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,  1999

[  ]     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 000-16061
                                               ---------

                             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, Waukesha, Wisconsin       53186
             --------------------------------------------       -----
             (Address of Principal Executive Offices)        (Zip Code)

        Registrant's telephone number, including area code:  414-798-8282
                                                             ------------

           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, 1999 was $17,445,738.  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,  1999,  there  were  outstanding  8,706,151  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 November 5, 1999 are incorporated by reference into
Part  III  of  this  report.

                           [COVER PAGE 2 OF 2 PAGES.]


                                        2
<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.

     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.  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  503,  503DX,  504  and  504DX.  Criticare's  complete  line of pulse
oximeters  meets  the  needs  of  virtually  all  clinical environments:  adult,
pediatric

                                        3
<PAGE>
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  507E  Patient Monitors.  The 507E series is comprised of
small,  compact, portable, full-featured vital signs monitors configured to meet
specific  clinical  needs.  The  507E  series  is  well-suited  for  dental  and
physician  offices.  The  506DX  is  ideal  for  patient  ward  monitoring  of
noninvasive blood pressure.  The 507E series combines ECG, oxygen saturation and
noninvasive  blood  pressure  for  a  complete vital signs monitor for physician
office  and  hospital  applications.  The  507E  series is an effective low-cost
monitoring  system  for  the  emergency  room  or  the  recovery  room.

     Scholar(R).  The Scholar monitor series specifically addresses the needs of
small  hospitals  with broad clinical needs (the monitoring of ECG, blood oxygen
saturation,  noninvasive  blood  pressure,  temperature  and  invasive  blood
pressure).  Scholar  offers  all  the primary features a hospital needs with the
capability  of  adding more features if desired.  Scholar monitors are available
with  printer  and  recorder  capability  and  can  transmit data to Criticare's
VitalView  Central  Stations.

     Model  1100  Anesthesia  Monitor.  The  Model 1100 monitor provides patient
monitoring  for  a  wide variety of cardio-pulmonary parameters in an integrated
system.  The  Model 1100 is able to monitor two ECG waveforms, noninvasive blood
pressure,  three types of invasive blood pressure, respiration rate, heart rate,
temperature,  oxygen  saturation,  inspired/expired  oxygen,  carbon dioxide and
anesthetic  gases.  The  Model  1100  uses  the Company's proprietary disposable
respiratory  secretion  filter  system.

     Model  602-3B,  602-6B,  602-11  and  602-13  Gas Monitors.  The 602 series
provides  monitoring  of  carbon  dioxide,  pulse oximetry and anesthetic agents
using  Criticare's  proprietary  infrared  technology.  The  602  IQ  series  of
operating  room monitors provides automatic identification and quantification of
all  five  approved  anesthetic  agents.

     Model  4400  Series  Blood  Pressure,  Pulse  Oximetry  and  Temperature
Combination  Monitor.  The 4400 series monitor was developed in conjunction with
Alaris  Medical ("Alaris") and incorporates Criticare's oximetry and noninvasive
blood  pressure technology with Alaris's temperature technology.  Alaris has the
rights  to  market  the Model 4400 monitor to hospitals in the United States and
Canada.  Criticare has rights to market the product to the alternate care market
and  to  international  markets.

     Model  602-14  POET(TM) LT Monitor.  The hand-held POET  LT  provides small
hospitals  and alternate care environments with compact, portable carbon

                                        4
<PAGE>
dioxide  monitoring.  The  POET  LT series is an effective, low-cost functioning
solution for  these  environments.

     VitalView(TM).  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  Scholar,  507E  and  MPT.

     MPT(TM).  The  MPT  (Multiple  Parameter  Telemetry)  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.

     Water  Chek/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.

Marketing  and  Sales
---------------------

     Domestic  Sales.  At  August  31,  1999, the Company's domestic sales force
consisted of 18 employees and 75 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

                                        5
<PAGE>
Central  Station and anesthetic agent monitors) principally to hospitals whereas
the vital signs and pulse oximeters are sold primarily for nonhospital settings.

     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 1999, Criticare sold its products,
principally  to  hospitals,  in  over  75 countries through over 140 independent
dealers.  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  1999,  37%  of  Criticare's  net  sales,  or $10.5 million, was
attributable  to  international sales, of which approximately 44% was from sales
in  Europe  and the Middle East, 21% was from sales to Pacific Rim countries and
35% was from sales to Canada and Central and South America.  In fiscal 1998, 46%
of  Criticare's  net  sales  was attributable to international sales.  In fiscal
1997,  51%  of  Criticare's net sales was attributable to exports.  There are no
material  identifiable  assets  of  the Company located in foreign markets.  The
Company  sells  its  products  in  United  States  dollars and is not subject to
significant  currency  risks;  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.

     Clinical  Support.  At  August  31, 1999, Criticare employed three clinical
support  specialists  to  provide  customer training and education, primarily to
domestic  hospitals.  The  clinical  support  staff also assists in the periodic
training and education of the direct sales force.  In addition, the direct sales
force  maintains  contact  with  end-users  and provides additional training and
updates.  Clinical  support  in  foreign  markets  is  provided by the Company's
clinical  support  staff  and  direct  sales  force.

     Warranty  and  Service.  Criticare  believes that customer service is a key
element  of  its  marketing program.  Criticare's monitors are warranted against
defects  for one year and its reusable sensors are warranted for six months.  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.  At  August  31,  1999,  the Company had a customer service

                                        6
<PAGE>
staff  of  16  people  at  its Waukesha, Wisconsin facility.  The Company offers
extended  warranties  and  service  contracts  on  all  of  its  monitors.

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

     The  Company  continually  strives  to implement manufacturing efficiencies
while  maintaining product quality and reliability.  The Company's oximeters and
sensors  are assembled from off-the-shelf components and other parts produced to
the  Company's  specifications, such as printed circuit board assemblies, custom
transformers  and  sensor  cable/connector  subassemblies.  However,  Criticare
produces  certain  important components in-house.  All electronic components are
subjected  to  a  24-hour  high-temperature burn-in to eliminate early component
failure.  Some  subassembly  is  performed by subcontractors, but final assembly
and  quality control are performed at Criticare's facility.  Criticare maintains
test  and  inspection  procedures  to  minimize errors and enhance the operating
reliability  of  its  products.  Final  test procedures on fully assembled units
include  an  operational  test  and  a  continuous  72-hour  burn-in  procedure.

     Certain  of Criticare's products incorporate components currently purchased
from  single sources.  While the Company believes these components are available
from  alternate  sources on reasonable terms, an interruption in the delivery of
these or other components could have an adverse effect on the Company.  In order
to  reduce the risk of supply interruption, the Company maintains inventories of
certain  components.

     The  ISO  9000  series  of  quality  management and assurance standards was
developed  by  the  International  Organization  for  Standardization  (ISO) and
published  in  1987.  In  1993  the  EC (European Community) was formed with the
signing  of  the  Maastricht  Treaty  by 12 European countries.  One of the many
standards  adopted by this group is the ISO 9000 international quality assurance
and  quality  management  series  under the designation EN2 9000.  Based on this
action  by the EC and specific requirements from European customers, the Company
believes  ISO  9000  registration  will  be  required to compete in EC and other
international  markets as an indication of compliance with international quality
management  and  assurance  standards.  In  July  1994  the  Food  and  Drug
Administration  (FDA)  announced  its  intention  of  harmonizing  the  ISO 9000
standards  with  its  Medical  Device  Good  Manufacturing Practices (GMP).  The
Company  has  achieved  certification  under ISO's standards 9001 and 9002.  See
"Regulation."

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

     Criticare  has  focused  its  research,  development  and  engineering
expenditures  on  products  designed  to  meet  identified  market demands.  The

                                        7
<PAGE>
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,  1999,  the  Company  had  an in-house research, development and
engineering  staff  of  23  people.  The  Company's  research,  development  and
engineering  expenditures  were  $3.0  million  in  fiscal 1999, $3.3 million in
fiscal  1998  and  $2.3  million  in  fiscal  1997.

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
competitors have a competitive advantage over the Company.  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  and  its patented and other proprietary technology and software for
noninvasive,  continuous  monitoring of oxygen, anesthetic gases, carbon dioxide
and noninvasive blood pressure, its cost-efficient manufacturing, the efficiency
and  speed  of  its  research  and  development  efforts  and  its  established
international  presence.

     The  principal  competing  manufacturers  of  pulse  oximeters  are Nellcor
Puritan  Bennett, a unit of Mallinckrodt Inc., and Datex/Ohmeda, a United States
subsidiary of Instrumentarium OY, a Finnish company.  The Company estimates that
Nellcor has captured a majority of the worldwide pulse oximeter market, and that
Datex/Ohmeda  and  the  Company  have  each captured significant portions of the
worldwide  pulse  oximeter  market.  In  addition,  there are approximately four
other  companies  which  compete in the market for pulse oximeters.  The Company
also  indirectly competes with manufacturers of numerous other medical equipment
products  for  limited  customer  funds.

