UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ________________________

                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
(Mark  One)

[x]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT  OF  1934.

For  the  fiscal  year  ended  June  30,  2002

[  ]     TRANSITION  REPORT  PURSUANT  TO  SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE  ACT  OF  1934.

For  the  transition  period  from  to

                         Commission file number 0-16061
                                                -------

                             Criticare Systems, Inc.
                -------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


         Delaware                                      39-1501563
----------------------------------           -----------------------------
(State or Other Jurisdiction of            (I.R.S. Employer Identification  No.)
Incorporation  or  Organization)

       20925 Crossroads Circle, Suite 100, Waukesha, Wisconsin     53186
       -------------------------------------------------------     -----
             (Address of Principal Executive Offices)            (Zip Code)

        Registrant's telephone number, including area code:  262-798-8282
                                                             ------------

           Securities registered pursuant to Section 12(b) of the Act:

                                                   Name  of  Each  Exchange  on
     Title  of  Each  Class                              Which  Registered
     ----------------------                        ----------------------------
            NA                                                NA
          ------                                            ------
                           [COVER PAGE 1 OF 2 PAGES.]

<PAGE>
           Securities registered pursuant to Section 12(g) of the Act:

                       Voting Common Stock, $.04 Par Value
                (together with associated Preferred Stock Purchase Rights)
      --------------------------------------------------------------------
                                (Title of class)

     Indicate  by  check mark whether the registrant:  (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or  for  such shorter period that the
Registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days.  Yes  [  X  ]  No  [   ]

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

     The aggregate market value of the voting common stock held by nonaffiliates
of  the  registrant as of August 31, 2002 was approximately $31,820,000.  Shares
of  voting  common  stock  held  by  any  executive  officer  or director of the
Registrant  and  any person who beneficially owns 10% or more of the outstanding
voting  common  stock  have  been  excluded  from  this computation because such
persons  may be deemed to be affiliates.  This determination of affiliate status
is  not  a  conclusive  determination  for  other  purposes.

     On  August  31,  2002,  there  were  outstanding  11,199,524  shares of the
registrant's  $.04  par  value  voting  common  stock.

DOCUMENTS  INCORPORATED  BY  REFERENCE

     Portions  of the Proxy Statement for the Annual Meeting of the Stockholders
of the Registrant to be held December 6, 2002 are incorporated by reference into
Part  III  of  this  report.

                           [COVER PAGE 2 OF 2 PAGES.]


<PAGE>
                                     PART I
                                     ------

Item  1.  BUSINESS.
-------   --------

     Criticare  Systems,  Inc.  (the  "Company"  or  "Criticare")  designs,
manufactures  and markets vital signs and gas monitoring instruments and related
noninvasive  sensors  used  to monitor patients in many healthcare environments.
Since  a  patient's  oxygen, anesthetic gas and carbon dioxide levels can change
dramatically  within  minutes,  causing severe side effects or death, continuous
monitoring  of  these  parameters  is  increasing.  The  Company's  monitoring
equipment  improves  patient  safety  by  delivering accurate, comprehensive and
instantaneous patient information to the clinician.  The Company's products also
allow  hospitals  to  contain  costs  primarily  by  substituting cost-effective
reusable  pulse  oximetry sensors for disposable sensors, controlling the use of
costly  anesthetics  and  increasing  personnel  productivity.

     To  meet  the needs of end-users in a wide variety of patient environments,
the  Company has developed a broad line of patient monitors which combine one or
more  of  its  patented or other proprietary technologies, for monitoring oxygen
saturation,  carbon  dioxide  and  anesthetic  agents,  with standard monitoring
technologies  that  provide  electrocardiogram ("ECG"), invasive and noninvasive
blood pressures, temperature, heart rate and respiration rate.  In addition, the
Company's  VitalView  telemetry  system  allows one nurse to monitor up to eight
patients  simultaneously  from  a  convenient  central  location.  This  allows
hospitals  to  move  out  of the intensive care unit those patients that require
continuous monitoring, but do not need all of an intensive care unit's extensive
and  costly  personnel  and  equipment  resources.

     According  to  the  guidance  set  by  Statement  of  Financial  Accounting
Standards  No.  131,  the  Company  operates  in  one  business  segment  in the
healthcare  environment.  The  chief  operating  decision maker does not utilize
segmented  financial  statements  in  making decisions about resource allocation
because  the  business  activities  that  generate  revenue do not have expenses
specifically  associated  with them.  Therefore, no segment data is disclosed in
the  notes  to  the  financial  statements  in  Item  8.  However, the Company's
customer  base  is  differentiated  by  region  (see  note 9 in the notes to the
financial  statements  in  Item  8 for an analysis of sales by geographic area).

     The  Company  was  incorporated  under the laws of the State of Delaware in
October  1984.

Products
--------

     Criticare  markets a broad range of vital signs and gas monitoring products
designed  to  address  the  needs of a variety of end-users in different patient
environments.  Criticare's  monitors  display  information  graphically  and
numerically.  Many  of  the

<PAGE>
Company's  new  products,  as  well as those in development, focus on anesthesia
related  monitoring,  as  management  believes  this  is a high growth area with
relatively  few  competitors.  All  Criticare  monitors  incorporate  adjustable
visual  and  audible  alarms  to  provide  reliable patient-specific warnings of
critical conditions, and most of the Company's monitors record up to 60 hours of
trend data.  Criticare monitors are available with printer capability to provide
permanent  records  of  patient  data.

     Model  8100  Vital  Signs Monitors.  The full-featured CSI 8100 Vital Signs
     ----------------------------------
Monitor provides maximum flexibility for hospital, transport and outpatient care
settings.  The  unit's  custom  configurations  include  ECG,  ComfortCuff(TM)
noninvasive  blood  pressure, DOX(TM) digital oximetry, heart rate, temperature,
respiration  rate,  and nurse call interface.  Optional features include CO2 and
CO2/O2  monitoring  and an integrated printer.  The 8100 is well suited for busy
departments  that  require  basic  vital signs monitoring to conscious sedation.

     Model 8500 Poet IQ(TM) Anesthesia Gas Monitor.  The 8500 series of monitors
     ----------------------------------------------
is  used  in  conjunction  with  the  8100  series  and  provides  automatic
identification  and  quantification  of all five approved anesthetic agents. The
operating  system  consists  of  an  integrated, solid state module based upon a
proprietary  infrared  technology  developed  by  Criticare.  It  automatically
monitors  up  to  five  anesthetic agents plus nitrous oxide, oxygen, and carbon
dioxide. The system also utilizes a unique, disposable water trap component that
is  also  proprietary to the Company. This product is expected to be released in
October  2002  and will be marketed as a configurable system for applications by
original  equipment  manufacturers  ("OEMs") and as a Criticare branded product.

     Model 503DX, 504+, and 504DX Pulse Oximeters.  Criticare's complete line of
     --------------------------------------------
pulse  oximeters  meets  the  needs  of  virtually  all  clinical  environments,
including:  adult, pediatric and neonatal intensive care units, operating rooms,
emergency rooms, nursing homes, physicians' offices and ambulances.  The line is
designed  to  provide  accuracy  and  convenience  at  a competitive cost to the
end-user.

     Model  506DX  and  507EL  Patient  Monitors.  The 506DX and 507EL series of
     -------------------------------------------
monitors  are  comprised  of small, compact, portable, full-featured vital signs
monitors  configured to meet specific clinical needs.  The 506DX combines oxygen
saturation,  noninvasive  blood  pressure  and temperature and is ideal for spot
checking  patients'  vital  signs.  The  507EL  series  combines  ECG,  oxygen
saturation,  noninvasive  blood  pressure  and  temperature for a complete vital
signs  monitor  for  physician  offices and hospital applications.  The 507EL is
available with a color monitor display or a low cost black and white display and
is  an  effective monitoring system for the emergency room or the recovery room.


                                        2
<PAGE>
     Model  602-14  POET(TM)  LT  Monitor.  The hand-held POET LT provides small
     ------------------------------------
hospitals  and alternate care environments with compact, portable carbon dioxide
monitoring.  The  POET  LT  series  is an effective, low-cost solution for these
environments.

     VitalView(TM)  Central  Monitoring  Station.  The VitalView central station
     -------------------------------------------
makes  it  possible  for  one  nurse  or technician to monitor numerous patients
simultaneously.  The  VitalView  can receive, display and store data from a wide
variety  of  Criticare  monitors,  including  the  8100  and  MPT.

     MPT(TM) (Multiple Parameter Telemetry) Monitor.  The MPT monitor allows the
     ----------------------------------------------
transmission  of vital signs (ECG, blood oxygen saturation and noninvasive blood
pressure)  on a real time basis to a VitalView central station while the patient
is  ambulatory.  In  today's healthcare environment, hospitals benefit by moving
patients from expensive critical care departments as quickly as possible to less
expensive  general  nursing  floors.  MPT,  because  of  its complete monitoring
capability  and  its lower cost, allows the patient to be ambulatory while still
being  monitored  for  all  vital  signs.

     Pulse  Oximetry  Sensors.  Criticare  has designed proprietary, noninvasive
     ------------------------
sensors that can be used on any patient, from a premature infant to a full-grown
adult.  Criticare's  line  of  reusable  pulse  oximetry  sensors  offers  users
significant  cost savings compared to disposables.  Criticare's reusable sensors
generally  last  longer  than  the  one-year  warranty period and are easily and
inexpensively  cleaned  between  uses.  Criticare's  reusable  sensors include a
finger  sensor  for  routine  applications  and a multisite sensor for increased
placement  flexibility.  The  multisite sensor is fully immersible, allowing for
sterilization  between  patients.  The  Company also sells a range of disposable
sensors  designed for single use in cases where the facility would prefer to use
a  patient  charge  disposable  product.

     WaterChek(TM)/Chek-Mate  Filter System.  The Company's patented, disposable
     --------------------------------------
Water  Chek  system  separates  a patient's respiratory secretions from a breath
sample  before  it  enters  the  gas  monitor(s)  for  analysis.  The  Company's
proprietary,  disposable  Chek-Mate filter enhances the removal of moisture from
the  sample,  while  preventing  cross-contamination.  This  system  allows  the
monitor to operate effectively regardless of humidity or patient condition.  The
self-sealing  feature  also  protects  the  healthcare  provider  from potential
contamination.

     Automatic External Defibrillator.  In the fourth quarter of fiscal 2002 the
     --------------------------------
Company  entered  into a distribution agreement with a manufacturer of automatic
external  defibrillators  that will allow Criticare to sell their defibrillators
in  the  markets  in  which  Criticare  has an established presence.  This newly
developed  system  is believed to be the smallest and lightest package available
while  still  providing  clinically  advanced  defibrillation capabilities.  The
system  resides  in a rugged waterproof case, features Biphasic Wavecontrol(TM),
integrated  electrodes  and  intuitive operating parameters.  The  agreement for
the  Company  to  distribute  this  new  defibrillator  replaces  a  distributor
agreement  previously  set  up  with  another  manufacturer  of  defibrillators.


                                        3
<PAGE>
Marketing  and  Sales
---------------------

     Domestic  Sales.  At  August  31,  2002, the Company's domestic sales force
     ---------------
consisted  of  seven employees and 104 independent dealers.  The Company's sales
force  and  independent  dealers market the Company's products to many different
types  of  medical  facilities such as hospitals, surgery centers, nursing homes
and  physician  offices.  The  Company sells its higher-end monitors (MPT, Vital
View  Central  Station  and  anesthetic agent monitors) principally to hospitals
whereas  the  vital signs and pulse oximeters are sold primarily in non-hospital
settings.

     In  June 1999 the Company began to focus on selling to OEMs with the hiring
of  a senior manager to lead this effort.  Modules and stand-alone monitors were
developed and marketed for blood pressure, pulse oximetry, respiration rate, and
anesthetic  gases  for  specific  OEM  customers.  OEM  business  has  become  a
significant  sales  channel  for  the  Company and is expected to be the primary
driver  of  growth  in  future  periods.

     International  Sales.  One  of the Company's principal marketing strategies
     --------------------
has been to target international markets, particularly Europe, Latin America and
the  Pacific  Rim  countries.  During  fiscal 2002, Criticare sold its products,
principally  to  hospitals,  in  over  75  countries through over 75 independent
dealers.

     In  order  to  expand  its business in China and Taiwan, in fiscal 2002 the
Company  changed  its distributor in these countries.  This distributor will now
manufacture,  sell,  and  service Criticare labeled product in China and Taiwan.
Also  in  fiscal 2002, the Company entered into a manufacturing and distribution
agreement  with  a  Romanian company that will assemble and distribute Criticare
labeled  product  in  the  Black Sea Economic Zone, including Romania, Bulgaria,
Ukraine,  Belarus,  Greece,  Turkey,  Serbia,  Croatia,  Slovenia, Slovakia, and
Hungary.  The  Company  expects  to increase its international sales by entering
these  high  growth,  developing  markets.

     Most of the Company's international order processing, invoicing, collection
and  customer  service  functions  are  handled  directly  from  the  Company's
headquarters in Waukesha, Wisconsin. Criticare believes demand for the Company's
products  in  international  markets  is  primarily  driven  by cost containment
concerns,  and  increased  interest in using quality patient monitoring products
for  improved  patient  management.

     In  fiscal  2002,  39%  of  Criticare's  net  sales,  or $10.3 million, was
attributable  to  international sales, of which approximately 66% was from sales
in  Europe  and the Middle East, 13% was from sales to Pacific Rim countries and
21%  was  from sales to Canada and Central and South America. In fiscal 2001 and
2000,  41%  of  Criticare's  net sales were attributable to international sales.
Other  than inventory and accounts receivable for the Company's branch office in
India  totaling  approximately  $1.0 million, there are no material identifiable
assets of the Company located in foreign markets. The Company sells its products
in  United  States  dollars  and  is  therefore  not  subject  to

                                        4
<PAGE>
currency  risks  other  than  currency  fluctuations  from  its office in India;
however,  an  increase  in  the  value  of  the United States dollar relative to
foreign  currencies  could make the Company's products less price competitive in
those  markets.  In  addition,  significant  devaluation  of  certain  foreign
currencies could adversely affect the collectibility of accounts receivable from
international customers.  The Company analyzes this risk before making shipments
to  countries  it  views  as  unstable.

     Service, Support and Warranty.  Criticare believes that customer service is
     -----------------------------
a  key  element  of its marketing program. At August 31, 2002, the Company had a
customer  service  staff  of  19  people  at  its  Waukesha, Wisconsin facility.
Customer  service  support  is available 24 hours a day, seven days a week, with
the majority of customers' technical problems being resolved over the telephone.
The  customer  service staff also provide periodic training and education of the
direct  sales  force  who  in  turn  provide  training  to  the  end-users.

     Criticare's  monitors  and  sensors  are  warranted against defects for one
year.  If  a problem develops with a Criticare product while under warranty, the
Company  typically provides a replacement unit until the product can be repaired
at  the  Company's  facility. The Company offers extended warranties and service
contracts  on  all  of  its  monitors.

