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

                           FORM 10-KSB

                            (Mark One)

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

             For the fiscal year ended January 31, 1999    

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

       For the transition period from  ______________ to 

               Commission file number:     Z-24196

                          MEDPLUS, INC.
         (Name of small business issuer in its charter)

           OHIO                                48-1094982
{State or other jurisdiction of             (I.R.S. Employer 
incorporation or organization             Identification No.)

8805 Governor's Hill Drive, Ste. 100, Cincinnati OH    45249     
(Address of principal executive offices)             (Zip Code)

Issuer's telephone number                    513-583-0500

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

Securities registered under Section 12(g) of the Exchange Act:      
Common Stock, No Par Value
(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 contained in this form, and no 
disclosure will be contained, to the best of registrant's 
knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-KSB or any 
amendment to this Form 10-KSB. [  X ]

(Cover Page continued on Page 2)

The Company's revenues from continuing operations for its fiscal 
year ended January 31, 1999 were $11,429,984.

The aggregate market value of the voting stock held by non-
affiliates of the Company as of April 26, 1999 was $6,073,645, 
based on the average bid and ask price of such stock on that date 
as reported on the Nasdaq National Market.

As of April 26, 1999, 6,055,269 shares of the Company's no par 
value common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Company's Proxy Statement for the Annual Meeting 
of Shareholders to be held on June 18, 1999, are incorporated by 
reference into Part III of this Form 10-KSB.

Transitional Small Business Disclosure Format (check one):

Yes   ________             No    _____X_____ 

INTEGRATED REPORTS TO SECURITY HOLDERS

Pursuant to General Instruction F of Form 10-KSB and Regulation 
240.14a(d) of the Securities Exchange Act of 1934, the Company's 
Annual Report to Security Holders for its fiscal year ended 
January 31, 1999 has been combined with the required information 
of Form 10-KSB and is being filed with the U.S. Securities and 
Exchange Commission and submitted to the registrant's shareholders 
on an integrated basis.

A list of the exhibits to this Form 10-KSB is included in Part III 
hereof under the caption "Exhibits and Reports on Form 8-K."  
MedPlus, Inc. will provide a copy of any such exhibit to any of 
its shareholders upon written request and payment of a copying 
charge of $.10 per page.  Requests for copies should be directed 
to:  Investor Relations, MedPlus, Inc., 8805 Governor's Hill 
Drive, Suite, 100, Cincinnati, Ohio 45249. 


PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

General

MedPlus[r], Inc. (the "Company") was incorporated in 1991.  The 
Company's principal executive offices are located at 8805 
Governor's Hill Drive, Suite 100, Cincinnati, Ohio, 45249 and its 
Web site address is http://www.medplus.com.  The Company's 
telephone number is (513) 583-0500.

The Company operates primarily in three operating segments: 
Healthcare Solutions, Workflow and Document Management (through 
its wholly-owned subsidiary Universal Document Management Systems, 
Inc.) and Distributed Computing Products and Services (through its 
majority owned subsidiary DiaLogos Incorporated).

Healthcare Solutions: The Company provides state-of-the-art 
information management technology products and consulting services 
to customers predominantly in the healthcare industry. The 
Company's products and services presently consist of enterprise-
wide electronic patient record systems, optical document archival 
and retrieval systems and process improvement and automation 
services, primarily in the area of patient care and laboratory 
services. The Company's products and consulting services are 
designed to allow healthcare providers to achieve quality and 
productivity enhancements quickly and easily.  Moreover, this 
technology enables the providers to reach cost containment goals 
which are increasingly imposed upon them by legal and regulatory 
requirements as well as economic and consumer pressures.

Workflow and Document Management: The Company's Universal Document 
Management Systems, Inc. subsidiary ("Universal Document") 
develops and sells Step2000[r], a workflow, document management 
and application development software product that enhances the 
utilization of information on an enterprise-wide basis.  Universal 
Document serves customers primarily in the  manufacturing, 
engineering, pharmaceutical and healthcare industries.

Distributed Computing Products and Services:  On January 30, 1998, 
the Company acquired a majority interest in DiaLogos[tm] 
Incorporated ("DiaLogos").  DiaLogos specializes in assisting 
organizations in the integration of enterprise-wide business 
systems with existing applications and data using distributed 
object computing, including CORBA and Java technologies, through 
education, consulting and implementation services.  DiaLogos is in 
the initial phases of developing several products designed to 
simplify the effort of legacy system integration and is currently 
focusing on creating the technology to provide Internet based 
training.  DiaLogos' customers are primarily in the technology 
related industries.

In January 1998, the Company completed the sale of all the assets 
of its IntelliCode division to Becton, Dickinson and Company for 
approximately $17.3 million plus royalty payments over five years.  

As of January 31, 1998, the Company changed its fiscal year end 
from December 31 to January 31.  Accordingly, the Company's 
current fiscal year commenced on February 1, 1998 and ended on 
January 31, 1999 ("fiscal 1999").

Industry Background

Over 80% of the Company's fiscal 1999 revenues were related to the 
healthcare industry.  The Company's remaining revenues were 
derived from manufacturing, engineering, pharmaceutical and 
technology markets.  Fortune 500 companies represented the 
predominance of customers in these other markets and the Company 
did not rely on any one customer or market for these revenues.  

The healthcare industry continues to be subject to the pressures 
of various economic, regulatory and operational factors creating 
the need for better information systems and processes.  As a 
result, this industry has increased its spending on information 
systems and services such as those offered by the Company. The 
Company intends to capitalize on this trend.  During fiscal 1999, 
however, many institutions within the industry were focused on 
ensuring that their existing systems are Year 2000 compliant.  
Although the Company cannot be certain when these institutions 
will resolve all of their Year 2000 compliance issues, the Company 
anticipates that as fiscal 2000 progresses, more of these 
institutions will have resolved these issues and will begin 
investing in technology and systems to address their information 
and efficiency needs.

Economic.  The dramatic increase in healthcare costs in the United 
States has caused significant change in the healthcare industry.  
Managed care organizations such as health maintenance 
organizations, preferred providers and independent physician 
associations, as well as other payers, have developed alternative 
payment models to control costs, including procedure-based cost 
limitations, contractually approved providers and capitation (a 
fixed monthly fee for members as payment for all required 
services).  The result has been a continuing shift of financial 
risk from the payers to both the physician/provider and the 
institutional provider (hospitals, clinics, long-term care, acute 
providers and rehabilitative care centers).  In response, 
healthcare organizations are aligning themselves with one another 
in order to form integrated delivery systems in an effort to lower 
costs and compete more effectively in the changing healthcare 
environment.

The economic viability of many providers will be dependent upon 
their ability to continue to provide quality healthcare services 
while dramatically cutting costs and increasing productivity.  The 
delivery of healthcare services is both labor and information 
intensive because the functions of tracking, organizing, 
retrieving, evaluating and generally managing the high volume of 
healthcare data that providers generate are essential to any 
provider.  Compared to other industries, however, the healthcare 
industry has been slow to automate its information management 
needs.

Hospitals, because of the lack of efficiency incentives, 
historically have underinvested in information technology, 
spending only 2-3% of their operating budgets on information 
technology compared to the 6-8% allocated by other industries.  
According to the research firm of Sheldon Dorenfest and 
Associates, an enterprise-wide computer-based patient record 
system is one of the top five information technology purchases 
planned by integrated delivery systems in the near term.  Another 
study conducted by Input, a  Mountain View, California research 
firm, found that U.S. hospitals plan to spend more than $14 
billion on information technology software and services for 
critical applications over the next three years.

Regulatory.  Various regulatory bodies have begun to focus on the 
information management function.  For example, the Joint 
Commission for Accreditation of Healthcare Organizations 
("JCAHO"), which is responsible for accrediting all hospitals, has 
determined that records management can have an important clinical 
impact.  As a result, JCAHO has begun to impose specific 
information management requirements for accreditation.  Most of 
the new requirements mandate performance levels difficult to 
achieve without computerization.  The Company's products and 
services are specifically designed to help providers comply with 
these requirements.

Operational.  Hospitals and other healthcare organizations 
comprise numerous departments, such as the accounting, laboratory, 
radiology, pharmacy, medical records, business office and clinical 
areas.  The information management requirements of these 
departments are very distinct.  To the extent that computerized 
systems have been purchased, most hospitals have historically 
acquired a collection of separate, stand-alone information systems 
for their various departments.  Moreover, even within a particular 
systems category, such as the laboratory, there are no system 
standards.  Numerous vendors sell proprietary systems which often 
are not directly compatible with either competitive systems or the 
systems of other departments.  The Company's products and services 
enhance the capabilities of the existing systems by adding 
functionality and facilitating integration not otherwise present 
in these systems.


Products and Services

Healthcare Solutions
The products and services in the Company's Healthcare Solutions 
segment consist of an automated data storage and retrieval system, 
OptiMaxx[r] Archival System, a computerized enterprise-wide 
electronic patient record system, ChartMaxx[tm] Enterprise-Wide 
Patient Record System, and a consulting services division, 
FutureCORE[r], Inc.  The Company designed its products with open 
architecture and modular functionality which are compatible with 
most existing systems to which they will interface, without 
requiring any support or cooperation from the systems vendors.  By 
designing products to be entirely independent of, but compatible 
with, other system vendors, potential customer acceptance of the 
Company's products is not limited in any way by their existing 
information system configurations.  As a result, the Company's 
ability to market its products generally is not subject to the 
cooperation of third party systems vendors.

OptiMaxx Archival System
As described above, the Company offers an optical disk storage and 
retrieval system under the name "OptiMaxx" specially customized 
for hospitals, medical practices and other healthcare providers.  
It consists of hardware (optical drives, disk "jukeboxes" and 
personal computers) and software, purchased from outside vendors, 
which are combined with the Company's proprietary software in a 
manner that provides specific benefits to healthcare industry 
users.  At its most basic level, OptiMaxx permits a user to store 
automatically on an optical disk any data that it previously would 
have printed out of its system and then stored as paper or on 
microfilm/microfiche.  OptiMaxx can also scan and manage existing 
paper documents. OptiMaxx has been installed and is operational at 
over 100 customer sites to date. 

Specifically, OptiMaxx provides in a single system:
-  information collected from a variety of information systems 
without the need for a complex interface or programming expertise;
-  scanned documents or images;
-  instant access to information for ad hoc query and analysis;
-  simple, common user interface for searching and retrieving 
information regardless of origin; and
-  ability to fax, print or e-mail search results.

A key feature of OptiMaxx is its ability to capture data directly 
from existing computer information systems without special 
software, other interfaces or any data manipulation.  Most optical 
storage systems must have the "host" information system computer 
configure files in a specific manner or convert the electronic 
format of the outgoing data into a particular format, often 
proprietary, which the optical system can then recognize and use 
when the data is received.  OptiMaxx, which was designed to act as 
a system peripheral (such as a printer), can work with most host 
systems without the need for data configuration by the host 
system.  Every host system must have the capacity to output data 
to a printer, and OptiMaxx can accept any such output "as is" 
without any special treatment by the host system.  Moreover, 
OptiMaxx itself does not convert or change the incoming data.  
OptiMaxx stores the data and can retrieve it in its native format, 
without conversion.  

During fiscal 1999, the Company entered into an agreement to 
license a customized version of OptiMaxx to be used throughout 
Quest Diagnostics Incorporated's laboratory facilities nationwide. 
This agreement is unique because it combines the functionality of 
the OptiMaxx system with the workflow documentation system created 
by Universal Document.  Under the agreement, Quest Diagnostics is 
committed to the implementation of five sites, with the potential 
of an additional thirteen sites.  The Company is currently in the 
process of implementing the first five sites and the thirteen 
sites are contingent upon Quest Diagnostics' approval of the first 
five sites and acceptance of the use of OptiMaxx in its global 
model. Quest Diagnostics is currently evaluating the effect of a 
recent acquisition on its global model; the Company does not 
anticipate acceptance of the use of OptiMaxx in Quest Diagnostics' 
global model until some time during the first half of fiscal 2000.

ChartMaxx Enterprise-Wide Patient Record System
The ChartMaxx system is an enterprise-wide electronic medical 
records system that combines multiple technical and functional 
approaches to computer-based patient records development.  The 
Company has installed, or is currently installing, the ChartMaxx 
system at over 20 customer sites nationwide.  ChartMaxx is an 
integrated software and hardware platform which:
     
-  creates complete, digital medical records that meet 
administrative and legal requirements;
-  manages multimedia digital data (structured and unstructured) 
in both report-oriented and discreet data element formats;
-  manages scanned documents (imaging);
-  manages workflow and the work processes associated with health 
information management;
-  builds a data repository based on an SQL (an industry standard) 
database and mass storage;
-  forms a system that has both enterprise-wide and remote 
connections;
-  provides application software to further automate the medical 
records and patient accounts departments;
-  may be used by providers of care and other healthcare staff 
members; and
-  facilitates communication of clinical information within the 
healthcare organization and to external sources.

To complement the immediate benefits provided by ChartMaxx - 
automating an organization's medical records department and 
creating an electronic patient record - the Company has been 
consistently developing a data repository that can encompass the 
entire integrated delivery system.  In 1997, the Company 
introduced ChartMaxx Web Navigator[tm], a web-based application 
which provides authorized clinicians with chart viewing and query 
capabilities from remote locations via the hospital Intranet.  In 
February 1998, the Company issued Web Completion, a new Web-based 
application ChartMaxx.  The new application enables authorized 
clinicians to sign patient charts with an encrypted digital 
signature from the convenience of their offices via the hospital 
Intranet. With both ChartMaxx Web applications, clinicians, for 
the first time, can perform both of their routine chart functions 
after the patient is discharged - chart completion and access to 
historical charts from any location using a Netscape Navigator or 
Internet Explorer Web browser. 

In addition, in September 1998, a significant ChartMaxx release 
(version 2.4) was issued which included numerous enhancements 
designed to improve physician access to vital patient information.  
In addition to the Web-based chart completion discussed above, 
physician-oriented ChartMaxx 2.4 features include the ability to 
distribute patient documentation to physician systems, capture and 
display of structured lab results and role-based security that 
provides chart viewing and signing privileges to physicians.

FutureCORE
The acquisition of FutureCORE in July 1996 significantly enhanced 
the Company's product lines by providing the Company's customers 
with access to consultants who can analyze customers' information 
systems and provide process improvement methodologies in 
laboratories, physician offices, hospitals, major healthcare 
instrumentation firms and integrated delivery networks.  Thus, the 
Company has the unique advantage of being able to assist 
healthcare providers re-engineer their existing processes while 
implementing the Company's product line so as to maximize a 
customer's return on its investment (ROI) in technology.  
Specifically, FutureCORE's "Check-Up" service includes an on-site 
operational analysis to assist clients in implementing process 
improvements and an ROI analysis that documents available cost 
savings by implementing FutureCORE's recommended process 
improvements and ChartMaxx and OptiMaxx products and services.

Workflow and Document Management
Universal Document, acquired by the Company in 1995, offers 
workflow and document management and products (including its 
"Step2000[r]" product) and consulting services related to those 
products.  Step2000 is the only development solution that provides 
totally integrated workflow, document management and application 
development power.  It enables developers easily and quickly to 
create and deploy workflow-enabled application solutions 
throughout the enterprise.  Universal Document boasts a solid base 
of Fortune 500 clients including Mercedes-Benz, Marathon Oil, 
Boeing North American, Inc. (formerly Rockwell International Space 
Systems Division), PPG Industries, Abbott Laboratories Diagnostics 
Division and many others.

Distributed Computing Products and Services
In January 1998, the Company purchased a majority ownership in 
DiaLogos, a Cincinnati-based provider of distributed object 
computing training and technology.  The Company currently has a 
56.5% ownership interest in DiaLogos.  DiaLogos focuses on 
educational services, consulting and products using CORBA and JAVA 
technologies. 

DiaLogos' primary focus is distributed technology education.  As 
such, it has been creating partnerships and education programs 
with top Fortune 500 companies who are demanding that CORBA and 
Java be deployed in critical projects in industries spanning such 
fields as healthcare, electronic commerce and manufacturing.  
DiaLogos provides the Senior Developers and System Architects of 
these organizations with the education necessary to craft CORBA 
and Java based solutions.  DiaLogos works with the directors of 
education of companies such as Oracle to define and deliver the 
required high-tech training necessary for their software 
developers in the year 2000 and beyond.  DiaLogos is currently 
developing a solution called "Global Distributed Registration" 
which provides enterprise-wide Web access to healthcare 
organizations' disparate legacy systems.

In addition, DiaLogos is developing an innovative Internet-based 
educational model, "CyberDean[tm]." DiaLogos will develop 
courseware using the CyberDean model that will allow a company to 
provide an Internet-based training program for its employees 
through customized courses geared toward the specifics of the 
information systems of the particular company or for a particular 
technological focus.  The initial CyberDean course is targeted for 
beta release on May 31, 1999.  The first course is expected to be 
released during the second quarter of fiscal 2000.  DiaLogos plans 
to forge relationships with emerging Internet companies to enhance 
its marketing and distribution strategy. 

Strategy

The Company's strategies vary by segment, based upon each 
segment's goals and initiatives:

Healthcare Solutions: The Company's business strategy since its 
inception has been to focus on specific healthcare information 
problems that the Company believes have not been adequately 
addressed by other vendors.  It is the Company's goal to develop 
appropriate information management systems that address market 
needs, are affordable and can be easily integrated with the major 
systems currently in place at most healthcare organizations in the 
United States.  The Company's products and services are designed 
to give customers the ability to leverage their existing 
investments in computerized information systems rather than 
forcing them to replace entire systems at a much greater cost.

The Company concentrates on specific segments of information 
technology for the healthcare industry including imaging, data 
storage and retrieval, enterprise-wide electronic patient records, 
integration of enterprise-wide business systems with existing 
applications using distributed object computing and process 
engineering and consulting services.  The Company believes this 
niche has enabled it to provide high technology solutions at an 
affordable per-user cost.  It is the Company's intention to adapt 
its current products to changing needs, to develop and/or acquire 
new products and services, and to address selected information 
management needs throughout the typical healthcare organization.

Another goal of this segment is to grow through the use of 
partnership/distributor relationships to increase market 
penetration both in the U.S. and in international markets to which 
the Company has had limited exposure in the past.