     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 Hewlett-Packard Company.  The market for vital
signs  monitors  includes  competitors  such as Hewlett-Packard Company, Siemens
A.G.,  Datex/Ohmeda  and SpaceLabs, Inc., a subsidiary of Westmark International
Incorporated.

                                        8
<PAGE>
     The  Company  believes  that  its  principal  competitors in Western Europe
include  Datex/Ohmeda  and  that  the  Company  has  a significant share of this
market.  In the Pacific Rim countries, the Company believes that Datex/Ohmeda is
the  leading  competitor.

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.

     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

                                        9
<PAGE>
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.
None of the Company's U.S. patents expire before 2004.  Criticare also has three
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  a  United  States  trademark  registrations  for  "POET" and
"Scholar."

     The  Company  also  relies  upon trade secret protection for certain of its
proprietary  technology.  Although  the  Company  requires  its employees having
access  to  its  proprietary  information 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,  1999  Criticare  had  105  employees;  including  41  in
manufacturing and operations, six in quality control, 22 in sales and marketing,
13  in  administration  and  23  in  research,  development  and  engineering.

     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.

Backlog
-------

     Criticare's  backlog on June 30, 1999 and 1998 was approximately $1,836,000
and $1,542,000, respectively.  The backlog at these dates consisted primarily of
products for which the sales order specified a delayed delivery date.  Criticare
generally delivers its products out of inventory when specified by the

                                       10
<PAGE>
customer.  The  Company  does  not  believe  that  its  backlog  at  any date is
indicative of its future  sales.

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

     In  November  1992, the Company purchased a new 60,000 square foot facility
for  approximately  $4.5  million.  The  Company's  mortgage  calls  for monthly
installments  of  principal  and  interest  of approximately $28,000 and a final
"balloon"  payment  of  approximately  $3.0  million in April 2004.  The Company
believes  this  facility  will  be  adequate  for  the  foreseeable  future.

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

     In  July,  1999, Criticare and Dynamic Options Corporation, Inc. ("D.O.C.")
amicably  settled certain pending legal proceedings.  Criticare agreed to make a
cash  payment  to  D.O.C.,  transfer to D.O.C. a portion of the shares Criticare
holds in Immtech International, Inc. ("Immtech"), issue to D.O.C. 150,000 shares
of  Criticare's common stock and transfer certain inventory related to telemetry
products  no  longer  sold  by the Company.  The settlement agreement requires a
broker chosen by the Company to sell the Immtech shares and the Criticare shares
on  behalf  of  D.O.C.

     In  the normal course of business Criticare also 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,  1999.


                                       11
<PAGE>
                                     ------
                                     PART II
                                     -------

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

Criticare  Systems,  Inc.  common  stock is traded on the Nasdaq National Market
(Symbol  CXIM).  As  of  June  30, 1999, there were approximately 320 holders of
record of Criticare's common stock.  The Company has never paid dividends on its
common  stock  and has no plans to pay cash dividends in the foreseeable future.


                                              YEAR  ENDED  JUNE  30,
                                        1999                      1998
Quarter  Ended:                 High            Low          High       Low
September  30                   $2-15/16        $1-1/4       $8         $4-3/8
December  31                    $2-3/4          $1-5/8       $6-5/8     $2-13/16
March  31                       $2-1/16         $1-3/8       $4-3/8     $2-5/8
June  30                        $3-3/8          $1-11/16     $3-3/4     $2-11/16


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,
                                                              ----------------------
                                        1999             1998          1997          1996         1995
                                   --------------    ------------  ------------  ------------  -----------
<S>                                <C>               <C>            <C>           <C>           <C>
Net Sales                           $28,512,507      $27,908,364    $26,235,355   $31,528,266   $28,660,275
Income (Loss) Before Income
Taxes and Extraordinary Gain         (4,388,171)        (499,276)    (2,749,435)   (4,280,989)      175,643
Net Income (Loss)                    (4,388,171)        (499,276)    (2,179,489)   (4,330,989)      105,643
Net Income (Loss) Per
Common Share-Basic and
Diluted                                  ($0.51)          ($0.06)        ($0.30)       ($0.63)        $0.02

Average Shares
Outstanding                          8,581,863          8,309,240     7,267,184     6,913,557     6,764,236
Stockholders' Equity                $12,711,709        $17,282,997   $14,227,135   $13,917,549  $17,130,449
Long-term Obligations                $4,014,356         3,165,258     5,110,934     4,669,975     3,646,867
Working Capital                      10,340,014         13,716,891    12,053,165    10,282,033   13,401,741
Total Assets                         24,041,987         24,726,819    25,145,066    27,075,922   25,468,428
</TABLE>

                                       12
<PAGE>
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,
                                            -----------------------
                                               1999     1998    1997
                                              -------  ------  ------

<S>                                           <C>      <C>     <C>
Net sales. . . . . . . . . . . . . . . . . .   100.0%  100.0%  100.0%
Cost of goods sold . . . . . . . . . . . . .    54.5    53.3    53.6
Gross profit . . . . . . . . . . . . . . . .    45.5    46.7    46.4

Operating expenses:
Marketing. . . . . . . . . . . . . . . . . .    31.4    26.7    33.4
Research, development and engineering. . . .    10.4    11.7     8.8
Administrative . . . . . . . . . . . . . . .    14.6     7.2     9.6
Severance pay. . . . . . . . . . . . . . . .     2.8       -       -
Total. . . . . . . . . . . . . . . . . . . .    59.2    45.6    51.8
Income (loss) from operations. . . . . . . .   (13.7)    1.1    (5.4)
Interest expense . . . . . . . . . . . . . .    (1.5)   (2.9)   (4.0)
Interest income. . . . . . . . . . . . . . .      .3      .4      .1
Equity in loss of investments. . . . . . . .     (.5)    (.4)   (1.2)
Loss before income taxes and
    extraordinary gain . . . . . . . . . . .   (15.4)   (1.8)  (10.5)
Income tax provision . . . . . . . . . . . .       -       -       -
Extraordinary gain on extinguishment of debt       -       -     2.2
Net loss . . . . . . . . . . . . . . . . . .   (15.4)%  (1.8)%  (8.3)%
</TABLE>



FISCAL  YEAR  ENDED  JUNE  30,  1999  COMPARED  TO  JUNE  30,  1998

Net  sales  for  the  twelve  months  ended  June  30,  1999  increased  2.2% to
$28,512,507  from $27,908,364. The sales increase is attributable to an increase
in  OEM  sales  partially  offset  by  a  decrease  in  international  sales.

The  gross  profit percentage decreased from 46.7% in 1998 to 45.5% in 1999. The
primary  reason  for  the decrease in gross profit is the increase in OEM sales.
OEM  sales  typically  have  a  lower  gross  profit  than  sales  to  non-OEM
customers.

Operating  expenses  of $16,871,981 represents a 32.5% increase from fiscal 1998
levels.  Marketing  expenses increased approximately $1,486,000 when compared to
1998 levels.  This increase is due primarily to increased promotional activities
throughout  the  world.  Engineering  expenses  decreased approximately $316,000

                                       13
<PAGE>
when compared to 1998 levels; however, excluding the one-time $900,000 charge
in 1998 (discussed in  footnote  8  of  the  financial  statements)  engineering
expenses increased approximately $584,000. This  increase  is  due  to  expanded
research  and  development  efforts  related  to  new  product  introductions.
Administrative expenses increased approximately  $2,159,000.  This  increase  is
attributable  to  the  settlement  and related legal costs related to litigation
with  a former dealer that represented the Company's products.  The Company also
recorded  approximately  $810,000  of severance costs related primarily to costs
associated  with  the  resignation  of  the  two  co-founders  of  the  Company.

Interest  expense  decreased  due to the conversion of convertible debentures to
common  stock  in  1998.

FISCAL  YEAR  ENDED  JUNE  30,  1998  COMPARED  TO  JUNE  30,  1997

Net  sales  for  the  twelve  months  ended  June  30,  1998  increased  6.3% to
$27,908,364  from  $26,235,355  for  the twelve months ended June 30, 1997.  The
sales  increase  is  attributable to the alternate care sales and new OEM sales.

The gross profit percentage remained relatively consistent at 46.7% versus 46.4%
in fiscal 1997.  Margins in domestic hospital, alternate care, and international
all  remained  relatively  consistent  with  those  of  the  prior  year.

Operating  expenses  of  $12,731,695 decreased 6.3% from fiscal 1997 levels.  In
addition,  operating  expenses  as a percentage of sales decreased to 45.6% from
51.8%  in  fiscal  1997.  The largest savings occurred in the marketing expenses
where  spending  levels were reduced by approximately $1,300,000.  The reduction
in  marketing  expenses  was  primarily  related to international spending.  The
Company  consolidated  several international functions at the home office in the
United  States.  This  resulted  in  a savings of over $850,000.  Administrative
expenses  for  fiscal  1998  decreased  by 20.4% from fiscal 1997 levels, due to
liquidation expenses incurred in fiscal 1997 related to Criticare International.
The reduced expenses in marketing and administration were partially offset by an
increase  of  41.3%  in  research,  development, and engineering expenses, which
resulted  from  a  $900,000 charge associated with the acquisition of in-process
technology  related  to  the  transmission  of  clinical  data.

