<SUBMISSION>
<ACCESSION-NUMBER>0000950148-01-500726
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20010331
<FILING-DATE>20010515
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ACCUMED INTERNATIONAL INC
<CIK>0000888335
<ASSIGNED-SIC>2835
<IRS-NUMBER>364054899
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-20652
<FILM-NUMBER>1636401
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>900 N FRANKLIN ST
<STREET2>STE 401
<CITY>CHICAGO
<STATE>IL
<ZIP>60610
<PHONE>3126429200
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>920 N FRANKLIN STREET
<STREET2>SUITE 402
<CITY>CHICAGO
<STATE>IL
<ZIP>60610
</MAIL-ADDRESS>
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<FORMER-CONFORMED-NAME>ALAMAR BIOSCIENCES INC
<DATE-CHANGED>19950504
</FORMER-COMPANY>
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<TYPE>10-Q
<SEQUENCE>1
<FILENAME>v72486e10-q.txt
<DESCRIPTION>FORM 10-Q
<TEXT>

<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X]       Quarterly report pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934


                 For the quarterly period ended March 31, 2001.

                                       OR

[ ]      Transition report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

         For the transition period from _____  to _____.


                         Commission file number: 0-20652


                           ACCUMED INTERNATIONAL, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           Delaware                                         36-4054899
  -------------------------------                        ----------------
    (State or other jurisdiction                           (IRS Employer
  of incorporation or organization)                      Identification No.)


                920 N. Franklin St., Suite 402, Chicago, IL 60610
                -------------------------------------------------
                    (Address of principal executive offices)

                                 (312) 642-9200
                                 --------------
               (Registrant's telephone number including area code)


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 [ ]


The registrant had 5,739,838 shares of common stock outstanding as of May 10,
2001.


<PAGE>   2



                   ACCUMED INTERNATIONAL, INC. AND SUBSIDIARY

                                      INDEX

<TABLE>
<CAPTION>

                                                                                                  Page
                                                                                                 Number
                                                                                                 ------
<S>                                                                                              <C>
  PART I.     FINANCIAL INFORMATION

  Item 1.     Condensed Consolidated Financial Statements

              Condensed Consolidated Balance Sheets
                 as of March 31, 2001 (unaudited) and December 31, 2000 .....................         1

              Condensed Consolidated Statements of Operations
                 for the Three Months Ended March 31, 2001 and 2000 (unaudited) .............         2

              Condensed Consolidated Statements of Cash Flows
                 for the Three Months Ended March 31, 2001 and 2000 (unaudited) .............         3

              Notes to Condensed Consolidated Financial Statements (unaudited) ..............         4

  Item 2.     Management's Discussion and Analysis of Financial
                   Condition and Results of Operations ......................................         6

  Item 3.     Quantitative and Qualitative Disclosures About Market Risk ....................         9

PART II.OTHER INFORMATION

  Item 6.     Exhibits and Reports on Form 8-K...............................................        10

SIGNATURES     ..............................................................................        11
</TABLE>


<PAGE>   3



                         PART I - FINANCIAL INFORMATION
                   ACCUMED INTERNATIONAL, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                         UNAUDITED            AUDITED
                                                     -----------------------------------
                          ASSETS                     March 31, 2001    December 31, 2000
                                                     --------------    -----------------
<S>                                                   <C>                <C>
CURRENT ASSETS
   Cash and cash equivalents                          $    633,724       $        462
   Accounts receivable                                      38,170             19,600
   Prepaid expenses and other current assets                10,000             18,984
   Available-for-sale security                             294,125            195,085
   Notes receivable                                           --              492,772
   Inventories                                             632,220            639,220
                                                      ------------       ------------
      TOTAL CURRENT ASSETS                               1,608,239          1,366,123
                                                      ------------       ------------

Property and equipment, net                                289,675            385,372
Purchased technology, net                                3,358,365          3,523,866
Patents, net                                               756,408            775,416
                                                      ------------       ------------

                                                      $  6,012,688       $  6,050,777
                                                      ============       ============

         LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Current portion of debt                            $  1,557,241       $    668,288
   Accounts payable                                        256,490            330,168
   Accrued interest                                         29,088             13,161
   Deferred revenues, current portion                      322,435            419,739
   Other current liabilities                               851,481            747,020
                                                      ------------       ------------
      TOTAL CURRENT LIABILITIES                          3,016,734          2,178,376
                                                      ------------       ------------

Deferred revenues                                        1,036,152          1,487,973