Manufacturing
-------------

     Historically,  Criticare  has  manufactured  and  assembled  its  products
internally,  principally  at the Company's facility in Waukesha, Wisconsin.  Due
mainly  to pricing pressures on monitoring systems worldwide, in fiscal 2001 the
Company  entered  into agreements with two offshore contract manufacturing firms
located  in  Ireland  and  Taiwan,  respectively,  that  exclusively manufacture
medical  devices in a regulated environment.  The contract manufacturing firm in
Taiwan also has manufacturing capabilities in China and a portion of Criticare's
production  is  being  transitioned  to  China  to continue to receive favorable
pricing.  The  Company  works  closely  with these two firms to maintain product
quality  and  reliability.  These  two  firms  perform the same rigorous quality
control  testing  at their facilities that Criticare had done in the past at its
own facility.  With the majority of the Company's manufacturing outsourced as of
the end of calendar 2001, Criticare concentrates on product enhancements and new
product  development,  customer  service, and increased involvement with its OEM
customers.  The  Company anticipates that it will continue limited production of
new  products  internally  during  the  development phase and for a short period
after  commercial  introduction until production can be effectively transitioned
to  offshore  manufacturers.

     Any  inability  of  these  offshore  manufacturers to deliver products on a
timely basis could have a material adverse effect on the Company.  However, each
of  these manufacturers has the ability to produce the majority of the Company's
products,  in addition to the dual manufacturing capabilities that the Taiwanese
company has to produce product in both Taiwan and China.  Therefore, the Company
is  not  totally  reliant

                                        5
<PAGE>
on  a  single  plant  or single source to supply product.  This factor, combined
with  the  Company's  ability  to continue to manufacture at its headquarters in
Waukesha,  Wisconsin,  reduces  the  Company's  risk  of  supply  interruption.

     The Company has achieved certification under the International Organization
for  Standardization's  (ISO)  standards  9001  and  9002.  Each of the offshore
contract  manufacturing  firms  has  achieved certification under ISO's standard
9001.  See  "Regulation."

Research,  Development  and  Engineering
----------------------------------------

     Criticare  has  focused  its  research,  development  and  engineering
expenditures  on  products  designed  to  meet  identified  market demands.  The
Company  seeks  to  apply  its  expertise  in  gas monitoring and related sensor
technology  to develop new products and adapt existing products for new markets.
At  August  31,  2002,  the  Company  had  an in-house research, development and
engineering  staff  of  22  people.  The  Company's  research,  development  and
engineering  expenditures  were  $2.3  million  in  fiscal 2002, $2.4 million in
fiscal  2001  and  $2.9  million  in  fiscal  2000.

     The  Company  made significant investments in engineering in fiscal 2000 to
update  the  entire  Criticare  product  line  and  develop the 8100 vital signs
monitor.  In  fiscal 2001 and fiscal 2002, research and development efforts were
more  focused on refinements to the 8100 product line and the development of the
8500  series  monitor which features automatic identification and quantification
of  all  five  approved  anesthetic  agents.

Competition
-----------

     The  markets  for  the  Company's products are highly competitive.  Many of
Criticare's  competitors,  including  its principal competitors described below,
have  greater  financial  resources,  more  established  brand  identities  and
reputations,  longer  histories in the medical equipment industry and larger and
more experienced sales forces than Criticare.  In these respects, such companies
have  a competitive advantage over Criticare.  The Company competes primarily on
the  basis  of  product  features,  the quality and value of its products (i.e.,
                                                                           ----
their  relative  price  compared  to  performance  features  provided)  and  the
effectiveness of its sales and marketing efforts.  The Company believes that its
principal  competitive advantages are provided by its focus on cost containment,
provided  in  part  by its outsourcing a large portion of its manufacturing, its
patented  and  other  proprietary  technology  and  software  for  noninvasive,
continuous  monitoring  of  oxygen,  anesthetic  gases,  carbon  dioxide  and
noninvasive  blood  pressure,  the  efficiency  and  speed  of  its research and
development  efforts,  and  its  established  international  presence.


                                        6
<PAGE>
     The Company believes that the worldwide anesthetic agent and carbon dioxide
monitor markets are comparatively fragmented, with Datex/Ohmeda as the principal
competitor.  The  Company's  principal  competitors  in the domestic gas monitor
market  include  Datex/Ohmeda  and  Agilent  (formerly Hewlett-Packard Company),
which  has  been  acquired  by  Philips.  The  market  for  vital signs monitors
includes  competitors  such as Agilent, Siemens A.G., Datex/Ohmeda and Spacelabs
Medical,  Inc.,  which  has  been  acquired  by  Datex/Ohmeda.

     The  Company  believes  that its principal competitor in Western Europe and
the  Pacific  Rim  countries  is  Datex/Ohmeda.

Regulation
----------

     As a manufacturer of medical diagnostic equipment, the Company is regulated
by  the  FDA  and  similar  foreign  governmental  agencies.  In  producing  its
products,  the  Company must comply with a variety of regulations, including the
good manufacturing practices regulations of the FDA.  In addition, it is subject
to  periodic  inspections  by  this  agency.  If the FDA believes that its legal
requirements  have  not  been  fulfilled,  it  has extensive enforcement powers,
including  the ability to ban or recall products from the market and to prohibit
the  operation  of  manufacturing facilities.  The Company believes its products
comply  with  applicable FDA regulations in all material respects.  In addition,
the  Company  received  ISO  9002  certification  on April 29, 1993 and ISO 9001
certification  on  July  8,  1994.

     Under  the  Federal  Food,  Drug  and Cosmetic Act, as amended, all medical
devices  are  classified  as  Class I, Class II or Class III, depending upon the
level  of  regulatory control to which they will be subject.  Class III devices,
which  are the most highly controlled devices, are subject to premarket approval
by  the  FDA  prior  to  commercial  distribution  in  the  United  States.

     The  Company's  current  products  have  not  been  subject  to  the  FDA's
comprehensive  premarket  approval  requirements,  but  are generally subject to
premarket  notification  requirements.  If  a  new  device  is  substantially
equivalent to a device that did not require premarket approval, premarket review
is satisfied through a procedure known as a "510(k) submission," under which the
applicant  provides  product  information  supporting  its  claim of substantial
equivalence.  The  FDA  may also require that it be provided with clinical trial
results  showing  the  device's  safety  and  efficacy.

     The Company believes that the products it is currently developing generally
will be eligible for the 510(k) submission procedure and, therefore, will not be
subject  to  lengthy premarket approval procedures.  However, these products are
still  being developed and there can be no assurance that the FDA will determine
that  the  products  may  be  marketed  without  premarket  approval.


                                        7
<PAGE>
     Criticare  seeks, where appropriate, to comply with the safety standards of
Underwriters'  Laboratories  and  the  Canadian  Standards  Association  and the
standards  of  the European Community.  To date, the Company has not experienced
significant regulatory expense or delay in the foreign markets in which it sells
its  products.  Industry and professional groups such as the American Society of
Anesthesiologists,  to  the  extent  they  have  the  power  to  mandate certain
practices or procedures as part of their profession's standard of care, are also
a  source  of  indirect  regulation  of  the  Company's  business.

Patents  and  Trademarks
------------------------

     The  Company  believes  one  of  its  principal  competitive  advantages is
provided  by  its patented and other proprietary technology including its sensor
technology,  infrared  specific  anesthetic gas monitoring technology, UltraSync
signal  processing  software and disposable respiratory secretion filter system.
The  Company  has  15  issued U.S. patents and four patent applications pending.
The Company's U.S. patents expire between 2004 and 2019.  Criticare also has two
issued  foreign patents and 11 foreign patent applications pending.  There is no
assurance  that  any  patents  held  or  secured by the Company will provide any
protection  or  commercial or competitive benefit to the Company.  There is also
no  assurance that the Company's products will not infringe upon patents held by
others.  The  Company  is the owner of United States trademark registrations for
"POET",  "MPT",  "REMOTEVIEW",  "MICROVIEW",  and  "WATERCHEK".

     The  Company  also  relies  upon trade secret protection for certain of its
proprietary  technology.  Although  the  Company  requires all employees to sign
confidentiality  agreements,  no assurance can be given that such agreements can
be  effectively  enforced  or  that  others  will  not  independently  develop
substantially  equivalent  proprietary  information  and techniques or otherwise
gain  access  to  or  disclose  the  Company's  trade  secrets.

Employees
---------

     At  August  31,  2002 Criticare had 84 employees, including 22 in research,
development  and  engineering,  19  in customer service, 15 in manufacturing and
operations, 13 in administration, 11 in sales and marketing, and four in quality
control.

     Many  of the Company's technical employees are highly skilled.  The Company
believes  that  its continued success depends in part on its ability to continue
to attract qualified management, marketing and technical personnel.  None of the
Company's  employees  are  subject  to  a  collective bargaining agreement.  The
Company  believes  that  its  relations  with  its  employees  are  good.


                                        8
<PAGE>
Backlog
-------

     Criticare's  backlog on June 30, 2002 and 2001 was $1,000,450 and $813,438,
respectively.  Criticare  generally  delivers its products out of inventory when
specified by the customer.  The Company does not believe that its backlog at any
date  is  indicative  of  its  future  sales.

Item  2.  PROPERTIES.
-------   ----------

     In  August  2002,  the  Company  sold  its  60,000  square foot building in
Waukesha,  Wisconsin  for $4,000,000 and leased back approximately 37,000 square
feet  of  this  building  to  serve  as  the  Company's headquarters, warehouse,
manufacturing, research and development and service facility.  The proceeds from
the sale were used to retire the mortgage note on the facility and resulted in a
debt  free balance sheet for the Company.  The lease expires on August 30, 2007,
with an option for the Company to extend for an additional three years, and with
rent  totaling  $22,423  per  month  for  the first year of the lease and annual
increases  approximating  3%  in  years  two,  three  and  five  of  the  lease.

Item  3.  LEGAL  PROCEEDINGS.
-------   ------------------

     In the normal course of business Criticare may be involved in various legal
proceedings  from  time  to  time.  Criticare  does  not believe it is currently
involved  in  any claim or action the ultimate disposition of which would have a
material  adverse  effect  on  Criticare.

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  the  fiscal  year  ended  June  30,  2002.

                                     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 (Symbol
CXIM).  As  of  June 30, 2002, there were approximately 233 holders of record of
the  common stock.  The Company has never paid dividends on its common stock and
has  no  plans  to  pay  cash  dividends  in  the  foreseeable  future.

                                        9
<PAGE>
<TABLE>
<CAPTION>

                                    Year Ended June 30,
                                     2002          2001
                                  ----------    ----------
<S>                              <C>    <C>    <C>    <C>
Quarter Ended:                    High   Low    High   Low
September 30 . . . . . . . .     $4.68  $3.30  $3.38  $2.31
December 31. . . . . . . . .     $5.23  $4.00  $3.00  $1.63
March 31 . . . . . . . . . .     $4.70  $3.50  $3.44  $1.94
June 30. . . . . . . . . . .     $5.81  $4.00  $4.49  $2.55


</TABLE>


     The  following  table summarizes share information for the Company's equity
compensation plans as of June 30, 2002, including the 1992 Employee Stock Option
Plan,  the  1992  Non-employee Stock Option Plan, the 1987 Employee Stock Option
Plan,  the  1987  Non-employee Stock Option Plan and the Employee Stock Purchase
Plan. All of these equity compensation plans have been approved by the Company's
shareholders.  The  Company  has also issued warrants to a consultant which have
not  been approved by the Company's shareholders. See Note 7 of the Notes to the
Consolidated  Financial  Statements  in  Item  8  of  this report for additional
information  regarding  these  warrants.


EQUITY  COMPENSATION  PLAN  INFORMATION
<TABLE>
<CAPTION>


                                                                                    Number  of  securities
                                                                                   remaining available for
                          Number of securities to be    Weighted average           future issuance under
                          issued  upon exercise of      exercise price of           equity compensation
                           outstanding  options,       outstanding  options,     plans (excluding securities
Plan category               warrants and rights        warrants and rights            in first column)
-------------             -------------------------    --------------------       ---------------------------
<S>                         <C>                        <C>                           <C>
Equity compensation
plans approved by
security holders. . .        1,209,620 shares            $2.26 per share               616,300 shares

Equity compensation
plans not approved by
security holders. . .          100,000 shares            $2.21 per share                     0 shares
                             ----------------            ---------------               --------------

  Total . . . . . . .        1,309,620 shares            $2.25 per share               616,300 shares

</TABLE>



                                       10
<PAGE>
Item  6.     SELECTED  FINANCIAL  DATA.
-------      -------------------------

     The  following table sets forth selected financial data with respect to the
Company  for  each  of  the  periods  indicated.

<TABLE>
<CAPTION>


                                                      Years Ended June 30,
                                                      --------------------

                                    2002          2001          2000          1999          1998
                                ------------  ------------  ------------  ------------  ------------
<S>                             <C>           <C>           <C>           <C>           <C>
Net sales  . . . . . . . . . .  $26,219,618   $27,736,304   $27,154,236   $28,512,507   $27,908,364
(Loss) income from operations.   (1,212,478)      (86,055)   (2,517,548)   (3,887,788)      306,216
Loss before income
  taxes and extraordinary gain   (1,425,181)     (178,232)   (2,686,388)   (4,388,171)     (499,276)
Net loss . . . . . . . . . . .   (1,425,181)     (178,232)     (186,388)   (4,388,171)     (499,276)
Net loss per common share--
  basic and diluted  . . . . .  $     (0.13)  $     (0.02)  $     (0.02)  $     (0.51)  $     (0.06)
Average shares outstanding . .   10,876,818    10,171,394     8,694,918     8,581,863     8,309,240
Stockholders' equity . . . . .  $18,387,067   $21,005,816   $18,798,952   $12,711,709   $17,282,997
Long-term obligations. . . . .    3,151,879     3,270,131     3,552,474     4,014,356     3,165,258
Working capital. . . . . . . .   15,464,899    17,995,488    16,257,780    10,340,014    13,716,891
Total assets . . . . . . . . .   25,474,256    29,871,854    27,210,867    24,041,987    24,726,819

</TABLE>


Item  7.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
-------      -------------------------------------------------------------------
RESULTS  OF  OPERATION.
----------------------

RESULTS  OF  OPERATIONS

     The  following  table  sets forth, for the periods indicated, certain items
from  the  Company's  Consolidated  Statements  of  Operations  expressed  as
percentages  of  net  sales.
<TABLE>
<CAPTION>


                                         PERCENTAGE  OF  NET  SALES
                                           YEARS  ENDED  JUNE  30,
                                         --------------------------

                                          2002    2001    2000
                                         ------  ------  -------
<S>                                      <C>     <C>     <C>
Net sales . . . . . . . . . . . . . . .  100.0%  100.0%   100.0%
Cost of goods sold. . . . . . . . . . .   62.8    59.4     60.6
Gross profit. . . . . . . . . . . . . .   37.2    40.6     39.4

Operating expenses:
Marketing . . . . . . . . . . . . . . .   21.5    23.0     29.5
Research, development and engineering .    8.9     8.8     10.5
Administrative. . . . . . . . . . . . .   11.4     9.1      8.6
Total . . . . . . . . . . . . . . . . .   41.8    40.9     48.6

Loss from operations. . . . . . . . . .   (4.6)   (0.3)    (9.2)

Interest expense. . . . . . . . . . . .   (0.9)   (0.9)    (1.0)
Interest income . . . . . . . . . . . .    0.3     0.5      0.3
Foreign currency exchange loss. . . . .   (0.5)     --       --
Gain on sale of stock                 .     --      --      9.2
Other income                    . . . .    0.3      --       --

Loss before income taxes. . . . . . . .   (5.4)   (0.7)    (0.7)
Income tax provision. . . . . . . . . .     --      --       --
Net loss. . . . . . . . . . . . . . . .   (5.4)%  (0.7)%   (0.7)%
</TABLE>




                                       11
<PAGE>
FISCAL  YEAR  ENDED  JUNE  30,  2002  COMPARED  TO  JUNE  30,  2001

     Net  sales  of  $26.2  million for the fiscal year ended June 30, 2002 were
down  5.5% from $27.7 million in fiscal 2001.  A 5.0% reduction in the number of
units shipped and a 3.9% decrease in the average selling price per unit were the
main  contributors  to  the  sales  decline  between  years.  A 2.0% increase in
accessory  sales  in  the current year partially offset the reduced sales volume
and  lower  average  selling  prices  on  the  Company's  monitors  and  related
equipment.