Interest  expense  decreased during fiscal 1998 due to no borrowings on the line
of  credit during the year.  Interest income increased during fiscal 1998 due to
higher  cash  balances  on  hand  throughout  the  year.  Equity  in the loss of
investments  relates  to  a  $120,000 advance provided to Immtech International,
Inc.

                                       14
<PAGE>
LIQUIDITY  AND  CAPITAL  RESOURCES

In  fiscal  1999,  the  Company  generated  $465,577  from operating activities,
$256,413  from  the  mortgage  refinancing discussed below, and $10,313 from the
exercise  of  stock  options.  The  Company  used  $92,776 for the retirement of
long-term  debt, $515,017 for capital expenditures, $150,000 for the purchase of
stock  and  intangible assets from Immtech International, Inc., and $193,430 for
the  repurchase of Company stock. These sources and uses of cash resulted in net
negative  cash  flow  of  $218,920  for  the  1999  fiscal  year.

In  fiscal  1998,  the  Company  generated  $448,434  from operating activities,
$194,431  from  the  exercise  of  stock  options, $120,000 from the issuance of
common  stock,  and  $82,000  from  the  exercise of warrants.  The Company used
$147,441 for retirement of long-term debt, $288,285 for capital expenditures and
$120,000  for advances to Immtech International, Inc.  These sources and uses of
cash  resulted in a net positive cash flow of $289,139 for the 1998 fiscal year.

In  March 1999, the Company refinanced its mortgage note on the Company's office
and  manufacturing facility. The new mortgage note requires monthly debt service
payments  of  approximately  $28,000  with  a  final  payment  of  approximately
$3,000,000  due  in  April  2004.

The  Company  expects  its  continued  programs  to increase accounts receivable
collections,  decrease  inventory  levels,  reduce  product  development tooling
requirements  and  stabilize  sales  demonstration  equipment levels will have a
positive  affect on cash flow activities in the next fiscal year.  Consequently,
the  Company  believes its research and development activities and other capital
and  liquidity  requirements  for the next one to two years will be satisfied by
cash  generated  from  operations and other borrowings.  During fiscal 1999, the
Company also had access to a commercial bank line of credit of up to $4,000,000.
At  June  30,  1999, there were no borrowings outstanding on the line of credit.
The  Company  violated a convenant related to maintaining a certain tangible net
worth  amount  and  achieving certain income levels.  The bank waived compliance
with  this covenant subsequent to year end.  This line expires in November 2001.

YEAR  2000  PREPARATIONS

The  Company  has  developed a plan to address company-wide Year 2000 readiness.
The  Year 2000 issue relates to computer hardware and software and other systems
designed  to  use  two  digits  rather than four digits to define the applicable
year.  As  a  result,  the Year 2000 would be translated as two zeroes.  Because
the  Year  1900  could  also  be translated as two zeroes, systems which use two
digits  could  read  the  date  incorrectly  for  a  number  of  date-sensitive
applications  resulting in potential calculation errors or the shutdown of major

                                       15
<PAGE>
systems.  The  Company  is  in  the  process  of  updating its internal computer
software,  other  information  technology  and  other  operating systems for the
purposes  of  Year 2000 compliance.  The Company will also address the Year 2000
compliance  of the Company's new and existing products. The Company has incurred
costs  of  approximately  $300,000  as  of  June  30,  1999 related to Year 2000
preparations. The Company expects to spend an additional $50,000 to complete its
Year  2000  plan.  The  Company  currently  expects  to  complete  its Year 2000
compliance plan during October 1999 and does not expect that its costs to become
Year  2000  compliant  will be material to its financial condition or results of
operations.

The  Company's  operations  may  also  be  adversely affected to the extent that
suppliers  and  other  third  parties  are  not  Year  2000
compliant.  The  Company  has  circulated surveys to its key third party vendors
during  fiscal  1999  to assess the Year 2000 compliance status of the operating
systems  of  such  vendors  and  the  potential  impact  on  the  Company  of
non-compliance.  However,  a number of risks relating to the Year 2000 issue may
be  out  of  the  Company's  control,  including  reliance  on outside links for
essential  services such as communications and power.  There can be no assurance
that  a  failure  of systems of third parties on which the Company's systems and
operations  will rely to be Year 2000 compliant will not have a material adverse
effect  on  the  Company's  business,  financial condition or operating results.

FORWARD-LOOKING  STATEMENTS

A  number  of the matters and subject areas discussed in this Annual Report 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, Year 2000 compliance,
management's  or  the  Company's  expectations  and  beliefs and similar matters
discussed  in  Management's  Discussion and Analysis or elsewhere in this Annual
Report.  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, government regulation, health care cost containment
programs,  and  competition  in  the  Company's  markets.



                                       16
<PAGE>
Item  7A.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES ABOUT MARKET RISK.
--------      -------------------------------------------------------------

     The  Company  did not hold any market risk sensitive instruments during the
period  covered  by  this  report.

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

FINANCIAL STATEMENTS

                    CRITICARE SYSTEMS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             JUNE 30, 1999 AND 1998
<TABLE>
<CAPTION>



ASSETS                                                         1999         1998

<S>                                                         <C>          <C>
CURRENT ASSETS (Note 5):
Cash and cash equivalents (Note 1) . . . . . . . . . . . .  $ 2,511,078  $ 2,729,998
Accounts receivable, less allowance for doubtful accounts
   of $375,000 and $300,000, respectively. . . . . . . . .    6,358,487    6,921,713
Other receivables. . . . . . . . . . . . . . . . . . . . .       83,106      322,976
Inventories (Notes 1 and 2). . . . . . . . . . . . . . . .    8,510,975    7,682,471
Prepaid expenses . . . . . . . . . . . . . . . . . . . . .      192,290      338,297
Total  current  assets . . . . . . . . . . . . . . . . . .   17,655,936   17,995,455

PROPERTY, PLANT AND EQUIPMENT (Notes 1 and 5):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . .      925,000      925,000
Building . . . . . . . . . . . . . . . . . . . . . . . . .    3,600,000    3,600,000
Machinery and equipment. . . . . . . . . . . . . . . . . .    2,051,442    1,796,120
Furniture and fixtures . . . . . . . . . . . . . . . . . .      819,579      712,428
Demonstration and loaner monitors. . . . . . . . . . . . .    1,416,893    1,783,611
Production tooling . . . . . . . . . . . . . . . . . . . .    2,158,378    2,005,834
Property, plant and equipment - cost . . . . . . . . . . .   10,971,292   10,822,993
Less accumulated depreciation. . . . . . . . . . . . . . .    4,697,232    4,210,622
Property,  plant  and  equipment - net . . . . . . . . . .    6,274,060    6,612,371

INVESTMENTS (Notes 1, 3 and 5) . . . . . . . . . . . . . .            -            -

OTHER ASSETS (Notes 1 and 5):
License rights and patents - net . . . . . . . . . . . . .      111,991      118,993
Total  other  assets . . . . . . . . . . . . . . . . . . .      111,991      118,993
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . .  $24,041,987  $24,726,819
</TABLE>




See  notes  to  consolidated  financial  statements.
                                       17
<PAGE>
<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY                                          1999          1998
------------------------------------------------------------------------  ------------  ------------

<S>                                                                       <C>           <C>
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 3,078,020   $ 2,305,721
Accrued liabilities:
    Compensation and commissions . . . . . . . . . . . . . . . . . . . .    1,446,614       819,886
    Product warranties (Note 1). . . . . . . . . . . . . . . . . . . . .      325,000       328,000
    Lawsuit settlement (Note 7). . . . . . . . . . . . . . . . . . . . .    1,600,000             -
    Deferred income. . . . . . . . . . . . . . . . . . . . . . . . . . .      380,000             -
    Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      412,395       715,603
Current maturities of long-term debt (Note 5). . . . . . . . . . . . . .       73,893       109,354
                                                                          ------------  ------------
Total  current  liabilities. . . . . . . . . . . . . . . . . . . . . . .    7,315,922     4,278,564
                                                                          ------------  ------------

LONG-TERM DEBT, less current maturities (Note 5) . . . . . . . . . . . .    3,364,356     3,165,258
                                                                          ------------  ------------

OTHER LONG-TERM OBLIGATIONS (Note 11). . . . . . . . . . . . . . . . . .      650,000             -
                                                                          ------------  ------------

CONTINGENCIES (Note 7)

STOCKHOLDERS' EQUITY (Notes 5, 6 and 8):
Preferred stock - $.04 par value, 500,000 shares authorized,
    no shares issued or outstanding. . . . . . . . . . . . . . . . . . .            -             -
Common stock - $.04 par value, 15,000,000 shares authorized,
    8,706,151 and 8,351,151 shares issued and outstanding, respectively.      348,246       334,046
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . .   17,960,363    17,964,250
Common stock held in treasury 103,840 shares - at cost . . . . . . . . .     (193,430)            -
Retained earnings (accumulated deficit). . . . . . . . . . . . . . . . .   (5,403,470)   (1,015,299)
                                                                          ------------  ------------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . .   12,711,709    17,282,997
                                                                          ------------  ------------
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $24,041,987   $24,726,819
                                                                          ============  ============
</TABLE>



See  notes  to  consolidated  financial  statements.