Workflow and Document Management:  This segment, through Universal 
Document, licenses a workflow development product that facilitates 
the flow of information for its customers in various markets.  The 
goal of Universal Document is to continue to maintain a superior, 
versatile product and to obtain the market penetration necessary 
for continual growth.  The Company has integrated, and will 
continue to integrate, Step2000 into the Company's Healthcare 
Solutions products to create a comprehensive product package for 
its customers.

Distributed Computing Products and Services:  This segment, 
through DiaLogos, develops and delivers distributed systems 
intelligence to a diversity of national and international clients 
in a broad range of  industries through education, mentoring and 
collaborative teamwork.  The strategy of DiaLogos is to enhance 
its market penetration by continuing its superior education 
services and promoting the use of computer based training through 
the use of its innovative Internet-based educational model, 
CyberDean.  In addition, the Company plans to build upon DiaLogos' 
already strong foundation and reputation in distributed object 
technologies by developing more extensive applications and 
creating other educational requirements.  DiaLogos can provide 
exceptional solutions to benefit a broad range of industries and 
has already started to sell in international markets.

Sales and Marketing

The Company utilizes selected strategic resellers and reference 
selling arrangements and employs a direct sales force to market 
its products.  Recently, the Company has become less reliant on a 
direct sales organization as a result of its strategic alliances 
with value added distribution partners.  These alliances provide 
the Company with access to a broad customer base.  Its sales 
philosophy is to provide consultative selling services to end 
users, conducted by both direct and indirect sales sources 
knowledgeable about the healthcare industry and information 
management technologies. 

Because of its products' ability to interface with major 
information system vendors, the Company is able to market its 
products directly to end users and is not required to enter into 
costly technical support, joint selling or other collaborative 
selling arrangements with vendors of health information systems 
merely to obtain access to the market.  However, the Company has 
found it to be advantageous to enter into reseller and reference 
seller agreements for strategic reasons, including increased 
acceptance by customers due to the association with familiar 
vendors and exposure to the existing customer bases of the 
resellers and reference sellers. Recently, the Company announced 
some new strategic alliances, including its agreement with 
Datacom, Inc. (a leading provider of document conversions and 
information management services in Canada), Medical Systems 
Management, Inc. (system integrators for MEDITECH environments), 
and StorCOMM, Inc. (a leading provider of enterprise-wide clinical 
image management systems).  The Company previously entered into 
similar agreements, which are still in effect, with Quorum Health 
Resources, Inc. (one of the nation's largest managers of not-for-
profit hospitals), MAGNET, Inc. (a regional purchasing 
organization) and Sunquest Information Systems, Inc.  (a provider 
of laboratory information systems).

Competition

The market for information technology in the healthcare industry 
is intensely competitive.  The Company believes that the principal 
competitive factors in this market include the breadth and quality 
of system and product offerings, product pricing, the reputation 
and stability of the information systems provider, the features 
and capabilities of the information systems, management of the 
system implementation cycle, ongoing support for such systems, the 
potential for enhancements thereto and technical and financial 
resources.  Certain of the Company's competitors have 
significantly greater resources than the Company.  In addition, 
the Company's products compete with other technologies as well as 
similar products developed by other major information management 
companies who may enter the markets in which the Company competes.  
Competitive pressures and other factors, such as new product 
introductions by the Company or its competitors, or the entry into 
new geographic markets, may result in significant pricing 
pressures that could have a material adverse effect on the 
Company's business.

There can be no assurance that the Company will be able to 
continue to compete successfully with its existing or any future 
competitors.  However, the Company believes that it possesses 
certain competitive advantages, by virtue of its concentration on 
the healthcare market enabling it to tailor products to the needs 
of that particular market.  The compatibility of the Company's 
products with most of the information systems with which they must 
interact also constitutes an advantage over its present 
competitors, most of whom must secure the support and cooperation 
of third party vendors in order for their products to operate.  
The compatibility of the Company's products with other systems 
will likely be to the Company's advantage in the future if, as the 
Company believes, future enterprise-wide systems become quite 
expensive.  In such a situation, the Company's products will be 
attractive to customers that already have made substantial 
investments in numerous departmental systems and may have limited 
budgets for future purchases.

Product Manufacturing and Sources

The Company does not possess internal hardware manufacturing 
capacity and instead relies upon third party manufacturers to 
fulfill its hardware requirements.  This reliance on outside 
suppliers involves several risks, including limited control over 
pricing, availability, quality and delivery schedules.  Hardware 
incorporated into the Company's products, such as optical disk 
drives and computers, are non-proprietary items which are 
potentially available from multiple sources, although the Company 
currently has limited its purchases to certain vendors based on 
delivery, service and cost factors.  To the extent the Company 
relies on single sources of components, it is vulnerable to 
potential disruptions in supply should such a manufacturer become 
insolvent or otherwise experience production problems.  The 
Company believes, however, that any such disruption would be 
temporary since there are numerous alternative sources of supply 
available.

The Company relies to a large extent on licensed third party 
software which is integrated into its products through the use of 
proprietary software.  The Company's internal software development 
capacity is limited, and the Company therefore concentrates its 
efforts on developing and enhancing proprietary software that 
enables various third party software products to work together.  
The Company must rely on the third party suppliers for 
enhancements and ongoing support for the acquired products.  The 
failure of one or more of such vendors to provide services for any 
reason could, at least temporarily, adversely affect the Company's 
business.

Customers

The Company's contracts for certain systems and related services 
it sells may approach or exceed $1,000,000 per individual 
customer.  As a result, the Company may have certain customers in 
any one year which represent a significant portion of the 
Company's total revenues for that year.  For the years ended 
January 31, 1999 and 1998, and December 31, 1996, a single 
customer accounted for 31%, 12% and 15% of the Company's total 
revenues, respectively.  


Product Development

When possible, the Company has developed new products internally.  
However, the Company believes it can sometimes respond more 
quickly to market requirements by acquiring complementary products 
or technology.  The Company believes that continued investment in 
research and development for both internally developed and 
acquired products is critical to its long-term growth and success.  
The Company's product development strategy is to continue to focus 
on specific healthcare related information management requirements 
and to expand its existing product lines in its other segments by 
adapting them to related applications.  

The Company's total product development expenditures were 
$3,123,018, $1,597,461 and $1,717,923 for the years ended January 
31, 1999 and 1998, and December 31, 1996, respectively. 

Government Regulation

The United States Food and Drug Administration (the "FDA") has 
issued a series of draft guidance documents addressing the 
regulation of certain computer products as medical devices under 
the Federal Food, Drug, and Cosmetic Act (the "FDC Act").  To the 
extent that a particular computer software product is considered a 
"medical device" under the FDC Act, the manufacturer of such a 
product is required (depending on the product) to: (i) register 
and list such product with the FDA; (ii) notify the FDA of and 
demonstrate substantial equivalence to other products on the 
market before marketing such a product; or (iii) obtain FDA 
approval by filing a pre-market application that establishes the 
safety and effectiveness of the product.  The Company expects that 
the FDA is likely to become increasingly active in regulating 
computer software that is intended for use in healthcare settings.  
None of the Company's products currently is regulated by the FDA.  
The FDA indicated its intention to consider more extensive 
regulation of additional types of computer software, which could 
include existing or future products offered by the Company, and 
has solicited industry input as to the regulation of computer 
products as medical devices.  The FDA has reached no decision to 
date on this issue.  The FDA, if it chooses to regulate such 
software, can impose extensive requirements governing pre- and 
post-market conditions relating to clinical investigations, 
approvals and manufacturing.  In addition, such products would be 
subject to the FDC Act's general controls, including those 
relating to good manufacturing practices and adverse experience 
reporting.

Licenses and Proprietary Rights

To a significant degree, the Company's products consist of third 
party hardware and software integrated with proprietary software 
of the Company.  The Company does not hold any patents with 
respect to any of its current products, nor does it expect to 
apply for any patents in the foreseeable future.  To the extent 
possible, the Company attempts to protect its use of third party 
hardware and software with contractual exclusivity and 
nondisclosure provisions, but because the Company does not own the 
rights to these third party products, there can be no assurance 
that competitors or others will not attempt to integrate the same 
or similar products into systems competitive with those sold by 
the Company.  To protect its proprietary product components, the 
Company relies upon the law of copyrights, trade secrets, 
nondisclosure agreements with employees and others, and 
restrictions incorporated into agreements with customers.  
Notwithstanding these safeguards, it could be possible for 
competitors to obtain and/or imitate the Company's software and/or 
hardware.  Further, there can be no assurance that others will not 
independently develop products similar or superior to those of the 
Company.  The Company also explores technology developed by other 
entities that may be licensed or acquired in an effort to reduce 
the product development cycle or to complement existing product 
lines.

Federal trademark protection has been obtained for the names 
"MedPlus," "OptiMaxx," "FutureCORE," "ObjectScholar" and 
"Step2000."  The Company has entered into an agreement to use the 
name "ChartMaxx" with the owner of the trademark, and has applied 
for federal trademark protection for the names "DiaLogos" and 
"CyberDean."

Employees

As of January 31, 1999 and 1998, the Company had 111 and 101 full-
time employees, respectively.  The Company's future success will 
depend, in part, on its ability to continue to attract, retain and 
motivate highly qualified technical, marketing and management 
personnel who are in great demand.

ITEM 2.  DESCRIPTION OF PROPERTY.

The Company currently leases approximately 34,000 square feet of 
high quality office space in various locations located in 
Cincinnati, Ohio.  The varying lease terms expire during 2003 and 
2004.

ITEM 3.  LEGAL PROCEEDINGS.

As of the date hereof, the Company is not a party to any material 
legal proceeding and, to the Company's knowledge, there are no 
material legal proceedings pending against the Company, as 
described in SEC Reg. Sec. 228.103.  However, as mentioned in the 
Notes to Consolidated Financial Statements, the Company has been 
arbitrating a dispute since September 1998 through the American 
Arbitration Association in Cincinnati, Ohio with Valcor 
Associates, Inc., an independent contractor previously retained by 
the Company to sell certain of its products (the "independent 
contractor").  The independent contractor has demanded $1,076,000 
in past and future commissions it believes it is owed as a result 
of a representative sales agreement by and between the contractor 
and MedPlus.  MedPlus believes the contractor's position is 
without merit and intends to vigorously contest the arbitration.  
In addition, MedPlus has filed a counterclaim against the 
contractor to recover lost sales which resulted from the 
contractor's failure to provide its best efforts under the 
representative sales agreement.

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

No matters were submitted to a vote of security holders during the 
fourth quarter of fiscal 1999.


PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED 
STOCKHOLDER MATTERS.

The Company's common stock is traded on the Nasdaq National Market 
System ("NMS") under the symbol "MEDP."   There were approximately 
2,700 record holders of the Company's common stock as of April 26, 
1999.  The following table sets forth, for the periods indicated, 
as reported by Nasdaq, the range of high and low sales price (not 
closing bids) of the Company's common stock on the NMS.  All 
prices are rounded to the nearest one-eighth, and bid prices 
reflect inter-dealer prices, without retail mark-up, mark-down or 
commission, and may not necessarily represent actual transactions.

Fiscal Year/Quarter                        High        Low
___________________                      _______      _______

Fiscal Year Ended January 31, 1999
__________________________________
First Quarter                           $  8.875     $ 6.250 
Second Quarter                             8.000       5.500
Third Quarter                              7.250       1.625
Fourth Quarter                             3.375       1.375


Fiscal Year Ended January 31, 1998
__________________________________
First Quarter                           $  7.750     $ 4.625
Second Quarter                             7.500       5.125
Third Quarter                             10.500       6.625
Fourth Quarter                            11.000       6.750


The Company has not paid any cash dividends on its common stock 
since its inception.  No dividends on its common stock are 
expected to be declared in the foreseeable future.

Subsequent to year-end, the Company has agreed, subject to 
shareholder approval, to the issuance of 2,371,815 shares of 
convertible Preferred Shares.  If approved, the Preferred Shares 
will start paying dividends in the third quarter of fiscal year 
2000 at a rate of 4% per share for the first four years, 
increasing to 10% thereafter and accruing on a cumulative basis.  
The issuance of Preferred Shares has been further described in 
Note 17 of the Company's Annual Report to Shareholders included as 
Exhibit 13 to this document.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
CONDITION AND RESULTS OF OPERATION.

General

MedPlus[r], Inc. (the "Company") provides information technology 
solutions designed to enable customers to manage information 
efficiently and cost effectively through innovative technology, 
consulting, and education. It has been the Company's practice to 
continue to develop new products, enhance existing applications, 
make selected strategic acquisitions, and introduce consulting 
services, which has led to consistent revenue growth since the 
commencement of operations. The Company's solutions focus on 
various elements of process analysis and redesign, document 
imaging and management, workflow, systems integration and 
technology education. 

The Company's healthcare related products presently consist of the 
ChartMaxx[tm] Enterprise-wide Patient Record System ("ChartMaxx") 
and the OptiMaxx[r] Archival System ("OptiMaxx").  ChartMaxx is an 
enterprise-wide electronic patient record system that enables 
healthcare organizations to create and manage a fully paperless 
electronic patient record comprising clinical, financial and 
administrative data captured from scanned paper and digital data.  
OptiMaxx is an optical disk-based archival system designed to meet 
the departmental needs of healthcare providers that require 
electronic storage and quick retrieval of information.  The 
Company's FutureCORE[r], Inc. subsidiary ("FutureCORE") provides 
process improvement and automation services, primarily in the 
areas of medical records and patient accounts departments, 
hospital and reference laboratories and physician offices.  

The Company's Universal Document Management Systems, Inc. 
subsidiary ("Universal Document") develops and sells Step2000[r], 
a workflow, document management and application development 
software product that enhances the utilization of information on 
an enterprise-wide basis, regardless of hardware platform or 
operating environment. 

In January 1998, the Company acquired a majority interest in 
DiaLogos[tm] Incorporated ("DiaLogos"). DiaLogos specializes in 
assisting organizations in the integration of enterprise-wide 
business systems with existing applications and data using 
distributed object computing, including CORBA and Java 
technologies, through education, consulting and implementation 
services. 

The Company's IntelliCode division, which was sold in January 
1998, developed and sold the IntelliCode Intelligent Bar Code 
System ("IntelliCode"), an intelligent bar coding system for 
hospitals and other healthcare organizations. The IntelliCode 
division has been accounted for as discontinued operations in the 
accompanying consolidated financial statements.  

Revenue Recognition Cycle
 
The Company's revenues are derived from systems sales, including 
software licenses and hardware, support contracts and 
installation, implementation, training and education and 
consulting services.  Systems sales consist of software licenses 
for proprietary software, third party software and hardware, and 
related installation services.  The gross profit percentage on 
systems sales may vary among customers based upon the relative 
proportion of proprietary software and third party software and 
hardware included in a sale.  Revenues from support contracts 
include software and hardware maintenance and support.  Consulting 
services revenues are derived from implementation, training and 
education, custom software development and process improvement 
services. Revenues from support contracts and consulting services 
are expected to increase as the number of installed systems 
increases.  The gross profit percentage on support contracts and 
consulting services may fluctuate based upon the negotiated terms 
of each contract and the Company's ability to fully utilize its 
customer support, implementation and consulting personnel. 

The decision by a healthcare provider to replace, substantially 
modify or upgrade its information systems is a strategic decision 
and often involves a large capital commitment requiring an 
extended approval process.  The sales cycle for the Company's 
ChartMaxx systems' sales is typically six to eighteen months from 
initial contact to the execution of a sales agreement.  As a 
result, the sales cycle causes variations in quarter to quarter 
results.  These agreements cover the entire implementation of the 
system and specify the implementation schedule, which typically 
takes place in one or more phases.  The agreements generally 
provide for the licensing of the Company's software and third 
party software with a one-time perpetual license fee that is 
adjusted depending on the number of concurrent users using the 
software.  Third party hardware is usually sold outright, with a 
one-time fee charged for installation and training.  Site specific 
customization, interfaces with existing customer systems and other 
consulting services are sold on a fixed fee or a time and material 
basis.

Effective for the fiscal 1999 year, revenue related to system 
sales is recognized in compliance with American Institute of 
Certified Public Accountants Statements of Position ("SOP") 97-2, 
and 98-4, Software Revenue Recognition. For OptiMaxx systems, 
revenue is generally recognized upon shipment.  Revenue 
recognition for ChartMaxx systems generally commences when a 
contract is signed and, the system is configured and shipped.  If 
a contract requires the Company to perform services or provide 
modifications that are deemed significant to system acceptance, 
the Company recognizes revenue for the entire contract under the 
percentage of completion method of accounting. Revenues from 
installation, implementation, training and education and 
consulting services are recognized in the period in which the 
services are performed.  Revenue from support contracts is 
recognized ratably over the term of the contract. Deferred 
revenues primarily represent support contracts that have been 
billed in advance of the support to be provided.

Fluctuations in Results of Operations

The Company has historically experienced significant quarterly and 
annual fluctuations in revenues and operating results  which may 
continue in the future.  The Company's revenues have fluctuated 
due to the length of the sales cycle, the number and timing of 
systems sales, and the timing of installation, implementation and 
consulting services.  As a significant percentage of the Company's 
operating expenses are fixed, quarterly operating results will 
vary with the fluctuation in revenues.  As a result, period to 
period comparisons of the Company's past operating results may not 
be necessarily indicative of future operating results of the 
Company.

Fiscal Year

The Company changed its fiscal year end from December 31 to 
January 31 effective for the 1998 fiscal year.  Accordingly, the 
Company's 1999 and 1998 fiscal years commenced on February 1 and 
ended on January 31 of the respective years.  Information for the 
year ended January 31, 1998 is also compared with information for 
the year ended December 31, 1996.  No analysis is provided for the 
one month ended January 31, 1997.  The amounts reflected for the 
one month period ended January 31, 1997 would not necessarily be 
indicative of results that would have been obtained for a full 
fiscal year.

DiaLogos Acquisition

Prior to January 30, 1998, the company maintained a minority 
interest in DiaLogos, which was accounted for under the equity 
method.  On January 30, 1998, based upon a previously defined 
letter of agreement, the Company converted aggregate advances of 
$1,191,960 to DiaLogos into common shares of DiaLogos stock.  Upon 
conversion of these advances, MedPlus became a majority owner of 
DiaLogos with 56.5% ownership.  The acquisition of the shares by 
the Company has been accounted for under the purchase method. 
Accordingly, the financial position of DiaLogos has been included 
in the Company's Consolidated Balance Sheet as of January 31, 
1998, and the results of operations of DiaLogos have been included 
in the Company's Consolidated Statement of Operations effective 
February 1, 1998. 