     International  sales  in  fiscal  2002  to  Criticare's distributors in the
United  Kingdom  (U.K.)  and  China  decreased  36.3%  from  the  prior year and
contributed  over  $1.1  million  to the Company's sales decrease between years.
Significant  cutbacks in health care spending in the U.K., where only critically
important  capital  expenditures  are  being  made, have negatively impacted the
Company's  sales  to its distributor in the U.K. in fiscal 2002.  The transition
to  a  new  distributor in China in fiscal 2002 is expected to provide long-term
sales  growth  opportunities for the Company, but in the short-term has resulted
in  reduced  sales  in fiscal 2002 as this change was implemented.  See "Forward
Looking  Statements".

     Domestic  sales  in fiscal 2002 were down $499,552 from the prior year, but
this was partially offset by higher sales to domestic OEM customers that were up
$182,186  in  fiscal  2002.  The decrease in domestic sales can be attributed to
the  poor  U.S.  economy  in fiscal 2002 and the events of September 11th, which
basically  eliminated  sales  from  one  of the Company's largest domestic trade
shows that was held that week.  OEM sales in fiscal 2002 increased for the third
consecutive  year  and  represented 19.5% of total company sales in fiscal 2002,
consistent with the Company's strategy to increase this segment of its business.

The gross profit percentage of 37.2% realized in fiscal 2002 was down from 40.6%
in  fiscal  2001.  Higher  manufacturing  costs  in  the first six months of the
current  fiscal  year  to  support  the  Company's  efforts  to  transition  its
manufacturing  offshore  by  the  end  of calendar year 2001 and the lower sales
volume  between  years  resulted  in an under-utilization of fixed manufacturing
costs  which  contributed  to  reduced  margins  in  fiscal  2002.  Due  to  the
outsourcing of the majority of the Company's products, approximately $509,000 of
fixed  costs  that had previously been classified as manufacturing expenses were
included  in  administrative expenses in the current year.  The favorable impact
of  this  change on margins was offset by a $621,000 increase in the reserve for
obsolete  inventory  that  was  deemed necessary due to continued high levels of
component  parts  being maintained by the Company after outsourcing the majority
of  its  manufacturing.


                                       12
<PAGE>
     Total  operating expenses in fiscal 2002 were $385,796 lower than the prior
year,  despite  a  $457,611 increase in administrative expenses, due mainly to a
$736,196  reduction  in  marketing expenses in fiscal 2002.  As noted above, the
higher  administrative  expenses  were  mainly  driven  by  a  change  in  the
classification  of  expenses  due to a change in the operations of the business.
Certain fixed costs that had been expensed as manufacturing costs in prior years
were  more  appropriately  classified as administrative expenses in fiscal 2002.
The  decrease  in  marketing  expenses  was  due  mostly to a reduction in sales
commissions  and  bonuses  earned from lower sales in fiscal 2002.  In addition,
the  elimination of a sales vice president position in the fourth quarter of the
prior  year resulted in a reduction in marketing salaries and fringe benefits in
fiscal  2002.

     In  addition  to  the  lower  sales and reduction in gross profit in fiscal
2002,  a  $120,526  increase in other expenses in fiscal 2002, due mostly to the
recognition  of  a  $119,188  foreign  currency  exchange  loss  related  to the
Company's operation in India, contributed to the $1,425,181 loss in fiscal 2002.

FISCAL  YEAR  ENDED  JUNE  30,  2001  COMPARED  TO  JUNE  30,  2000

     Net  sales  for  the  fiscal year ended June 30, 2001 increased 2% from the
prior  year.  However,  two  significant  and  isolated sales in the prior year,
combined  with  the  partial  return  of  product from one of these sales in the
current  year,  had  the  effect  of  increasing prior year revenue and reducing
current  year  revenue.  Adjusting for these items, the net sales in fiscal 2001
increased over $2.6 million, or 10.3%, above the prior year.  Approximately $2.1
million  of  this increase can be attributed to higher OEM sales, which grew 73%
from  the  prior  year  on  a  77% increase in the number of units shipped.  OEM
business  has  become a significant distribution channel in fiscal 2001.  Higher
replacement  part  shipments  contributed another $300,000 to the sales increase
between  years.

     The  gross profit percentage of 40.6% realized in fiscal 2001 improved from
the  39.4%  generated  in  fiscal  2000.  Margins  in fiscal 2001 were favorably
impacted  by  the recognition of $105,000 in deferred income from the settlement
of  a  contract  that  was  agreed to in January 2000 and fully satisfied in the
third  quarter  of  fiscal 2001.  In addition, a warranty reserve was reduced by
$105,000  due  to  favorable  warranty experience on extended warranty contracts
sold  to  customers,  and  a  reserve  for  obsolete  inventory was decreased by
$75,000.  These adjustments increased margins approximately 1.0 percentage point
in  fiscal  2001.

     Total  operating  expenses  were  $1,856,000  lower in fiscal 2001 than the
prior year, of which $1.2 million of this reduction was due to a decrease in bad
debt expense between years.  Marketing expenses in fiscal 2000 included bad debt
expense  of  $1.2 million, including a specific charge of $900,000 in the fourth
quarter  related  to  the receivable balances of certain international customers
that  were  deemed  to  be

                                       13
<PAGE>
uncollectible  during  the  fourth  quarter.  Marketing  expenses in fiscal 2001
included  a $300,000 recovery of a portion of the bad debt expense recognized in
the  fourth  quarter  of the prior year from the repossession of inventory sold,
and  more than offset the bad debt provision provided in fiscal 2001.  Excluding
the  $1.2  million  impact on bad debt expense between years, marketing expenses
were  still  down  $447,000  in  fiscal  2001, due mainly to more cost-effective
spending  on  travel and trade shows.  In addition to the reduction in marketing
expenses,  engineering  project  expenses were reduced nearly $500,000 in fiscal
2001,  due  to  significant  spending  incurred  in  fiscal  2000 related to the
development  of  the  8100  product  that was released in late fiscal 2000.  The
reduction  in  marketing  and engineering expenses more than offset the $200,000
increase  in  administrative  expenses  related  mostly  to  the termination and
replacement  of  a  senior  manager  in  fiscal  2001.

     The  overall  $1,856,000  reduction  in  operating expenses in fiscal 2001,
combined with slightly higher revenue and improved margins compared to the prior
year,  resulted  in  an  $86,000  loss  from  operations,  which  represented  a
significant  improvement  from the $2,518,000 operating loss generated in fiscal
2000.

     Other  income and expense in fiscal 2001 is comparable to that of the prior
year  with the exception of the $2.5 million gain recorded in fiscal 2000.  This
gain  related  to the private placement sale of a portion of the Company's stock
investment  in  Immtech  International,  Inc.,  in which the Company still has a
position.  The  large  gain  allowed  the  Company to offset the majority of the
operating  loss  produced  in  fiscal 2000, resulting in a net loss of $186,000,
that  was  $8,000  greater  than  the  $178,000  loss  generated in fiscal 2001.

CRITICAL  ACCOUNTING  POLICIES

     The  Company's  discussion  and  analysis  of  its  financial condition and
results  of  operations  are  based  upon  the  Company's consolidated financial
statements,  which  have  been prepared in accordance with accounting principles
generally  accepted  in  the  United  States. The preparation of these financial
statements  requires the Company to make estimates and judgments that affect the
reported  amounts  of  assets,  liabilities,  revenues and expenses, and related
disclosure  of  contingent  assets  and  liabilities.  On an on-going basis, the
Company  evaluates  its  estimates,  including those related to bad debts, sales
returns,  inventories  and warranty obligations. The Company bases its estimates
on  historical  experience and on various other assumptions that are believed to
be  reasonable  under the circumstances, the results of which form the basis for
making  judgments  about  the carrying values of assets and liabilities that are
not  readily  apparent  from other sources. Actual results may differ from these
estimates.  The  Company  believes the following accounting policies require its
more  significant  judgments  and  estimates  used  in  the  preparation  of its
financial  statements.


                                       14
<PAGE>
     REVENUE  RECOGNITION

     Revenues  and  the  costs  of  products  sold are recognized as the related
products  are shipped or installed, if there are significant installation costs.
This revenue recognition policy is utilized for shipment of product to customers
including  both  distributors  and  end-users.

     ESTIMATING  ALLOWANCES  FOR  DOUBTFUL  ACCOUNTS  AND  SALES  RETURNS

     The Company maintains allowances for doubtful accounts for estimated losses
resulting  from  the  inability  of  its  customers  to  make required payments.
Management  analyzes  specific  accounts  receivable  as  well as historical bad
debts,  customer  concentrations,  customer  credit-worthiness, current economic
trends,  foreign  currency  movements  and changes in its customer payment terms
when  evaluating the allowance for doubtful accounts. If the financial condition
of  one  of the Company's customers were to deteriorate, resulting in impairment
of  its  ability  to  make payments to the Company, additional allowances may be
required.

     The  Company  also  maintains  a sales returns reserve in order to estimate
potential  future  product returns related to current period revenue. Management
analyzes historical returns, current economic trends, changes in customer demand
and  acceptances  of  the Company's products when evaluating the adequacy of the
sales  returns  reserve.  Significant management judgments and estimates must be
made  and  used in connection with establishing the sales returns reserve in any
accounting  period. Material differences between actual sales returns experience
and  management's  estimates  may  affect  the  Company's  revenue in subsequent
periods.

     VALUATION  OF  INVENTORIES

     Inventories are stated at the lower of cost or market, with cost determined
on the first-in, first-out method.  The Company maintains a reserve for obsolete
inventory  that it utilizes to write down inventories for estimated obsolescence
or  unmarketable inventory equal to the difference between the carrying value of
the inventory and the estimated market value based upon assumptions about future
product  demand  and  market conditions.  If future product demand is lower than
expected  or if market conditions are less favorable than those projected by the
Company,  additional  charges  to  the  obsolescence  reserve  may  be required.

     During  fiscal  2002,  the  reserve for obsolete inventory was increased by
$621,000  to $946,000 at June 30, 2002 due to continued high levels of component
parts  being  maintained  by  the  Company after outsourcing the majority of its
manufacturing.


                                       15
<PAGE>
     PRODUCT  WARRANTY

     The  Company  reserves  for the estimated cost of product warranties at the
time  products  are  shipped  based  upon  its  historical  experience providing
warranty  coverage.  The  Company's warranty obligations are affected by product
failure  rates, material usage and service delivery costs incurred in correcting
a  product  failure.  If actual product failure rates, material usage or service
delivery  costs  differ  from  current  projections,  revisions to the estimated
warranty  reserve  would  be  required.

RECENTLY  ISSUED  ACCOUNTING  PRONOUNCEMENTS

     In August 2001, the Financial Accounting Standards Board (FASB) issued SFAS
No.  144, "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS
No.  144  addresses  the  recognition and measurement of long-lived assets to be
held  and  used  and the measurement of long-lived assets to be disposed of. The
Company  is  required  to adopt the provision of SFAS No. 144 beginning with its
fiscal year that starts July 1, 2002. The Company does not believe that adoption
of  SFAS  144  will  have  a  material  effect  on  its  consolidated  financial
statements.

     In  June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for Costs
Associated with Exit or Disposal Activities". SFAS No. 146 addresses significant
issues  regarding the recognition, measurement and reporting of costs associated
with  exit and disposal activities, including restructuring activities. SFAS No.
146  is  effective  for  exit  or  disposal  activities that are initiated after
December  31,  2002.  Given that SFAS No. 146 was issued in June 2002 and is not
yet  effective,  the  impact  on  the Company's financial position or results of
operations  from  adopting  SFAS  No.  146  has  not  been  determined.

     See  the  Summary of Significant Accounting Policies in Note 1 of the Notes
to  the  Consolidated  Financial  Statements  for  further  explanation of these
Statements  of  Financial  Accounting  Standards.

SUBSEQUENT EVENT

     On  August  6,  2002,  in part due to the new regulations imposed under the
Sarbanes-Oxley  Act,  the Company initiated an internal review of its import and
export  procedures.  On August 28, 2002, senior management of the Company became
aware  of  actions  that  may have violated United States import/export laws and
regulations. Senior management of the Company immediately authorized an internal
audit  of  these  possible violations, focusing on the sale of medical equipment
directly  or  indirectly  into an embargoed country and possible marking issues.
This  internal  audit  is  ongoing  and,  at  this time, management is unable to
determine  with  certainty the extent of any violations or the potential for the
imposition  of  penalties.  The import and export rules applicable to all United
States  companies  engaged  in  international  business  transactions  contain
compliance  guidelines. Violations may result in civil or criminal penalties, or
both,  as well as the potential loss of export privileges. The Company has taken
action  to  adopt  and  implement  a  written compliance program with respect to
applicable  import/export  rules.  The  Company  has also undertaken a voluntary
disclosure  with  the Bureau of Industry and Security ("BIS") and the Treasury's
Office  of Foreign Asset Control ("OFAC"). Although there is no assurance, based
upon a review of the internal audit to date and precedents, the Company believes
a  negotiated  settlement  of  any  violations  will not have a material adverse
effect  on  the  operations  of  the  Company.  At this time, the Company cannot
determine whether any monetary fines would have a material adverse effect on its
financial condition. The Company does not believe that the evidence supports the
denial  of  export  privileges;  however, any such penalty would have a material
adverse  effect on the Company's business. The Company further believes that the
voluntary  disclosure  to the BIS, OFAC and, possibly, other agencies will serve
to  mitigate  any  potential  adverse  consequences that otherwise might accrue.