STOCKHOLDERS' EQUITY
   Preferred stock, Series A convertible                 2,576,185          2,655,893
   Common stock, $0.01 par value                            57,398             57,280
   Additional paid-in capital                           61,290,333         61,210,743
   Accumulated other comprehensive income (loss)           (95,425)          (190,939)
   Accumulated deficit                                 (61,651,953)       (61,131,812)
   Treasury stock                                         (216,737)          (216,737)
                                                      ------------       ------------
      TOTAL STOCKHOLDERS' EQUITY                         1,959,801          2,384,428
                                                      ------------       ------------

                                                      $  6,012,688       $  6,050,777
                                                      ============       ============

</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                      -1-
<PAGE>   4



                   ACCUMED INTERNATIONAL, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      For the Three Months Ended March 31,


<TABLE>
<CAPTION>
                                                                   UNAUDITED
                                                         -----------------------------
                                                             2001              2000
                                                         ------------       ----------
<S>                                                       <C>               <C>
Net sales                                                 $      --         $   154,963
Licensing fees and royalties                                  583,535              --
                                                          -----------       -----------
        Total net revenues                                    583,535           154,963
                                                          -----------       -----------

Operating expenses:
        Cost of sales                                            --              43,681
        Cost of revenues                                       12,712              --
        General and administrative                            880,100           788,168
        Research and development                              182,142           352,368
        Sales and marketing                                    37,667            72,589
                                                          -----------       -----------
           Total operating expenses                         1,112,621         1,256,806
                                                          -----------       -----------

Operating loss                                               (529,086)       (1,101,843)
                                                          -----------       -----------

Other income (expense):
        Interest expense                                      (23,380)           (7,500)
        Realized gain on available-for-sale security             --             326,844
        Other income (expense), net                            32,324            15,335
                                                          -----------       -----------
           Total other income (expense)                         8,944           334,679
                                                          -----------       -----------

Loss before income taxes                                     (520,141)         (767,164)

Income tax expense                                               --                --
                                                          -----------       -----------

Net loss                                                     (520,141)         (767,164)
                                                          ===========       ===========

Basic and diluted net loss per share                      $     (0.09)      $     (0.14)
                                                          ===========       ===========

Weighted average common shares outstanding                  5,736,689         5,535,507
                                                          ===========       ===========

</TABLE>


      See accompanying notes to condensed consolidated financial statements



                                      -2-
<PAGE>   5


                   ACCUMED INTERNATIONAL, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                      FOR THE THREE MONTHS ENDED MARCH 31,

<TABLE>
<CAPTION>

                                                                               UNAUDITED
                                                                      -----------------------------
                                                                         2001               2000
                                                                      -----------       -----------
<S>                                                                   <C>               <C>

OPERATING ACTIVITIES:
         Net loss                                                     $  (520,141)      $  (767,164)
         Adjustments to reconcile net loss to net cash (used in)
         provided by operating activities:
            Depreciation and amortization                                 257,567           263,725
            Gain on sale of property and equipment                        (22,586)             --
            (Decrease) increase in deferred revenues                     (549,125)        1,339,967
            Changes in other operating assets and liabilities             536,895          (439,843)
                                                                      -----------       -----------
CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                          (297,390)          396,685
                                                                      -----------       -----------

INVESTING ACTIVITIES:
         Proceeds from repayment of note receivable                          --             400,000
         Proceeds from sale of available-for-sale security                   --             326,844
         Proceeds from sale of property and equipment                      45,225              --
                                                                      -----------       -----------
CASH PROVIDED BY INVESTING ACTIVITIES                                      45,225           726,844
                                                                      -----------       -----------

FINANCING ACTIVITIES:
         Proceeds from notes payable                                      920,000              --
         Repayment of notes payable                                       (31,047)          (25,000)
                                                                      -----------       -----------
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                           888,953           (25,000)
                                                                      -----------       -----------
                                                                      -----------       -----------
EFFECT OF EXCHANGE RATES ON CASH                                           (3,526)             (708)
                                                                      -----------       -----------
                                                                      -----------       -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                 633,262         1,097,821
                                                                      -----------       -----------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                              462           196,303
                                                                      -----------       -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                            $   633,724       $ 1,294,124
                                                                      ===========       ===========

</TABLE>

     See accompanying notes to condensed consolidated financial statements.