Discontinued Operations

In January 1998, the Company completed the sale of all the assets 
of its IntelliCode division to Becton Dickinson and Company 
("Becton Dickinson") for an initial payment of $17,408,847 plus 
royalty payments over five years.  The final closing of the 
transaction in April 1998 reduced the initial payment by $74,259. 
In connection with the sale, Becton Dickinson also assumed certain 
liabilities of the IntelliCode division, primarily deferred 
revenues and obligations related to service contracts and an 
office lease. The Company recognized a pre-tax gain of $14,724,720 
and an after-tax gain of $10,268,710 related to this transaction 
for the year ended January 31, 1998. The royalty payments are 
based on future defined revenues and are recorded as income when 
earned.  No royalty payments were earned for the year ended 
January 31, 1999.

In January 1998, the Company had decided to sell the net assets of 
the Step2000 segment of Universal Document.  However, during 
fiscal 1999, the Company decided to retain the segment and reduce 
operations to primarily research and development and customer 
support while a new generation of products was developed.  The 
Step2000 segment had previously been accounted for as a 
discontinued operation.  However, as a result of the Company's 
decision to retain the Step2000 segment, the results of operations 
and financial position of the segment have been included in 
continuing operations in the Company's consolidated financial 
statements as of and for the twelve months ended January 31, 1999.  
Prior years' financial statements have been presented on a 
comparable basis.  

Synergis Commitments 

The Company's Universal Document subsidiary hired a senior 
management team and entered into agreements with two consulting 
firms in 1997 to assist it in the identification and recruitment 
of certain design automation software resellers and integrators 
(collectively the "Founding Companies") that Universal Document 
would acquire or with which it would combine (the "Acquisitions"), 
and to assist Universal Document in an initial public offering of 
its common stock.  In late 1997, Universal Document entered into 
definitive merger agreements, which were contingent upon a 
successful initial public offering, to acquire nine such 
companies.  Also, in October 1997, Universal Document filed a 
registration statement on Form S-1 with the Securities and 
Exchange Commission, which was subsequently amended in December 
1997 and January 1998, to offer its common stock to the public. 
The Company would retain a minority interest in Universal Document 
after the initial public offering.  In connection with its initial 
public offering, Universal Document planned to change its name to 
Synergis Technologies, Inc.  Due to adverse market conditions for 
initial public offerings in January 1998, Universal Document 
postponed the initial public offering upon the advice of its 
underwriters. 

During early 1998, the Company evaluated the business operations 
of Universal Document and determined that it no longer 
complemented the businesses of the Founding Companies.  As a 
result, the Company created its Synergis subsidiary to serve as 
the acquirer in the Acquisitions.  The Company expected the newly 
created Synergis subsidiary to complete the Acquisitions and an 
initial public offering of its common stock.  Due to adverse 
conditions in the equity capital markets, Synergis' plans to 
conduct an initial public offering were postponed for a second 
time in August 1998.  Currently, all plans for an initial public 
offering have been cancelled.

Because the proposed public offering related to the Synergis 
transaction has been cancelled, the Company has significantly 
reduced the on-going expenses related to this subsidiary.  The 
Company is currently evaluating the feasibility of a merger of 
Synergis and certain of the Founding Companies into a new entity.  
Such a merger would be financed on a private basis.  However, 
definitive plans related to any such merger have not been 
finalized.  Various agreements related to the merger, including 
employment agreements for the new entity's management, are 
contingent upon the successful completion of the merger.  Based 
upon the final outcome of the transaction, these agreements may be 
terminated or significantly amended.  
 

Results of Operations

Years Ended January 31, 1999 and 1998

Revenues:  Revenues for the year ended January 31, 1999 were 
$11,429,984, an increase of $1,228,832, or 12% over the 
$10,201,152 reported for the comparable period in 1998.  Systems 
sales decreased $1,756,777, or 22%, from the year ended January 
31, 1999 primarily as a result of a decrease in the number and 
relative size of ChartMaxx and OptiMaxx systems sold during the 
year.  Support and consulting revenues increased $2,985,609, or 
130%, from the year ended January 31, 1998 due to the addition of 
consulting and education revenues from DiaLogos and increased 
support and consulting revenues from the Company's ChartMaxx and 
OptiMaxx product lines as the number of installed sites of these 
products continued to increase. 

Gross Profit:  Gross profit for the year ended January 31, 1999 
was $3,100,009, or 27% of revenues, compared to $2,974,961, or 29% 
of revenues, for the year ended January 31, 1998. The gross profit 
percentage on systems sales increased from 35% for the year ended 
January 31, 1998 to 45% for the year ended January 31, 1999 due to 
a higher proportion of proprietary software relative to lower 
margin third party hardware and software included in sales. The 
gross profit percentage for support and consulting revenues 
decreased from 10% for the year ended January 31, 1998 to 7% for 
the year ended January 31, 1999. The decrease in this percentage 
was primarily a result of an increase in customer support, 
installation, and consulting personnel in advance of related 
revenues and lower than expected utilization rates of those 
personnel.  These items were partly offset by the addition of the 
gross profit on DiaLogos' consulting and education revenues and 
the increased support revenues noted above.  Future gross profit 
margins for support and consulting services may continue to be 
depressed in the near term as a result of the timing of systems 
sales, unforeseen delays in implementation schedules, the number 
and timing of additions to the implementation and consulting staff 
relative to when they become billable to customers, or the need to 
use independent consultants while the Company is further 
developing its implementation and consulting staff.

Operating Expenses: Operating expenses for the year ended January 
31, 1999 were $11,652,949 compared to $10,552,270  for the 
comparable period of 1998, an increase of 11%. Included in 
operating expenses for the year ended January 31, 1998 were non-
recurring charges of $710,318 and $774,677 related to the write 
off of acquired in-process technology related to the DiaLogos 
acquisition and the impairment losses related to the excess of 
cost over fair value of net assets acquired for Universal 
Document.  Excluding these non-recurring charges, operating 
expenses increased by 29% between periods.  This increase relates 
primarily to the inclusion of operating expenses for DiaLogos and 
a focus in product development and other research and development 
activities related activities for both ChartMaxx and OptiMaxx.  As 
product development related activities are the cornerstone to 
maintaining a competitive position in the market, the Company has 
increased its investing in these types of activities during fiscal 
1999.  In addition, the Company had continued to increase its 
investment in sales and marketing efforts for the ChartMaxx 
product line and DiaLogos in the areas of direct sales, channel 
partner programs, national accounts and general marketing 
activities. General and administrative expenses had an increase of 
7% between years, largely due to DiaLogos.

Other Income(Expense):  Expenses related to the employment of 
Synergis management, acquisition, and offering costs discussed 
above under "Synergis Commitments" were $2,070,731 and $3,707,945 
for the years ended January 31, 1999 and 1998, respectively.  
Other expenses decreased to $14,751 for the year ended January 31, 
1999 from expense of $231,922 for the year ended January 31, 1998. 
The decrease in expense is primarily due to an increase in 
interest income as a result of an increase in the Company's 
average cash and cash equivalents balances from fiscal 1998 due to 
cash received from the sale of the Company's IntelliCode division 
to Becton, Dickinson and Company in January 1998.  For the year 
ended January 31, 1999, the Company also recognized $297,000 of 
income related to the recognition of minority shareholders' 
interest in losses incurred through the results of operations of 
DiaLogos.  During 1999, the Company has recognized greater than 
its majority interest in the operating losses of DiaLogos as the 
minority shareholders' interest investment in DiaLogos was reduced 
to zero.

Income Tax Benefit: The Company's income tax benefit was 
$1,616,370 in the year ended January 31, 1999, compared to 
$3,475,777 for fiscal 1998. The Company recognized a portion of 
the benefit of its net operating loss for income tax purposes for 
fiscal 1999 through the carryback of this loss against taxable 
income in fiscal 1998 generated by the sale of the IntelliCode 
division.  However, the Company did not recognize for accounting 
purposes the full tax benefit of its net operating losses for 
fiscal 1999 or 1998 as the realization of these benefits did not 
meet the recognition criteria at the end of either period due to 
the Company's history of operating losses. The Company's ability 
to recognize the full benefit of its net operating loss in future 
periods will be dependent upon the generation of future taxable 
income, limitations imposed by the Internal Revenue Service, and 
other matters potentially affecting the realizability of these 
carryforwards. 

Discontinued Operations: Discontinued operations for the fiscal 
1999 represents the reversal of the accrued loss related to the 
Step2000 segment which the Company decided to retain in August 
1998.  Discontinued operations for the year ended January 31, 1998 
represents the gain on the sale and the results of operations of 
the Company's IntelliCode division, as well as the accrued losses 
related to the Step2000 segment.  

Net Income(Loss): While revenues increased 12% over the year ended 
January 31, 1998, the decrease in gross margins and significant 
increase in operating expenses, particularly research and 
development, resulted in a loss of $8,725,052, or $1.43 per share, 
from continuing operations for the year ended January 31, 1999 
compared to a loss of $8,011,399, or $1.35 per share, for the year 
ended January 31, 1998.  Net income(loss) decreased from net 
income for the year ended January 31, 1998 of $3,105,089, or $.52 
per share, to a net loss of $8,547,753, or $1.40 per share, for 
the year ended January 31, 1999 primarily due to income from 
discontinued operations of $11,116,488 recognized in 1998 offset 
by the items discussed above. 

Years Ended January 31, 1998 and December 31, 1996

Revenues. Revenues for the year ended January 31, 1998 were 
$10,201,152, an increase of $5,633,508, or 123% over the 
$4,567,644 reported for the comparable period in 1996.  System 
sales increased $4,785,859 or 153% from the year ended December 
31, 1996 primarily due to increased sales of ChartMaxx systems.  
Support and consulting revenues increased $847,649 or 59% from the 
year ended December 31, 1996 due to higher support revenues 
resulting from an increase in the installed base of all systems 
and higher consulting revenues from a full year of revenues from 
consulting services provided by FutureCORE.

Gross Profit. Gross profit for the year ended January 31, 1998 was 
$2,974,961 compared to $2,057,652 for the year ended December 31, 
1996, an increase of  $917,309 or 45%. The overall gross profit 
margin as a percent to sales decreased from 45% in the year ended 
December 31, 1996 to 29% in the year ended January 31, 1998. The 
gross profit margin on systems sales decreased from 46% in the 
year ended December 31, 1996 to 35% in the year ended January 31, 
1998 due to an aggressive pricing strategy and an increase in 
capitalized software amortization, including a write-off of 
Universal Document capitalized software.  Gross profit margins on 
support and consulting revenues decreased from 42% in the year 
ended December 31, 1996 to 10% in the year ended January 31, 1998 
due to an increase in customer support, installation, and 
consulting personnel in advance of related revenues and lower than 
expected utilization rates of those personnel. 

Operating Expenses. Operating expenses increased from $6,173,975 
in the year ended December 31, 1996 to $10,522,270 in the year 
ended January 31, 1998, an increase of 70%. Included in operating 
expenses in the year ended January 31, 1998 are non-recurring 
charges of $710,318 and $774,677, respectively, related to the 
write off of acquired in-process technology related to the 
DiaLogos acquisition and impairment losses related to the excess 
of cost over fair value of net asset acquired for Universal 
Document. The Company also continued to add a significant number 
of employees in the areas of product development and sales and 
marketing during the year ended January 31, 1998.  Substantial 
expenditures were made to increase market awareness of the 
Company's products and to expand the direct and indirect channels 
of distribution.

Other Income (Expense). Other income (expense) decreased from 
$124,663 of income for the year ended December 31, 1996 to 
$3,939,867 of expense for the year ended January 31, 1998.  The 
change resulted primarily from expenses of $3,707,945 associated 
with management expenses, acquisition and offering costs related 
to Synergis, as discussed above.  Also, the Company's interest 
expense increased from $23,493 of income for the year ended 
December 31, 1996 to $346,315 of expense for the year ended 
January 31, 1998 due to increased borrowing requirements to fund 
the Synergis acquisition and initial public offering efforts and 
the Company's operations.  Consequently, the Company's interest 
income decreased from $308,992 for the year ended December 31, 
1996 to $94,703 for the year ended January 31, 1998.

Discontinued Operations.  Income from discontinued operations, net 
of income tax expense, increased from $923,129 for the year ended 
December 31, 1996 to $11,116,488 for the year ended January 31, 
1998.  The primary reason for the increase was a pre-tax gain of 
$14,724,720 related to the sale of the assets of the IntelliCode 
division to Becton Dickinson as discussed above. The Company 
realized an after-tax gain of $10,268,710 on this transaction. 

Net Income (Loss). While net revenues increased 123% over the year 
ended December 31, 1996, the significant increase in operating 
expenses, the Synergis management expenses, acquisition and 
offering costs, and the non-recurring charges for the acquired in-
process technology of DiaLogos and Universal Document non-
recurring charges resulted in a loss of $8,011,399 from continuing 
operations for the year ended January 31, 1998 compared to a loss 
of $3,395,321 for the year ended December 31, 1996.  Net income 
(loss) increased from a net loss for the year ended December 31, 
1996 of $2,472,192 to net income of $3,105,089 for the year ended 
January 31, 1998 primarily due to income from discontinued 
operations of $11,116,488 offset by the items discussed in the 
preceding sentence. 


Liquidity and Capital Resources

The Company's business requires significant amounts of working 
capital to finance new product research and development, the 
expansion of its sales and marketing organization, anticipated 
revenue growth, capital expenditures and strategic investments. 
The Company has financed its operations, working capital needs, 
and investments through the sale of common stock, bank borrowings, 
capital lease financing agreements and the sale of the assets of 
its IntelliCode division. The Company's principal uses of cash 
since inception have been for funding operations, capital 
expenditures, research and development activities, investments in 
and advances to companies which are deemed to have strategic value 
to the Company and funding costs associated with the Synergis 
acquisitions, initial public offering, and private financing.

In December 1998, the term on a $10,000,000 revolving line of 
credit agreement with a bank expired.  A new month-to-month 
agreement with the same bank was executed with a limit of 
$3,250,000. At January 31, 1999, the amount outstanding under the 
line of credit was $2,757,017.  No amounts were outstanding under 
the line of credit at January 31, 1998.  Interest is payable at 
the bank's prime rate plus 1/2 %, which was 8.25% as of January 
31, 1999.  The line of credit is secured by all assets of the 
Company. Subsequent to year-end, the bank amended the agreement to 
reduce the limit to $3,000,000 and to extend the expiration of 
$2,250,000 of this limit to February 2000, subject to a defined 
net worth formula and the completion of certain debt and equity 
financing executed subsequent to year end.  As a result, the 
Company classified $2,250,000 of the outstanding balance at 
January 31, 1999 as non-current in the consolidated balance sheet.  
The current portion is payable to the bank in specified amounts 
throughout fiscal 2000.  The interest rate on the new financing 
agreement is payable at the bank's prime rate plus 1 1/2 %.  The 
new agreement contains a closing fee of $60,000 and a commitment 
fee of 1% on the line of credit limit.

Subsequent to year-end, the Company entered into an Agreement (the 
"Agreement") with three investment firms (the "Investors") to 
obtain $6,100,000 in debt and equity financing.  The terms of the 
Agreement provide for financing of $4,100,000 in Series A 
Convertible Preferred Shares (the "Preferred Shares") and 
$2,000,000 in subordinated debentures (the "Notes"). The proceeds 
of the financing will be utilized to fund working capital 
requirements and continue the market penetration of certain of the 
Company's core products.  Certain terms of the agreement, 
including the authorization of the Preferred Shares, are subject 
to shareholder approval at the Company's special and annual 
shareholders' meeting scheduled for June 18, 1999. 

On April 30, 1999, the Company issued the Notes, due 2004, with a 
coupon rate of 10% in the first year and 12% thereafter.  The 
principal portion of the Notes is payable as follows: $666,666 in 
April 2002,  $666,667 in April 2003 and $666,667 in April 2004; 
however, the Company may redeem the Notes at any time during their 
term without penalty.  The Notes provide that if the Preferred 
Shares are authorized, and certain additional terms related to the 
Agreement are approved, by the Company's shareholders prior to 
July 30, 1999, then the Company will issue to the holders of the 
Notes five-year warrants to purchase 281,137 Preferred Shares at 
an exercise price not to exceed $1.90.  This warrant price is 
subject to adjustment if the Company does not meet specified 
requirements relating to the appreciation of its stock price at 
the end of a defined two-year period.  However, the Notes also 
provide that if the Preferred Shares are not authorized, and 
certain additional terms related to the Agreement are not 
approved, by the Company's shareholders prior to July 30, 1999, 
then (a) the entire amount of principal and interest which remains 
unpaid shall become due and payable as of November 28, 1999 and  
(b) the Company shall immediately issue to the holders of the 
Notes, for no additional consideration shares of the Company's 
Common Stock as described in the Agreement and 281,137 warrants to 
purchase shares of Common Stock. 

In addition, subject to shareholder approval on or before July 30, 
1999, the Company has agreed to issue to the Investors 2,371,815 
Preferred Shares at a purchase price of $1.729 per share. The 
Preferred Shares will pay dividends quarterly at a rate of 4% per 
share for the first four years, increasing to 10% thereafter, and 
accruing on a cumulative basis.  The Preferred Shares include (a) 
voting rights, (b) receive preferential treatment upon liquidation 
of the Company and (c) convert into Common Shares upon certain 
events.  The designation, rights, preferences and other terms and 
conditions relating to the Preferred Shares is described in detail 
in the Agreement.  Also, subject to shareholder approval on or 
before July 30, 1999, the Company has agreed to issue to the 
Investors ten-year warrants for the purchase (subject to 
adjustment as provided therein) of 759,562 Preferred Shares.  
These warrants cannot be exercised unless the value of the 
Company's stock price as traded on the NASDAQ over a twenty-day 
period exceeds $7.28.

The Company's Board of Directors authorized a common stock 
repurchase program in November 1996.  Under the program the 
Company may repurchase up to 500,000 shares of the Company's 
common stock. For the year ended January 31, 1999 the Company's 
repurchases totaled 189,500 shares at a cost of $809,943.  On a 
cumulative basis, the Company has repurchased 200,000 shares.