                                       16
<PAGE>
LIQUIDITY  AND  CAPITAL  RESOURCES

     As  of  June  30, 2002, the Company had no short-term borrowings and a cash
balance  of  $3,523,070 that was up $160,966 from the $3,362,104 cash balance at
the  end  of fiscal 2001. The Company generated $283,269 of cash from operations
as  significant  reductions  in accounts receivables and additional decreases in
inventory  more than offset the $1,425,181 loss in fiscal 2002. The Company used
$513,307  of  cash to invest in property, plant and equipment and $86,767 to pay
down long-term debt. In addition, $197,727 of cash was used to repurchase 41,123
shares  of  the Company's common stock in accordance with the stock buyback that
was  approved by the Criticare Board of Directors in the third quarter of fiscal
2002.  The  majority  of  these uses of cash were funded by $654,843 in proceeds
received  from  the issuance of common stock related to the exercise and payment
of  303,300  stock  options  in  the  last  three  quarters  of  fiscal  2002.

     As  of  June  30, 2001, the Company had a cash balance of $3,362,104 and no
short-term  borrowings. In October 2000, the Company received $4,019,114 million
in  proceeds  from  a  private  placement  of additional shares of the Company's
common stock. These proceeds allowed the Company to increase its cash balance in
fiscal  2001 by $3,247,274 from the prior year. In fiscal 2001, the Company used
$688,322 of these proceeds for capital expenditures, $80,432 to retire long-term
debt,  and  $103,289  to  fund  operations.

     In  August  2002  the  Company sold its building in Waukesha, Wisconsin and
leased back approximately 62% of the building's square footage. The building was
sold for $4,000,000 and a gain of approximately $41,000 was realized on the sale
after  the  payment  of  commissions  and  fees  and  the funding of $105,000 in
capitalized  build  out  costs  needed  to  split the building into two leasable
spaces. The proceeds from the sale were used to retire the $3,197,125 of debt on
the  Company's  balance  sheet at June 30, 2002 and increased the Company's cash
position by approximately $500,000. In addition, the reduction in square footage
is  expected  to reduce annual operating expenses by approximately $150,000 (see
"Forward  Looking  Statements").

     As  noted above, the Company's Board of Directors authorized the repurchase
of  up  to  500,000 shares of the Company's common stock in the third quarter of
fiscal  2002.  In  accordance  with  this  buyback, the Company purchased 41,123
shares  in  the  fourth  quarter  of  fiscal  2002.  These share repurchases are
expected  to continue in fiscal 2003, depending upon market conditions, and will
be  funded  by  cash  generated  from  operations  and  current  cash  balances.

     The  Company believes all future capital and liquidity requirements will be
satisfied by cash generated from operations, proceeds received from the issuance
of  common  stock related to the exercise of stock options, and its current cash
balances.  The  Company  also has a $4,000,000 line of credit currently in place
that  expires in November 2002 that could be utilized, if necessary. At June 30,
2002 there were no borrowings outstanding under this line of credit. The Company
violated  a loan covenant under this line of credit related to achieving certain
income  levels. The bank waived compliance with this covenant subsequent to year
end.  This  line  expires  in November 2002, but is expected to be extended with
terms  consistent  with  the  current  agreement.


                                       17
<PAGE>
FORWARD-LOOKING  STATEMENTS

     A  number  of  the  matters and subject areas discussed herein that are not
historical  or  current  facts  deal  with  potential  future  circumstances and
developments.  These  include anticipated product introductions, expected future
financial  results,  liquidity  needs,  financing  ability,  management's or the
Company's expectations and beliefs and similar matters discussed in Management's
Discussion  and  Analysis  or elsewhere herein.  The discussions of such matters
and  subject  areas  are  qualified  by  the  inherent  risk  and  uncertainties
surrounding  future  expectations generally, and also may materially differ from
the  Company's  actual  future  experience.

     The Company's business, operations and financial performance are subject to
certain  risks  and  uncertainties which could result in material differences in
actual  results  from  management's or the Company's current expectations. These
risks  and  uncertainties  include,  but  are  not  limited to, general economic
conditions,  demand  for  the  Company's  products,  costs  of  operations,  the
development  of  new  products,  the  reliance  on  single sources of supply for
certain components in the Company's products, government regulation, health care
cost containment programs, the effectiveness of the Company's programs to manage
working  capital  and  reduce  costs,  competition  in  the  Company's  markets,
compliance  with  product  safety  regulations and product liability and product
recall  risks,  risks  relating  to international sales and compliance with U.S.
export  regulations, unanticipated difficulties in outsourcing the manufacturing
of  the  majority  of its products to foreign manufacturers and risks related to
foreign  manufacturing,  including economic and political instability, trade and
foreign  tax  laws, production delays and cost overruns and quality control, and
the  Company's  ability  to  reduce  costs by eliminating excess capacity at its
principal  facility.

Item  7A.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK.
--------      ----------------------------------------------------------------

     The  Company  has  a  demand line of credit facility with a commercial bank
with  interest  payable  monthly  at  25 basis points above the bank's reference
rate.  The  Company  had  no  borrowings outstanding under this bank facility at
June  30,  2002, 2001, and 2000.  Due historically to the lack of need to borrow
from this credit facility and due to the Company's current strong cash position,
the  Company  is  not  subject  to financial risk on this obligation if interest
rates  in  the  market  change  significantly.

                                       18
<PAGE>

Item  8.     FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA.
-------      -----------------------------------------------

FINANCIAL  STATEMENTS

                    CRITICARE SYSTEMS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             JUNE 30, 2002 AND 2001
<TABLE>
<CAPTION>

ASSETS                                                         2002         2001
                                                            -----------  -----------
<S>                                                         <C>          <C>
CURRENT ASSETS:
Cash and cash equivalents (Note 1) . . . . . . . . . . . .  $ 3,523,070  $ 3,362,104
Accounts receivable, less allowance for doubtful accounts
  of $300,000 and $1,000,000, respectively . . . . . . . .    5,481,952    7,122,464
Investments (Notes 1 and 3). . . . . . . . . . . . . . . .    2,304,689    3,970,454
Other receivables (Note 1) . . . . . . . . . . . . . . . .      502,348       33,788
Inventories (Notes 1 and 2). . . . . . . . . . . . . . . .    7,134,803    8,600,413
Prepaid expenses . . . . . . . . . . . . . . . . . . . . .      453,347      502,172
                                                            -----------  -----------
Total current assets . . . . . . . . . . . . . . . . . . .   19,400,209   23,591,395

PROPERTY, PLANT AND EQUIPMENT (Notes 1 and 5):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . .      925,000      925,000
Building . . . . . . . . . . . . . . . . . . . . . . . . .    3,600,000    3,600,000
Machinery and equipment. . . . . . . . . . . . . . . . . .    2,007,322    2,055,518
Furniture and fixtures . . . . . . . . . . . . . . . . . .      809,277      837,238
Construction in progress . . . . . . . . . . . . . . . . .      116,798           --
Demonstration and loaner monitors. . . . . . . . . . . . .    1,616,766    1,463,909
Production tooling . . . . . . . . . . . . . . . . . . . .    3,425,117    3,122,938
                                                            -----------  -----------
Property, plant and equipment - cost . . . . . . . . . . .   12,500,280   12,004,603
Less accumulated depreciation. . . . . . . . . . . . . . .    6,517,220    5,822,133
                                                            -----------  -----------
Property, plant and equipment - net. . . . . . . . . . . .    5,983,060    6,182,470

OTHER ASSETS (Note 1):
License rights and patents - net . . . . . . . . . . . . .       90,987       97,989
                                                            -----------  -----------
Total other assets . . . . . . . . . . . . . . . . . . . .       90,987       97,989
                                                            -----------  -----------
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . .  $25,474,256  $29,871,854
                                                            ===========  ===========
</TABLE>


See  notes  to  consolidated  financial  statements.


                                       19
<PAGE>
<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY                                          2002          2001
                                                                          ------------  ------------
<S>                                                                       <C>           <C>
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 2,331,496   $ 3,421,776
Accrued liabilities:
  Compensation and commissions . . . . . . . . . . . . . . . . . . . . .      770,578     1,187,493
  Product warranties (Note 1). . . . . . . . . . . . . . . . . . . . . .      248,725       220,000
  Accrued taxes other than income. . . . . . . . . . . . . . . . . . . .      131,412        96,947
  Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      359,510       582,925
Current maturities of long-term debt (Note 5). . . . . . . . . . . . . .       93,589        86,766
                                                                          ------------  ------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . .    3,935,310     5,595,907

LONG-TERM DEBT, less current maturities (Note 5) . . . . . . . . . . . .    3,103,536     3,197,126

OTHER LONG-TERM OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . .       48,344        73,005

CONTINGENCIES (Notes 6 and 12)

STOCKHOLDERS' EQUITY (Notes 5 and 7):
Preferred stock - $.04 par value, 500,000 shares authorized,
  no shares issued or outstanding. . . . . . . . . . . . . . . . . . . .           --            --
Common stock - $.04 par value, 15,000,000 shares authorized,
  11,199,524 and 10,796,224 shares issued and outstanding, respectively.      447,981       431,849
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . .   23,350,124    22,494,548
Common stock held in treasury (100,890 and 64,134 shares, respectively).     (309,059)     (119,467)
Subscriptions receivable . . . . . . . . . . . . . . . . . . . . . . . .     (225,000)           --
Retained earnings (accumulated deficit). . . . . . . . . . . . . . . . .   (7,187,501)   (5,771,568)
Cumulative translation adjustment. . . . . . . . . . . . . . . . . . . .        5,832            --
Unrealized gain on investments . . . . . . . . . . . . . . . . . . . . .    2,304,689     3,970,454
                                                                          ------------  ------------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . .   18,387,066    21,005,816
                                                                          ------------  ------------
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $25,474,256   $29,871,854
                                                                          ============  ============
</TABLE>



See  notes  to  consolidated  financial  statements.

                                       20
<PAGE>
                    CRITICARE SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    YEARS ENDED JUNE 30, 2002, 2001 AND 2000
<TABLE>
<CAPTION>



                                                    2002          2001          2000
                                                ------------  ------------  ------------
<S>                                             <C>           <C>           <C>
NET SALES (NOTE 9) . . . . . . . . . . . . . .  $26,219,618   $27,736,304   $27,154,236

COST OF GOODS SOLD . . . . . . . . . . . . . .   16,464,652    16,469,119    16,462,477
                                                ------------  ------------  ------------

GROSS PROFIT . . . . . . . . . . . . . . . . .    9,754,966    11,267,185    10,691,759

OPERATING EXPENSES:
Marketing (Note 1) . . . . . . . . . . . . . .    5,631,199     6,367,395     8,014,129
Research, development and engineering (Note 1)    2,339,696     2,446,907     2,861,733
Administrative (Note 6). . . . . . . . . . . .    2,996,549     2,538,938     2,333,445
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .   10,967,444    11,353,240    13,209,307

LOSS FROM OPERATIONS . . . . . . . . . . . . .   (1,212,478)      (86,055)   (2,517,548)

OTHER INCOME (EXPENSE):
Interest expense (Note 5). . . . . . . . . . .     (246,207)     (253,150)     (259,280)
Interest income. . . . . . . . . . . . . . . .       76,771       157,782        90,440
Foreign currency exchange loss . . . . . . . .     (119,188)           --            --
Gain on sale of stock (Note 3) . . . . . . . .           --            --     2,500,000
Other income . . . . . . . . . . . . . . . . .       75,921         3,191            --
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .     (212,703)      (92,177)    2,331,160

LOSS BEFORE INCOME TAXES . . . . . . . . . . .   (1,425,181)     (178,232)     (186,388)

INCOME TAX PROVISION (NOTES 1 AND 4) . . . . .           --            --            --
                                                ------------  ------------  ------------

NET LOSS . . . . . . . . . . . . . . . . . . .  $(1,425,181)  $  (178,232)  $  (186,388)
                                                ============  ============  ============

NET LOSS PER COMMON SHARE (NOTE 1):
Basic. . . . . . . . . . . . . . . . . . . . .  $     (0.13)  $     (0.02)  $     (0.02)
Diluted. . . . . . . . . . . . . . . . . . . .  $     (0.13)  $     (0.02)  $     (0.02)

WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES OUTSTANDING (NOTE 1):
Basic. . . . . . . . . . . . . . . . . . . . .   10,876,818    10,171,394     8,694,918
Diluted. . . . . . . . . . . . . . . . . . . .   10,876,818    10,171,394     8,694,918
</TABLE>



See  notes  to  consolidated  financial  statements.

                                       21
<PAGE>
                    CRITICARE SYSTEMS, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    YEARS ENDED JUNE 30, 2002, 2001 AND 2000


<TABLE>
<CAPTION>



                                                              Additional        Common Stock
                                         Common Stock          Paid-In            Treasury               Subscriptions
                                      Shares        Amount      Capital       Shares       Cost           Receivable
<S>                                 <C>          <C>           <C>          <C>         <C>
BALANCE, JUNE 30, 1999 . . . . . .   8,706,151   $   348,246   $17,960,363     103,840   $(193,430)         $   0

Net loss . . . . . . . . . . . . .
Unrealized gain on investment. . .
Comprehensive income/(loss). . . .
Common stock issued in settlement
  of lawsuit . . . . . . . . . . .      30,000         1,200        68,175
Exercise of options. . . . . . . .     240,100         9,604       448,746
Employee common stock
  purchased from treasury. . . . .                                     756     (22,718)     42,319

BALANCE, JUNE 30, 2000 . . . . . .   8,976,251       359,050    18,478,040      81,122    (151,111)             0

Net loss . . . . . . . . . . . . .
Unrealized (loss) on investment. .
Comprehensive income/(loss). . . .
Common stock issued. . . . . . . .   1,801,273        72,051     3,977,063
Exercise of options. . . . . . . .      18,700           748         2,273
Employee common stock
  purchased from treasury. . . . .                                  37,172     (16,988)     31,644

BALANCE, JUNE 30, 2001 . . . . . .  10,796,224       431,849    22,494,548      64,134    (119,467)             0

Net loss . . . . . . . . . . . . .
Unrealized (loss) on investment. .
Cumulative translation adjustment.
Comprehensive income/(loss). . . .
Exercise of options. . . . . . . .     403,300        16,132       848,121                               (225,000)
Employee common stock
  purchased from treasury. . . . .                                   7,455      (4,367)      8,135
Repurchase of Company stock. . . .                                              41,123    (197,727)

BALANCE, JUNE 30, 2002 . . . . . .  11,199,524   $   447,981   $23,350,124     100,890   $(309,059)     $(225,000)

                                        Retained
                                        Earnings        Cumulative      Unrealized            Total
                                      (Accumulated      Translation      Gain on           Stockholders'
                                         Deficit)        Adjustment     Investment            Equity
<S>                                 <C>               <C>              <C>               <C>

BALANCE, JUNE 30, 1999 . . . . . .    $(5,403,470)      $       0       $        0        $12,711,709

Net loss . . . . . . . . . . . . .       (186,388)                                           (186,388)
Unrealized gain on investment. . .                                       5,704,675          5,704,675
Comprehensive income/(loss). . . .                                                          5,518,287
Common stock issued in settlement
  of lawsuit . . . . . . . . . . .                                                             69,375
Exercise of options. . . . . . . .                                                            458,350
Employee common stock. . . . . . .
  purchased from treasury. . . . .         (1,844)                                             41,231

BALANCE, JUNE 30, 2000 . . . . . .     (5,591,702)              0        5,704,675         18,798,952

Net loss . . . . . . . . . . . . .       (178,232)                                           (178,232)
Unrealized (loss) on investment. .                                      (1,734,221)        (1,734,221)
Comprehensive income/(loss). . . .                                                         (1,912,453)
Common stock issued. . . . . . . .                                                          4,049,114
Exercise of options. . . . . . . .                                                              3,021
Employee common stock. . . . . . .
  purchased from treasury. . . . .         (1,634)                                             67,182

BALANCE, JUNE 30, 2001 . . . . . .     (5,771,568)              0        3,970,454         21,005,816

Net loss . . . . . . . . . . . . .     (1,425,181)                                         (1,425,181)
Unrealized (loss) on investment. .                                      (1,665,765)        (1,665,765)
Cumulative translation adjustment.          9,248           5,832                              15,080
Comprehensive income/(loss). . . .                                                         (3,075,866)
Exercise of options. . . . . . . .                                                            639,253
Employee common stock. . . . . . .
  purchased from treasury. . . . .                                                             15,590
Repurchase of Company stock. . . .                                                           (197,727)

BALANCE, JUNE 30, 2002 . . . . . .    $(7,187,501)      $   5,832       $2,304,689        $18,387,066
</TABLE>



See  notes  to  consolidated  financial  statements.