                                       18
<PAGE>
                    CRITICARE SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    YEARS ENDED JUNE 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>



                                                    1999          1998          1997

<S>                                             <C>           <C>           <C>
NET SALES (NOTE 10). . . . . . . . . . . . . .  $28,512,507   $27,908,364   $26,235,355

COST OF GOODS SOLD . . . . . . . . . . . . . .   15,528,314    14,870,453    14,059,508
                                                ------------  ------------  ------------

GROSS PROFIT . . . . . . . . . . . . . . . . .   12,984,193    13,037,911    12,175,847
                                                ------------  ------------  ------------

OPERATING EXPENSES:
Marketing. . . . . . . . . . . . . . . . . . .    8,941,036     7,454,619     8,761,731
Research, development and engineering (Note 8)    2,963,134     3,278,714     2,320,655
Administrative (Note 7). . . . . . . . . . . .    4,157,811     1,998,362     2,509,506
Severance pay (Note 11). . . . . . . . . . . .      810,000             -             -
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .   16,871,981    12,731,695    13,591,892
                                                ------------  ------------  ------------

INCOME (LOSS) FROM OPERATIONS. . . . . . . . .   (3,887,788)      306,216    (1,416,045)
                                                ------------  ------------  ------------


OTHER INCOME (EXPENSE):
Interest expense (Note 5 and 6). . . . . . . .     (432,477)     (797,376)   (1,048,391)
Interest income. . . . . . . . . . . . . . . .       82,094       111,884        39,001
Equity in loss of investments (Notes 1 and 3).     (150,000)     (120,000)     (324,000)
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .     (500,383)     (805,492)   (1,333,390)
                                                ------------  ------------  ------------

LOSS BEFORE INCOME TAXES
    AND EXTRAORDINARY GAIN . . . . . . . . . .   (4,388,171)     (499,276)   (2,749,435)

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

LOSS BEFORE EXTRAORDINARY GAIN . . . . . . . .   (4,388,171)     (499,276)   (2,749,435)

EXTRAORDINARY GAIN ON EXTINGUISHMENT
    OF DEBT (NOTE 5) . . . . . . . . . . . . .            -             -       569,946

NET LOSS . . . . . . . . . . . . . . . . . . .  $(4,388,171)  $  (499,276)  $(2,179,489)
                                                ============  ============  ============

LOSS PER COMMON SHARE-
BASIC AND DILUTED: (NOTE 1)
Before extraordinary gain. . . . . . . . . . .  $      (.51)  $      (.06)  $      (.38)
Extraordinary gain . . . . . . . . . . . . . .            -             -           .08
                                                ------------  ------------  ------------

NET LOSS PER COMMON SHARE. . . . . . . . . . .  $      (.51)  $      (.06)  $      (.30)
                                                ============  ============  ============

WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING (NOTE 8):
Basic. . . . . . . . . . . . . . . . . . . . .    8,581,863     8,309,240     7,267,184
Diluted. . . . . . . . . . . . . . . . . . . .    8,581,863     8,309,240     7,267,184
                                                ============  ============  ============
</TABLE>



See  notes  to  consolidated  financial  statements.


                                       19
<PAGE>

                    CRITICARE SYSTEMS, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    YEARS ENDED JUNE 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>



                                                                      Additional    Common Stock
                                       Common Stock                   Paid-In       Treasury
                                       Shares         Amount          Capital       No. of Shares    Cost
<S>                                    <C>            <C>             <C>           <C>              <C>
BALANCE, JUNE 30, 1996. . . . . . . .     7,128,272   $     285,131   $11,995,118
Net loss. . . . . . . . . . . . . . .
Foreign currency translation
    adjustments . . . . . . . . . . .
Comprehensive income/(loss) . . . . .
Common stock issued in connection
    with extinguishment of debt . . .       200,000           8,000       772,000
Exercise of options and warrants. . .       252,020          10,081       570,838
Convertible debentures converted
    to common stock, net of $61,872
    of unamortized issuance costs . .       216,173           8,647     1,047,075
Issuance of warrants for services . .                                      84,375

BALANCE, JUNE 30, 1997. . . . . . . .     7,796,465         311,859    14,469,406
Net loss. . . . . . . . . . . . . . .
Foreign currency translation
    adjustments . . . . . . . . . . .
Comprehensive income/(loss) . . . . .
Issuance of common stock. . . . . . .        20,425             817       119,183
Exercise of options and warrants. . .       126,500           5,060       271,371
Convertible debentures converted
    to common stock, net of $100,822
    of unamortized issuance costs . .       407,761          16,310     2,181,225
Commitment to issue common
    stock for patented technology . .                                     900,000
Issuance of warrants for services . .                                      23,065

BALANCE, JUNE 30, 1998. . . . . . . .     8,351,151         334,046    17,964,250
Net loss. . . . . . . . . . . . . . .
Comprehensive income/(loss) . . . . .
Issuance of common stock for
    patented technology . . . . . . .       350,000          14,000       (14,000)
Exercise of options and warrants. . .         5,000             200        10,113
Common stock repurchased. . . . . . .                                                      103,840   $    (193,430)

BALANCE, JUNE 30, 1999. . . . . . . .     8,706,151   $     348,246   $17,960,363          103,840   $    (193,430)

                                       Retained         Accumulated
                                       Earnings         Other         Total
                                       (Accumulated     Comprehensive Stockholders'
                                       Deficit)         Income/Loss   Equity
<S>                                    <C>              <C>           <C>
BALANCE, JUNE 30, 1996. . . . . . . .  $    1,663,466   $   (26,166)  $13,917,549
Net loss. . . . . . . . . . . . . . .      (2,179,489)                 (2,179,489)
Foreign currency translation
    adjustments . . . . . . . . . . .                       (11,941)      (11,941)
Comprehensive income/(loss) . . . . .                                  (2,191,430)
Common stock issued in connection
    with extinguishment of debt . . .                                     780,000
Exercise of options and warrants. . .                                     580,919
Convertible debentures converted
    to common stock, net of $61,872
    of unamortized issuance costs . .                                   1,055,722
Issuance of warrants for services . .                                      84,375

BALANCE, JUNE 30, 1997. . . . . . . .      (516,023)        (38,107)   14,227,135
Net loss. . . . . . . . . . . . . . .      (499,276)                     (499,276)
Foreign currency translation
    adjustments . . . . . . . . . . .                        38,107        38,107
Comprehensive income/(loss) . . . . .                                    (461,169)
Issuance of common stock. . . . . . .                                     120,000
Exercise of options and warrants. . .                                     276,431
Convertible debentures converted
    to common stock, net of $100,822
    of unamortized issuance costs . .                                   2,197,535
Commitment to issue common
    stock for patented technology . .                                     900,000
Issuance of warrants for services . .                                      23,065

BALANCE, JUNE 30, 1998. . . . . . . .     (1,015,299)                  17,282,997
Net loss. . . . . . . . . . . . . . .     (4,388,171)                  (4,388,171)
Comprehensive income/(loss) . . . . .                                  (4,388,171)
Issuance of common stock for
    patented technology . . . . . . .                                           -
Exercise of options and warrants. . .                                      10,313
Common stock repurchased. . . . . . .                                    (193,430)

BALANCE, JUNE 30, 1999. . . . . . . .  $   (5,403,470)               $ 12,711,709
</TABLE>

See  notes  to  consolidated  financial  statements.

                                       20
<PAGE>

                    CRITICARE SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    YEARS ENDED JUNE 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>



                                                                     1999          1998         1997
<S>                                                                  <C>           <C>          <C>
OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $(4,388,171)  $ (499,276)  $(2,179,489)
Adjustments to reconcile net loss to net cash
    provided by (used in) operating activities:
         Depreciation . . . . . . . . . . . . . . . . . . . . . . .      486,610      721,476       709,618
         Amortization . . . . . . . . . . . . . . . . . . . . . . .        7,002       21,440        74,749
         Interest and discount accrued on convertible debentures. .            -      462,034       451,438
         Provision for doubtful accounts. . . . . . . . . . . . . .      380,004       99,000       366,505
         Expense related to equity in loss of investments . . . . .      150,000      120,000       324,000
         Expense related to issuance of warrants for services . . .            -       23,065        84,375
         Expense related to commitment to issue common stock
             for patented technology. . . . . . . . . . . . . . . .            -      900,000             -
         Extraordinary gain on extinguishment of debt . . . . . . .            -            -      (569,946)
        Changes in assets and liabilities:
              Accounts receivable . . . . . . . . . . . . . . . . .      183,222      161,524     2,321,416
              Other receivables . . . . . . . . . . . . . . . . . .      239,870      (86,121)      117,783
              Inventories . . . . . . . . . . . . . . . . . . . . .     (461,786)      46,207        93,351
              Prepaid expenses. . . . . . . . . . . . . . . . . . .      146,007      (68,677)      (81,488)
              Accounts payable. . . . . . . . . . . . . . . . . . .      772,299     (768,284)     (509,017)
              Accrued liabilities . . . . . . . . . . . . . . . . .    2,950,520     (683,954)      287,876
Net cash provided by  operating activities. . . . . . . . . . . . .      465,577      448,434     1,491,171

INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net . . . . . . . . . .     (515,017)    (287,205)     (134,785)
Purchase of license rights. . . . . . . . . . . . . . . . . . . . .            -       (1,080)      (40,815)
Advances to Immtech International, Inc. . . . . . . . . . . . . . .     (150,000)    (120,000)      (24,000)
Net cash used in investing activities . . . . . . . . . . . . . . .     (665,017)    (408,285)     (199,600)

FINANCING ACTIVITIES:
Proceeds from mortgage refinancing. . . . . . . . . . . . . . . . .    3,450,000            -             -
Repayment of mortgage . . . . . . . . . . . . . . . . . . . . . . .   (3,193,587)           -             -
Repurchase of company stock . . . . . . . . . . . . . . . . . . . .     (193,430)           -             -
Borrowings (payments) under line of credit facility . . . . . . . .            -            -    (2,300,000)
Proceeds from the issuance of convertible debentures. . . . . . . .            -            -     2,500,000
Principal payments on long-term debt. . . . . . . . . . . . . . . .      (92,776)    (147,441)     (217,619)
Convertible debenture issuance costs. . . . . . . . . . . . . . . .            -            -      (220,657)
Proceeds from issuance of common stock. . . . . . . . . . . . . . .       10,313      396,431       580,919
Net cash (used in) provided by financing activities . . . . . . . .      (19,480)     248,990       342,643

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS. . . . . . . .     (218,920)     289,139     1,634,214

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR. . . . . . . . . . . .    2,729,998    2,440,859       806,645

CASH AND CASH EQUIVALENTS, END OF YEAR. . . . . . . . . . . . . . .  $ 2,511,078   $2,729,998   $ 2,440,859

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
     Income taxes (refunded) paid-net . . . . . . . . . . . . . . .  $     8,010   $    8,525   $   (87,626)
     Interest . . . . . . . . . . . . . . . . . . . . . . . . . . .      437,401      335,342       456,880
Noncash investing and financing activities:
     Common stock issued in connection with extinguishment of debt.            -            -       780,000
     Common stock issued upon conversion of convertible debentures,
        net of $100,822 and $61,872 of unamortized issuance costs .            -    2,197,535     1,055,722
     Issuance of warrants for services. . . . . . . . . . . . . . .            -       23,065        84,375
     Commitment to issue common stock for patented technology . . .            -      900,000             -
</TABLE>



See  notes  to  consolidated  financial  statements.

                                       21
<PAGE>

NOTES  TO  FINANCIAL  STATEMENTS

CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  1999,  1998  AND  1997



1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     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"), Sleep Care, Inc. ("Sleep
Care"),  Criticare  (FSC),  Inc.  and CSI International Corp. (DISC).  Criticare
International  was  liquidated during fiscal 1998.  CSI Trading was incorporated
in  November 1996 to assist with European marketing activities.  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  -  The  Company  accounts  for  its  investment  in  Intercare
Technologies,  Inc.  ("Intercare")  on  the  cost  method  and  accounts for its
investment  in  Immtech  International, Inc. ("Immtech") and Blatz House Offices
Limited Partnership (the "Blatz Partnership") on the equity method (see Note 3).

     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 is being depreciated over 40 years,
and  the remaining assets are being depreciated over three to seven years, using
primarily  the  straight-line  method.

     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, $7,000, and $9,000 of

                                       22
<PAGE>
amortization was charged to operations in 1999,  1998  and  1997,  respectively.
Accumulated amortization approximated $85,000 and $78,000 at June 30,  1999  and
1998, respectively.

     CONVERTIBLE DEBENTURE ISSUANCE COSTS - Convertible debenture issuance costs
were  amortized over the two-year term of the debentures.  Approximately $15,000
and  $46,000  of  amortization  was charged to operations in 1998 and 1997.  The
prorata  amount  of  unamortized  debenture  issuance  costs  were  charged  to
additional  paid-in-capital  upon  conversion of the debentures to common stock.
Unamortized  debenture  issuance  costs  charged  to  additional paid-in capital
amounted  to  $100,822  and  $61,872  during  1998  and  1997.  (See  Note  6.)

     GOODWILL  - Goodwill relating to the excess of the cost over the fair value
of  the  net assets of an acquired subsidiary was amortized on the straight-line
method over approximately five years.  Approximately $20,000 of amortization was
charged  to operations in 1997.  The goodwill was fully amortized as of June 30,
1997.

     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.

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

     RESEARCH  AND  DEVELOPMENT  EXPENSES  -  Research and development costs are
charged  to  operations  as  incurred.  Such  expenses  approximated $2,798,000,
$3,156,000,  and  $2,175,000  in  1999,  1998  and 1997, respectively.  The 1998
amount  includes  $900,000 related to certain acquired patented technology which
was  charged  to  operations as in-process research and development costs at the
time  of  the  acquisition.  (See  Note  8.)

     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 statement 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.

     FOREIGN  CURRENCY  TRANSLATION  -  The  effects of unrealized exchange rate
fluctuations  from  translating  foreign  currency  assets  and liabilities into
United  States  dollars are accumulated as cumulative translation adjustments in
stockholders'  equity.

                                       23
<PAGE>
     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.

     FAIR  VALUE  OF  FINANCIAL STATEMENTS - The Company's financial instruments
under  Statement  of  Financial  Account  Standards ("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  and  foreign  currency translation adjustments and is
presented  in  the Consolidated Statement of Stockholders' Equity.  The adoption
of  SFAS  130 had no impact on total stockholders' equity.  Prior year financial
statements  have  been  reclassified  to  conform  to the SFAS 130 requirements.

     APPROVED ACCOUNTING STANDARDS - In 1998, the FASB also issued SFAS No. 133,
"Accounting  for Derivative Instruments and Hedging Activities."  This statement
is  required  to  be  adopted  in  fiscal 2001.  The Company is currently in the
process  of  evaluating  the  impact  of  adopting  SFAS  No.  133.

     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.

                                       24
<PAGE>
2.     INVENTORIES


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



                      1999        1998
<S>                <C>         <C>
Component parts .  $3,790,728  $2,647,231
Work in process .   1,261,709   1,409,187
Finished units. .   3,458,538   3,626,053
Total inventories  $8,510,975  $7,682,471
</TABLE>



3.     INVESTMENTS

     INTERCARE TECHNOLOGIES, INC. - During 1992, the Company's subsidiary, Sleep
Care,  transferred  certain assets to Intercare Technologies, Inc. ("Intercare")
in  exchange  for 75,000 shares of convertible preferred stock of Intercare with
an  estimated  fair  value  of  $300,000,  at that time.  In connection with the
transfer,  Sleep  Care  licensed to Intercare the rights to certain intellectual
property  and  technology,  primarily  license  rights  and  patents, related to
products previously marketed by Sleep Care.  In exchange for the license rights,
the  Company  is  to receive royalties of 5% of the gross revenues from sales of
products  licensed  under the agreement. No royalty income was recognized during
1999,  1998  and  1997  and  no  royalty income is expected in future years. The
assets  retained  by  Sleep  Care  were  fully  amortized  as  of June 30, 1996.
Amortization  of  the intellectual property approximated $8,000 in 1996.  During
the year ended June 30, 1997, management of the Company concluded the investment
in  Intercare  was impaired and the carrying value of the investment was reduced
from  $300,000  to  zero.

     IMMTECH  INTERNATIONAL,  INC.  -  The  Company  owns comon 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.

                                       25
<PAGE>
     The  following  is a summary of the Company's investment in and advances to
Immtech  as  of  June  30,  1999  and  1998:
<TABLE>
<CAPTION>



                                       1999          1998
<S>                                <C>           <C>
Investment in Immtech . . . . . .  $ 2,736,000   $ 2,586,000
Advances to Immtech . . . . . . .      863,940       863,940
Total . . . . . . . . . . . . . .    3,599,940     3,449,940
Less investment losses recognized   (3,599,940)   (3,449,940)
Net investment. . . . . . . . . .  $         0   $         0
</TABLE>

     During  July  1998,  the Company purchased certain intangible assets and an
additional  172,414  shares of Immtech stock for $150,000. These intangibles and
shares of stock were subsequently sold to a related party as part of a severance
agreement  for  $150,000  (see  note  11).

     The  Company  has recognized investment losses related to the investment in
Immtech  of $150,000, $120,000 and $24,000 in 1999, 1998 and 1997, respectively.
As of June 30, 1999, the Company owned approximately 20% of Immtech's issued and
outstanding  common  stock.

     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 no 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 ($10) for 20 consecutive trading days and one year has passed
from  the  date of the IPO. The lock-up agreement expires in April 2004. At June
30,  1999,  the  lock-up  provisions  were  still in force. Unrestricted Immtech
shares  were  trading  at  $17.50  on  June  30,  1999.

     Subsequent  to  June  30,  1999,  the Company sold a portion of its Immtech
stock  in  a  Private  Placement.  The  proceeds from this sale were $1,760,000.