Cash flows used in operating activities was $9,495,660 and 
$2,726,648 for the years ended January 31, 1999 and 1998, 
respectively.  The Company has continued to incur operating losses 
from continuing operations.  During fiscal 1999, the Company has 
made significant cash expenditures in the areas of research and 
development, sales and marketing, customer support and 
implementation consulting in anticipation of higher revenues.  
However, revenues have been lower than expected during the period 
of the operating losses. Management has continued to review the 
Company's current operations to identify areas to reduce or 
maintain current levels of expenses until revenues increase 
sufficiently to justify increased investments in certain areas. In 
addition to expense reductions, increased revenues will also be 
needed to improve operating cash flow.  Management believes that 
the Company's current pipeline for its ChartMaxx product, its 
contract for an imaging and workflow solution for Quest 
Diagnostics Incorporated and the marketing of this solution to 
other reference laboratories will result in significant 
opportunities to increase revenues over the next twelve to 
eighteen months. 

The Company believes that improvements in operating cash flow from 
the expense reductions and increased revenues noted above combined 
with its cash and cash equivalents and available line of credit 
will be sufficient to finance its expected growth and cash 
requirements. The Company also believes that its debt and equity 
financings which occurred subsequent to year end will provide 
adequate funding necessary to continue its current level of 
operations. There can be no assurance, however, as to the extent 
or timing of the Company's success in increasing revenues, that 
additional sources of financing, if needed, will be available on a 
timely basis or on terms satisfactory to the Company.

Year 2000 Compliance

Some existing computer programs use only the last two digits to 
refer to a year.  Because these programs may not properly 
recognize a year that begins with "20" rather than "19" and thus 
may fail or create errors in the year 2000, they are not 
considered "year 2000 compliant." The Company has been reviewing, 
and continues to review, all potential year 2000 compliance issues 
which may have a material effect on the Company's business, 
results of operations or financial condition.

Specifically, the most recent releases of the Company's ChartMaxx 
and OptiMaxx products have both been developed using four digit 
date fields and, as such, are year 2000 compliant.  The Company's 
standard license agreements for the most recent releases of each 
of these products now include a year 2000 compliance warranty. 
Customers who have earlier versions of these products may upgrade 
to the versions warranted by the Company as year 2000 compliant 
under the terms of their license agreements with the Company or 
the Company's standard maintenance and support agreements, as the 
case may be.  

Although the most recent releases of the Company's ChartMaxx and 
OptiMaxx products are year 2000 compliant, the Company is also 
working to ensure that its customers do not experience problems 
where data entered into a ChartMaxx or OptiMaxx system includes 
two digit date fields.  Currently, if a two digit date field is 
passed from another system to ChartMaxx or OptiMaxx, the product's 
four digit date field is automatically populated with the first 
two digits of the current ChartMaxx or OptiMaxx system date.  The 
Company has completed final year 2000 testing for these systems 
and verified that the most recent releases are year 2000 
compliant.  

In addition, both systems incorporate third party software and 
hardware.  While the Company's year 2000 compliance warranty 
covers the components of third party products which are 
incorporated into the ChartMaxx or OptiMaxx application, the 
Company does not independently warrant any third party product.  
The Company has received certifications from many of its third 
party vendors that their products are year 2000 compliant and is 
currently reviewing the remaining third party products, and 
working with those vendors, to determine what steps, if any, are 
required to ensure compliance. 

Furthermore, the ChartMaxx and OptiMaxx products operate in 
conjunction with third party hardware and operating systems 
provided by the Company, but excluded from the Company's year 2000 
compliance warranty. The Company has advised, and continues to 
advise, its customers to contact the manufacturers of the hardware 
and operating systems in order to upgrade these systems to the 
year 2000 compliant versions, if necessary. Where possible, the 
Company will provide its customers with specific information 
regarding how they may obtain upgrades to their operating system 
software via the Internet or other means.

The Company's Universal Document subsidiary has completed its 
testing of the Step2000 software product and verified that it is 
year 2000 compliant.  Step2000, however, may be used by a customer 
to develop other software applications.  The customer is 
responsible for ensuring that these developed applications are 
also year 2000 compliant. Universal Document has provided a year 
2000 compliance warranty to its customers, but the warranty 
excludes developed applications from coverage.

The Company's internal software systems are either already 
compliant or will be upgraded to available year 2000 compliant 
versions.  

The Company has to date, and will in the foreseeable future use, 
internal resources to continue to monitor its products for year 
2000 compliance.  If modifications to any of the Company's 
products are required to ensure year 2000 compliance, the Company 
plans to use internal resources for those modifications. The 
Company does not anticipate the total cost of its year 2000 
compliance measures to be material based on the results of its 
review and testing to date.  The cost of the year 2000 effort will 
be funded by cash on hand and cash from operations.  The Company 
does not anticipate, based on its current understanding of the 
year 2000 issue and the results of its review and testing to date, 
that the year 2000 issue will have a material effect on the 
Company's results of operations or result in significant 
operational problems for the Company.

Forward Looking Statements

The Company notes that many of the statements made herein are 
forward-looking statements.  As such, factors may occur which 
could cause actual events to differ materially from those 
anticipated in these statements. 

Although management believes that the Company's current pipeline 
for its ChartMaxx product, its recent contract for an imaging and 
workflow solution for Quest Diagnostics Incorporated and the 
marketing of this solution to other reference laboratories will 
result in significant opportunities to increase revenues over the 
next twelve to eighteen months, any number of factors, including 
those beyond the control of MedPlus such as each potential 
customer's financial condition and/or the time frame in which it 
may receive contract approval, could prevent the execution of such 
agreements during this period.  Furthermore, whether (i) 
improvements in operating cash flow from the expense reductions 
and increased revenues combined with cash and cash equivalents, 
(ii) the Company's available line of credit and (iii) cash 
received from the debt and equity financing occurring subsequent 
to year-end will be sufficient to finance expected growth and cash 
requirements is also uncertain.  Finally, although the Company 
believes the Preferred Stock described Under "Liquidity and 
Capital Resources" above will be approved by the Company's 
shareholders and subsequently issued, there can be no assurance 
that such approval and issuance will take place as anticipated.  
If the Preferred Stock is not issued on or before July 31, 1999, 
then the Notes will become immediately payable and Company will be 
required to grant to the investment firm and its affiliates a 
percentage of its then-outstanding common stock as a penalty.


ITEM 7.  FINANCIAL STATEMENTS

Information called for by this item is set forth in the Company's 
Consolidated Financial Statements contained in this report.  
Specific financial statements and supplemental data can be found 
at the pages listed in the following index:

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                   Page Number
Description                                        In This Report

Independent Auditors' Report of KPMG LLP                 23

Consolidated Balance Sheets as of January 31, 1999 
    and 1998                                             24

Consolidated Statements of Operations for the years 
ended January 31, 1999 and 1998, one month ended 
January 31, 1997 and year ended December 31, 1996        25

Consolidated Statements of Shareholders' Equity and 
Comprehensive Income for the years ended 
January 31, 1999 and 1998, one month ended 
January 31, 1997 and year ended December 31, 1996        26

Consolidated Statements of Cash Flows for the years
ended January 31, 1999 and 1998, one month ended 
January 31, 1997 and year ended December 31, 1996        27

Notes to Consolidated Financial Statements             28 to 54











Independent Auditors' Report





The Board of Directors
MedPlus, Inc.:

We have audited the accompanying consolidated balance sheets of 
MedPlus, Inc. and subsidiaries as of January 31, 1999 and 1998, 
and the related consolidated statements of operations, 
shareholders' equity and comprehensive income, and cash flows for 
the years ended January 31, 1999 and 1998, the one month period 
ended January 31, 1997 and the year ended December 31, 1996.  
These consolidated financial statements are the responsibility of 
the Company's management.  Our responsibility is to express an 
opinion on these consolidated 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 financial 
position of MedPlus, Inc. and subsidiaries as of January 31, 1999 
and 1998, and the results of their operations and their cash flows 
for the years ended January 31, 1999 and 1998, the one month 
period ended January 31, 1997 and the year ended December 31, 
1996, in conformity with generally accepted accounting principles.


/s/ KPMG LLP

Cincinnati, Ohio
April 30, 1999







<TABLE>
                                       MEDPLUS, INC. AND SUBSIDIARIES
                                        Consolidated Balance Sheets
                                          January 31, 1999 and 1998
 <CAPTION>
                                                                           January 31,           January 31,
                                                                              1999                  1998
                                                                         _____________           ___________ 
                              ASSETS                                                                    
<S>                                                                      <C>                      <C>
Current assets:
  Cash and cash equivalents                                              $ 1,148,099              13,794,473
  Accounts receivable, less allowance for doubtful accounts of                                   
           $155,000  in 1999 and $115,000 in 1998                          5,595,273               4,520,333
  Other receivables                                                           70,769                  71,728
  Income tax receivable                                                      550,000                    -
     Inventories                                                             442,312                 757,471
     Prepaid expenses                                                        656,588                 568,769
     Deferred tax asset                                                          -                   328,497
                                                                         _____________           ___________
                         Total current assets                              8,463,041              20,041,271

Capitalized software development costs, net                                2,559,823               2,020,613
Fixed assets, net                                                          1,648,093               1,484,875
Excess of cost over fair value of net assets acquired, net                   714,448                 781,391
Other assets                                                                 291,402                 328,141
                                                                         _____________           ___________
                                                                         $13,676,807              24,656,291
                                                                         _____________           ___________
                                                                         _____________           ___________
               LIABILITIES AND SHAREHOLDERS' EQUITY  

Current liabilities: 
     Current installments of obligations under capital leases            $   222,558                 132,206 
     Borrowings on line of credit                                            507,017               1,496,353
     Accounts payable                                                      1,712,392               2,892,891 
     Accrued expenses                                                      2,099,124               2,675,996
     Accrued income taxes payable                                                -                 1,346,869
     Deferred revenue                                                      1,158,128                 635,463
     Other current liabilities                                                   -                   297,000
                                                                         _____________           ___________
                         Total current liabilities                         5,699,219               9,476,778
Long-term borrowings on line of credit                                     2,250,000                    -
Obligations under capital leases, excluding current installments             148,746                 167,884
Deferred tax liability                                                          -                    534,644
                                                                         _____________           ___________
                         Total liabilities                                 8,097,965              10,179,306
                                                                         _____________           ___________

Commitments and contingencies                                                                           
                                                                           
Shareholders' equity:                                                                           
     Common stock, no par value, authorized 15,000,000                                             
          shares; issued 6,225,371 shares in 1999 and 
            6,171,212 shares in 1998                                            -                        - 
     Additional paid-in capital                                           17,639,105              17,338,111
     Treasury stock, at cost, 200,000 shares in 1999 and
            10,500 shares in 1998                                           (863,497)                (53,554)
     Accumulated deficit                                                 (11,167,502)             (2,619,749)
     Unearned stock compensation                                             (29,264)               (187,823)
                                                                         _____________           ___________

                         Total shareholders' equity                        5,578,842              14,476,985
                                                                         _____________           ___________

                                                                         $13,676,807              24,656,291
                                                                         _____________           ___________
                                                                         _____________           ___________
              
See accompanying notes to consolidated financial statements.
</TABLE>




<TABLE><CAPTION>
                                        MEDPLUS, INC. AND SUBSIDIARIES
                                     Consolidated Statements of Operations
                           Years Ended January 31, 1999 and 1998, One Month Ended 
                              January 31, 1997 and Year Ended December 31, 1996
    
                                       Year Ended       Year Ended       Month Ended        Year Ended
                                       January 31,      January 31,      January 31,        December 31,
                                         1999             1998              1997                1996
                                      ____________     ____________      ____________       ____________
<S>                                   <C>              <C>                 <C>               <C>
Revenues:                                                                                
     Systems sales                    $ 6,155,381        7,912,158           138,785          3,126,299
     Support and consulting revenues    5,274,603        2,288,994           109,659          1,441,345
                                      ____________     ____________      ____________       ____________
            Total revenues             11,429,984       10,201,152           248,444          4,567,644
                                      ____________     ____________      ____________       ____________
Cost of revenues:                                                                                
     Systems sales                      3,411,387        5,171,635            96,817          1,676,525
     Support and consulting revenues    4,918,588        2,054,556           124,207            833,467
                                      ____________     ____________      ____________       ____________
            Total cost of revenues      8,329,975        7,226,191           221,024          2,509,992
                                      ____________     ____________      ____________       ____________
            Gross profit                3,100,009        2,974,961            27,420          2,057,652
                                                                                 
Operating expenses:                                                                                
     Sales and marketing                5,542,008        5,309,109           338,023          2,902,388
     Research and development           2,062,848          713,124            72,023            485,898
     General and administrative         4,048,093        3,789,719           217,307          2,785,689
     Acquired in-process technology         -              710,318               -                 -
                                      ____________     ____________      ____________       ____________
            Total operating expenses   11,652,949       10,522,270           627,353          6,173,975
                                      ____________     ____________      ____________       ____________
            Operating loss             (8,552,940)      (7,547,309)         (599,933)        (4,116,323)

Other income (expense):                                                                             
     Synergis management expenses, 
     Acquisition and offering costs    (2,070,731)      (3,707,945)              -                 -
     Other income (expense), net          (14,751)        (231,922)            4,721            124,663
     Minority interest                    297,000            -                   -                 -
                                      ____________     ____________      ____________       ____________

        Total other 
        income (expense), net          (1,788,482)      (3,939,867)            4,721            124,663
                                      ____________     ____________      ____________       ____________

        Loss before income 
        tax benefit                   (10,341,422)     (11,487,176)         (595,212)        (3,991,660)
                                                                                
Income tax benefit                     (1,616,370)      (3,475,777)              -             (596,339) 
                                      ____________     ____________      ____________       ____________
  Loss from continuing operations      (8,725,052)      (8,011,399)         (595,212)        (3,395,321)
                                                                                
Income (loss) from 
   discontinued operations                177,299       11,116,488           (26,549)           923,129
                                      ____________     ____________      ____________       ____________
         Net income (loss)            $(8,547,753)       3,105,089          (621,761)        (2,472,192) 
                                      ____________     ____________      ____________       ____________
                                      ____________     ____________      ____________       ____________
                                                                                
Earnings (loss) per share - basic and diluted:
 
       Continuing operations          $     (1.43)           (1.35)            (0.10)             (0.58)
       Discontinued operations                .03             1.87             (0.01)              0.16
                                      ____________     ____________      ____________       ____________
          Net income (loss)           $     (1.40)            0.52             (0.11)             (0.42) 
                                      ____________     ____________      ____________       ____________
                                      ____________     ____________      ____________       ____________
Weighted average number of shares of                                                                
     common stock                       6,109,439        5,922,781         5,911,971          5,868,954
                                      ____________     ____________      ____________       ____________
                                      ____________     ____________      ____________       ____________

See accompanying notes to consolidated financial statements </TABLE>




<TABLE><CAPTION>
                                                    MEDPLUS, INC. AND SUBSIDIARIES
                             Consolidated Statements of Shareholders' Equity and Comprehensive Income
                                     Years Ended January 31, 1999 and 1998, One Month Ended 
                                        January 31, 1997 and Year Ended December 31, 1996

                                                                                                       Accumulated 
                                       Common     Additional                             Unearned         other          Total
                                       stock -     paid-in     Treasury   Accumulated      stock       comprehensive  shareholders'
                                       shares      capital      stock       deficit     compensation    income(loss)     equity
                                      __________  __________  __________  ___________  ______________ _______________ _____________ 
<S>                                   <C>        <C>          <C>        <C>           <C>            <C>             <C>
Balances at 
  December 31, 1995                    5,808,524 $14,036,784  $   -      $(2,377,388)  $   (39,105)   $        3,258  $11,623,549
Comprehensive income (loss):                                                                      
   Unrealized 
   gains on 
   investment securi-
   ties, net of tax                        -          -           -            -               -              (1,434)      (1,434)
   Net loss                                -          -           -       (2,472,192)          -                 -     (2,472,192)
                                                                                                                       ____________
Total comprehensive 
   income (loss)                                                                                                       (2,473,626)
Issuance of common 
   stock                                  64,749     403,886      -            -               -                 -        403,886
Options exercised                         36,933      220,19      -            -               -                 -        220,193
Unearned compensation 
   under employee 
   stock award plan, 
   net of amortization                     9,000      74,249      -            -              9,742              -         83,991
                                      __________  __________  __________  ___________  ______________ _______________  ____________
Balances at December 
   31, 1996                            5,919,206  14,735,112      -       (4,849,580)       (29,363)           1,824    9,857,993
Issuance of common 
   stock, net of 
   issuance costs                          2,500      15,000      -             -               -                -         15,000
Net loss                                   -          -           -         (621,761)           -                -       (621,761)
Unearned compensation under employee stock                                                                       
     award plan, net of amortization      -           -           -             -             1,712              -          1,712
Fair value of options issued 
    to nonemployees                       -          188,074      -             -          (176,503)             -         11,571
                                      __________  __________  __________  ___________  ______________ _______________  ___________
Balances at January 31, 1997           5,921,706  14,938,186      -       (5,471,341)      (204,154)           1,824    9,264,515
Comprehensive income:                                                                      
   Unrealized gains on investment 
   securities, net of tax                 -           -           -             -              -              (1,824)      (1,824)
   Net income                             -           -           -        3,105,089           -                 -      3,105,089  
                                                                                                                        __________
Total comprehensive income                                                                                              3,103,265
Issuance of common stock, 
   net of issuance costs                225,056    2,010,549      -             -              -                 -      2,010,549
Purchase of treasury shares             (10,500)      -         (53,554)        -              -                 -        (53,554)
Options exercised                        16,666      109,719      -             -              -                 -        109,719
Tax benefit associated with exercise 
    of options                            -           93,500      -             -              -                 -         93,500
Minority shareholders' interest 
    in accumulated                                                                       
    deficit of DiaLogos                   -           -           -         (253,497)          -                 -       (253,497)
Unearned compensation under employee 
    stock award plan, net of 
    amortization                         7,784        63,610      -              -           (4,449)             -         59,161
Fair value of options issued to 
     nonemployees                         -          122,547      -              -           20,780              -        143,327
                                      __________  __________  __________  ___________  ______________ _______________  ___________
Balances at January 31, 1998          6,160,712   17,338,111    (53,554)  (2,619,749)      (187,823)             -     14,476,985
Net issuances of common stock            32,232      217,574      -              -             -                 -        217,574
Purchase of treasury shares            (189,500)      -        (809,943)         -             -                 -       (809,943)
Options exercised                         7,673       58,085      -              -             -                 -         58,085
Net loss                                  -           -           -       (8,547,753)          -                 -     (8,547,753)
Stock compensation under employee stock                                                                      
   award plan, net of amortization       14,254       25,335      -              -            2,832              -         28,167
Net amortization of options 
    issued to nonemployees                 -          -           -            -            155,727            -          155,727
                                      __________  __________  __________  ___________  ______________ _______________  ____________ 
Balances at January 31, 1999          6,025,371  $17,639,105  $(863,497) $(11,167,502)  $   (29,264)  $        -       $5,578,842
                                      __________  __________  __________  ___________  ______________ _______________  ____________ 
                                      __________  __________  __________  ___________  ______________ _______________  ____________