                                      -3-
<PAGE>   6


                   ACCUMED INTERNATIONAL, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   PREPARATION OF INTERIM FINANCIAL STATEMENTS

     In our opinion, the accompanying unaudited condensed consolidated financial
statements include all normal adjustments considered necessary to present fairly
our financial position as of March 31, 2001, and our results of operations and
cash flows for the three-month period ended March 31, 2001 and 2000. Our interim
results are not necessarily indicative of the results we expect for the full
year.

     The condensed consolidated financial statements and notes are presented as
permitted by Form 10-Q, and do not contain certain information included in our
audited consolidated financial statements and notes thereto for the fiscal year
ended December 31, 2000 as filed with the Securities and Exchange Commission on
Form 10-K.

2.   BASIS OF PRESENTATION

     The condensed consolidated financial statements include the accounts of
AccuMed and its wholly-owned subsidiary. All significant intercompany balances,
transactions and stockholdings have been eliminated.

3.   COMPREHENSIVE LOSS

<TABLE>
<CAPTION>

                                                                Three Months Ended
                                                                     March 31,
                                                              -------------------------
                                                                 2001           2000
                                                              ----------      ---------
<S>                                                           <C>             <C>
Net loss                                                      $(520,141)      $(767,164)
Other comprehensive income (loss)
  Reclassification of realized gain included in net loss           --          (326,844)
  Change in fair value of available-for-sale security            99,040         471,520
  Foreign currency translation adjustments                       (3,526)         (708)
                                                              ---------       ---------
Comprehensive loss                                            $(424,627)      $(623,196)
                                                              =========       =========
</TABLE>


4.   INVENTORIES

     Inventories are summarized as follows:

<TABLE>
<CAPTION>

                                                           March 31,         December 31,
                                                              2001               2000
                                                           ---------         -----------
<S>                                                        <C>               <C>
Raw material                                                $539,944           $539,944
Work in process                                                 --                 --
Finished goods                                                92,276             99,276
                                                            --------           --------
Total inventories                                           $632,220           $639,220
                                                            ========           ========
</TABLE>


                                      -4-
<PAGE>   7



5.   SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

<TABLE>
<CAPTION>


                                                  Three Months Ended March 31,
                                                   ----------------------------
                                                      2001           2000
                                                   ----------      ----------
<S>                                                <C>             <C>
OPERATING ACTIVITIES:
    Interest paid                                  $    7,453      $    2,345
NON-CASH INVESTING AND FINANCING ACTIVITIES:
    Preferred stock converted to common stock      $   79,708      $1,115,537

</TABLE>


6.   MONOGEN LICENSE AGREEMENTS

     On December 29, 2000, we entered into license agreements with Monogen, Inc.
and received $500,000 of notes receivable as consideration for the license fees
due under the agreements. In the first quarter of 2001, we collected the balance
due under these notes in full. We also recognized as revenue in 2001 the total
amount of the license fees received of $491,012, net of interest imputed on the
notes, since we completed all of our remaining obligations under the agreements.

7.   PENDING MERGER

     On February 7, 2001, we signed an agreement to merge with Ampersand Medical
Corporation. Under the terms of the agreement, holders of our common stock will
receive 0.6552 of a share (subject to adjustment) of Ampersand common stock for
each share of AccuMed common stock held. Each share of our Series A convertible
preferred stock will be exchanged for one share of Ampersand's preferred stock
that will be convertible into Ampersand's common stock. Consummation of the
merger is subject to customary closing conditions, including the approval of
AccuMed's stockholders, and the registration of the Ampersand common shares with
the Securities and Exchange Commission. On May 10, 2001, we amended the merger
agreement to extend the termination date to July 31, 2001. The termination date
will be automatically extended to September 30, 2001 if the proxy
statement-prospectus for the merger is not declared effective by the Securities
and Exchange Commission by June 17, 2001. Closing of the merger is expected to
occur in the third quarter of 2001.

     In conjunction with the signing of the merger agreement, we received a
$470,000 advance from Ampersand. We issued an $800,000 note to Ampersand, which
includes $330,000 of funds previously advanced by Ampersand. On each of March 1
and March 30, 2001, we received additional advances of $225,000 each from
Ampersand. On May 1, 2001, we received an additional advance of $150,000. The
notes for these advances bear interest at prime, plus 2.5%, and are secured by
our inventory and certain customer contracts. These notes will be dissolved upon
consummation of the merger or will be due and payable upon the termination of
the merger agreement. The due date of the notes may be extended upon mutual
agreement of the parties.