                                       22
<PAGE>
                    CRITICARE SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    YEARS ENDED JUNE 30, 2002, 2001 AND 2000
<TABLE>
<CAPTION>


                                                          2002          2001          2000
                                                      ------------  ------------  ------------
<S>                                                   <C>           <C>           <C>
OPERATING ACTIVITIES:
Net loss . . . . . . . . . . . . . . . . . . . . . .  $(1,425,181)  $  (178,232)  $  (186,388)
Adjustments to reconcile net loss to net cash
  provided by (used in) operating activities:
    Depreciation . . . . . . . . . . . . . . . . . .      865,291       742,931       871,510
    Amortization . . . . . . . . . . . . . . . . . .        7,002         7,001         7,001
    Gain on sale of fixed assets . . . . . . . . . .       (5,292)           --            --
    Provision for doubtful accounts. . . . . . . . .     (700,000)     (300,000)      925,000
    Provision for obsolete inventory . . . . . . . .      621,000            --            --
    Gain on sale of Immtech stock. . . . . . . . . .           --            --    (2,500,000)
    Litigation settled with common stock . . . . . .           --            --        69,375
    Changes in assets and liabilities:
      Accounts receivable. . . . . . . . . . . . . .    2,340,512       (39,699)   (1,349,278)
      Other receivables. . . . . . . . . . . . . . .     (468,560)       82,985       (33,667)
      Inventories. . . . . . . . . . . . . . . . . .      691,753      (670,510)      341,955
      Prepaid expenses . . . . . . . . . . . . . . .       48,825      (282,320)      (27,562)
      Accounts payable . . . . . . . . . . . . . . .   (1,090,280)      786,432      (442,676)
      Accrued liabilities. . . . . . . . . . . . . .     (601,801)     (251,877)   (2,401,762)
                                                      ------------  ------------  ------------
Net cash provided by (used in) operating activities.      283,269      (103,289)   (4,726,492)

INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net. . .     (513,307)     (688,322)     (595,412)
Proceeds from sale of fixed assets . . . . . . . . .        5,575            --            --
Proceeds from sale of Immtech stock. . . . . . . . .           --            --     2,500,000
                                                      ------------  ------------  ------------
Net cash (used in) provided by investing activities.     (507,732)     (688,322)    1,904,588

FINANCING ACTIVITIES:
Repurchase of Company common stock . . . . . . . . .     (197,727)           --            --
Principal payments on long-term debt . . . . . . . .      (86,767)      (80,432)      (73,925)
Proceeds from issuance of common stock . . . . . . .      654,843     4,119,317       499,581
                                                      ------------  ------------  ------------
Net cash provided by financing activities. . . . . .      370,349     4,038,885       425,656

EFFECT OF EXCHANGE RATE CHANGES ON CASH. . . . . . .       15,080            --            --

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS      160,966     3,247,274    (2,396,248)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR . . . .    3,362,104       114,830     2,511,078
                                                      ------------  ------------  ------------
CASH AND CASH EQUIVALENTS, END OF YEAR . . . . . . .  $ 3,523,070   $ 3,362,104   $   114,830

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
  Income taxes paid-net. . . . . . . . . . . . . . .  $    12,309   $    16,639   $     7,535
  Interest . . . . . . . . . . . . . . . . . . . . .      246,749       253,653       259,590
Noncash investing and financing activities:
  Litigation settled with common stock . . . . . . .           --            --        69,375
  Cost of fixed asset disposals. . . . . . . . . . .      168,320            --       201,072
  Unrealized (loss)/gain on investment in Immtech. .   (1,665,765)   (1,734,221)    5,704,675
</TABLE>



See  notes  to  consolidated  financial  statements.

                                       23
<PAGE>
NOTES  TO  FINANCIAL  STATEMENTS

CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2002,  2001  AND  2000

1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

NATURE  OF BUSINESS -- Criticare Systems, Inc. designs, manufactures and markets
patient  monitoring  equipment  and  related  accessories  to  the  health  care
community  worldwide  and  is  headquartered in Waukesha, Wisconsin. The Company
sells domestically primarily to oral and stand-alone general surgery centers and
hospitals through regional sales managers and a dealer network. Internationally,
the  Company  sells mainly to hospitals through country managers and a worldwide
dealer  network. In addition, the Company sells modules and stand-alone monitors
worldwide  to  original  equipment  manufacturers  ("OEMs").

PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements include the
accounts  of  Criticare  Systems,  Inc.  (the  "Company")  and  its wholly owned
subsidiaries:  Criticare  International  GmbH  Marketing  Services  ("Criticare
International"),  CSI  Trading,  Inc.  ("CSI  Trading"), Criticare Service GmbH,
Criticare  Biomedical,  Inc.  ("Criticare  Biomedical"),  and  Sleep  Care, Inc.
("Sleep  Care").  CSI  Trading  was incorporated in November 1996 to assist with
European  marketing activities and includes a branch sales office in India.  All
significant  intercompany  accounts  and  transactions  have  been  eliminated.

CASH  EQUIVALENTS  --  The  Company  considers  all  investments  with purchased
maturities  of  less  than  three  months  to  be  cash  equivalents.

INVENTORIES  -- Inventories are stated at the lower of cost or market, with cost
determined  on  the  first-in,  first-out  method.

INVESTMENTS  --  In  accordance  with  Financial  Accounting  Standards No. 115,
"Accounting  for  Certain  Investments  in Debt and Equity Securities", debt and
equity  securities  not  classified  as  either  held-to-maturity  securities or
trading  securities are classified as available-for-sale securities and reported
at  fair  value,  with  unrealized  gains  and losses excluded from earnings and
reported  in  a  separate  component  of  shareholders'  equity.  The  Company's
investments  were  in  marketable  equity  securities  and  were  classified  as
available-for-sale  securities.  There  were  no  held-to-maturity  or  trading
securities  as  of  June  30,  2002  (see  Note  3).


                                       24
<PAGE>
OTHER RECEIVABLES -- Other receivables in fiscal 2002 include a trade receivable
that  was  assumed  by  a  new  distributor  in  China.  In  accordance with the
agreement  executed with this distributor, this receivable balance is to be paid
over  a  twelve  month  period  beginning  in May 2002 and ending in April 2003.

PROPERTY,  PLANT  AND  EQUIPMENT -- Property, plant and equipment is recorded at
cost.  Each  member  of the Company's sales force is provided with demonstration
monitors  to  assist  them in their sales efforts.  Also, the Company has loaner
monitors  which  are  used  to  temporarily replace a customer's unit when it is
being  repaired or upgraded.  Depreciation is provided over the estimated useful
lives  of  the  assets.  The  building, which was sold in August 2002, was being
depreciated  over  40  years  prior to the sale.  The remaining assets are being
depreciated over three to seven years, using primarily the straight-line method.
Construction  in  progress  represents building improvements made related to the
sale  of  the building.  The estimated costs to complete the construction totals
approximately  $145,000.

The  Company  periodically  assesses  the  recoverability  of long-lived assets,
including  property  and  equipment  and  intangibles,  in  accordance  with the
Statement  of  Financial  Accounting  Standards  No.  121,  "Accounting  for the
Impairment  of  Long-Lived  Assets  and for Long-Lived Assets to be Disposed Of"
("SFAS No. 121"), when indications of potential impairment exist.  The amount of
any  impairment  is calculated by comparing the estimated fair market value with
the  carrying  value of the related asset.  Management considers such factors as
current  operating  results,  trends, and future prospects, in addition to other
economic factors in performing this analysis.  No such impairments exist at June
30,  2002  and  2001.

LICENSE  RIGHTS AND PATENTS -- License rights and patents are amortized over the
estimated  useful  lives  of  the  related  agreements  using  primarily  the
straight-line  method.  Approximately  $7,000  of  amortization  was  charged to
operations  in  each  of  the  fiscal  years ended June 30, 2002, 2001 and 2000.
Accumulated  amortization approximated $106,000 and $99,000 at June 30, 2002 and
2001,  respectively.

REVENUE RECOGNITION -- Revenues and the costs of products sold are recognized as
the  related  products  are  shipped  or  installed,  if  there  are significant
installation costs.  This revenue recognition policy is utilized for shipment of
product  to  customers  including  both  distributors  and  end-users.

SHIPPING  COSTS  --  Shipping  costs  are  included in cost of goods sold in the
accompanying  consolidated  statements  of  operations.

PRODUCT WARRANTIES -- Estimated costs for product warranties are accrued for and
charged  to  operations  as  the  related  products  are  shipped.


                                       25
<PAGE>
MARKETING  EXPENSES  --  Marketing  expenses  include all of the Company's sales
related  costs.  In  fiscal  2002  and 2001, recoveries of bad debts expensed in
prior years more than offset additional provisions expensed in the current year,
resulting  in  a  net  credit  of  bad debt expense of $(183,046) and $(25,757),
respectively.  Marketing  expenses  in  fiscal 2000 include a $900,000 charge to
bad  debt  expense  related  to  the  accounts  receivable  balances  of certain
international  customers.  Including  this  $900,000  charge,  bad  debt expense
totaled  $1,160,614  for  fiscal  year  2000.

RESEARCH  AND DEVELOPMENT EXPENSES -- Research and development costs are charged
to  operations  as  incurred.  Such expenses approximated $2,147,000, $2,325,000
and  $2,696,000  in  2002,  2001  and  2000,  respectively.

INCOME  TAXES  --  The  Company  accounts  for  income  taxes using an asset and
liability  approach.  Deferred  income  tax  assets and liabilities are computed
annually  for  differences  between  the  financial  statements and tax bases of
assets  and liabilities that will result in taxable or deductible amounts in the
future  based  on  enacted tax laws and rates applicable to the periods in which
the  differences  are  expected  to  affect  taxable  income.

NET  INCOME (LOSS) PER COMMON SHARE -- Basic income (loss) per share is computed
using  the  weighted  average  number  of  common  shares outstanding during the
periods.  Diluted income per share is computed using the weighted average number
of  common and dilutive common equivalent shares outstanding during the periods.
The  basic  and  diluted weighted average number of common shares outstanding in
the financial statements are the same because including a diluted calculation in
a  loss position would produce an anti-dilutive per share amount.  The number of
diluted  weighted  average  common shares outstanding would be higher by 597,129
shares  in  2002  and  370,260 shares in 2001 without this anti-dilutive impact.

FAIR  VALUE OF FINANCIAL STATEMENTS -- The Company's financial instruments under
SFAS  No.  107  "Disclosure About Fair Value of Financial Instruments," includes
cash,  accounts  receivable,  accounts  payable, borrowings under line of credit
facility  and long-term debt.  The Company believes that the carrying amounts of
these  accounts  are  a  reasonable  estimate of their fair value because of the
short-term  nature of such instruments or, in the case of long-term debt because
of  interest  rates  available  to  the  Company  for  similar  obligations.

COMPREHENSIVE  INCOME  --  In 1999, the Company adopted SFAS No. 130, "Reporting
Comprehensive  Income."  This  statement  establishes rules for the reporting of
comprehensive  income  and its components.  Comprehensive income consists of net
income,  foreign  currency  translation  adjustments  and  unrealized  gains  on
investments,  and  is  presented  in the Consolidated Statement of Stockholders'
Equity.


                                       26
<PAGE>
APPROVED  ACCOUNTING  STANDARDS  --  In  June  2001,  the  Financial  Accounting
Standards  Board  (FASB)  finalized  SFAS No. 141, "Business Combinations" (SFAS
141),  and  No. 142, "Goodwill and Other Intangible Assets" (SFAS 142). SFAS 141
requires  the  use of the purchase method of accounting and prohibits the use of
the  pooling-of-interests  method  of  accounting  for  business  combinations
initiated after June 30, 2001. SFAS 141 also requires that the Company recognize
acquired intangible assets apart from goodwill if the acquired intangible assets
meet  certain  criteria. SFAS 141 applies to all business combinations initiated
after June 30, 2001 and for purchase business combinations completed on or after
July  1,  2001.  It  also  requires, upon adoption of SFAS 142, that the Company
reclassify  the  carrying amounts of intangible assets and goodwill based on the
criteria  in  SFAS  141.

SFAS  142  requires,  among  other  things,  that  companies  no longer amortize
goodwill,  but  instead  test  goodwill  for  impairment  at least annually.  In
addition,  SFAS  142  requires that the Company identify reporting units for the
purpose  of  assessing  potential  future  impairments of goodwill, reassess the
useful  lives  of  other  existing  recognized  intangible  assets,  and  cease
amortization of intangible assets with an indefinite useful life.  An intangible
asset  with  an  indefinite  useful  life  should  be  tested  for impairment in
accordance with the guidance in SFAS 142.  SFAS 142 is required to be applied in
fiscal  years  beginning  after  December  15,  2001  to  all goodwill and other
intangible  assets recognized at that date, regardless of when those assets were
initially  recognized.  SFAS 142 requires the Company to complete a transitional
goodwill  impairment  test six months from the date of adoption.  The Company is
also required to reassess the useful lives of other intangible assets within the
first  interim  quarter  after  adoption  of  SFAS  142.

The  Company does not have any goodwill recorded as an asset as of June 30, 2002
and  has  only  a  small  investment  in  intangible  assets  at  June 30, 2002.
Therefore,  the  adoption  of  SFAS 141 and 142 has not had a material effect on
the  Company's  financial  statements.

