PER      PRICE PER 
                                                           SHARES           SHARE          SHARE
                                                     ------------------------------------------------
<S>                                                  <C>                <C>          <C>
Balance at December 31, 1994                                      -            $  -        $    -
Granted                                                     655,322            $.20        $  .20
Exercised                                                  (148,125)           $.20        $  .20
Canceled                                                          -              -         $    -
                                                     ------------------------------------------------------
Balance at December 31, 1995                                507,197            $.20        $  .20
Granted                                                   1,173,888    $.20 -  $.80        $  .33
Exercised                                                  (389,349)           $.20        $  .20
Canceled                                                    (45,935)           $.20        $  .20
                                                     ------------------------------------------------------
Balance at December 31, 1996                              1,245,801    $.20 -  $.80        $  .32
Granted                                                     447,500    $.80 -$14.38        $ 8.94
Exercised                                                  (150,273)   $.20 -  $.80        $  .42
Canceled                                                    (25,500)           $.60        $  .60
                                                     ------------------------------------------------------
Balance at December 31, 1997                              1,517,528    $.20 -$14.38        $ 2.85
                                                     ------------------------------------------------------
                                                     ------------------------------------------------------

</TABLE>





                                                F-16
<PAGE>

                        Vista Medical Technologies, Inc.

             Index to Consolidated Financial Statements (continued)



7. STOCKHOLDERS' EQUITY (CONTINUED)


<TABLE>
<CAPTION>

                                                                                       EXERCISABLE STOCK 
                                     OUTSTANDING STOCK OPTIONS                               OPTIONS
                       ------------------------------------------------------     ----------------------------
                                             WEIGHTED-
                                              AVERAGE             WEIGHTED-                     WEIGHTED-
                                             REMAINING            AVERAGE                       AVERAGE
      RANGE OF                              CONTRACTUAL           EXERCISE                      EXERCISE 
   EXERCISE PRICE           SHARES             LIFE                PRICE           SHARES        PRICE
---------------------------------------------------------------------------------------------------------
<S>                     <C>                 <C>               <C>                 <C>          <C>
$.20 - $.80               1,107,528             101              $    .32         336,352      $    .29
$4.00                        75,000             109              $   4.00          12,500      $   4.00
$9.88                       170,000             116              $   9.88          16,103      $   9.88
$11.31 - 14.38              165,000             119              $  12.07             667      $  13.61

</TABLE>

The weighted average fair value of stock options granted during 1996 and 1997 
was $0.09 and $4.66, respectively. The weighted average remaining life of the 
options at December 31, 1996 and 1997 was 111 and 102 months, respectively.

1997 EMPLOYEE STOCK PURCHASE PLAN

In February 1997, the Company adopted the 1997 Employee Stock Purchase Plan 
(the "Purchase Plan") and reserved 200,000 shares for issuance, thereunder. 
The Purchase Plan permits eligible employees of the Company to purchase 
shares of Common Stock, at semi-annual intervals, through periodic payroll 
deductions. Payroll deductions may not exceed 10% of the participant's base 
salary, and the purchase price per share will not be less than 85% of the 
lower of the fair market value of the common stock at either the beginning or 
the end of the semi-annual intervals.

Adjusted pro forma information regarding net income is required by SFAS 123, 
and has been determined as if the Company had accounted for its employee 
stock options under the fair value method of that Statement. The fair value 
for these options was estimated at the date of grant using the minimum value 
method for option pricing for options granted prior to the initial public 
offering and the "Black-Scholes" method for option pricing for options 
granted subsequent to the initial public offering with the following 
weighted-average assumptions: risk-free interest rate range of 5.5% to 6.0%; 
dividend yield of 0%; volatility of 55% and a weighted average expected life 
of the option of 2.5 to 5 years.

<TABLE>
<CAPTION>
                                                                   YEARS ENDED DECEMBER 31,
                                                     ------------------------------------------------------
                                                           1995              1996               1997
                                                     ------------------------------------------------------
<S>                                                  <C>               <C>                <C> 
Adjusted pro forma net loss                             $3,279,659        $7,451,220         $17,047,180
                                                     ------------------------------------------------------
                                                     ------------------------------------------------------
<S>                                                 <C>                <C>               <C>
Adjusted pro forma net loss per share                   $   (88.64)       $   (37.07)        $     (2.53)
                                                     ------------------------------------------------------
                                                     ------------------------------------------------------
</TABLE>


                                     F-17
<PAGE>

                        Vista Medical Technologies, Inc.

             Index to Consolidated Financial Statements (continued)


8.  LOSS PER SHARE

The following table sets forth the computation of basic and diluted earnings 
per share:

<TABLE>
<CAPTION>

                                                            1995              1996               1997
                                                     -------------------------------------------------------
<S>                                                  <C>                   <C>               <C>
Numerator:
   Net loss                                              $(3,273,950)      $(7,439,139)      $(16,877,038)

Denominator:
   Weighted-average common shares                             37,000           201,000           6,731,000
                                                     -------------------------------------------------------
   Denominator for basic and diluted loss per share           37,000           201,000           6,731,000
                                                     -------------------------------------------------------
                                                     -------------------------------------------------------

   Basic and diluted loss per share                      $    (88.49)      $    (37.01)      $       (2.51)
                                                     -------------------------------------------------------
                                                     -------------------------------------------------------

</TABLE>

All other potential common shares have been excluded from the diluted EPS 
computation as they are antidilutive. The Company has not issued any common 
shares or potential common shares that are considered nominal issuances under 
the requirements of Staff Accounting Bulletin No. 98.

The Company believes that the preferred stock, which is excluded from the FAS 
128 basic and diluted computation as an antidilutive security, is an 
important component of the capital structure. Including the preferred stock 
as weighted average shares outstanding would result in the following pro 
forma net loss per share: ($1.22) in 1995, ($1.06) in 1996, and ($1.52) in 
1997.


                                     F-18