                                      -5-
<PAGE>   8


ITEM 2.             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

     AccuMed markets and develops cost effective screening instruments and
systems for clinical diagnostic laboratories, hospitals and others. Our
integrated systems use reliable, accurate and innovative products and methods to
provide laboratories with comprehensive solutions that are intended to improve
efficiency and reduce costs while significantly improving disease detection. We
are currently developing cytology computer-aided image cytometry instruments and
systems that support early detection and diagnosis programs for screening
high-risk individuals for cellular diseases, such as lung cancer. We expect to
incur additional operating losses over at least the next 12 months primarily as
a result of expenditures for corporate overhead and development.

OVERVIEW

     On February 7, 2001, we signed an agreement to merge with Ampersand Medical
Corporation. Under the terms of the agreement, holders of our common stock will
receive 0.6552 of a share (subject to adjustment) of Ampersand common stock for
each share of AccuMed common stock held. Each share of our Series A convertible
preferred stock will be exchanged for one share of Ampersand's preferred stock
that will be convertible into Ampersand's common stock. Consummation of the
merger is subject to customary closing conditions, including the approval of
AccuMed's stockholders, and the registration of the Ampersand common shares with
the Securities and Exchange Commission. On May 10, 2001, we amended the merger
agreement to extend the termination date to July 31, 2001. The termination date
will be automatically extended to September 30, 2001 if the proxy
statement-prospectus for the merger is not declared effective by the Securities
and Exchange Commission by June 17, 2001. Closing of the merger is expected to
occur in the third quarter of 2001.

     In conjunction with the signing of the merger agreement, we received a
$470,000 advance from Ampersand. We issued an $800,000 note to Ampersand, which
includes $330,000 of funds previously advanced by Ampersand. On each of March 1
and March 30, 2001, we received additional advances of $225,000 each from
Ampersand. On May 1, 2001, we received an additional advance of $150,000. The
notes for these advances bear interest at prime, plus 2.5%, and are secured by
our inventory and certain customer contracts. These notes will be dissolved upon
consummation of the merger or will be due and payable upon the termination of
the merger agreement. The due date of the notes may be extended upon mutual
agreement of the parties.

RESULTS OF OPERATIONS

YEAR ENDED MARCH 31, 2001 COMPARED WITH YEAR ENDED MARCH 31, 2000

     REVENUES AND COST OF SALES

     Our net revenues were $584,000 for the three months ended March 31, 2001
compared to $155,000 for the three months ended March 31, 2000. Net revenues for
2001 include one-time licensing fees of $491,000 recognized under agreements
with Monogen, Inc. that we signed late in the fourth quarter of 2000. The 2001
period also includes licensing fees, royalties, and fees under a per-use
contract that we earned on agreements signed in 2000 that are not reflected in
the prior year revenues. Net revenues for the 2000 period represent the sale of
one AcCell-Savant and four AcCell units. There were no units sold in the 2001
period. Cost of revenues in 2001 represents the cost of one unit installed under
our per-use contract.




                                      -6-
<PAGE>   9


     OPERATING EXPENSES

     General and administrative expenses increased by $92,000, or 11.7% from
$788,000 in the 2000 period to $880,000 in the 2001 period. The increase in
these expenses is a result of a one-time charge of $227,000 related to the
termination of our professional services agreement with our chief executive
officer, Paul Lavallee, as required under our merger agreement with Ampersand.
Mr. Lavallee will continue to serve as our chief executive officer through the
closing of the merger. This one-time charge was offset by our efforts to reduce
corporate expenditures, in particular legal and consulting fees, travel, and
rent.

     Research and development expenses decreased by $170,000, or 48.3%, from
$352,000 in 2000 to $182,000 in 2001. The decrease in these expenses is
substantially a result of reducing personnel and scaling back our research and
development efforts.

     Sales and marketing expenses were $38,000 for the three months ended March
31, 2001 compared to $73,000 for the 2001 period. Our expenses decreased
primarily as result of personnel reductions and reduced discretionary spending.

     OTHER INCOME AND EXPENSE

     Interest expense for the three months ended March 31, 2001 was $23,000
compared to $8,000 for the 2000 period. The increase in interest expense is a
result of receiving a total of $1,250,000 of advances from Ampersand pending the
completion of our merger with Ampersand.

     In the 2000 period, we sold a total of 85,776 of our Ampersand common
shares on the open market for proceeds of $326,844. A realized gain on the sale
of these shares of $326,844 was recorded.