In  August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets."  SFAS  No.  144  supercedes  SFAS  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be  Disposed  Of",  in  that  it  removes goodwill from its impairment scope and
allows  for different approaches in cash flow estimation.  However, SFAS No. 144
retains  the  fundamental  provisions  of  SFAS  No. 121 for (a) recognition and
measurement  of  long-lived  assets  to  be held and used and (b) measurement of
long-lived  assets to be disposed of.  SFAS No. 144 also supercedes the business
segment  concept  in  APB  Opinion  No.  30,  "Reporting  the  Results  of
Operations-Reporting  the  Effects  of  Disposal of a Segment of a Business, and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions," in
that it permits presentation of a component of an entity, whether classified as
held  for  sale  or  disposed  of,  as  a  discontinued

                                       27
<PAGE>
operation.  However,  SFAS No. 144 retains the requirement of APB Opinion No. 30
to  report  discontinued  operations separately from continuing operations.  The
Company  is  required  to adopt the provision of SFAS No. 144 beginning with its
fiscal  year  that  starts  July  1,  2002.  The  Company  does not believe that
adoption  of  SFAS 144 will have a material effect on its consolidated financial
statements.

SFAS  No.  146,  "Accounting  for  Costs  Associated  with  Exit  or  Disposal
Activities".  SFAS  No.  146  addresses  significant  issues  regarding  the
recognition,  measurement,  and  reporting  of  costs  associated  with exit and
disposal  activities,  including  restructuring  activities.  SFAS  No. 146 also
addresses recognition of certain costs related to terminating a contract that is
not  a capital lease, costs to consolidate facilities or relocate employees, and
termination  benefits  provided  to  employees that are involuntarily terminated
under the terms of a one-time benefit arrangement that is not an ongoing benefit
arrangement  or  an  individual deferred-compensation contract.  SFAS No. 146 is
effective  for exit or disposal activities that are initiated after December 31,
2002.  Given that SFAS No. 146 was issued in June 2002 and is not yet effective,
the  impact  on  the  Company's financial position or results of operations from
adopting  SFAS  No.  146  has  not  been  determined.

USE  OF  ESTIMATES -- The preparation of financial statements in conformity with
generally  accepted  accounting principles requires management to make estimates
and  assumptions  that affect the reported amounts of assets and liabilities and
disclosure  of  contingent  assets  and liabilities at the date of the financial
statements  and  the  reported  amounts  of  revenues  and  expenses  during the
reporting  period.  Actual  results  could  differ  from  those  estimates.

RECLASSIFICATIONS  --  Certain amounts from the fiscal 2001 financial statements
have  been  reclassified  to  conform  to  the  fiscal  2002  presentation.

2.     INVENTORIES

     Inventories  consist  of  the  following  as  of  June  30:
<TABLE>
<CAPTION>


                                    2002        2001
<S>                              <C>         <C>
Component parts . . . . . . . .  $3,549,397  $3,784,491
Work in process . . . . . . . .     499,950   1,372,587
Finished units. . . . . . . . .   4,031,456   3,768,335
                                 ----------  ----------
Total inventories . . . . . . .   8,080,803   8,925,413
Less:  reserve for obsolescence     946,000     325,000
                                 ----------  ----------
Net inventory . . . . . . . . .  $7,134,803  $8,600,413
</TABLE>


                                       28
<PAGE>
3.     INVESTMENTS

IMMTECH  INTERNATIONAL,  INC.  -  Investments  classified  as available-for-sale
securities  consist  of common stock of Immtech International, Inc. ("Immtech").
Immtech  is  a  biopharmaceutical  company  focusing  on  the  discovery  and
commercialization  of  therapeutics  for  treatment  of  patients afflicted with
opportunistic  infectious diseases, cancer or comprised immune systems.  Immtech
has two independent programs for developing drugs: one based on a technology for
the design of a class of pharmaceutical compounds referred to as dications.  The
second  is  based  on  developing  a  series of biological proteins that work in
conjunction with the immune system.  Immtech has no products currently for sale,
and  none  are expected to be commercially available for several years.  Immtech
has  a  March  31  fiscal  year  end.

During  the first and second quarters of fiscal 2000, the Company sold a portion
of  its  Immtech stock in a Private Placement.  The proceeds from this sale were
$2,500,000.  As  a  result  of  this  sale,  the  Company owned less than 20% of
Immtech's  issued  and outstanding common stock as of June 30, 2000.  Therefore,
beginning  in  fiscal  2000,  in  accordance  with SFAS No. 115, "Accounting for
Certain  Investments  in  Debt  and  Equity  Securities,"  the  Company  ceased
accounting  for  the Immtech investment under the equity method and recorded the
asset  on  the  balance  sheet  at  the  fair  market  value  of $5,704,675.  An
unrealized  gain  was also recorded as a component of stockholders' equity.  The
Company  held 456,374 shares of Immtech common stock, which was trading at $5.05
and  $8.70 per share, on June 30, 2002 and 2001, respectively.  The market value
of  these  shares  could  change  substantially  due  to  overall  market  risk.

During  April  1999, Immtech completed an Initial Public Offering ("IPO") of its
stock.  As  part  of  this  IPO,  the  Company  was  required  to sign a lock-up
agreement by which it was agreed that none of the restricted shares owned by the
Company could be sold in the public market until the Immtech stock traded at $20
(200%  of  its initial IPO price of $10) for 20 consecutive trading days and one
year  had  passed  from the date of the IPO.  As of June 30, 2000, these lock up
provisions  had  been satisfied, but the restricted legends had not been removed
from  the  shares.

In  order  to  have  the  restricted  legends  removed  from  the  Immtech stock
certificates,  the Company entered into an agreement with Immtech dated November
2,  2001.  Under  the  agreement,  portions  of the Company's Immtech stock were
subject  to  restrictions on transfer for relatively short-term periods of up to
six months, after which time all such stock would be free of restrictions. As of
June  30,  2002,  all  of  the  Company's  Immtech  shares were freely tradable.

                                       29
<PAGE>
4.     INCOME  TAXES

The  Company  accounts  for  income  taxes using an asset and liability approach
which  generally  requires  the  recognition  of  deferred income tax assets and
liabilities  based  upon  the  expected future income tax consequences of events
that  have  previously  been recognized in the Company's financial statements or
tax  returns.  In  addition,  a  valuation allowance is recognized if it is more
likely  than  not  that some or all of the deferred income tax asset will not be
realized.  A  valuation  allowance  is  used  to offset the related net deferred
income  tax assets due to uncertainties of realizing the benefits of certain net
operating  loss  and  tax  credit  carryforwards.

Significant  components of the Company's deferred income tax assets and deferred
income  tax  liabilities  are  as  follows:
<TABLE>
<CAPTION>



                                                           JUNE 30,      JUNE 30,      JUNE 30,
                                                             2002          2001          2000
<S>                                                      <C>           <C>           <C>
Deferred income tax assets:
  Accounts receivable and sales allowances. . . . . . .  $   146,000   $   415,000   $   533,000
  Inventory allowances. . . . . . . . . . . . . . . . .      400,000       164,000       191,000
  Product warranties. . . . . . . . . . . . . . . . . .       98,000        86,000       128,000
  Other accrued liabilities . . . . . . . . . . . . . .      136,000       210,000       246,000
  Severance pay accrual . . . . . . . . . . . . . . . .       24,000        52,000       145,000
  Federal net operating loss carryforwards. . . . . . .    4,282,000     3,665,000     3,320,000
  State net operating loss carryforwards. . . . . . . .      536,000       467,000       483,000
  Federal tax credit carryforwards. . . . . . . . . . .      152,000       152,000       152,000
  Investment losses not deducted. . . . . . . . . . . .      709,000       709,000       709,000
                                                         ------------  ------------  ------------
  Total deferred income tax assets. . . . . . . . . . .    6,483,000     5,920,000     5,907,000

Deferred income tax liabilities:
  Excess of tax over book depreciation and amortization     (585,000)     (625,000)     (616,000)
  Prepaid expenses. . . . . . . . . . . . . . . . . . .      (41,000)      (28,000)      (13,000)
  Unrealized gain on investments. . . . . . . . . . . .     (904,000)   (1,557,000)   (2,237,000)
                                                         ------------  ------------  ------------
  Total deferred income tax liabilities . . . . . . . .   (1,530,000)   (2,210,000)   (2,866,000)

  Valuation allowance . . . . . . . . . . . . . . . . .   (4,953,000)   (3,710,000)   (3,041,000)

  Net deferred income taxes recognized in the
    consolidated balance sheets . . . . . . . . . . . .  $         0   $         0   $         0
</TABLE>


At  June  30,  2002, the Company had federal net operating loss carryforwards of
approximately  $12,594,000 which expire in 2008 through 2022.  At June 30, 2002,
the  Company had available for federal income tax purposes approximately $41,000
of alternative minimum tax credit carryforwards which carry forward indefinitely
and approximately $111,000 of tax credit carryforwards which expire in the years
2007  through 2009.  The Company also has approximately $10,713,000 of state net
operating  loss  carryforwards,  which expire in 2003 through 2017, available to
offset  certain  future  state  taxable  income.


                                       30
<PAGE>
     The  income  tax  provision  consists  of  the  following:
<TABLE>
<CAPTION>

                              2002   2001   2000
<S>                           <C>    <C>    <C>
Current
  Federal. . . . . . . . . .  $   0  $   0  $   0
  State. . . . . . . . . . .      0      0      0
  Total income tax provision  $   0  $   0  $   0
</TABLE>


     A reconciliation of the provision for income taxes (benefit) at the federal
statutory  income  tax  rate  to  the  effective  income  tax  rate  follows:
<TABLE>
<CAPTION>

                                                           2002     2001     2000
<S>                                                      <C>      <C>      <C>
Federal statutory income tax rate . . . . . . . . . . .   (34.0)%  (34.0)%  (34.0)%
Losses for which no benefit was provided. . . . . . . .    51.9     17.5     35.3
Non-deductible losses of subsidiaries . . . . . . . . .     0.0     15.6     27.6
Other--net (principally stock options in 2002 and 2000)   (17.9)     0.9    (28.9)
                                                         -------  -------  -------
Effective income tax rate . . . . . . . . . . . . . . .       0%       0%       0%
</TABLE>


5.     LINE  OF  CREDIT  FACILITY  AND  LONG-TERM  DEBT
<TABLE>
<CAPTION>

     Long-term  debt  consists  of  the  following:

                                                                 2002        2001
<S>                                                           <C>         <C>
  Mortgage note, 7.5% due in monthly installments of $27,793
    with a final payment of $3,048,253 due April 1, 2004,
    collateralized by real estate with a carrying value of
    approximately $3,664,000 at June 30, 2002. . . . . . . .  $3,197,125  $3,283,892
  Less current maturities. . . . . . . . . . . . . . . . . .      93,589      86,766
                                                              ----------  ----------
  Long-term debt . . . . . . . . . . . . . . . . . . . . . .  $3,103,536  $3,197,126
</TABLE>


     Aggregate  annual  principal payments required under terms of the long-term
debt  agreements  are  as  follows:
<TABLE>
<CAPTION>


<S>                    <C>
YEARS ENDING JUNE 30,  PRINCIPAL PAYMENTS
2003. . . . . . . . .               93,589
2004. . . . . . . . .            3,103,536
2005. . . . . . . . .                    0
2006. . . . . . . . .                    0
2007. . . . . . . . .                    0
                       -------------------
Total . . . . . . . .  $         3,197,125
</TABLE>


                                       31
<PAGE>
In  August  2002, the  Company  sold  its  facility  headquartered  in Waukesha,
Wisconsin  and  leased  back approximately 62% of the building's square footage.
The proceeds from the sale of the building were used to retire the mortgage note
on  the  facility.

At  June  30,  2002, the Company had a $4,000,000 demand line of credit facility
with  a  commercial  bank  to  meet  its  short-term borrowing needs. Borrowings
against  the  line  were  payable on demand with interest payable monthly at the
bank's  reference  rate,  plus  .25%  (5.0% as of June 30, 2002). As of June 30,
2002,  2001 and 2000 there were no borrowings against the line. Borrowings under
the  line  of  credit facility are collateralized by substantially all assets of
the  Company.  The credit facility has covenants which require minimum levels of
tangible net worth and income levels. The Company was not in compliance with the
income  level  covenant  at June 30, 2002. This non-compliance was waived by the
lending  institution.


6.     CONTINGENCIES

From  time to time, various lawsuits arise out of the normal course of business.
These  proceedings  are handled by outside counsel.  Currently management is not
aware  of  any  claim  or  action  pending against the Company that would have a
material  adverse  effect  on  the  Company.


7.     STOCKHOLDERS'  EQUITY

STOCK  OPTIONS  --  In  December  1992,  the  Board  of Directors approved a new
Employee  Stock  Option  Plan  and Non-Employee Stock Option Plan.  No new stock
options  can  be  granted  under the Employee Stock Option Plan and Non-Employee
Stock  Option  Plan  which  existed prior to the approval of the new plans.  The
Board  of  Directors  has  authorized  in  connection  with  these new plans the
issuance  of 2,220,000 reserved shares of common stock of which 160,630 reserved
shares  of  common  stock  remain  available for future issuance under the stock
option  plans  at June 30, 2002.  The Board of Directors increased the number of
reserved  shares for issuance under the Plans from 1,720,000 to 2,220,000 during
2001.  The activity during 2000, 2001 and 2002 for the above plans is summarized
as  follows:

                                       32
<PAGE>

<TABLE>
<CAPTION>

                               NUMBER OF   STOCK OPTIONS    WEIGHTED AVG.
                                SHARES      PRICE RANGE     EXERCISE PRICE
<S>                           <C>         <C>            <C>
Outstanding at June 30, 1999  1,191,600      $1.50-3.00          $ 1.83
  Granted. . . . . . . . . .    489,100       2.00-2.25            2.24
  Cancelled. . . . . . . . .   (287,700)      1.63-3.63            1.99
  Exercised. . . . . . . . .   (240,100)      1.50-2.75            1.91
                              ----------
Outstanding at June 30, 2000  1,152,900       1.50-2.75            1.96
  Granted. . . . . . . . . .    780,520       1.88-3.69            2.47
  Cancelled. . . . . . . . .   (279,100)      1.88-2.75            2.01
  Exercised. . . . . . . . .    (18,700)      1.63-2.97            2.03
                              ----------
Outstanding at June 30, 2001  1,635,620       1.50-3.69            2.19
  Granted. . . . . . . . . .     35,000       3.60-4.40            4.21
  Cancelled. . . . . . . . .    (57,700)      1.63-2.97            2.43
  Exercised. . . . . . . . .   (403,300)      1.63-2.97            2.14
                              ----------
Outstanding at June 30, 2002  1,209,620      $1.50-4.40          $ 2.26
</TABLE>



     The  following table summarizes information about stock options outstanding
as  of  June  30,  2002:
<TABLE>
<CAPTION>


                                        OPTIONS OUTSTANDING
                                         Weighted Average                         OPTIONS EXERCISABLE
                            Shares          Remaining       Weighted            Shares
Range of                  Outstanding      Contractual  Average Exercise     Exercisable     Weighted Average
Exercise Prices        at June 30, 2002    Life-Years         Price        at June 30, 2002   Exercise Price
<S>                   <C>                  <C>          <C>                <C>               <C>
$1.50-2.00 . . . . .           621,250         2.49            $  1.73           378,750            $  1.64
 2.25-4.40. . . . . .          588,370         3.11               2.82           275,870               2.80
 1.50-4.40. . . . . .        1,209,620         2.79               2.26           654,620               2.13
</TABLE>


Outstanding  options  have  fixed  terms  and  are  exercisable  over  a  period
determined by the Compensation Committee of the Company's Board of Directors but
no  longer  than  five  years  after  the  date  of  grant.