     The  following  is summarized financial information for Immtech at June 30,
1999  and  1998  and  for  the  twelve  months  then  ended.
<TABLE>
<CAPTION>

                                                   1999          1998

<S>                                            <C>           <C>
Current assets. . . . . . . . . . . . . . . .  $ 8,541,000   $    84,000
Noncurrent assets . . . . . . . . . . . . . .       68,000       111,000
Current liabilities . . . . . . . . . . . . .      253,000     4,097,000
Noncurrent liabilities. . . . . . . . . . . .            -             -
Redeemable preferred stock. . . . . . . . . .            -     5,548,000
Common stockholders' equity (deficit) . . . .    8,356,000    (9,450,000)
Revenues. . . . . . . . . . . . . . . . . . .      136,000       156,000
Net loss. . . . . . . . . . . . . . . . . . .   (8,341,000)   (1,152,000)
Net loss attributable to common stockholders.   (4,657,000)   (1,666,000)
</TABLE>


                                       26

<PAGE>
     BLATZ  PARTNERSHIP  -  The  Company  was the sole limited partner in a real
estate  limited  partnership  which  owns  the  Blatz Phase II Commercial Office
Buildings  located  in  Milwaukee,  Wisconsin.  Under  terms  of the Partnership
Agreement (the "Agreement"), profits and losses (other than those resulting from
a sale or refinancing of the Project) were allocated 40% to the general partners
and  60%  to the Company.  This investment was sold during 1999, resulting in no
material  gain  or  loss.

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 on 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,    JULY 1,
                                                  1999        1998        1997
<S>                                            <C>         <C>         <C>
Deferred income tax assets:
     Accounts receivable and sales allowances  $  170,000  $  156,000  $  237,000
     Inventory allowances . . . . . . . . . .     254,000     110,000     207,000
     Product warranties . . . . . . . . . . .     127,000     128,000     144,000
     Other accrued liabilities. . . . . . . .     243,000      86,000      98,000
     Severance pay accrual. . . . . . . . . .     279,000           -           -
     Lawsuit settlement . . . . . . . . . . .     626,000           -           -
     Federal net operating loss carryforwards   2,244,000   1,870,000   1,717,000
     State net operating loss carryforwards .     325,000     270,000     255,000
     Federal tax credit carryforwards . . . .     152,000     152,000     198,000
     Investment losses not deducted . . . . .   1,481,000   1,481,000   1,434,000
     Total deferred income tax assets . . . .   5,901,000   4,253,000   4,290,000
</TABLE>



<TABLE>
<CAPTION>



                                                                 JUNE 30,      JUNE 30,      JULY 1,
                                                                   1999          1998          1997
<S>                                                            <C>           <C>           <C>
Deferred income tax liabilities:
     Excess of tax over book depreciation and amortization. .     (619,000)     (596,000)   (1,007,000)
     Prepaid expenses . . . . . . . . . . . . . . . . . . . .       (7,000)       (3,000)       (6,000)
     Total deferred income tax liabilities. . . . . . . . . .     (626,000)     (599,000)   (1,013,000)

     Valuation allowance. . . . . . . . . . . . . . . . . . .   (5,275,000)   (3,654,000)   (3,277,000)

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

                                       27

<PAGE>
     At  June 30, 1999, the Company had Federal net operating loss carryforwards
of  approximately  $6,600,000  which  expire  in 2008 through 2019.  At June 30,
1999,  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 tax credit carryforwards which expire in
the  years  2007 through 2009.  The Company also has approximately $6,500,000 of
state  net  operating  loss  carryforwards,  which  expire in 2002 through 2019,
available  to  offset  certain  future  state  taxable  income.

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



                                 1999   1998   1997
<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>



                                                1999     1998     1997

<S>                                            <C>      <C>      <C>
     Federal statutory income tax rate. . . .  (34.0)%  (34.0)%  (34.0)%
     Losses for which no benefit was provided    29.3     30.9     29.1
     Non-deductible losses of subsidiaries. .     3.2        -      4.0
     Other-net. . . . . . . . . . . . . . . .     1.5      3.1       .9
     Effective income tax rate. . . . . . . .       0%       0%       0%
</TABLE>





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



                                                                                   1999        1998
<S>                                                                             <C>         <C>
Long-term debt consists of the following:

     Mortgage note, 7.5% due in monthly installments of $27,793
          with a final payment of $3,048,253 due in April 1, 2004,
          collateralized by real estate with a carrying value of approximately
          $3,934,000 at June 30, 1999. . . . . . . . . . . . . . . . . . . . .  $3,438,249           -
     Mortage note, 9.625% due in monthly installments of $34,983
         with a final payment of $2,688,336 due in December 2002,
         collateralized by real estate (refinanced in 1999). . . . . . . . . .  $3,274,612
     Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $3,438,249  $3,274,612
     Less current maturities . . . . . . . . . . . . . . . . . . . . . . . . .      73,893     109,354
     Long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $3,364,356  $3,165,258
</TABLE>



                                       28
<PAGE>

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



Years Ending June 30,  Principal Payments
<S>                    <C>
2000. . . . . . . . .  $            73,893
2001. . . . . . . . .               79,430
2002. . . . . . . . .               86,764
2003. . . . . . . . .               93,596
2004. . . . . . . . .            3,104,566
Total . . . . . . . .  $         3,438,249
</TABLE>




     In  March  1999,  the Company refinanced its mortgage note on the Company's
office  and manufacturing facility. The Company incurred a prepayment penalty of
approximately  $120,000  which  was  recorded  as  interest  expense.

     At  June  30,  1999,  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 are payable on demand with interest payable  monthly
at  the bank's reference rate, plus .25% (8.0% as of June 30, 1999).  As of June
30,  1999,  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
these  covenants at June 30, 1999. This non-compliance was waived by the lending
institution,  and  the line of credit facility was extended until November 2001.

     In  March  1997,  the  Company  satisfied a $1,240,000 promissory note plus
interest  accrued  on the note of approximately $110,000 in exchange for 200,000
shares  of newly issued common stock. Under the provisions of the agreement, the
shares  must be held for one full year prior to resale. In conjunction with this
transaction, the Company recorded an extraordinary gain on the extinguishment of
debt  of  $569,946 for the outstanding indebtedness under the promissory note in
excess  of  the  estimated  fair  market  value  of  the  restricted  stock.


6.     CONVERTIBLE  DEBENTURES

     In  February 1997, the Company issued $2,500,000 of convertible debentures.
The  debentures  had  a  two year term to maturity with a stated annual interest
rate of 8%, payable in shares of common stock at the conversion date or maturity
date.  The  holders of the debentures had the option to convert up to $1,250,000
of  the debentures and accrued interest to common stock of the Company sixty-one
(61)  days after the February 1997 closing date at a conversion price equal to a
20%  discount  from  the average closing bid price of the Company's common stock
for  the  five  days  preceding  the  conversion  date.  Debentures  aggregating
$550,000 were converted under the 20% discount conversion feature. The remaining
debentures and accrued interest were converted to common stock of the Company at
a conversion price equal to a 25% discount from the average closing bid price of

                                       29

<PAGE>
the  Company's common stock for the five days preceding the conversion date. For
the  years  ended  June 30, 1998 and 1997, $1,650,000 and $850,000 of debentures
were  converted to 407,761 and 216,173 shares of common stock with a fair market
value  of  $2,298,357  and  $1,117,594  as  of  the  conversion  dates.

     Proceeds  from  the issuance of the debentures were recorded as a liability
at  the  issuance  date.  The  conversion discount was amortized and reported as
additional interest expense over the life of the debentures. Additional interest
expense  wasrecognized  for  any unamortized discount as of the conversion date.
The  debentures  were  included  in  the accompanying June 30, 1997 consolidated
balance  sheet  at  the  issuance price, plus any accrued interest and amortized
discount.


7.     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's financial position or
results  of  operations.

     The  Company  has  received  two  grants  from  the  State of Wisconsin for
research  and development of certain products.  The grants are to be repaid only
upon  successful  completion and marketing of the related product.  Repayment of
these  grants  is  to be made on a sales by unit basis.  Repayments approximated
$182,000  and  $14,000  in 1999 and 1997, respectively.  One grant was repaid in
full during 1999.  The repayments are charged to expense as the related products
are  sold.  Since  the  second grant did not result in the successful completion
and  marketing  of a product, the Company does not have to repay the grant.  The
Company has been awarded a third grant from the State of Wisconsin for an amount
up to $100,000 which requires repayment of the grant amount plus interest at 8%,
plus  payment  of  a  royalty  in  the  amount of 1% of net sales of the related
product  for  a five-year period, as defined.  No funds have been received under
this  grant  at  June  30,  1999.

     As  of June 30, 1999, the Company accrued a liability of $1,600,000 related
to  certain  legal  proceedings with a former dealer.  In July 1999, the Company
agreed to a $1,600,000 settlement with the dealer.  The Company agreed to

                                       30
<PAGE>
make a cash payment to the dealer, transfer a portion of the shares the  Company
holds in Immtech, issue the dealer 150,000 shares of the Company's common stock,
and  transfer  certain inventory related to telemetry products no longer sold by
the Company. The settlement agreement requires  that  a  broker  chosen  by  the
Company sell the Immtech and Company common stock  on  behalf  of  the  dealer.