     Other income for the 2001 period includes interest income of $8,000 and a
gain on the sale of property and equipment of $23,000. Other income in 2000
includes interest income of $10,000.

LIQUIDITY AND CAPITAL RESOURCES

     AccuMed has incurred, and continues to incur, losses from operations and
has a working capital deficiency. For the years ended December 31, 2000 and
1999, AccuMed incurred net losses from continuing operations of $3,098,000 and
$6,803,000, respectively. For the three months ended March 31, 2001, our net
loss was $520,000. At March 31, 2001, we have a working capital deficiency of
$1,408,000, and our available resources are not presently sufficient to fund our
expected cash requirements through the end of 2001. These conditions raise
substantial doubt about AccuMed's ability to continue as a going concern.

     In 2000 and the first quarter of 2001, we implemented strategies to reduce
losses from operations and cash used in operating activities. These strategies
include reducing personnel, curtailing certain research and development efforts,
and cutting discretionary expenditures. As a result of our signing of the merger
agreement with Ampersand, we have received in 2001 an aggregate of $1,070,000 in
advances from Ampersand to be used for working capital purposes. The merger
agreement requires further monthly advances from Ampersand through September
2001 of $100,000 automatically or up to $225,000 as requested by AccuMed. The
Ampersand advances will be dissolved upon consummation of the merger or will be
due and payable upon the termination of the merger agreement. The due date for
repayment of these advances may be extended upon mutual agreement of AccuMed and
Ampersand. Through March 31, 2001, we collected the full $500,000 of notes due
from MonoGen. Development milestone payments in the aggregate amount of


                                      -7-
<PAGE>   10


$400,000 are scheduled for receipt in 2001 from Ventana Medical Systems, Inc.
under our license and development agreement with Ventana. In addition, we expect
to begin shipping licensed product to Ventana beginning in the fourth quarter of
2001.

     We expect our merger agreement with Ampersand to be consummated in the
third quarter of 2001. If we are not able to consummate the merger agreement, or
if Ventana does not meet its payment obligation, or the development timetable
with Ventana is not met or is substantially delayed, we would be required to
pursue other strategies to maintain our liquidity. Our strategies would include
substantially curtailing our development and marketing efforts, liquidating our
inventories and technology portfolio or ceasing operations. This would
materially and adversely affect AccuMed's business, financial condition, results
of operations, and cash flows.

     At March 31, 2001, AccuMed has current debt of $1,557,000. Our debt
consists of a Canadian dollar note of $120,000 ($190,000 in Canadian dollars), a
non-interest bearing repayable contribution of $187,000, and $1,250,000 of notes
payable to Ampersand. The Canadian dollar note is due on demand, or in the event
not called, principal payments are required at a rate of $25,000 U.S. dollars
per month, plus interest at a rate of 6.0% over the Canadian prime rate. The
Canadian dollar note is convertible into shares of AccuMed's common stock at a
price of $1.43 per share. The repayable contribution was received under a
Canadian government program and calls for semi-annual installments based on
future sales of product and available funds, as defined. AccuMed is currently
past due in making certain of its payment obligations under this program. As a
result, AccuMed's repayment obligation is callable. The Ampersand notes bear
interest at prime, plus 2.5%, are secured by our inventory and certain customer
contracts, and are due upon the earliest of July 31, 2001 or termination of the
merger agreement. The due date of the notes may be extended upon mutual
agreement of the parties.

     OPERATING ACTIVITIES

     For the three months ended March 31, 2001, we used $297,000 of cash for
operating activities compared to the generation of $397,000 of cash from
operations in 2000. The change in cash from operations reflects the receipt in
2001 of $500,000 in licensing fees compared to 2000 when we received $1,339,000
of licensing fees and advance royalties. The effect of this change is offset by
our efforts to reduce expenditures.

     INVESTING ACTIVITIES

     For the three months ended March 31, 2001, we sold certain property and
equipment for proceeds of $45,000. In 2000, we collected $400,000 from the
repayment of a note receivable with Microsulis Corp. as a result our failed
merger with Microsulis and received $327,000 of proceeds from the sale of our
shares of Ampersand common stock. We do not anticipate material capital
expenditures during 2001.

     FINANCING ACTIVITIES

     We received $920,000 in working capital advances from Ampersand during the
three months ended March 31, 2001. In 2001 and 2000, we repaid $31,000 and
$25,000, respectively, of our notes payable.

     We currently have no commitments with respect to sources of additional
financing other than with respect to funds to be received under our agreements
with Ampersand and Ventana.