See accompanying notes to consolidated financial statements. </TABLE>


<TABLE><CAPTION>

                                          MEDPLUS, INC. AND SUBSIDIARIES
                                     Consolidated Statements of Cash Flows
                           Years Ended January 31, 1999 and 1998, One Month Ended  
                             January 31, 1997 and Year Ended December 31, 1996

                                       Year Ended       Year Ended       Month Ended        Year Ended
                                       January 31,      January 31,      January 31,        December 31,
                                         1999             1998              1997                1996
                                       __________       __________        __________        ___________
<S>                                   <C>             <C>                 <C>               <C>
Cash flows from operating activities:                                        
   Loss from continuing operations    $(8,725,052)     (8,011,399)         (595,212)        (3,395,321)
   Adjustments to reconcile loss 
     from continuing operations                                        
     to net cash used in operating 
     activities:                                        
   Synergis acquisition and offering 
     costs                                573,724       2,979,555               -                 -
   Impairment losses related to UDMS         -          1,241,513               -                 -
   Acquired in-process technology            -            710,318               -                 -
   Amortization of capitalized 
      software development costs          520,960         531,024            32,200            248,228
   Amortization of unearned stock  
      compensation costs                  158,559         222,487            23,283             85,689
   Depreciation and amortization of 
      fixed assets                        566,812         226,200            26,894            143,789
   Amortization of excess of cost 
       over fair value of net                                        
       assets acquired                     86,801         130,705               548            161,575
   Provision for loss on doubtful 
       accounts                           123,749         112,348               -               88,512
   Deferred income taxes                 (206,147)       (359,224)              -              (57,880)
  (Gain) loss on sale of investment 
       securities and fixed assets        103,414          (3,691)              -              (18,507)
Changes in assets and liabilities, 
      net of business acquisitions:                                         
   Accounts receivable                 (1,104,911)     (3,017,908)           84,288           (496,884)
   Other receivables                          959         (35,581)           (1,411)           121,991
   Inventories                            315,159        (471,902)          (55,946)           (62,961)
   Prepaid expenses and other assets      (84,857)          1,165           (69,984)          (144,111)
   Accounts payable and accrued 
      expenses                           (450,625)      2,835,279          (462,776)           153,963
   Income taxes                        (1,896,869)          -                   -                  -
   Deferred revenue                       522,664         182,463             3,006            150,982
                                       __________       __________        __________        ___________
   Net cash used in operating 
      activities                       (9,495,660)     (2,726,648)       (1,015,110)        (3,020,935) 
                                       __________       __________        __________        ___________
                                        
Cash flows from investing activities:                                        
   Capitalization of software 
      development costs                (1,060,170)       (884,337)          (90,817)        (1,232,025)
   Purchases of fixed assets             (507,008)       (351,229)          (54,632)          (643,779)
   Proceeds from sales of investment 
      securities and fixed assets            -            318,248               -              518,507
   Cash acquired in (payments made for) 
      business acquisitions               (19,858)         16,375               -              (67,328)
   Synergis acquisition and offering 
      costs                            (1,725,452)     (1,478,838)              -                  -
   Other advances and investments          -             (927,695)         (157,406)          (454,788)
                                       __________       __________        __________        ___________
   Net cash used in investing 
      activities                       (3,312,488)     (3,307,476)         (302,855)        (1,879,413) 
                                       __________       __________        __________        ___________
                                        
Cash flows from financing activities:                                        
   Proceeds from issuance of common 
      stock, net of issuance costs         83,420       2,105,269               -              461,653
   Purchase of treasury stock            (809,943)        (53,554)              -                  -
   Proceeds from borrowings on 
      line of credit                    7,143,759      11,721,152               -            1,587,815
   Repayments on line of credit        (5,883,094)    (10,224,799)              -           (1,587,815)
   Payment of debt issue costs            (60,000)          -                   -                  -
   Principal payments on capital 
      lease obligations and                                        
      notes payable                      (217,863)        (39,345)           (2,598)           (37,275) 
                                       __________       __________        __________        ___________
   Net cash provided by 
      (used in) financing activities      256,279       3,508,723            (2,598)           424,378
                                       __________       __________        __________        ___________
                                        
   Discontinued operations                (94,505)     15,306,854          (367,024)          (317,517) 
                                       __________       __________        __________        ___________
   Net increase (decrease) in cash 
      and cash equivalents            (12,646,374)     12,781,453        (1,687,587)        (4,793,487)
   Cash and cash equivalents, 
       beginning of period             13,794,473       1,013,020         2,700,607          7,494,094
                                       __________       __________        __________        ___________
   Cash and cash equivalents, 
       end of period                  $ 1,148,099      13,794,473         1,013,020          2,700,607
                                       __________       __________        __________        ___________
                                       __________       __________        __________        ___________
Interest paid                         $   113,920         282,963             1,029             23,493
                                       __________       __________        __________        ___________
                                       __________       __________        __________        ___________
Income taxes paid (refunds received)  $   600,000           -                   -              (66,192) 
                                       __________       __________        __________        ___________
                                       __________       __________        __________        ___________

See accompanying notes to consolidated financial statements.</TABLE>




                MEDPLUS, INC. AND SUBSIDIARIES
 
          Notes to Consolidated Financial Statements


(1)  Description of the Business

     MedPlus[r], Inc. (the "Company") provides information 
technology solutions designed to enable customers to manage 
information efficiently and cost effectively through innovative 
technology, consulting, and education.  The Company's solutions 
focus on various elements of process analysis and redesign, 
document imaging and management, workflow, systems integration and 
technology education.  

     The Company's healthcare related products, included in its 
Healthcare Solutions segment, presently consist of the 
ChartMaxx[tm] Enterprise-wide Patient Record System ("ChartMaxx") 
and the OptiMaxx[r] Archival System ("OptiMaxx").  ChartMaxx is an 
enterprise-wide electronic patient record system that enables 
health care organizations to create and manage a fully paperless 
electronic patient record comprising clinical, financial and 
administrative data captured from scanned paper and digital data.  
OptiMaxx is an optical disk-based archival system designed to meet 
the departmental needs of health care providers that require 
electronic storage and quick retrieval of information.  The 
Company's FutureCORE[r], Inc. subsidiary ("FutureCORE") provides 
process improvement and automation services, primarily in the 
areas of medical records and patient accounts departments, 
hospital and reference laboratories and physician offices.  

     The Company's Universal Document Management Systems, Inc. 
subsidiary ("Universal Document"), included in its Workflow and 
Document Management Segment, develops and sells Step2000[r], a 
workflow, document management and application development software 
product that enhances the utilization of information on an 
enterprise-wide basis, regardless of hardware platform or 
operating environment. 

     DiaLogos[tm] Incorporated ("DiaLogos"), included in the 
Company's Distributed Computing Products and Services Segment, is 
a majority-owned subsidiary and specializes in assisting 
organizations in the integration of enterprise-wide business 
systems with existing applications and data using distributed 
object computing, including CORBA and Java technologies, through 
education, consulting and implementation services.  DiaLogos is in 
the initial phases of developing several products designed to 
simplify the effort of legacy system integration. 

     Substantially all of the Company's operations are located in 
Cincinnati, Ohio.


(2)  Summary of Significant Accounting Policies

     (a) Principles of Consolidation

     The consolidated financial statements include the accounts of 
the Company and its wholly-owned subsidiaries, Universal Document 
and FutureCORE.  The accounts of DiaLogos, its 56.5% majority-
owned subsidiary, have been included in the 
consolidated financial statements as of the date of the Company's 
acquisition of a majority interest, January 30, 1998.  During 
1999, a liability that related to a minority shareholder's 
interest in DiaLogos was reduced to zero.  As a result, the 
Company has recognized greater than 56.5% of the losses from 
operations of DiaLogos in the consolidated statements of 
operations.  All intercompany accounts and transactions have been 
eliminated in consolidation. 

     The Company's IntelliCode division was sold on January 28, 
1998 and, as a result, has been accounted for as a discontinued 
operation (see Note 4 to the consolidated financial statements).  
The accompanying notes present amounts related only to continuing 
operations, unless otherwise indicated.  
 
     (b) Fiscal Year
     
         As of January 31, 1998, the Company changed its fiscal 
year end from December 31 to January 31.  Accordingly, the years 
ending January 31, 1999 and 1998 commenced on February 1 and ended 
on January 31 of the respective year.  Due to the change in fiscal 
year, the consolidated statements of operations, cash flows and 
shareholders' equity and comprehensive income also present the 
period from January 1, 1997 to January 31, 1997.  The amounts 
reflected for the one month period ended January 31, 1997 are not 
indicative of results that would have been obtained for a full 
fiscal quarter or fiscal year.

     (c) Revenue Recognition

         The Company's revenues are derived from systems sales, 
including software licenses and hardware, support contracts, 
installation, implementation, training and education, and 
consulting services.  

         Revenue related to system sales is recognized in 
compliance with American Institute of Certified Public Accountants 
Statements of Position ("SOP") 97-2 and 98-4, Software Revenue 
Recognition. For OptiMaxx systems, revenue is generally recognized 
upon shipment.  Revenue recognition for ChartMaxx systems 
generally commences when a contract is signed, the system is 
configured and shipped.  If a contract requires the Company to 
perform services or provide modifications that are deemed 
significant to system acceptance, the Company recognizes revenue 
for the entire contract under the percentage of completion method 
of accounting. 

         Revenues from installation, implementation, training and 
education, and consulting services are recognized in the period in 
which the services are performed.  Revenue from support contracts 
is recognized ratably over the term of the contract. Deferred 
revenues primarily represent support contracts that have been 
billed in advance of the support to be provided.

     (d) Cash and Cash Equivalents

         At January 31, 1999, cash equivalents of $1,010,351 
consisted of investments in money market funds with initial terms 
of less than three months.  At January 31, 1998, cash equivalents 
of $13,691,025 consisted of overnight repurchase agreements and 
investments in money market funds with initial terms of less than 
three months.  Due to the short-term nature of these investments, 
the carrying value of cash and cash equivalents approximates fair 
value.  

         Interest income from cash equivalents and investment 
securities, included in other income (expense) in the consolidated 
statements of operations, was $260,481, $94,703, and $308,992 for 
the years ended January 31, 1999, January 31, 1998, and December 
31, 1996, respectively.
          
     (e) Concentrations of Credit Risk

         Financial instruments potentially exposing the Company to 
concentrations of credit risk, as defined by SFAS No. 105, 
Disclosure of Information about Financial Instruments with Off-
Balance-Sheet Risk and Financial Instruments with Concentrations 
of Credit Risk, consist primarily of cash equivalents and trade 
accounts receivable. The Company's cash equivalents consist of 
highly liquid money market funds. The Company's trade accounts 
receivables are largely concentrated in the health care industry.  
However, the Company's credit risk is limited due to the 
geographic dispersion and diversity of customers making up the 
Company's receivable portfolio.

     (f) Inventories

         Inventories generally relate to computer equipment 
purchased for resale and are stated at the lower of cost or 
market.  Cost is determined by the first-in, first-out (FIFO) 
method.

     (g) Capitalized Software Development Costs

         The Company accounts for software development costs in 
accordance with the provisions of SFAS No. 86, Accounting for the 
Costs of Computer Software to be Sold, Leased or Otherwise 
Marketed.  Costs incurred in designing and developing computer 
software products are expensed as research and development until 
technological feasibility has been established.  Technological 
feasibility is established upon completion of a detail program 
design or, in its absence, completion of a working model.   Upon 
the achievement of technological feasibility, software production 
costs are capitalized and subsequently reported at the lower of 
unamortized cost or net realizable value.

         Annual amortization expense, included in cost of revenues 
in the consolidated statements of operations, is the greater of 
the amount computed, using the ratio of the current year's 
revenues to the total of current and anticipated future revenues, 
or the straight-line method over the remaining economic life which 
does not exceed five years.   Amortization amounted to $520,960, 
$531,024, and $248,228, for the years ended January 31, 1999, 
January 31, 1998, and December 31, 1996, respectively.  
Accumulated amortization for capitalized software development 
costs was $1,356,737, and $835,777 at January 31, 1999 and 1998, 
respectively.

     (h) Fixed Assets

         Fixed assets are stated at cost for purchased assets, 
fair value for assets obtained through acquisitions, and the 
present value of minimum lease payments for equipment held under 
capital leases.  Depreciation, including amortization of capital 
leases, is computed using the straight-line method over the 
estimated useful lives of the assets, which range from three to 
ten years.   Leasehold improvements and equipment held under 
capital leases are amortized using the straight -line method over 
the shorter of the lease term or estimated useful life of the 
asset. 

     (i) Excess of Cost Over Fair Value of Net Assets Acquired

         The excess of the cost over fair value of net assets 
acquired from business acquisitions is being amortized on the 
straight-line method over the expected periods to be benefited, 
which is principally ten years.   Accumulated amortization of the 
excess of the cost over the fair value of net assets acquired was 
$86,801 and $35,095 at January 31, 1999 and 1998, respectively.   

         The Company assesses the recoverability of this 
intangible asset by determining whether the amortization of the 
intangible balance over its remaining life can be recovered 
through undiscounted future operating cash flows of the acquired 
operation.  The amount of the intangible impairment, if any, is 
measured based on projected discounted future operating cash flows 
using a discount rate reflecting the Company's average cost of 
funds.  The assessment of the recoverability of the intangible 
asset will be impacted if estimated future operating cash flows 
are not achieved.

     (j) Income Taxes

         The provisions for income taxes are accounted for in 
accordance with SFAS No. 109, Accounting for Income Taxes.  Under 
the asset and liability method of SFAS No. 109, deferred tax 
assets and liabilities are recognized for the future tax 
consequences attributable to differences between the financial 
statement carrying amounts of existing assets and liabilities and 
their respective tax bases.   Deferred tax assets and liabilities 
are measured using enacted tax rates expected to apply to taxable 
income in the years in which those temporary differences are 
expected to be recovered or settled.

     (k) Stock Option Plan

         The Company accounts for its stock option plan in 
accordance with the provisions of Accounting Principles Board 
("APB") Opinion No. 25, Accounting for Stock Issued to Employees, 
and related interpretations.   As a result, the Company recognizes 
no compensation cost in its consolidated statements of operations 
because the exercise price of its stock options is equal to the 
market price of the underlying stock on the date of grant.  In 
addition, the Company provides pro forma disclosure of the 
provisions of SFAS No. 123, Accounting for Stock-Based 
Compensation, which is an alternative method of accounting for 
stock options. 

     (l) Earnings (Loss) Per Share

         The Company calculates earnings (loss) per share in 
accordance with the provisions of SFAS No. 128, Earnings per 
Share, which requires the calculation of  "basic" and "diluted" 
earnings per share.  Basic earnings per share excludes any 
dilutive effects of options, warrants or convertible securities.  
Diluted earnings per share reflects the assumed conversion of all 
dilutive securities. 

         Basic and diluted earnings per share are based on the 
weighted average number of shares of common stock outstanding for 
each period excluding any shares related to nonvested employee 
stock awards.  Dilutive securities have not been included in the 
weighted average shares used for the calculation of diluted 
earnings per share in periods of losses from continuing operations 
because the effect of such securities would be antidilutive. At 
January 31, 1999, dilutive securities consisted of options to 
purchase 1,294,727 shares of common stock.

     (m) Comprehensive Income (Loss)

         Consistent with SFAS No. 130, Reporting Comprehensive 
Income, the Company includes comprehensive income (loss) in its 
consolidated statement of shareholders' equity and comprehensive 
income.  Comprehensive income represents the net change in 
shareholders' equity during a period from sources other than 
transactions with shareholders.  Amounts included in this 
statement represent net income (loss) and unrealized gains 
(losses) on investment securities.

     (n) Supplemental Cash Flow Information

         Stock Transactions: During the year ended January 31, 
1999, the Company issued 32,232 shares of common stock, valued at 
$217,574 at the date of issuance as a contribution into the 
Company's 401(k) benefit plan.  In the year ended January 31, 
1998, the Company converted $1,191,960 of advances to DiaLogos 
into common shares of DiaLogos in connection with its acquisition 
of a majority interest in the subsidiary.  In the year ended 
December 31, 1996, the Company issued 14,429 shares of common 
stock, valued at $160,728 at the date of issuance in connection 
with the acquisition of Universal Document.  
          
         Stock Option Transactions: During the years ended January 
31, 1999, January 31, 1998, and December 31, 1996, the Company 
granted employees 14,254, 7,784, and 8,900 shares of common stock, 
respectively, under a stock award plan.   The market value of the 
stock at the dates of grant was approximately $23,000, $64,000, 
and $74,000, respectively, and is being amortized over periods of 
one to three years in accordance with the terms of the awards. In 
January and February 1997, the Company issued 5,000 shares of 
restricted common stock valued at $30,000 to a vendor in exchange 
for services rendered.  In January 1997 and December 1997, the 
Company also granted options to purchase 85,000 and 50,000 shares, 
respectively, of the Company's common stock as compensation to 
consultants to the Company.  These options have a fair value of 
approximately $188,000 and $155,000, respectively, which is being 
amortized into expense over the related service periods of one to 
two years.  In addition, the Company realized a tax benefit of 
$93,500 during the year ended January 31, 1998 associated with the 
exercise of stock options.  The tax benefit reduced the income tax 
liability and was credited to paid-in capital.

         Capital Leases: The Company entered into capital leases 
for equipment totaling approximately $327,792 during the year 
ended January 31, 1999. 

         As these are non-cash transactions, they have not been 
presented in the Consolidated Statements of Cash Flows.

     (o) Use of Estimates
          
         Preparing financial statements in conformity with 
generally accepted accounting principles requires the Company's 
management to make a number of estimates and assumptions relating 
to the reporting of assets and liabilities and the disclosure of 
contingent assets and liabilities.   Actual results could differ 
from those estimates.

     (p) Reclassifications

         Certain reclassifications have been made to the 
consolidated financial statements previously reported to conform 
to the current period presentation.