8.     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 1,720,000 reserved shares of common stock of which 220,750 reserved
shares  of  common  stock  remain  available for future issuance under the stock
option  plans  at June 30, 1999.  The Board of Directors increased the number of
reserved  shares  for     issuance  under  the Plans from 1,220,000 to 1,720,000
during  1999.  The  activity  during 1997, 1998 and 1999 for the above plans are
summarized  as  follows:

<TABLE>
<CAPTION>

                              Number of   Stock Options  Weighted Avg.
                                Shares     Price Range   Exercise Price
<S>                           <C>         <C>            <C>
Outstanding at July 1, 1996.  1,069,420       1.88-8.50            2.45
     Granted . . . . . . . .    250,500       2.50-5.25            2.64
     Cancelled . . . . . . .   (113,500)      2.00-8.50            3.38
     Exercised . . . . . . .   (162,020)      2.00-2.63            2.47
Outstanding at June 30, 1997  1,044,400       1.88-5.25            2.40
     Granted . . . . . . . .     60,000       3.00-3.25            3.13
     Cancelled . . . . . . .   (179,200)      2.00-5.25            2.38
     Exercised . . . . . . .    (85,500)      2.00-2.75            2.27
Outstanding at June 30, 1998    839,700       1.88-3.63            2.50
     Granted . . . . . . . .    993,700       1.50-1.88            1.74
     Cancelled . . . . . . .   (636,800)      1.69-3.00            2.06
     Exercised . . . . . . .     (5,000)           2.06            2.06
Outstanding at June 30, 1999  1,191,600       1.50-3.00            1.83
Exercisable at June 30, 1999    560,600       1.50-3.00            2.02
</TABLE>



     The  following table summarizes information about stock options outstanding
as  of  June  30,  1999:

<TABLE>
<CAPTION>

                                        OPTIONS OUTSTANDING                         Options Exercisable
                                        Weighted Average
                            Shares          Remaining        Weighted           Shares
Range of                  Outstanding      Contractual   Average Exercise    Exercisable     Weighted Average
Exercise Prices        at June 30, 1999     Life-Years        Price        at June 30, 1999   Exercise Price
<S>                   <C>                  <C>           <C>               <C>               <C>
1.50-1.875                        980,700          3.52  $       1.74              210,400           1.90
2.00-3.00                         210,900          1.15          2.28              350,200           2.21
1.50-3.00                       1,191,600          3.10          1.90              560,600           2.02
</TABLE>

                                       31
<PAGE>

     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.  A  substantial
portion of the options issued  are  contingent  on  future  services  or  future
events.

     At  June 30, 1999, 1,038,350 shares of common stock were reserved under the
above  plans.

     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,  1998,1997, and 1996, 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:

<TABLE>
<CAPTION>


                                                       YEARS ENDED JUNE 30,
                                                 1999              1998         1997
<S>                                         <C>                 <C>         <C>
Net loss-as reported . . . . . . . . .      $   (4,388,171)     $(499,276)  $(2,179,489)
Net loss-pro forma . . . . . . . . . .      $   (4,538,172)     $(779,276)  $(2,325,795)
Net loss per common share-as reported.      $         (.51)     $    (.06)  $      (.30)
Net loss per common share-pro forma. .      $         (.53)     $    (.09)  $      (.32)
Assumptions used:
     Expected volatility . . . . . . .                     15%         14%           58%
     Risk-free interest rate . . . . .                      5%          5%            6%
     Expected option life (in years) .                      3           3             3
</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.

     In  March 1999, the Company granted 120,000 stock options to a non-employee
at  a  price  of  $2.50 per  share.  The  options  vest  if  certain performance
parameters  are  achieved by May 2000.  No such parameters were achieved by June
30,  1999.

     STOCK  WARRANTS  -  In  September  1995,  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 the common stock of the Company,
exercisable  at  a  price of $2.00 per share.  The warrant was exercisable as to
37,500  shares  upon  execution  of  the  agreement  and  the


                                       32
<PAGE>
warrants  to purchase the remaining 112,500 shares were to become exercisable if
certain performance parameters were achieved by September 1996.  Such parameters
were  not  met as of such date.  In January 1997, the agreement was extended and
the  parameters  were changed.  During the year ended June 30, 1997, the Company
recognized  $84,375 of expense related to the value of the services performed by
the  consultant  under  the  extended  agreement.  By June 30, 1997, warrants to
purchase  the  remaining  112,500 shares of common stock at a price of $2.00 per
share  became  exercisable.  The  warrant  holder exercised rights and purchased
41,000  and  90,000  shares  of common stock at $2.00 per share during the years
ended  June  30,  1998  and  1997.  Warrants to purchase 15,000 shares of common
stock  at  $2.00  per share were exercisable as of June 30, 1999.  Such warrants
expire  in  September  2000.

     In February 1998, the Company executed a similar warrant agreement with the
consultant.  The  warrant  agreement  provides  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  is  exercisable as to 30,000 shares upon execution of the agreement and
the  warrants  to  purchase  the remaining 120,000 shares will be exercisable if
certain  performance  parameters  are  achieved  by  February  1999.  No  such
parameters  were  achieved.  During  the  year  ended June 30, 1998, the Company
recognized  $23,065  of  expense  related to the value of the services performed
under the agreement. As of June 30, 1999, 30,000 warrants were exercisable. Such
warrants  expire  in  February  2003.

     COMMITMENT  TO  ISSUE  SHARES  OF COMMON STOCK - In April 1998, the Company
agreed  to and accepted the patent rights assigned to them by a third party with
respect  to certain technology related to the transmission of clinical data.  In
consideration  for the patent, the Company has agreed to provide the third party
with  400,000  shares  of common stock payable over a four-year time period with
additional consideration of up to 112,000 shares contingent upon the achievement
of  certain  sales  levels.  The  Company  recorded  a  charge  to operations of
$900,000  in  fiscal 1998 with respect to the value of the in-process technology
which  was expensed as research and development costs.  During 1999, the Company
renegotiated  the agreement and issued the third party 350,000 shares instead of
the  400,000  shares  payable over four years and the 112,000 contingent shares.
The  400,000 shares to have been issued were considered to be outstanding shares
for  purposes of computing basic and diluted income (loss) per common share from
April  1998  until  the  350,000  shares  were  issued  in  November  1998.

     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.

                                       33
<PAGE>
     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  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.


9.     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
$84,000,  $77,000,  and  $81,000  in  1999,  1998  and  1997,  respectively.

10.     BUSINESS  AND  CREDIT  CONCENTRATIONS
     The  Company  operates in one business segment-the manufacturing of medical
monitoring  and  telemetry equipment.  The Company's 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.  During 1999, a
customer,  who  has  entered  into  an OEM agreement with the Company, purchased
approximately  $4,360,000  of  the  Company's  products.  This  represents
approximately  15%  of  the  Company's  total  sales.  The  Company  currently
coordinates  substantially  all international sales and distribution activities.
Such  activities  were previously provided by the Company with the assistance of
Criticare  International.  Identifiable  assets


                                       34
<PAGE>
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>

                                         1999         1998         1997
<S>                                   <C>          <C>          <C>
Europe and Middle East . . . . . . .  $ 4,635,000  $ 5,464,000  $ 5,606,000
Pacific Rim. . . . . . . . . . . . .    2,243,000    3,895,000    3,784,000
Canada and Central and South America    3,634,000    3,414,000    3,867,000
Net export sales . . . . . . . . . .  $10,512,000  $12,773,000  $13,257,000
</TABLE>


11.     SEVERANCE  PAY
     During  November  1999,  the  two  co-founders of the Company resigned from
their  positions.  The  Company  has  provided  each of these individuals with a
severance agreement which includes a portion of their salary and fringe benefits
for  a  period  which approximates three years and recorded a charge of $810,000
for  their  severance  in  the  year  ended  June  30,  1999.

INDEPENDENT  AUDITORS'  REPORT

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

We  have  audited  the  accompanying  consolidated  balance  sheets of Criticare
Systems,  Inc.  and  subsidiaries  as of June 30, 1999 and 1998, and the related
consolidated  statements  of operations, stockholders' equity and cash flows for
each  of  the  three  years  in the period ended June 30, 1999.  These financial
statements  are  the  responsibility  of  the  Company's  management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audits.

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

In  our  opinion,  such consolidated financial statements present fairly, in all
material  respects,  the  financial  position  of  Criticare  Systems,  Inc. and
subsidiaries  at  June 30, 1999 and 1998 and the results of their operations and
their  cash flows for each of the three years in the period ended June 30, 1999,
in  conformity  with  generally  accepted  accounting  principles.

/s/  Deloitte  &  Touche  LLP
Milwaukee,  Wisconsin
July  28,  1999


                                       35

<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.  The Company recorded a charge of
approximately  $1,800,000  for  settlement  costs  related to a lawsuit that was
substantially  resolved  in  the  quarter  ended  June  30, 1999 and a charge of
$900,000  for  the purchase of patented technology in the quarter ended June 30,
1998.  These  items  were  unusual,  nonrecurring  adjustments.