The  Company  has  adopted  the  disclosure-only  provisions  of  SFAS  No. 123,
"Accounting  for  Stock-Based  Compensation,"  but applies Accounting Principles
Board  Opinion  No.  25,  "Accounting for Stock Issued to Employees" and related
interpretations  in  accounting  for  its  plans.  If the Company had elected to
recognize  compensation cost for the options granted during the years ended June
30,  2002, 2001 and 2000, consistent with the method prescribed by SFAS No. 123,
net loss and net loss per share would have been changed to the pro forma amounts
indicated  below:

                                       33
<PAGE>
<TABLE>
<CAPTION>


                                                       YEARS  ENDED  JUNE  30,
                                                     2002         2001        2000
<S>                                              <C>           <C>         <C>
Net (loss)--as reported . . . . . . . . . . . .  $(1,425,181)  $(178,232)  $(186,388)
Net (loss)--pro forma . . . . . . . . . . . . .  $(1,556,352)  $(507,678)  $(365,626)
Net (loss) per common share--as reported. . . .  $     (0.13)  $   (0.02)  $   (0.02)
Net (loss) per common share--pro forma. . . . .  $     (0.14)  $   (0.05)  $   (0.04)
Assumptions used:
  Expected volatility . . . . . . . . . . . . .        70.0%       37.5%       23.0%
  Risk-free interest rate . . . . . . . . . . .         3.59%       4.92%       6.00%
  Expected option life (in years) . . . . . . .         3.30        4.57        4.00

Weighted average fair market value of options
  granted during the fiscal year ended June 30.  $      1.57   $    0.61   $    0.38
</TABLE>



The  fair value of stock options used to compute pro forma net loss and net loss
per  common  share  is  the  estimated present value at the grant date using the
Black-Scholes  option-pricing  model.

STOCK  WARRANTS  --  In  February 1998, the Company executed a warrant agreement
with  a consultant.  The warrant agreement provided for the issuance of warrants
to  purchase up to 150,000 shares of common stock at a price of $3.00 per share.
The  warrant was exercisable as to 30,000 shares upon execution of the agreement
and the warrants to purchase the remaining 120,000 shares were to be exercisable
if  certain  performance  parameters  were  achieved  by February 1999.  No such
parameters  were achieved.  Therefore, as of June 30, 2002, only 30,000 of these
warrants  were  exercisable.  These  warrants  expire  in  February  2003.

In  December  2000,  the  Company  executed  another  warrant agreement with the
consultant.  The  warrant  agreement  provides  for  the issuance of warrants to
purchase  up  to  70,000  shares of common stock at a price of $1.875 per share.
The  warrant vests over a four year period in four equal increments each year on
the  anniversary  date  of the warrant.  The warrant terminates as to any shares
that  are  unvested  at  the  time  the  consultant ceases to provide consulting
services  to  the  Company.  As  of June 30, 2002, 17,500 of these warrants were
exercisable.  Such  warrants  expire  in  December  2005.

PREFERRED  STOCK  --  The  Company's  Board  of  Directors  has the authority to
determine  the  relative  rights  and preferences of any series it may establish
with  respect  to  the  500,000  shares  of  $.04 par value authorized preferred
shares.  No  preferred  stock  is  issued  or  outstanding.

On  March 27, 1997, the Board of Directors of the Company declared a dividend of
one  preferred  share  purchase  right (a "Right") for each outstanding share of
common  stock  of  the  Company.  The dividend was made on April 24, 1997 to the
stockholders

                                       34
<PAGE>
of  record  on  that  date  to  purchase  Preferred Stock ("Preferred") upon the
occurrence of certain events.  The Rights will be exercisable the tenth business
day after a person or group acquires 20% of the Company's common stock, or makes
an  offer  to  acquire  30%  or  more  of  the  Company's  common  stock.  When
exercisable,  each  right  entitles  the  holder to purchase for $25, subject to
adjustment, one-hundredth of a share of Preferred for each share of common stock
owned.  Each  share  of  Preferred  will  be  entitled to a minimum preferential
quarterly  dividend of $25 per share, but not less than an aggregate dividend of
100  times  the  common  stock dividend.  Each share will have 100 votes, voting
together  with  the  common  stock.  In  the  event of any merger, each share of
Preferred will be entitled to receive 100 times the amount received per share of
common  stock.  The  Rights  expire  on  April  1,  2007.

COMMON  STOCK  HELD  IN TREASURY - At June 30, 2002 and 2001 the Company held in
Treasury  100,890  and 64,134 shares of common stock, respectively. In the third
quarter  of  fiscal 2002, the Criticare Board of Directors approved the purchase
in  the  open  market  of up to 500,000 shares of Criticare common stock. In the
fourth  quarter  of  fiscal  2002, the Company purchased and held in Treasury at
June  30,  2002  41,123  shares  of  common  stock in accordance with this stock
buyback  program.

SUBSCRIPTIONS  RECEIVABLE  -  Subscriptions  receivable  represents common stock
issued  in  May  2002  to two directors of the Company related to expiring stock
options.  The  shares  have  been  issued  and  promissory  notes payable in the
principal  amount of $112,500 executed by each of the directors for the exercise
price  of  the  stock options.  These notes are non-interest bearing and are due
and  payable  within  one  year  from  the  date  of  execution  of  the  notes.

8.     EMPLOYEE  BENEFIT  PLAN

The Company has a 401(k) plan which covers substantially all employees.  Company
contributions  to  the  plan  are  discretionary  and determined annually by the
Company's  Board  of  Directors.  The Company's contributions were approximately
$87,000  in  2002  and  2001,  respectively,  and  $77,000  in  2000.

9.     BUSINESS  AND  CREDIT  CONCENTRATIONS

The  Company  is a manufacturer of medical monitors and telemetry products whose
customers  include  hospitals  and  alternative health care sites throughout the
world.  Although  the  Company's  products  are  sold  primarily  to health care
providers,  concentrations  of  credit  risk  with  respect  to  trade  accounts
receivable  are limited due to the Company's large number of customers and their
geographic  dispersion.  The  Company  currently  coordinates  substantially all
international  sales  and  distribution  activities  through its headquarters in
Waukesha,  Wisconsin.  Such  activities  were previously provided by the Company
with  the  assistance  of  Criticare  International.

                                       35
<PAGE>
Other  than inventory and accounts receivable for the Company's branch office in
India  totaling  approximately $1.0 million, identifiable assets located outside
of  the  United  States  are  insignificant  in  relation to the Company's total
assets.  Net  export  sales  by  geographic  area  are  as  follows:

<TABLE>
<CAPTION>



                                         2002         2001         2000

<S>                                   <C>          <C>          <C>
Europe and Middle East . . . . . . .  $ 6,861,000  $ 6,833,000  $ 5,437,000
Pacific Rim. . . . . . . . . . . . .    1,292,000    2,313,000    2,662,000
Canada and Central and South America    2,193,000    2,217,000    3,035,000
                                      -----------  -----------  -----------
Export net sales . . . . . . . . . .  $10,346,000  $11,363,000  $11,134,000
U.S. net sales . . . . . . . . . . .   15,874,000   16,373,000   16,020,000
                                      -----------  -----------  -----------
Total net sales. . . . . . . . . . .  $26,220,000  $27,736,000   27,154,000

</TABLE>


Note:  Sales in Europe and the Middle East have been combined above due to joint
sales  responsibility  in  these  areas. No country made up more than 10% of the
Company's  total  sales.


10.  OTHER  BUSINESS  CONCENTRATIONS

During 1999, the Company entered into an OEM agreement with a customer. Sales to
this customer approximated $3,507,000, $3,383,000 and $2,031,000 in fiscal 2002,
2001  and 2000, respectively. These sales represented approximately 13%, 12% and
8%  of  the  Company's total sales, respectively. This customer had a receivable
balance  of  $370,346,  $630,716  and  $935,520 on June 30, 2002, 2001 and 2000,
respectively,  which  represented  6%,  9%  and  14%  of  the  Company's  total
receivables  as  of  these  dates.

In  fiscal  2001, the Company entered into agreements with two offshore contract
manufacturing  firms  to  supply  finished  products.  In addition, prior to the
Company  outsourcing  the  majority  of  its production,  the Company also had a
supplier  that  it  made significant purchases from.  A summary of the purchases
and  outstanding  payables to these three companies for the years ended June 30,
2002,  2001,  and  2000  follows  below:
<TABLE>
<CAPTION>



                             2002         2001         2000
<S>                       <C>          <C>          <C>
Supplier I - Purchases .  $4,258,014   $  192,930   $        0
    % of total purchases        19.0%         0.8%         0.0%
Accounts payable balance  $  796,557   $        0   $        0
    % of total payables.        34.2%         0.0%         0.0%

Supplier II - Purchases.  $2,104,640   $  336,764   $        0
    % of total purchases         9.4%         1.4%         0.0%
Accounts payable balance  $  242,694   $  126,661            0
    % of total payables.        10.4%         3.7%         0.0%

Supplier III - Purchases  $1,680,600   $4,460,897   $3,358,214
    % of total purchases         7.5%        19.1%        16.3%
Accounts payable balance  $   33,103   $  144,131   $  220,999
    % of total payables.         1.4%         4.2%         8.4%

</TABLE>


                                       36
<PAGE>
11.     COMMITMENTS

In  fiscal  2002 and prior years, the Company leased certain operating equipment
under  various  operating  leases  for varying periods through fiscal 2005. Rent
expense  was  $104,311 in 2002 and $165,361 in 2001 for these lease commitments.

In  August  2002,  the  Company  sold  its  facility  headquartered in Waukesha,
Wisconsin  and  leased  back approximately 62% of the building's square footage.
The  future  minimum  rental commitments under this five year building lease and
all  other  lease  commitments  are  as  follows:

<TABLE>
<CAPTION>


            YEAR ENDED JUNE 30,
<S>         <C>
2003 . . .  $            262,397
2004 . . .               307,792
2005 . . .               310,212
2006 . . .               300,945
Thereafter               340,894
            --------------------
Total. . .  $          1,522,240

</TABLE>


During  fiscal  2001 the Company entered into supply partnership agreements with
two  offshore  contract manufacturing firms that exclusively manufacture medical
devices  in  a  regulated  environment.  These  two  firms  manufacture specific
products  designated  by  the Company in accordance with formal purchase orders.
The  initial  term  of  the  agreements  is  for  a period of three years and is
automatically  extended  for additional periods of two years each, unless either
party  gives  written notice at least sixty days prior to the end of the initial
term  or  the  then  current  extension  term.  To  ensure an adequate supply of
products  manufactured  by these companies is maintained, the agreements require
that these firms keep on hand in their finished goods inventories one full month
of  supply  of all products under current purchase orders.  At June 30, 2002 and
2001,  a  one  month supply of product maintained at these two firms would total
approximately  $596,000  and  $475,000,  respectively.  In the event the Company
would  cancel  a  purchase  order  under either of these agreements, the Company
would  be  required  to purchase at cost all raw materials, work-in-progress and
finished  goods  inventories for that purchase order.  In addition, any property
or  equipment  that these firms purchased specifically for the production of the
Company's  products  would  be  purchased at mutually agreed upon prices.  There
have  not  been  any  purchase  order  cancellations  under  these  agreements.

12.  SUBSEQUENT  EVENTS

In  August 2002, the Company sold its building in Waukesha, Wisconsin and leased
back  approximately  62% of the building's square footage. The building was sold
for  $4,000,000  and  a  gain  of approximately $41,000 was realized on the sale
after  the  payment  of  commissions  and  fees  and  the funding of $105,000 in
capitalized  build  out  costs  needed  to  split the building into two leasable
spaces. The proceeds from the sale were used to retire the $3,197,125 of debt on
the  Company's  balance  sheet at June 30, 2002 and increased the Company's cash
position  by  approximately  $500,000.

In  July  and  August  of 2002, the Company sold a total of 50,000 shares of its
Immtech  common  stock  and  realized  a  gain  on  the  sale  of  $241,746.

                                       37
<PAGE>

On  August  6,  2002,  in  part  due  to  the  new regulations imposed under the
Sarbanes-Oxley  Act,  the Company initiated an internal review of its import and
export  procedures.  On August 28, 2002, senior management of the Company became
aware  of  actions  that  may have violated United States import/export laws and
regulations.  Senior  management  of  the  Company  immediately  authorized  an
internal  audit  of  these  possible violations, focusing on the sale of medical
equipment  directly or indirectly into an embargoed country and possible marking
issues.  This  internal audit is ongoing and, at this time, management is unable
to  determine  with  certainty the extent of any violations or the potential for
the  imposition  of  penalties.  The  import  and export rules applicable to all
United  States  companies engaged in international business transactions contain
compliance guidelines.  Violations may result in civil or criminal penalties, or
both, as well as the potential loss of export privileges.  The Company has taken
action  to  adopt  and  implement  a  written compliance program with respect to
applicable  import/export  rules.  The  Company  has also undertaken a voluntary
disclosure  with  the Bureau of Industry and Security ("BIS") and the Treasury's
Office of Foreign Asset Control ("OFAC").  Although there is no assurance, based
upon a review of the internal audit to date and precedents, the Company believes
a  negotiated  settlement  of  any  violations  will not have a material adverse
effect  on  the  operations  of  the  Company.  At this time, the Company cannot
determine whether any monetary fines would have a material adverse effect on its
financial  condition.  The  Company  does not believe that the evidence supports
the denial of export privileges; however, any such penalty would have a material
adverse effect on the Company's business.  The Company further believes that the
voluntary  disclosure  to the BIS, OFAC and, possibly, other agencies will serve
to  mitigate  any  potential  adverse  consequences that otherwise might accrue.


                                       38
<PAGE>

INDEPENDENT  AUDITOR'S  REPORT

To  the  Stockholders  and  Directors
Criticare  Systems,  Inc.

We  have  audited  the  accompanying  consolidated  balance  sheets of Criticare
Systems,  Inc.  and  subsidiaries  as of June 30, 2002 and 2001, and the related
consolidated  statements  of operations, stockholders' equity and cash flows for
each  of  the  three  years  in the period ended June 30, 2002.  These financial
statements  are  the  responsibility  of  the  Company's  management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  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 Criticare Systems,
Inc.  at  June  30, 2002 and 2001 and the results of its operations and its cash
flows  for  each  of  the  three  years  in  the  period ended June 30, 2002, in
conformity with accounting principles generally accepted in the United States of
America.

/s/  BDO  Seidman,  LLP
Milwaukee,  Wisconsin
August  19,  2002



                                       39
<PAGE>
QUARTERLY  RESULTS

     The  following  table  contains  quarterly  information, which includes all
adjustments,  consisting  only of normal recurring adjustments, that the Company
considers  necessary  for  a  fair  presentation.  Certain  amounts  have  been
reclassified from the first and second quarters of fiscal 2002 to conform to the
annual  presentation  of  fiscal  2002.