(3)  Acquisitions
     
     (a) DiaLogos 

         Prior to January 30, 1998, the Company maintained a 
minority interest in DiaLogos, which was accounted for under the 
equity method.  On January 30, 1998, based upon a previously 
defined letter of agreement, the Company converted aggregate 
advances of $1,191,960 to DiaLogos into common shares of DiaLogos 
stock.  Upon conversion of these advances, the Company became a 
majority owner of DiaLogos with 56.5% ownership.   The acquisition 
of the shares by the Company has been accounted for under the 
purchase method. Accordingly, the financial position of DiaLogos 
has been included in the Company's Consolidated Balance Sheet as 
of January 31, 1998, and the results of operations of DiaLogos 
have been included in the Company's Consolidated Statement of 
Operations effective February 1, 1998.  Under the purchase method 
of accounting, at January 31, 1998, the Company recorded a 
$253,497 reduction to shareholders' equity equal to the amount the 
minority shareholders interest in the historical accumulated 
deficit exceed their contributed capital.

         The Company's purchase price for its majority interest in 
DiaLogos was $1,693,959 which included the conversion of 
$1,191,960 of advances and the assumption of $501,999 of DiaLogos 
liabilities. The purchase price was allocated to the identifiable 
tangible and intangible assets acquired based on their estimated 
fair values.   The Company allocated $774,677 of the purchase 
price to the excess of cost over the fair value of net assets 
acquired.  An additional $710,318 of the purchase price was 
allocated to acquired in-process technology and was expensed at 
the date of acquisition. To determine the fair market value of the 
acquired in-process technology, the Company utilized the income 
approach which focuses on the income-producing capability of the 
assets acquired and best represents the present value of the 
future economic benefits expected to be derived from these assets.   
Technological feasibility for the acquired in-process technology 
had not been reached based on design and development activities in 
place, requiring further refinement and testing.  The acquired 
technology represents unique and emerging technology, the 
application of which is limited to the Company's legacy system 
integration software strategy.  Accordingly, the acquired 
technology had no alternative future use. 

         The following unaudited pro forma data presents the 
results of operations as if the acquisition of DiaLogos had 
occurred at the beginning of each period.   This summary is 
provided for information purposes only and does not necessarily 
reflect the actual results that would have occurred had the 
acquisitions been made as of those dates or of results that may 
occur in the future.   

                         Year Ended              Year Ended
                         January 31,            December 31,
                            1998                   1996
                         ___________            ____________   
Revenues               $ 10,776,730                4,569,802
                         ___________            ____________
                         ___________            ____________
Loss from continuing 
   operations          $ (9,260,082)             (3,896,996) 
                         ___________            ____________
                         ___________            ____________
Net income (loss)      $  1,856,406              (2,973,867) 
                         ___________            ____________
                         ___________            ____________
                            
Earnings (loss) 
   per share - basic                            
   and diluted:                            
   Continuing 
     operations        $      (1.56)                 (0.66) 
                         ___________            ____________
                         ___________            ____________
   Discontinued 
     operations        $       1.87                   0.16
                         ___________            ____________
                         ___________            ____________
   Net income (loss)   $       0.31                  (0.51) 
                         ___________            ____________
                         ___________            ____________


     (b) FutureCORE
     
         Effective June 28, 1996, the Company acquired all of the 
assets of FutureCORE, Ltd., a hospital, laboratory, and physician 
services consulting firm.   The acquisition has been accounted for 
under the purchase method; accordingly, the results of operations 
of FutureCORE have been included in the Company's consolidated 
financial statements since the date of the acquisition.  The 
effect of FutureCORE on the results of operations for periods 
prior to its acquisition would not have been material.  The total 
consideration paid for these assets consisted of cash of $61,250. 

(4)  Discontinued Operations

     In January 1998, the Company completed the sale of all the 
assets of its IntelliCode division to Becton Dickinson and Company 
("Becton Dickinson") for an initial payment of $17,408,847 plus 
royalty payments over five years.  The final closing of the 
transaction in April 1998 reduced the initial payment by $74,259. 
In connection with the sale, Becton Dickinson also assumed certain 
liabilities of the IntelliCode division, primarily deferred 
revenues and obligations related to service contracts and an 
office lease. The Company recognized a pre-tax gain of $14,724,720 
and an after-tax gain of $10,268,710 related to this transaction 
for the year ended January 31, 1998. The royalty payments are 
based on future defined revenues and are recorded as income when 
earned.  No royalty payments were earned for the year ended 
January 31, 1999.

     In January 1998, the Company also decided to sell the net 
assets of the Step2000 segment of Universal Document and began 
negotiating with prospective buyers.  The Company had expected to 
complete the sale by December 1998.  However, the Company's 
efforts to sell the net assets of Step2000 ended in August 1998 
after negotiations with the prospective buyers were terminated by 
the Company.  After reviewing the operations of the Step2000 
segment and how it might complement a current business initiative 
of the Company, the Company decided to retain the segment and 
reduce operations to primarily research and development and 
customer support while a new generation of products is being 
developed.

     The Step2000 segment had previously been accounted for as a 
discontinued operation.  However, as a result of the Company's 
decision to retain the Step2000 segment, the results of operations 
and financial position of the segment have been included in 
continuing operations in the Company's consolidated financial 
statements as of and for the twelve months ended January 31, 1999.  
Prior years' financial statements have been presented on a 
comparable basis.  The Step2000 segment had assets of $546,978 and 
liabilities of $418,217 as of January 31, 1998.  For the year 
ended January 31, 1998, Step2000 had revenues of $1,169,509 and an 
operating loss of $1,620,823.  Included in the fiscal 1998 
operating loss were impairment losses related to the excess of 
cost over fair value of net assets acquired and capitalized 
software development costs of $774,677 and $466,836, respectively.  
The Company had also accrued a loss of $180,000 for the disposal 
of the net assets of the segment and for its estimated net 
operating losses through its expected date of disposal.  The 
Company reversed this accrual during fiscal year 1999 as a result 
of its decision to retain Step2000.  These reversals are included 
in discontinued operations for the year ended January 31, 1999.

     Income from the IntelliCode discontinued operations and the 
reversal of accrued losses related to the disposal of the net 
assets of the Step2000 segment, as shown on the accompanying 
Consolidated Statements of Operations, includes the following


           
                       Year Ended   Year Ended  Year Ended
                       January 31,  January 31, December 31,
                         1999          1998         1996
                       __________   __________  ___________
Revenues              $    -         7,274,279   6,408,184
                       __________   __________  ___________
                       __________   __________  ___________
Operating income      $  290,654     1,515,087   1,521,365
Gain on sale of 
   Intellicode             -        14,724,720       -
Income tax expense      (113,355)   (5,123,319)   (598,236) 
                       __________   __________  ___________
Net income from 
  discontinued                                          
  operations          $  177,299    11,116,488     923,129
                       __________   __________  ___________
                       __________   __________  ___________


(5)  Synergis Commitments and Contingencies
     
     The Company's Universal Document subsidiary hired a senior 
management team and entered into agreements with two consulting 
firms in 1997 to assist it in the identification and recruitment 
of certain design automation software resellers and integrators 
(collectively the "Founding Companies") that Universal Document 
would acquire or with which it would combine (the "Acquisitions"), 
and to assist Universal Document in an initial public offering of 
its common stock.  The Company would have owned a minority 
interest in the newly acquired entity that would potentially serve 
as a distribution channel for the Company's products.  In 
September and October 1997, Universal Document entered into 
definitive merger agreements, which were contingent upon a 
successful initial public offering, to acquire nine such 
companies.  In October 1997, Universal Document filed a 
registration statement on Form S-1 with the Securities and 
Exchange Commission, which was subsequently amended in December 
1997 and January 1998, to offer its common stock to the public.  
In connection with its initial public offering, Universal Document 
planned to change its name to Synergis Technologies, Inc.  Due to 
adverse market conditions for initial public offerings in January 
1998, Universal Document postponed the initial public offering 
upon the advice of its underwriters. 

     During early 1998, the Company evaluated the business 
operations of Universal Document and determined that it no longer 
complemented the businesses of the Founding Companies.  As a 
result, the Company created its Synergis subsidiary to serve as 
the 
acquirer in the Acquisitions.  The Company expected the newly 
created Synergis subsidiary to complete the Acquisitions and an 
initial public offering of its common stock.  Due to adverse 
conditions in the equity capital markets, Synergis' plans to 
conduct an initial public offering were postponed for a second 
time 
in August 1998.  Currently, all plans for an initial public 
offering have been cancelled.

     For the years ended January 31, 1999 and 1998, the Company 
has 
expensed $573,724 and $2,979,555, respectively, for acquisition 
and 
offering costs related to accountants', attorneys', and 
consultants' fees incurred on behalf of the postponed initial 
public offerings.  In addition, the Company also incurred and 
expensed $1,497,007 and $728,390 for 1999 and 1998, respectively, 
for operating costs associated with the senior management team 
hired to manage the Acquisitions, offering, private financing and 
integration of the Founding Companies.  As of January 31, 1999, 
the 
Company has costs accrued in its Consolidated Balance Sheet of 
approximately $120,000 related to the Company's decision to 
discontinue the employment of certain members of the management 
team hired to manage and complete the transaction.

     As the proposed public offering related to the Synergis 
transaction has been cancelled, the Company has significantly 
reduced the on-going expenses related to this affiliate.  The 
Company is currently evaluating the feasibility of a merger of 
Synergis with certain of the Founding Companies into a new entity 
financed on a private basis.  However, definitive plans related to 
any future transaction have not been finalized.  Various 
agreements 
related to the transaction, including employment agreements, are 
contingent upon the successful completion of the transaction.  
Based upon the final outcome of the transaction, these agreements 
may be terminated or significantly amended.
MEDPLUS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements



(6)  Fixed Assets

     Fixed assets consisted of the following at January 31, 1999 
and 1998:

                              January 31,       January 31,
                                 1999              1998
                            _____________      _____________
Equipment                   $ 1,903,949         1,408,996
Furniture and fixtures          596,076           493,470
Leasehold improvements          198,710           157,742
Purchased software              163,535           112,519
                            _____________      _____________
                              2,862,270         2,172,727
Accumulated depreciation 
   and amortization          (1,214,177)         (687,852) 
                            _____________      _____________
                            $ 1,648,093         1,484,875
                            _____________      _____________
                            _____________      _____________

(7)  Bank Agreements

     At the end of 1995, the Company had a $10,000,000 revolving 
line of credit agreement with a bank, which was subject to a 
defined net worth formula.  The amended term of the agreement 
extended the term to December 31, 1998.   In January 1999, this 
agreement was cancelled and a new agreement with the same bank was 
entered into with a limit of $3,250,000 and a term expiring on a 
monthly basis.

     The maximum amount available under the line of credit was 
$3,250,000 and $2,757,017 was outstanding as of January 31, 1999.  
No amounts were outstanding under the line of credit at January 
31, 1998.  Interest is payable at the bank's prime rate plus 1/2%, 
which was 8.25% as of January 31, 1999.  The line of credit is 
secured by all assets of the Company.   Due to the variable rate 
and the short-term nature of the agreement, its carrying value 
approximates fair value.

     On September 9, 1997, the Company and Company's Universal 
Document subsidiary entered into a line of credit agreement 
("Universal line of credit") with a bank to fund the costs 
associated with Universal Document's acquisitions and initial 
public offering discussed in Note 5 and for working capital.  The 
amount outstanding under the Universal line of credit at January 
31, 1998 was $1,496,353.  The Universal line of credit was paid in 
full and canceled on February 10, 1998.

     Interest expense included in other income (expense) from the 
lines of credit and capital lease obligations was $146,378, 
$346,315, and $23,493 for the years ended January 31, 1999 and 
1998, and December 31, 1996, respectively.

     Subsequent to year-end, the bank amended the $3,250,000 
revolving line of credit agreement described above to reduce the 
limit to $3,000,000 and to extend the expiration of $2,250,000 of 
this limit to February 2000, subject to a defined net worth 
formula and the completion of the debt and equity financing 
described in Note 17 of the notes to the consolidated financial 
statements.  As a result, the Company classified $2,250,000 of the 
outstanding balance as non-current at January 31, 1999 in the 
consolidated balance sheet.  The current portion is payable to the 
bank in specified amounts throughout fiscal 2000.  The interest 
rate on the new financing agreement is payable at the bank's prime 
rate plus 1 1/2%.  The new agreement contains a closing fee of 
$60,000 and a commitment fee of 1% on the line of credit limit.  
The line of credit is secured by all assets of the Company. 
 
     Subsequent to year-end, the Company also entered into an 
agreement with an investment firm to obtain $6,100,000 of debt and 
equity financing.  The terms of the agreement are described more 
fully in Note 17, Subsequent Events and Liquidity, of the notes to 
the consolidated financial statements.
     
(8)  Common Stock and Related Transactions 

     In connection with the sale of the IntelliCode assets to 
Becton Dickinson, the Company sold 222,556 shares of its common 
stock to Becton Dickinson in exchange for $2,000,000 in cash on 
January 28, 1998.  The sale price was based on the average closing 
price of the Company's common stock for the thirty days prior to 
the announcement on November 21, 1997 of the signing of a letter 
of intent relating to the sale of the IntelliCode assets.

     Subsequent to year-end, the Company entered into an agreement 
with an investment firm to obtain $6,100,000 of debt and equity 
financing.  The terms of the agreement are described more fully in 
Note 17, Subsequent Events and Liquidity, of the notes to the 
consolidated financial statements. 



(9)  Income Taxes

     Total income tax benefit for the years ended January 31, 
1999, January 31, 1998 and December 31, 1996 was allocated as 
follows:
                                          
                            January 31,   January 31, December 31,
                              1999           1998         1996
                           ___________    ___________ ____________
Loss from operations       $(1,616,370)   (3,475,777)    (596,339)
Discontinued 
   operations                  113,355     5,123,319      598,236
Shareholders' equity, 
  for compensation 
  expense for tax
  purposes in excess of 
  amounts recognized 
  for financial
  reporting purposes             -           (93,500)         -
Shareholders' equity, 
  unrealized gains 
  (losses) on marketable
  securities recorded for
  financial reporting 
  purposes                       -            (1,026)        (806) 
                           ___________    ___________ ____________
                           $(1,503,015)    1,553,016        1,091
                           ___________    ___________ ____________
                           ___________    ___________ ____________

Income tax benefit attributable to loss from continuing operations 
was as follows:

                            January 31,   January 31, December 31,
                              1999           1998         1996
                           ___________    ___________ ____________
Federal:                                          
     Current              $(1,229,425)    (2,574,749)    (508,521)
     Deferred                (179,718)      (231,146)     (54,900) 
                           ___________    ___________ ____________
                           (1,409,143)    (2,805,895)    (563,421) 
                           ___________    ___________ ____________
State:                                          
     Current                 (180,798)      (541,804)     (29,938)
     Deferred                 (26,429)      (128,078)      (2,980) 
                           ___________    ___________ ____________
                             (207,227)      (669,882)     (32,918) 
                           ___________    ___________ ____________
                          $(1,616,370)    (3,475,777)    (596,339) 
                           ___________    ___________ ____________
                           ___________    ___________ ____________



     Income tax benefit differs from the amounts computed by 
applying the Federal statutory rate to pre-tax loss from 
continuing operations as a result of the following: 

                            January 31,   January 31, December 31,
                              1999           1998         1996
                           ___________    ___________ ____________

Computed "expected" 
    benefit               $(3,516,083)    (3,905,640)  (1,358,043)
Change in valuation 
    allowance               2,265,566        468,754      843,673
State income taxes, 
    net of Federal 
    benefit                  (494,810)      (574,634)     (21,726)
Acquired in-process 
    technology                  -            241,508         -
Other                         128,957        294,235      (60,243) 
                           ___________    ___________ ____________
                          $(1,616,370)    (3,475,777)    (596,339) 
                           ___________    ___________ ____________
                           ___________    ___________ ____________

     The significant components of deferred income tax expense 
(benefit) attributable to loss from continuing operations for the 
years ended January 31, 1999, January 31, 1998, and December 31, 
1996 are as follows:

                            January 31,   January 31, December 31,
                              1999           1998         1996
                           ___________    ___________ ____________
Deferred tax expense  
  (exclusive of the 
   effects of other 
   components listed
   below)                 $  281,586       186,193       321,435
Increase in net 
   operating losses       (3,557,961)      (209,509)   (1,222,988)
Synergis acquisition 
   and offering costs        804,662       (804,662)        -
Increase in the 
   beginning-of-the-year
   balance of the 
   valuation allowance
   for deferred taxes      2,265,566        468,754       843,673
                           ___________    ___________ ____________
                         $  (206,147)      (359,224)      (57,880) 
                           ___________    ___________ ____________
                           ___________    ___________ ____________


     Included in income tax expense for discontinued operations 
for the year ended January 31, 1998 is $2,115,339 of deferred tax 
expense associated with the utilization of approximately 
$5,420,000 in net operating loss carryforwards.  This deferred tax 
expense is offset by a deferred tax benefit of $1,396,449 related 
to the reduction of the valuation allowance previously established 
for those net operating loss carryforwards. 

     The tax effects of temporary differences that give rise to 
deferred tax assets and deferred tax liabilities at January 31, 
1999 and 1998 are as follows:


                              January 31,       January 31,
                                 1999              1998
                            _____________      _____________
Deferred tax assets:                            
     Net operating loss 
     carryforward           $  4,378,589            820,628
     Accruals                    223,010            297,666
     Capital loss 
       carryforward               84,922             84,922
     Research and 
       experimentation  
       credit carryforward         2,612              2,612
     Alternative minimum tax      50,000                -
     Synergis acquisition and                            
          offering costs             -              804,662
     Other                           -               25,105
                            _____________      _____________
        Total gross 
         deferred  
         tax assets            4,739,133          2,035,595
        Less valuation 
         allowance            (3,554,543)        (1,288,977) 
                            _____________      _____________
        Net deferred 
         tax assets            1,184,590            746,618
                            _____________      _____________
Deferred tax liabilities:                            
     Software costs             (998,331)          (767,617)
     Fixed assets               (153,756           (159,269)
     Other                       (32,503)           (25,879) 
                            _____________      _____________
        Total gross 
         deferred tax                            
         liabilities          (1,184,590)          (952,765) 
                            _____________      _____________
         Net deferred 
          tax liabilities   $       -              (206,147) 
                            _____________      _____________
                            _____________      _____________

     In assessing the realizability of deferred tax assets, 
management considers whether it is more likely than not that some 
portion or all of the deferred tax assets will not be realized.   
The ultimate realization of deferred tax assets is dependent upon 
the generation of future taxable income during the periods in 
which those temporary differences become deductible.  Due to the 
Company's recent history of operating losses, management has 
established valuation allowances against its deferred tax assets 
as of January 31, 1999.