<TABLE>
<CAPTION>

                                                                   Quarters Ended
                          Sept. 30,     Dec. 31,   March 31,    June 30,    Sept. 30,    Dec. 31,    March 31,    June 30,
                            1997          1997        1998        1998        1998         1998        1999         1999
                                                         (in thousands, except per share data)
<S>                    <C>              <C>        <C>         <C>         <C>          <C>         <C>          <C>
Net sales . . . . . .  $         7,544  $   7,138  $    6,279  $   6,947   $    6,724   $   7,290   $    7,276   $   7,223
Gross profit. . . . .            3,506      3,273       2,919      3,340        3,259       3,562        3,379       2,784
Income (loss) from
  operations. . . . .              586        422          70       (772)        (214)       (880)        (486)     (2,308)
Net income (loss) . .              172        132          19       (822)        (420)       (947)        (681)     (2,340)
Net income (loss)
   per common
   share-Basic. . . .              .02        .02         .00       (.10)        (.05)       (.11)        (.08)       (.27)
            -Diluted.              .02        .02         .00       (.10)        (.05)       (.11)        (.08)       (.27)
</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.
---------------------

     The  Company has not changed accountants during the 24 months prior to June
30,  1999.  During that period, there were no disagreements with the accountants
regarding  accounting  and  financial  disclosure.

                                       36
<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  Director," "Other Directors," " Section 16(a) Beneficial Ownership
Reporting  Compliance" and "Executive Officers" in the Company's Proxy Statement
for  the  1999  Annual Meeting of Stockholders (the "Criticare Proxy Statement")
which  will  be  filed  on  or  before  October  28,  1999.

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  "Certain
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,  1999  and  1998.

          Consolidated  Statements  of Operations - for the years ended June 30,
1999,  1998  and  1997.

                                       37
<PAGE>
          Consolidated  Statements of Stockholders' Equity - for the years ended
June  30,  1999,  1998  and  1997.

          Consolidated  Statements  of Cash Flows - for the years ended June 30,
1999,  1998  and  1997.

          Notes  to  consolidated  financial  statements.

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

          Independent  Auditors'  Report.

          Financial  Statement Schedule for the years ending June 30, 1999, 1998
and  1997:

              Schedule
              Number     Description                        Page
              ------     -----------                        ----

              VIII       Valuation  and  Qualifying          21
                         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).

          10.1     Blatz  House  Offices  Limited  Partnership  Agreement
(incorporated  by  reference  to the Company's Quarterly Report on Form 10-Q for
the  quarter  ended  December  31,  1987).

                                       38
<PAGE>
          10.2     Rights  Agreement (incorporated by reference to the Company's
Current  Report  on  Form  8-K  filed  on  April  18,  1997).

          10.3     Assignment  of  Rights to Patent Applications, Patents and/or
Inventions,  effective  November  3,  1998,  between  the  Company  and  TeleMed
Technologies  International,  Inc.  (incorporated  by reference to the Company's
Quarterly  Report  on  Form  10-Q  for  the  quarter  ended  March  31,  1999).

          10.4     Registration Agreement, dated as of November 3, 1998, between
the  Company  and  TeleMed  Technologies  International,  Inc.  (incorporated

by  reference  to  the  Company's Quarterly Report  on Form 10-Q for the quarter
ended March  31,  1999).

          10.5*     1999  Employee  Stock  Purchase  Plan.

          10.6*     1992  Employee  Stock Option Plan (incorporated by reference
to the Company's Registration Statement on Form S-8, Registration No. 33-60644).

          10.7*     1992  Nonemployee  Stock  Option  Plan  (incorporated  by
reference  to the Company's Registration Statement on Form S-8, Registration No.
33-60214).

          10.8*     1987  Employee  Stock Option Plan (incorporated by reference
to the Company's Registration Statement on Form S-8, Registration No. 33-33497).

          10.9*     1987  Nonemployee  Stock  Option  Plan  (incorporated  by
reference  to the Company's Registration Statement on Form S-8, Registration No.
33-40038).

          10.10*     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).

          10.11*     Employment  Agreement  of  Gerhard  J.  Von  der  Ruhr
(incorporated  by  reference  to  the  Registration Statement filed on Form S-1,
Registration  No.  33-13050).

          10.12*     Employment  Agreement  of  N.C. Joseph Lai (incorporated by
reference  to  the  Registration  Statement  filed on Form S-1, Registration No.
33-13050).

                                       39
<PAGE>
          10.13*     Amendment  to  Employment  Agreement  of Gerhard J. Von der
Ruhr  (incorporated by reference to the Company's Annual Report on Form 10-K for
the  year  ended  June  30,  1997).

          10.14*     Amendment  to  Employment  Agreement  of  N.C.  Joseph  Lai
(incorporated  by  reference to the Company's Annual Report on Form 10-K for the
year  ended  June  30,  1997).

          10.15*     Severance  Agreement,  dated  as  of  November 16, 1998, of
Gerhard  J.  Von  der Ruhr (incorporated by reference to the Company's Quarterly
Report  on  Form  10-Q  for  the  quarter  ended  March  31,  1999).

          10.16*     Severance Agreement, dated as of November 16, 1998, of N.C.
Joseph  Lai (incorporated by reference to the Company's Quarterly Report on Form
10-Q  for  the  quarter  ended  March  31,  1999).

          10.17*     Employment  Agreement  of  Emil  H.  Soika.

          10.18*     Employment  Agreement  of  Joseph  M.  Siekierski.

          10.19*     Employment  Agreement  of  Stephen  D.  Okland.

          10.20*     Employment  Agreement  of  Drew  M.  Diaz.

          10.21*     Employment  Agreement  of  Gloria  Najera.

          10.22*     Amendment  to  Employment  Agreement  of  Gloria  Najera.

          21     Subsidiaries.

          23     Independent  Auditors'  Consent.

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

          27     Financial  Data  Schedule.

__________________
*  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,
1999.

                                       40
<PAGE>
(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.

                                       41
<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:  September  28,  1999


                                POWER OF ATTORNEY

KNOW  ALL  MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes  and  appoints  Emil  H. Soika and Joseph M. Siekierski, 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    September 28, 1999
----------------------------  and Director (Principal Executive
Emil H. Soika                 Officer)

/s/ Joseph M. Siekierski      Vice President-Finance and Secretary  September 28, 1999
----------------------------  (Principal Financial and Accounting
Joseph M. Siekierski          Officer)


                                       42
<PAGE>
/s/ Karsten Houm              Chairman of the Board and Director    September 28, 1999
----------------------------
Karsten Houm

/s/ Milton Datsopoulos        Director                              September 28, 1999
----------------------------
Milton Datsopoulos

/s/ Gerhard J. Von der Ruhr   Director                              September 28, 1999
----------------------------
Gerhard J. Von der Ruhr

/s/ N.C. Joseph Lai           Director                              September 28, 1999
----------------------------
N.C. Joseph Lai
</TABLE>






                                       43
<PAGE>

INDEPENDENT  AUDITORS'  REPORT

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

We have audited the consolidated financial statements of Criticare Systems, Inc.
and  subsidiaries  as of June 30, 1999 and 1998, and for each of the three years
in the period ended June 30, 1999, and have issued our report thereon dated July
28,  1999; such report is included elsewhere in this Form 10-K.  Our audits also
included  the  consolidated  financial  statement schedule of Criticare Systems,
Inc.  listed  in Item 14.  This consolidated financial statement schedule is the
responsibility of the Company's management.  Our responsibility is to express an
opinion  based  on  our  audits.  In  our  opinion,  such consolidated financial
statement  schedule,  when  considered  in  relation  to  the basic consolidated
financial  statements taken as a whole, presents fairly in all material respects
the  information  set  forth  therein.



/s/  Deloitte  &  Touche  LLP
Milwaukee,  Wisconsin
July  28,  1999


                                       44
<PAGE>
                                  SCHEDULE VIII

                             CRITICARE SYSTEMS, INC.

                        VALUATION AND QUALIFYING ACCOUNTS
                FOR THE YEARS ENDED JUNE 30, 1999, 1998 AND 1997

<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, 1997

Allowance for doubtful accounts  $   295,000  $   366,505  $   194,505  $ 467,000

Reserve for sales returns and
    allowances . . . . . . . . . $   504,000  $ 1,283,931  $ 1,647,931  $ 140,000

YEAR ENDED JUNE 30, 1998:

Allowance for doubtful accounts  $   467,000  $    99,000  $   266,000  $ 300,000

Reserve for sales returns and
    allowances . . . . . . . . . $   140,000  $ 1,357,917  $ 1,397,917  $ 100,000

YEAR ENDED JUNE 30, 1999:

Allowance for doubtful accounts  $   300,000  $   380,004  $   305,004  $ 375,000

Reserve for sales returns and
    allowances. . . . . . . . .  $   100,000  $   760,194  $   800,194  $  60,000
</TABLE>

                                       45