<TABLE>
<CAPTION>


                                                  QUARTERS ENDED (UNAUDITED)

                                        JUNE 30,    MARCH 31,   DEC. 31,    SEPT. 30,    JUNE 30,   MARCH 31,   DEC. 31,
                                          2002        2002        2001        2001         2001        2001       2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                    <C>         <C>          <C>        <C>          <C>         <C>         <C>
Net sales . . . . . . . . . . . . . .  $   6,982   $    6,403   $   7,346  $    5,489   $   7,678   $    7,264  $   6,564
Gross profit. . . . . . . . . . . . .      2,712        2,368       2,864       1,811       3,252        2,923      2,581
(Loss) income from
  operations. . . . . . . . . . . . .       (171)        (202)        198      (1,037)       (149)          37        134
Net (loss) income . . . . . . . . . .       (314)        (235)        186      (1,062)       (161)          44        106
Net (loss) income
  per common
  share--Basic. . . . . . . . . . . .      (0.03)       (0.02)       0.02       (0.10)      (0.01)        0.00       0.01
       --Diluted. . . . . . . . . . .      (0.03)       (0.02)       0.02       (0.10)      (0.01)        0.00       0.01


                                        SEPT. 30,
                                          2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                    <C>
Net sales . . . . . . . . . . . . . .  $    6,230
Gross profit. . . . . . . . . . . . .       2,511
(Loss) income from
  operations. . . . . . . . . . . . .        (108)
Net (loss) income . . . . . . . . . .        (166)
Net (loss) income
  per common
  share--Basic. . . . . . . . . . . .       (0.02)
       --Diluted. . . . . . . . . . .       (0.02)
</TABLE>


     The  Company typically receives a substantial volume of its quarterly sales
orders  at  or  near  the  end of each quarter.  In anticipation of meeting this
expected  demand, the Company usually builds a significant inventory of finished
products throughout each quarter.  If the expected volume of sales orders is not
received  during  the  quarter,  or is received too late to allow the Company to
ship  the  products  ordered during the quarter, the Company's quarterly results
and  stock  of  finished  inventory  can  be  significantly  affected.


Item  9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
--------------------------------------------------------------------------------
FINANCIAL  DISCLOSURE.
---------------------

     Not  applicable.



                                       40
<PAGE>
                                    PART III
                                    --------

Item  10.     DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT.
--------      --------------------------------------------------------

     Information  regarding  the executive officers and directors of the Company
is  incorporated  herein  by  reference  to  the discussions under "Nominees for
Election  as  Directors," "Other Directors," "Section 16(a) Beneficial Ownership
Reporting  Compliance" and "Executive Officers" in the Company's Proxy Statement
for  the  2002  Annual Meeting of Stockholders (the "Criticare Proxy Statement")
which  will  be  filed  on  or  before  October  28,  2002.

Item  11.     EXECUTIVE  COMPENSATION.
--------      -----------------------

     Incorporated  herein  by  reference  to  the  discussion  under  "Executive
Compensation"  in  the  Criticare  Proxy  Statement.

Item  12.     SECURITY  OWNERSHIP  OF  CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
--------      -----------------------------------------------------------------

     Incorporated  herein  by  reference  to  the  discussion  under  "Security
Ownership"  in  the  Criticare  Proxy  Statement.

Item  13.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.
--------      --------------------------------------------------

     Incorporated  herein  by  reference  to  the  discussion  under "Employment
Agreements"  and  "Certain  Relationships  and  Related  Transactions"  in  the
Criticare  Proxy  Statement.

                                     PART IV
                                     -------

Item  14.     EXHIBITS,  FINANCIAL  STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
--------      -----------------------------------------------------------------

(a)     The  following  documents  are  filed  as  part  of  this  report:

     1.     Financial  Statements.  The  following  consolidated  financial
            ---------------------
statements  of  the  Company  are  included  in  Item  8  of  this  report.

          Consolidated  Balance  Sheets  -  as  of  June  30,  2002  and  2001.

          Consolidated  Statements  of Operations - for the years ended June 30,
2002,  2001  and  2000.


                                       41
<PAGE>
          Consolidated  Statements of Stockholders' Equity - for the years ended
June  30,  2002,  2001  and  2000.

          Consolidated  Statements  of Cash Flows - for the years ended June 30,
2002,  2001  and  2000.

          Notes  to  consolidated  financial  statements.

     2.     Financial  Statement  Schedules:
            -------------------------------

          Independent  Auditor's  Report.

          Financial  Statement Schedule for the years ending June 30, 2002, 2001
and  2000:

Schedule

Number                         Description         Page
-----------------------  ------------------------  ----
II. . . . . . . . . . .  Valuation and Qualifying    49
                         Accounts and Reserves


     All  other  schedules  for  which  provision  is  made  in  the  applicable
accounting  regulations  of  the  Securities  and  Exchange  Commission  are not
required  under  the  related  instructions,  are  inapplicable  or the required
information is shown in the financial statements or notes thereto, and therefore
have  been  omitted.

     3.     Exhibits:
            --------

3.1  Restated  Certificate  of  Incorporation  of  the  Company (incorporated by
     reference  to  the  Registration  Statement  on  Form S-1, Registration No.
     33-13050).

3.2  By-Laws  of  the  Company  (incorporated  by  reference to the Registration
     Statement  filed  on  Form  S-1,  Registration  No.  33-13050).

4.1  Specimen  Common  Stock  certificate  (incorporated  by  reference  to  the
     Registration  Statement  filed  on  Form  S-1,  Registration No. 33-13050).

4.2  Rights Agreement (incorporated by reference to the Company's Current Report
     on  Form  8-K  filed  on  April  18,  1997).


                                       42
<PAGE>
10.1*  1999  Employee  Stock  Purchase  Plan  (incorporated  by reference to the
     Company's  Annual  Report  on  Form 10-K for the year ended June 30, 1999).

10.2*  1992  Employee  Stock  Option  Plan  (incorporated  by  reference  to the
     Company's  Registration  Statement on Form S-8, Registration No. 33-60644).

10.3*  1992  Nonemployee  Stock  Option  Plan  (incorporated by reference to the
     Company's  Registration  Statement on Form S-8, Registration No. 33-60214).

10.4*  1987  Employee  Stock  Option  Plan  (incorporated  by  reference  to the
     Company's  Registration  Statement on Form S-8, Registration No. 33-33497).

10.5*  1987  Nonemployee  Stock  Option  Plan  (incorporated by reference to the
     Company's  Registration  Statement on Form S-8, Registration No. 33-40038).

10.6*  Form  of Executive Officer and Director Indemnity Agreement (incorporated
     by  reference  to  the  Company's  Registration  Statement  on  Form  S-1,
     Registration  No.  33-13050).

10.7*  Employment  Agreement  of  Emil  H.  Soika,  dated  as  of June 26, 2001,
     (incorporated  by  reference  to the Company's Annual Report on Form 10-K/A
     for  the  year  ended  June  30,  2001).

10.8*  Employment  Agreement  of  Stephen  D.  Okland, dated as of June 1, 1999,
     (incorporated  by reference to the Company's Annual Report on Form 10-K for
     the  year  ended  June  30,  1999).

10.9*  Employment  Agreement  of  Drew  M.  Diaz,  dated  as  of  June  1, 1999,
     (incorporated  by reference to the Company's Annual Report on Form 10-K for
     the  year  ended  June  30,  1999).

10.10  Supply  Partnership  Agreement,  dated  as of August 1, 2000, between the
     Company and BioCare Corporation (incorporated by reference to the Company's
     Annual  Report  on  Form  10-K  for  the  year  ended  June  30,  2001).

10.11  Supply  Agreement,  dated as of October 26, 2000, between the Company and
     TriVirix  International Limited (incorporated by reference to the Company's
     Annual  Report  on  Form  10-K  for  the  year  ended  June  30,  2001).


                                       43
<PAGE>
10.12  Settlement  Agreement,  dated as of November 2, 2001, between the Company
     and Immtech International, Inc. (incorporated by reference to the Company's
     Quarterly  Report  on  Form  10-Q for the quarter ended December 31, 2001).

21   Subsidiaries.

23.1 Consent  of  BDO  Seidman,  LLP.

24   Power of Attorney (incorporated by reference to the signature page hereof).

__________________
*  Management  contract  or  compensatory  plan  or  arrangement.

(b)     Reports  on  Form  8-K.

     The  Company filed no reports on Form 8-K during the quarter ended June 30,
2002.


(c)     Exhibits.

     The  response to this portion of Item 14 is submitted as a separate section
of  this  report.

(d)     Financial  Statement  Schedules.

     The  response to this portion of Item 14 is submitted as a separate section
of  this  report.


                                       44
<PAGE>
                                   SIGNATURES


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

                                                CRITICARE  SYSTEMS,  INC.

                                                By  /s/  Emil  H.  Soika
                                                    --------------------
                                                Emil  H.  Soika,  President
                                                and  Chief  Executive  Officer

                                                Date:  October  15,  2002


                                POWER OF ATTORNEY

KNOW  ALL  MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes  and  appoints  Emil  H.  Soika and Michael J. Sallmann, and each of
them,  as  his  true and lawful attorneys-in-fact and agents, with full power of
substitution  and  resubstitution,  for him and in his name, place and stead, in
any  and  all  capacities, to sign any and all amendments to this Report on Form
10-K  and  to  file  the  same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said  attorneys-in-fact and agents, and each of them full power and authority to
do  and  perform each and every act and thing requisite and necessary to be done
in  connection  therewith,  as  fully to all intents and purposes as he might or
could  do  in  person,  hereby  ratifying  and  confirming  all  that  said
attorneys-in-fact  and  agents,  or  any  of them, or their or his substitute or
substitutes,  may  lawfully  do  or  cause  to  be  done  by  virtue  hereof.

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

<TABLE>
<CAPTION>


Signature                                    Title                         Date
----------------------------  ------------------------------------  ------------------

<S>                           <C>                                   <C>
/s/ Emil H. Soika             President, Chief Executive Officer    October 15, 2002
----------------------------  and Director (Principal Executive
Emil H. Soika                 Officer)

/s/ Michael J. Sallmann      Vice President-Finance and Secretary   October 15, 2002
----------------------------  (Principal Financial and Accounting
Michael J. Sallmann          Officer)


/s/ Karsten Houm              Chairman of the Board and Director    September 27, 2002
----------------------------
Karsten Houm

/s/ Milton Datsopoulos        Director                              September 27, 2002
----------------------------
Milton Datsopoulos

/s/ N.C. Joseph Lai           Director                              September 27, 2002
----------------------------
N.C. Joseph Lai

/s/ Higgins Bailey            Director                              September 27, 2002
----------------------------
Dr. Higgins Bailey

/s/ Jeffrey T. Barnes         Director                              September 27, 2002
----------------------------
Jeffrey T. Barnes

/s/ Stephen K. Tannenbaum     Director                              September 27, 2002
----------------------------
Stephen K. Tannenbaum

</TABLE>



                                       45
<PAGE>

                                 CERTIFICATIONS
                                 --------------


I,  Emil  H.  Soika, President and Chief Executive Officer of Criticare Systems,
Inc.,  certify  that:

     1.     I  have  reviewed  this  annual  report  on  Form  10-K of Criticare
Systems,  Inc.;

     2.     Based  on  my  knowledge,  this  annual  report does not contain any
untrue  statement  of a material fact or omit to state a material fact necessary
to  make  the  statements  made,  in light of the circumstances under which such
statements  were made, not misleading with respect to the period covered by this
annual  report; and

     3.     Based on my knowledge, the financial statements, and other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods  presented  in  this annual report.


     Date:  October 15,  2002

                                                /s/ Emil H. Soika
                                                -------------------------------
                                                Emil  H.  Soika
                                                President  and
                                                Chief  Executive  Officer


                                       46
<PAGE>
                                 CERTIFICATIONS
                                 --------------


I,  Michael  J.  Sallmann,  Vice  President - Finance and Secretary of Criticare
Systems,  Inc.,  certify  that:

     1.     I  have  reviewed  this  annual  report  on  Form  10-K of Criticare
Systems,  Inc.;

     2.     Based  on  my  knowledge,  this  annual  report does not contain any
untrue  statement  of a material fact or omit to state a material fact necessary
to  make  the  statements  made,  in light of the circumstances under which such
statements  were made, not misleading with respect to the period covered by this
annual  report; and

     3.     Based on my knowledge, the financial statements, and other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods  presented  in  this annual report.


     Date:  October 15,  2002

                                                /s/ Michael J. Sallmann
                                                -------------------------------
                                                Michael  J.  Sallmann
                                                Vice  President  -  Finance
                                                and  Secretary


                                       47
<PAGE>
                          INDEPENDENT AUDITOR'S REPORT

To  the  Board  of  Directors  and  Stockholders  of
Criticare  Systems,  Inc.:

The  audits  referred  to  in  our  report dated August 19, 2002 relating to the
consolidated financial statements of Criticare Systems, Inc., which is contained
in  Item  8  of  this  Form  10-K  included the audit of the financial statement
schedule  listed  in  Item  14.  This  financial  statement  Schedule  II is the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on  this  financial  statement  schedule  based  upon  our  audits.

In  our  opinion  such  financial  statement  schedule  presents  fairly, in all
material  respects,  the  information  set  forth  therein.



/s/  BDO  Seidman,  LLP
Milwaukee,  Wisconsin
August  19,  2002


                                       48
<PAGE>
                                   SCHEDULE II

                             CRITICARE SYSTEMS, INC.

                        VALUATION AND QUALIFYING ACCOUNTS
                FOR THE YEARS ENDED JUNE 30, 2002, 2001 AND 2000

<TABLE>
<CAPTION>


Column A                                    Column B      Column C     Column D     Column E
--------                                   -----------  ------------  -----------  ----------
                                            Balance at   Charged to                Balance at
                                            Beginning    Costs and                   End of
Description                                 of Period    Expenses      Deductions    Period
-----------                                -----------  ------------  -----------  ----------
<S>                                        <C>          <C>           <C>          <C>
YEAR ENDED JUNE 30, 2000:
Allowance for doubtful accounts . . . . .  $   375,000  $ 1,160,614   $   235,614  $1,300,000
Reserve for sales returns and allowances   $    60,000  $   554,101   $   554,101  $   60,000
Reserve for obsolete inventory. . . . . .  $   559,604  $    94,310   $   253,914  $  400,000
YEAR ENDED JUNE 30, 2001:
Allowance for doubtful accounts . . . . .  $ 1,300,000  $   685,873   $   985,873  $1,000,000
Reserve for sales returns and allowances   $    60,000  $         -   $         -  $   60,000
Reserve for obsolete inventory. . . . . .  $   400,000  $         -   $    75,000  $  325,000
YEAR ENDED JUNE 30, 2002:
Allowance for doubtful accounts . . . . .  $ 1,000,000  $  (183,046)  $   516,954  $  300,000
Reserve for sales returns and allowances   $    60,000  $    12,945   $         -  $   72,945
Reserve for obsolete inventory. . . . . .  $   325,000  $   676,284   $    55,284  $  946,000
</TABLE>

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