     At January 31, 1999, the Company and DiaLogos had net 
operating loss carryforwards for Federal income tax purposes of 
approximately $7,200,000 and $3,900,000, respectively, which are 
subject to realization based upon the Company's ability to 
generate future taxable income, limitations imposed by the 
Internal Revenue Service, and other matters potentially affecting 
the realizability of these carryforwards.  The net operating loss 
carryforwards expire at various periods through 2018. As DiaLogos 
files a separate Federal income tax return, its net operating loss 
carryforwards cannot be used to offset future taxable income of 
the MedPlus consolidated tax group.  The Company also has a 
capital loss carryforward of approximately $218,000 which is 
available to offset future capital gains, if any, through 2001.

(10) Stock Incentive Plans

     In 1994, the Company adopted the 1994 Long-Term Stock 
Incentive Plan ("Long-Term Plan") and the Directors' 
Nondiscretionary Stock Option Plan ("Directors' Plan"), 
collectively the "Option Plans."   The Long-Term Plan provides for 
the grant of stock-based incentives to employees in the form of 
stock options, stock appreciation rights, stock awards, or any 
combination thereof.   The Long-Term Plan was amended in December 
1998, to increase the maximum number of shares with respect to 
which stock incentives may be granted from 1,000,000 to 2,000,000 
shares. A total of 100,000 shares is reserved for issuance under 
the Directors' Plan.

     Options granted under the Long-Term Plan may be either 
nonqualified or incentive options.   Under the terms of both the 
Long-Term Plan and the Directors' Plan, options may not be granted 
at less than fair market value on the date of the grant.   Options 
granted under both plans are exercisable in installments; however, 
no options are exercisable earlier than six months or later than 
ten years from the date of the grant.

     At January 31, 1999, there were 651,411 shares available for 
grant under the Long-Term Plan and 63,225 additional shares 
available for grant under the Directors' Plan. 

     The per share weighted average fair values at the date of 
grant for options granted during the years ended January 31, 1999 
and 1998, and December 31, 1996 were $3.10, $3.25, and $4.83, 
respectively.  These fair values were estimated using the Black 
Scholes option-pricing model with the following weighted average 
assumptions:  1999- expected dividend yield 0%, risk-free interest 
rate of 5.07%, expected volatility of 53%, and an expected life of 
4.8 years; 1998 - expected dividend yield 0%, risk-free interest 
rate of 6.16%, expected volatility of 41%, and an expected life of 
4.8 years; 1996 - expected dividend yield 0%, risk-free interest 
rate of 6.09%, expected volatility of 38%, and an expected life of 
4.8 years.

     The Company applies APB Opinion No. 25 in accounting for the 
Option Plans; accordingly, no compensation cost has been 
recognized for its options granted to employees in the 
consolidated financial statements.   The Company recognized 
$190,483, $59,160 and $85,689 of compensation cost during the 
years ended January 31, 1999 and 1998 and December 31, 1996 
related to stock awards granted under the Long-Term Plan.   Had 
the 

Company determined compensation cost based on the fair value at 
the grant date for its stock options under SFAS No. 123, the 
Company's net income (loss) would have been reduced (increased) to 
the pro forma amounts indicated below:


                            January 31,  January 31,  December 31,
                              1999          1998         1996
                           ___________   ___________  ____________

Net income (loss) 
   As reported            $(8,547,753)    3,105,089    (2,472,192)
   Pro forma               (9,500,571)    2,239,941    (3,321,232) 
                           ___________   ___________  ____________
                           ___________   ___________  ____________
Net income (loss) 
  per share -                                           
  basic and diluted
   As reported            $     (1.40)         0.52         (0.42)
   Pro forma                    (1.56)         0.38         (0.57) 
                           ___________   ___________  ____________
                           ___________   ___________  ____________


     The Company also granted options to purchase 85,000 shares of 
common stock as compensation to consultants during January 1997.  
These options had an estimated fair value of approximately 
$188,000 on the date of grant. In December 1997, the Company 
granted options to purchase an additional 50,000 shares of the 
Company's common stock as compensation to one of these 
consultants.  These options had an estimated fair value of 
approximately $155,000 on the date of grant.  The estimated fair 
value of the options granted to the consultants in January 1997 
and December 1997 was determined using the Black Scholes option-
pricing model with the same weighted average assumptions as those 
used for 
          the employee option grants during the years ended 
December 31, 1996 and January 31, 1998, respectively, with the 
following exceptions: 1996 - expected life of 2.5 years; 1998 - 
expected life of 2.5 years.  The fair value of these options is 
being amortized over the related service periods of one to two 
years.  The Company recognized $155,727 and $143,327 in 
amortization expense related to these option grants in the years 
ended January 31, 1999 and 1998, respectively.


     Transactions with respect to options, including options 
granted to consultants, for the years ended January 31, 1999 and 
1998, the one month ended January 31, 1997 and the year ended 
December 31, 1996 were as follows:

                                   Number of      Weighted Average
                                   Shares         Exercise Price
                                  ____________    ________________
Shares under option, 
   December 31, 1995               237,500        $      6.99
Options exercised                  (36,933)              5.96
Options forfeited or canceled       (6,667)              7.56
Options granted                    352,500              11.34
                                  ____________
Shares under option, 
   December 31, 1996               546,400               9.86
Options forfeited or canceled      (50,000)              6.88
Options granted                    270,250               5.82
                                  ____________
Shares under option, 
   January 31, 1997                766,650               8.63
Options exercised                  (16,666)              5.97
Options forfeited or canceled      (12,467)              9.51
Options granted                    275,775               7.26
                                  ____________
Shares under option, 
   January 31, 1998              1,013,292               8.29
Options exercised                   (7,673)              7.57
Options forfeited or canceled      (41,892)              7.95
Options granted                    331,000               6.12
                                  ____________
Shares under option, 
   January 31, 1999              1,294,727               7.74
                                  ____________
                                  ___________




<TABLE>

     The following table summarizes information about options, including options granted to consultants, at January 31, 1999:

<CAPTION>
<S>
                               Options Outstanding                                      Options Exercisable
__________________________________________________________________________   ________________________________________
                                       Weighted                                       
       Range of                         Average             Weighted                                   Weighted
       Exercise        Number          Remaining             Average                Number              Average
       Prices        of Options     Contractual Life      Exercise Price          of Options         Exercise Price
_________________  ______________  __________________  ___________________   ____________________   _________________
   <C>             <C>                     <C>            <C>                      <C>                 <C>
   $     2.28          30,000              3.2            $ 2.28                      -                     -  
     5.13 - 7.69      838,894              3.2              6.29                   486,278             $ 6.18
     7.70 - 11.53     201,500              2.6              9.65                   181,834               9.76
    11.54 - 14.13     224,333              2.2             12.20                   164,000              12.19
                   ______________                                            ____________________
                    1,294,727              3.0              7.74                   832,112               8.15
                   ______________                                            ___________________

</TABLE>




     In June 1998, the Board of Directors approved the MedPlus, 
Inc. Employee Stock Purchase Plan (the "Plan"), to provide 
employees of the Company the opportunity to purchase shares of the 
Company's common stock.  The Company is authorized to issue up to 
350,000 shares of common stock to its full-time employees, nearly 
all of whom are eligible to participate.  Under the terms of the 
Plan, employees can choose biannually, to have up to 10% of their 
annual base earnings withheld to purchase the Company's common 
stock.  The purchase price of the stock is 85% of the lower of its 
beginning-of-period or end-or-period market price.  The initial 
offering period of the Plan commenced on August 1, 1998 and 
extended to January 31, 1999.  In February 1999, the Company 
issued 17,701 shares to employees for stock purchases with respect 
to the initial offering period.  As the Plan has been created as a 
noncompensatory plan, no compensation expense under APB 25 has 
been recognized in the Company's financial statements.  Under SFAS 
123, the weighted-average fair value of the employee's purchase 
rights, estimated using the Black-Scholes model with the following 
assumptions: dividend yield of 0%, expected life of 6 months, 
expected volatility of 53%, and risk free interest rate of 4.9%, 
was $.55 for fiscal year 1999.  The effect of the purchase rights 
to the Company's net loss, on a pro forma basis, was not material.

(11) Retirement Savings and Investment Plan

     The Company has a Retirement Savings and Investment Plan, a 
401(k) Plan, in which employees may participate by contributing 
specified percentages of qualified compensation subject to 
Internal Revenue Service limitation.   The Company may make 
discretionary contributions to a maximum of 100% of each 
participant's contribution.   For the year ended January 31, 1999, 
the Company recognized expense of $23,633 for discretionary 
contributions into the Plan.    For the year ended January 31, 
1998, the Company recognized expense of $213,495, of which 
$147,174 related to continuing operations.  The Company's 
contributions to the Plan were funded subsequent to each year end 
through the issuance of 12,197 and 31,629 shares of the Company's 
common stock for fiscal 1999 and 1998, respectively.  There were 
no expenses recorded related to the Plan for the year ended 
December 31, 1996.
     
(12) Related Party Transactions

     During 1997, the Company arranged for approximately $400,000 
of funding for DiaLogos from investors, which consisted of 
officers and directors of the Company.  In exchange for the 
funding, investors received 18.5% of DiaLogos' common shares.
          
     Prior to January 31, 1998, DiaLogos has leased office space 
from the Company under a sublease beginning October 1996.  The 
Company recognized $120,204 and $15,195 of sublease income from 
DiaLogos for the years ended January 31, 1998 and December 31, 
1996. 

(13) Commitments and Contingencies

     (a) Leases

         The Company leases office space and certain equipment 
under noncancelable operating lease agreements extending through 
May, 2004.  Rent expense related to these operating leases 
amounted to approximately $403,000, $201,000, and $168,000 for the 
years ended January 31, 1999 and 1998, and December 31, 1996, 
respectively. 

         The Company also leases certain equipment and furniture 
and fixtures under capital leases with terms ranging from three to 
five years.  At January 31, 1999, fixed assets on the consolidated 
balance sheets included capital leased assets with a cost of 
$598,626 and accumulated amortization of $274,513.  Amortization 
expense related to fixed assets held under capital leases is 
included with depreciation and amortization expense.

         Future minimum lease payments under non-cancelable 
operating leases with remaining terms in excess of one year and 
future minimum lease payments under capital leases as of January 
31, 1999 are as follows:

                                       Capital       Operating
                                       Leases         Leases
                                     ____________   ____________
Year ending January 31:                            
2000                                $    253,932    $   401,500
2001                                      98,455        388,500
2002                                      47,019        369,600
2003                                      17,964        214,200
2004                                       5,988         21,100
                                     ____________   ____________
Total minimum lease payments             423,358    $ 1,394,900
                                                    ____________
                                                    ____________
Less amounts representing interest       (52,054)             
Present value of minimum lease       ____________
    payments                             371,304              
Less current portion of capital 
    lease obligations                    222,558     
                                     ____________ 
Long-term portion of capital 
    lease obligations               $    148,746       
                                     ____________ 
                                     ____________ 


     (b) Employment Agreements

         The Company has entered into an employment agreement with 
an officer that expires on June 30, 2001.   In addition to a 
defined base salary, the officer is entitled to discretionary 
bonus and stock incentive arrangements, as approved by the Board 
of Directors.   The annual discretionary bonus is to be determined 
by the Board of Directors and cannot exceed 100% of the annual 
base salary.   This individual is also entitled to defined 
termination benefits under specified employment or change in 
control conditions.

         The Company has also entered into employment agreements 
with other officers and employees that generally provide annual 
salary, discretionary bonus and stock incentive provisions, all 
subject to the approval of the Board of Directors.

     (c) Legal Contingencies

         Various lawsuits arising during the normal course of 
business are pending against the Company and its consolidated 
subsidiaries.  Currently, the Company is involved with preliminary 
negotiations relating to an arbitration where the third party is 
seeking to recover damages of approximately $1,000,000.  
Management believes that the case is without merit and intends on 
vigorously contending the arbitration.  As the arbitration is 
still in the very early stages, no meaningful evaluation of the 
amount or range of possible loss or gain can be made at the 
present time.  In the opinion of management, the ultimate 
liability, if any, resulting from this action or other matters 
will have no material effect on the Company's consolidated 
financial position or results of operations.

(14) Operating Segments

     Based upon management's organization of its products and 
services, the company has three reportable segments: Healthcare 
Solutions (ChartMaxx, OptiMaxx, and FutureCore), Workflow and 
Document Management (Universal Document), and Distributed 
Computing Products and Services (DiaLogos).  The Company's 
management evaluates performance of each segment based on profit 
or loss from operations before allocation of corporate expenses, 
unusual, infrequent and extraordinary items, interest and income 
taxes.  The accounting policies of the segments are the same as 
those described in the summary of significant accounting policies 
(see Note 1 to the Consolidated Financial Statements).  

    The following table presents the revenues, segment operating 
loss, capital expenditures, depreciation and amortization, and 
total assets of the Company by operating segment:





<TABLE><CAPTION>                                          
                                                       January 31,              January 31,              December 31,
                                                          1999                     1998                      1996
                                                    _______________           _______________           ______________
<S>                                                 <C>                       <C>                       <C>
Revenues                                          
   Healthcare solutions                             $  9,285,097                 9,256,064                 3,467,592
   Workflow and Document Management                    1,421,963                 1,186,825                 1,100,052
   Distributed Computing Products and Services         1,471,046                     -                         -       
      Less intercompany (a)                             (748,122)                 (241,737)                    -  
                                                    _______________           _______________           ______________
                                                    $ 11,429,984                10,201,152                 4,567,644
                                                    _______________           _______________           ______________
                                                    _______________           _______________           ______________
                                          
Segment operating loss  (b)                                           
   Healthcare solutions                             $  3,233,699)               (1,049,406)               (1,010,276)
   Workflow and Document Management                      (27,231)               (1,498,981)                  130,302
   Distributed Computing Products and Services        (1,857,143)                    -                         -      
                                                    _______________           _______________           ______________
                                                    $ (5,118,073)               (2,548,387)                 (879,974) 
                                                    _______________           _______________           ______________
                                                    _______________           _______________           ______________
Capital expenditures (c)                                          
   Healthcare solutions (d)                         $    471,337                   326,747                   586,612
   Workflow and Document Management                        7,460                    24,482                    57,167
   Distributed Computing Products and Services            28,211                     -                         -    
                                                    _______________           _______________           ______________
                                                    _______________           _______________           ______________
                                                    $    507,008                   351,229                   643,779
Depreciation and amortization                                          
   Healthcare solutions (d)                         $    324,459                   201,717                   132,468
   Workflow and Document Management                       30,643                    24,483                    11,321
   Distributed Computing Products and Services (e)       211,710                     -                         -      
                                                    _______________           _______________           ______________
 
                                                    $    566,812                   226,200                   143,789
                                                    _______________           _______________           ______________
                                                    _______________           _______________           ______________
Total assets                                           
   Healthcare solutions (d)                         $ 11,397,917                22,917,353                10,401,315
   Workflow and Document Management                      475,932                   546,978                 1,698,382
                                                    _______________           _______________           ______________
   Distributed Computing Products and Services         1,802,958                 1,191,960                    -       
                                                    $ 13,676,807                24,656,291                12,099,697
                                                    _______________           _______________           ______________
                                                    _______________           _______________           ______________

</TABLE>






(a)  Intercompany revenues are based upon fair value of the 
     transaction.
(b)  Before corporate expenses and unusual items
(c)  Includes acquisitions, excludes capital lease purchases of 
     $327,792 related to DiaLogos for the year ended January 31, 
     1999.
(d)  The Company has not historically maintained a separate 
     balance sheet for its corporate assets.  The Healthcare 
     Solutions' balances include segment and corporate activity.
(e)  DiaLogos also had amortization of excess of cost over fair 
     value of net assets acquired of $86,801 for the year ended 
     January 31, 1999.

     Reconciliations of segment data to the Company's consolidated 
data follow:
                           January 31,   January 31,  December 31,
                              1999          1998          1996
                           ___________   ___________  ____________
Operating loss:                                          
   Segments              $ (5,118,073)   (2,548,387)     (879,974)
   Corporate               (3,434,867)   (4,288,604)   (3,236,349)
   Acquired in-process 
       technology               -          (710,318)        -     
                           ___________   ___________  ____________  
      Operating loss       (8,552,940)   (7,547,309)   (4,116,323)
Other income (expenses):                                          
   Synergis expenses       (2,070,731)   (3,707,945)        -       
   Other income-net           (14,751)     (231,922)      124,663
   Minority interest          297,000          -            -      
                           ___________   ___________  ____________ 
Loss from continuing 
   operations before
   income tax benefit    $(10,341,422)  (11,487,176)   (3,991,660) 
                           ___________   ___________  ____________
                           ___________   ___________  ____________
 
     All of the company's operations are located in the United 
States.  Also, the company primarily sells to customers within the 
United States.  Revenues from customers located internationally 
were not material.
  
(15) Significant Customers

     Due to the size of certain of the Company's contracts, one 
contract can represent a significant portion of the Company's 
total revenue in a given year.  However, the customer base 
representing this portion of revenue varies each year making the 
Company not necessarily dependent upon one significant customer.  
For the years ended January 31, 1999 and 1998, and December 31, 
1996, a single customer accounted for 31%, 12%, and 15% of the 
Company's total revenues, respectively.   





<TABLE> <CAPTION>
(16)     Quarterly Results of Operations (Unaudited) 

     The following tables set forth selected quarterly financial information for the fiscal years ended January 31, 1999 and 1998.

Year ended January 31, 1999:                                                                      
                                            First              Second              Third              Fourth              
                                           Quarter            Quarter             Quarter             Quarter          Total
                                         ___________        ____________        _____________       ____________    ____________
<S>                                     <C>                 <C>                  <C>                <C>             <C>
Revenues                                $ 1,933,351           1,843,429            3,949,127          3,704,077      11,429,984
Operating loss from                                                                      
       continuing operations  (a)        (2,457,131)         (2,863,825)          (1,615,181)        (1,616,803)     (8,552,940)
Loss from continuing                                                                      
       operations                        (1,754,417)         (2,776,860)          (1,500,058)        (2,693,717)     (8,725,052)
Income from discontinued                                                                      
       operations                             8,443             168,856                 -                 -             177,299
Net loss                                $(1,745,974)         (2,608,004)          (1,500,058)        (2,693,717)     (8,547,753) 
                                         ___________        ____________        _____________       ____________    ____________
                                         ___________        ____________        _____________       ____________    ____________
                                                                      
Earnings per share - basic                                                                       
       and diluted:                                                                      
       Continuing operations            $     (0.29)              (0.45)               (0.25)             (0.45)          (1.43)
       Discontinued operations                 -                   0.03                 -                 -                 .03
                                         ___________        ____________        _____________       ____________    ____________
       Net loss                         $     (0.29)              (0.42)               (0.25)             (0.45)          (1.40) 
                                         ___________        ____________        _____________       ____________    ____________ 
                                         ___________        ____________        _____________       ____________    ____________
Weighted average shares                                                                           
       outstanding                        6,160,157           6,170,726            6,085,537          6,016,325       6,109,439
                                         ___________        ____________        _____________       ____________    ____________
                                         ___________        ____________        _____________       ____________    ____________
                                                                      
                                                                     


Year ended January 31, 1998:                                                                      
                                            First              Second              Third              Fourth              
                                           Quarter            Quarter             Quarter             Quarter          Total
                                         ___________        ____________        _____________       ____________    ____________
                                                                      
Revenues                                $ 1,413,119           3,049,527            3,122,789          2,615,717      10,201,152
Operating loss from                                                                      
       continuing operations (a) (b)     (1,738,155)           (724,098)          (1,513,708)        (3,571,348)     (7,547,309)
Loss from continuing                                                                      
       operations (c)                    (1,614,060)           (550,847)          (1,446,387)        (4,400,105)     (8,011,399)
Income from discontinued                                                                      
       operations (d)                       185,672             347,781              269,036         10,313,999      11,116,488
Net income (loss)                       $(1,428,388)           (203,066)          (1,177,351)         5,913,894       3,105,089
                                         ___________        ____________        _____________       ____________    ____________
                                         ___________        ____________        _____________       ____________    ____________
                                                                      
Earnings per share - basic                                                                       
       and diluted:                                                                      
       Continuing operations  (e)       $     (0.27)              (0.09)              (0.24)              (0.74)          (1.35)
       Discontinued operations                 0.03                0.06                0.04                1.73            1.87
                                         ___________        ____________        _____________       ____________    ____________
       Net income (loss)  (e)           $     (0.24)              (0.03)              (0.20)               1.00             .52
                                         ___________        ____________        _____________       ____________    ____________
                                         ___________        ____________        _____________       ____________    ____________
Weighted average shares                                                                           
       outstanding                        5,921,546           5,913,413           5,919,985           5,936,139       5,922,781
                                         ___________        ____________        _____________       ____________    ____________
                                         ___________        ____________        _____________       ____________    ____________
                </TABLE>  


                                                   




Notes to quarterly results of operations:

(a)  Certain amounts from prior quarters have been restated to 
     conform to fourth quarter, fiscal 1999 presentation.
(b)  During the fourth quarter of the year ended January 31, 1998 
     and in conjunction with the Company's acquisition of a 
     majority interest in DiaLogos, $710,318 of in-process 
     research and development was charged to the results of 
     operations as of the date of acquisition.
(c)  During the fourth quarter of the year ended January 31, 1998, 
     the Company expensed $2,979,555 in deferred acquisition and 
     offering costs related to the postponed initial public 
     offering and acquisitions by its subsidiary, Universal 
     Document.
(d)  Income from discontinued operations for the fourth quarter
     includes a $10,268,710 after-tax gain related to the sale of 
     the assets of the Company's IntelliCode division.
(e)  Quarterly amounts are not additive.

(17) Subsequent Events and Liquidity

     Subsequent to year-end, the Company entered into an Agreement 
(the "Agreement") with three investment firms (the "Investors") to 
obtain $6,100,000 in debt and equity financing.  The terms of the 
Agreement provide for financing of $4,100,000 in Series A 
Convertible Preferred Shares (the "Preferred Shares") and 
$2,000,000 in subordinated debentures (the "Notes"). The proceeds 
of the financing will be utilized to fund working capital 
requirements and continue the market penetration of certain of the 
Company's core products.  Certain terms of the agreement, 
including the authorization of the Preferred Shares, are subject 
to shareholder approval at the Company's special and annual 
shareholders' meeting scheduled for June 18, 1999. 

       On April 30, 1999, the Company issued the Notes, due 2004, 
with a coupon rate of 10% in the first year and 12% thereafter.  
The principal portion of the Notes is payable as follows: $666,666 
in April 2002,  $666,667 in April 2003 and $666,667 in April 2004; 
however, the Company may redeem the Notes at any time during their 
term without penalty.  The Notes provide that if the Preferred 
Shares are authorized, and certain additional terms related to the 
Agreement are approved, by the Company's shareholders prior to 
July 30, 1999, then the Company will issue to the holders of the 
Notes five-year warrants to purchase 281,137 Preferred Shares at 
an exercise price not to exceed $1.90.  This warrant price is 
subject to adjustment if the Company does not meet specified 
requirements relating to the appreciation of its stock price at 
the end of a defined two-year period.  However, the Notes also 
provide that if the Preferred Shares are not authorized, and 
certain additional terms related to the Agreement are not 
approved, by the Company's shareholders prior to July 30, 1999, 
then (a) the entire amount of principal and interest which remains 
unpaid shall become due and payable as of November 28, 1999 and  
(b) the Company shall immediately issue to the holders of the 
Notes, for no additional consideration shares of the Company's 
Common Stock as described in the Agreement and 281,137 warrants to 
purchase shares of Common Stock. 

     In addition, subject to shareholder approval on or before 
July 30, 1999, the Company has agreed to issue to the Investors 
2,371,815 Preferred Shares at a purchase price of $1.729 per 
share. The Preferred Shares will pay dividends quarterly at a rate 
of 4% per share for the first four years, increasing to 10% 
thereafter, and accruing on a cumulative basis.  The Preferred 
Shares include (a) voting rights, (b) receive preferential 
treatment upon liquidation of the Company and (c) convert into 
Common Shares upon certain events.  Also, subject to shareholder 
approval on or before July 30, 1999, the Company has agreed to 
issue to the Investors ten-year warrants for the purchase (subject 
to adjustment as provided therein) of 759,562 Preferred Shares.  
These warrants cannot be exercised unless the value of the 
Company's stock price as traded on the NASDAQ over a twenty-day 
period exceeds $7.28.

In conjunction with the new financing agreement previously 
described, the Company's existing line of credit with a limit of 
$3,250,000 was amended to reduce the limit and to extend a portion 
of the term until February 2000.  This line of credit is senior to 
the subordinated debt referred to in the preceding paragraphs.  
See Note 7 to the consolidated financial statements for the terms 
of the new financing.

Since its inception in 1991, the Company has funded its 
operations, working capital needs and capital expenditures 
primarily through a combination of cash generated by operations, 
debt financing and offerings of its common stock to the public.  
Over the past few years, the Company's net cash outlays have 
exceeded its ability to generate revenue and cash through 
operations resulting in a working capital deficit.  Management 
believes that the additional financing agreements entered into 
subsequent to year-end, along with the execution of its current 
operating plan, will be sufficient to finance current working 
capital requirements.  
                                      
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON 
ACCOUNTING AND FINANCIAL DISCLOSURE.

None.




PART II

<TABLE><CAPTION>
ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

     The Company's executive officers and directors are as follows:
     Name                              Age                        Position
     <S>                               <C>                        <C>
     Richard A. Mahoney                51                         Chairman of the Board, Chief Executive Officer and President
     Philip S. Present II              48                         Senior Vice President, Chief Operating Officer and Director
     Timothy P. McMullen               44                         Vice President of Sales and Marketing
     Daniel A. Silber                  50                         Vice President of Finance and Chief Financial Officer
     Paul F. Albrecht                  44                         Vice President and Chief Technology Officer
     Jay Hilnbrand                     65                         Director and Retired General Manager of Universal Document
     Robert E. Kenny III               43                         Secretary and Director
     Martin A. Neads                   50                         Director
     Paul J. Stein                     52                         Director

</TABLE>




Directors are elected annually by the shareholders and serve for 
one year terms.  Officers serve at the discretion of the Board of 
Directors and are elected on an annual basis.

Richard A. Mahoney has been the Company's President and a director 
of the Company since January 1991.   While Mr. Mahoney has been 
the President of the Company since its inception, Mr. Mahoney has 
held the titles of Chairman of the Board and Chief Executive 
Officer of the Company since November 1995.

Philip S. Present II joined the Company in April 1995 as Vice 
President of Corporate Development.  Mr. Present was named the 
Chief Operating Officer of the Company in June 1996.  He became a 
director of the Company on December 13, 1997 to fill a vacancy 
created on the board by an increase in the number of directors of 
the Company from five to six.  From September 1973 to March 1995, 
Mr. Present was employed by the certified public accounting firm 
of KPMG LLP.  

Timothy P. McMullen has been the Vice President of Sales and 
Marketing since December 13, 1997.  He joined the Company as Vice 
President, Corporate Accounts and Managed Care in June 1996 after 
sixteen years with the Hill-Rom Co. Inc.  At Hill-Rom, the world's 
largest manufacturer and distributor of patient beds and patient 
environments, he held several senior positions including Vice 
President of Corporate Accounts, Merchandising, International, and 
Domestic Sales.
 
Daniel A. Silber joined the Company as Vice President of Finance 
and Chief Financial Officer in May 1995.  From 1993 until he 
joined the Company, he was Chief Financial Officer for Saturday 
Knight LTD, a manufacturer and distributor of bathroom 
accessories.

Paul F. Albrecht was elected Vice President and Chief Technology 
Officer on December 13, 1997 following his tenure as General 
Manager of the ChartMaxx Division of MedPlus since May 16, 1994.  
Prior to joining the Company, Mr. Albrecht had been the Director 
of the Systems Development Area for Cincinnati Bell Information 
Systems since December 1991.

Jay Hilnbrand, age 65, has been since April 1994, except for the 
period from December 1, 1998 until February 16, 1999, a director 
of the Company and is the retired General Manager of Universal 
Document Management Systems, Inc., which became a wholly-owned 
subsidiary of the Company in 1995.

Robert E. Kenny III, an attorney engaged in the private practice 
of law since 1980, has served as Secretary and a director of the 
Company since its inception.

Martin A. Neads became a director of the Company in December 1998.  
Mr. Neads is currently an executive director and business 
consultant with European IT Solutions, Ltd. ("EITS").  Prior to 
joining EITS, Mr. Neads was Vice President and General Manager of 
Operations and Senior Vice President and General Manager of the 
Software Products Division for Structural Dynamics Research Corp. 
("SDRC"), a leading international provider of mechanical design 
automation software and engineering services.

Paul J. Stein has been a director of the Company since 1991.  Mr. 
Stein has been a self-employed marketing consultant and 
manufacturer's representative since October 1990.

Additional information regarding the Company's officers and 
directors is incorporated herein by reference to the information 
set forth under the caption "Certain Relationships and Related 
Transactions" of the Proxy Statement for the Company's Annual 
Meeting of Shareholders to be held on June 18, 1999.  Such Proxy 
Statement will be filed with the Securities and Exchange 
Commission within 120 days after the end of the fiscal year 
covered by this Form 10-KSB.

Compliance with Section 16(a) of the Securities Exchange Act of 
1934

All transactions executed in 1998 by the Company's directors, 
officers and beneficial owners, were, to the Company's knowledge, 
reported in a timely fashion as required by Section 16(a).

ITEM 10.  EXECUTIVE COMPENSATION.

The information set forth under the caption "Executive 
Compensation" of the Proxy Statement for the Company's Annual and 
Special Meeting of Shareholders scheduled for June 18, 1999, is 
incorporated herein by reference.  Such Proxy Statement will be 
filed with the Securities and Exchange Commission within 120 days 
after the end of the fiscal year covered by this Form 10-KSB.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND 
MANAGEMENT.

The information set forth under the caption "Security Ownership of 
Certain Beneficial Owners and Management" of the Proxy Statement 
for the Company's Annual and Special Meeting of Shareholders  
scheduled for June 18, 1999, is incorporated herein by reference.  
Such Proxy Statement will be filed with the Securities and 
Exchange Commission within 120 days after the end of the fiscal 
year covered by this Form 10-KSB.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information set forth under the caption "Certain Relationships 
and Related Transactions" of the Proxy Statement for the Company's 
Annual and Special Meeting of Shareholders scheduled for June 18, 
1999, is incorporated herein by reference.  Such Proxy Statement 
will be filed with the Securities and Exchange Commission within 
120 days after the end of the fiscal year covered by this Form 10-
KSB.





<TABLE><CAPTION>
ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)  The following exhibits are hereby filed as part of this Form 10-KSB:
                                                                                                                        Sequential
Exhibit Number   Description of Exhibits                                                                                Page Number
______________   _____________________________________________________________________________________________________  ___________
<S>               <C>                                                                                                   <C>    
2                 Asset Purchase Agreement, dated January 28, 1998, by and between Becton, Dickinson and Company and 
                  MedPlus, Inc.                                                                                         See note 1
3                 Amended Articles of Incorporation and Code of Regulations                                             See note 2
10.1              Lease between MedPlus, Inc. and Duke Realty Limited Partnership for principal offices, 
                  dated April 24, 1995                                                                                  See note 3
10.2              Executive Employment Agreement dated October 31, 1995 between MedPlus, Inc. and Richard A. Mahoney    See note 3
10.3              First Lease Amendment between MedPlus, Inc. and Duke Realty Limited Partnership for principal 
                  offices, dated December 6, 1996                                                                       See note 4
10.4              Second Lease Amendment between MedPlus, Inc. and Duke Realty Limited Partnership for principal 
                  offices, dated December 6, 1996                                                                       See note 4
10.5              Letter Agreement between MedPlus, Inc. and Dialogos Incorporated dated January 31, 1997               See note 4
10.6              Agreement by and between MedPlus, Inc. and Growth Management Advisors, Inc. dated July 10, 1997       See note 5 
10.7              Amendment to Stock Purchase Agreement by and among Universal Document, Jay and Judy Hilnbrand and 
                  Robert C. Weiss dated August 12, 1997                                                                 See note 5
10.8              Agreement by and between MedPlus, Inc. and Jay Hilnbrand dated May 1, 1997                            See note 5
10.9              Second Amendment of Stock Purchase Agreement by and among Universal Document, Jay and Judy Hilnbrand  
                  and Robert C. Weiss dated December 10, 1997                                                           See note 6
10.10             Amendment to Agreement by and between Jay Hilnbrand and MedPlus, Inc. dated December 10, 1997         See note 6
10.11             OptiMaxx[tm] And Step2000[r] Software License, Hardware Purchase and Related Services Agreement dated 
                  August 31, 1998 by and between MedPlus, Inc. and Quest Diagnostics Incorporated                       
10.12             Employment Agreement dated February 1, 1999 by and between MedPlus, Inc. and Philip S. Present II              
10.13             Employment Agreement dated February 1, 1999 by and between Timothy P. McMullen and MedPlus, Inc.              
10.14             Employment Agreement dated February 1, 1999 by and between Daniel A. Silber and MedPlus, Inc.              
10.15             Employment Agreement dated February 1, 1999 by and between Paul F. Albrecht and MedPlus, Inc.              
10.16             Securities Purchase Agreement dated April 30, 1999 by and among MedPlus, Inc. and Cahill, Warnock 
                  Strategic Partners, L.P., et al.              
13                Annual Report to Shareholders                                                                         See note 7
21                Subsidiaries of MedPlus, Inc.              
23                Consent of KPMG LLP          
    </TABLE>

Note 1: Incorporated by reference to the Company's Report on Form 
8-K filed on February 11, 1998.

Note 2: Incorporated by reference to the Registration Statement on 
Form SB-2, Registration No. 33-77896C, effective May 24, 1994.

Note 3: Incorporated by reference to the Registration Statement on 
Form S-1, Registration No. 33-98696, effective November 21, 1995.

Note 4: Incorporated by reference to the Company's Annual Report 
on Form 10-KSB filed March 27, 1997.

Note 5: Incorporated by reference to the Company's Quarterly 
Report on Form 10Q-SB/A filed August 18, 1997.

Note 6:  Incorporated by reference to the Company's Annual Report 
on Form 10-KSB filed May 1, 1998

Note 7: Pursuant to general Instruction F of Form 10-KSB and 
Regulation 240.14a(d) of the Securities Exchange Act of 1934, the 
Issuer's Annual Report to the Security Holders for its fiscal year 
ended January 31, 1999 has been combined with the required 
information of Form 10-KSB and is being filed with the U.S. 
Securities and Exchange Commission and submitted to the 
registrant's shareholders on an integrated basis.
          
      (b) The following report on Form 8-K was filed during the 
three-month period ended January 31, 1999:

(i)  Current Report on Form 8-K filed December 23, 1998 announcing 
that On December 12, 1998, the registrant's Board of Directors 
issued a press release announcing (1) the resignation of Jay 
Hilnbrand from the registrant's Board of Directors, (2) the 
election of Martin Neads to the registrant's Board of Directors and 
(3) the adoption of a stock option repricing plan pursuant to which 
full-time employees of the registrant and its subsidiaries who 
owned options to purchase the registrant's common stock as of 
December 11, 1998 can elect to exchange all of those options for 
options with an exercise price of $2.28.



<TABLE><CAPTION>
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.

                         MEDPLUS, INC., Registrant


                         By:__/s/ Richard A. Mahoney_____
                              Richard A. Mahoney
                              President

                         Date:  April 30, 1999


     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>                                      <C>                                         <C>

     _/s/  Richard A. Mahoney__               Chairman of the Board, Chief                April 30, 1999
     Richard A. Mahoney                       Executive Officer and President
                                              (Principal Executive Officer)               
                    
     _/s/  Daniel A. Silber_____              Vice President of Finance and               April 30, 1999
      Daniel A. Silber                        Chief Financial Officer
                                              (Principal Financial and
                                              Accounting Officer)

      /s/  Robert E. Kenny III                Secretary and Director                      April 30, 1999
     Robert E. Kenny III


      /s/  Paul Stein                          Director                                   April 30, 1999
     Paul Stein
                  

     _/s/  Jay Hilnbrand________               Director                                   April 30, 1999
     Jay Hilnbrand


      /s/  Martin A. Neads                     Director                                   April 30, 1999
     Martin A. Neads                                                                 


      /s/  Philip S. Present II                Director                                   April 30, 1999
     Philip S. Present II                                                                 











</TABLE>