                                      -8-
<PAGE>   11


ITEM 3.             QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                ABOUT MARKET RISK

     We hold shares of common stock of Ampersand Medical Corporation, a publicly
traded company. As a result, our financial results could be significantly
affected by changes in the traded market price of this security. We have debt
instruments that are denominated in Canadian dollars. The interest rate for one
of the Canadian dollar denominated debt instruments is variable based on changes
in the Canadian prime rate of interest. Our notes payable with Ampersand have a
variable interest rate based on the U.S. prime rate. As a result, our financial
results could be significantly affected by changes in the exchange rate for
Canadian dollars and to changes in the U.S. and Canadian prime rates of
interest. We do not actively employ strategies to minimize our risks to these
exposures.

     The following table presents information about the shares we hold in
Ampersand as of March 31, 2001.

<TABLE>
<CAPTION>

                                           SHARES              FAIR
                                            HELD               VALUE
                                            ----               -----
     <S>                                  <C>               <C>
     Ampersand Medical Corporation         192,088           $294,125

</TABLE>

     The following tables present information about our debt instruments that
are subject to foreign currency and interest rate risk. The table presents
principal cash flows, related weighted-average interest rate by expected
maturity, and the applicable average Canadian to U.S. dollar exchange rate.

<TABLE>
<CAPTION>

                                                                                               FAIR
                                          2001              2002              TOTAL            VALUE
                                          ----              ----              -----            -----
     <S>                                 <C>              <C>               <C>              <C>
     Foreign currency risk:
       Principal                         $307,241         $   -             $307,241         $307,241
       Average interest rate               5.0%               -
       Exchange rate                      1.5783              -

<CAPTION>

                                                                                               FAIR
                                          2001              2002              TOTAL            VALUE
                                          ----              ----              -----            -----
     <S>                                <C>               <C>              <C>               <C>
     Interest rate risk:
       Principal                        $1,557,241        $   -            $1,557,241        $1,557,241
       Average interest rate               9.4%               -
</TABLE>


                           FORWARD-LOOKING STATEMENTS

     This report contains forward-looking statements that are based on our
current expectations, assumptions, estimates and projections about us and our
industry. When used in this Report, the words "may," "will," "expects,"
"anticipates," "believe," "estimates," "intends" and similar expressions are
intended to identify forward-looking statements. These statements describe our
beliefs concerning the future based on currently available information. Our
actual results could differ materially from those contained in the
forward-looking statements due to a number of risks and uncertainties. We assume
no obligation to publicly update or revise these forward-looking statements for
any reason, or to update the reasons actual results could differ materially from
those anticipated in these forward-looking statements, even if new information
becomes available in the future.



                                      -9-
<PAGE>   12



                                    PART II.
                                OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits. The following exhibits are filed herewith:

         Exhibit
          Number                      Description of Exhibit
          ------                      ----------------------

           10.1     Secured Promissory Note made March 30, 2001 by AccuMed in
                    favor of Ampersand Medical Corporation in the original
                    principal amount of $225,000.

           10.2     Secured Promissory Note made May 1, 2001 by AccuMed in favor
                    of Ampersand Medical Corporation in the original principal
                    amount of $150,000.

           10.3     Amendment No. 1 dated May 10, 2001 to the Agreement and Plan
                    of Merger among AccuMed, AccuMed Acquisition Corp. and
                    Ampersand Medical Corporation dated February 7, 2001.

     (b) No reports on Form 8-K were filed during the three-month period ended
March 31, 2001.



                                      -10-
<PAGE>   13




                                   SIGNATURES

Pursuant to the requirements 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.



                                            ACCUMED INTERNATIONAL, INC.

                                                 /s/ PAUL F. LAVALLEE
                                            ----------------------------------
                                                     Paul F.Lavallee
                                            Chairman of the Board and
                                            Chief Executive Officer
                                            (Principal Accounting Officer)


Date:  May 15, 2001



                                      -11-
<PAGE>   14



                                Index to Exhibits

    Exhibit
    Number                         Description of Exhibit
    ------                         ----------------------

      10.1     Secured Promissory Note made March 30, 2001 by AccuMed in favor
               of Ampersand Medical Corporation in the original principal amount
               of $225,000.

      10.2     Secured Promissory Note made May 1, 2001 by AccuMed in favor of
               Ampersand Medical Corporation in the original principal amount of
               $150,000.

      10.3     Amendment No. 1 dated May 10, 2001 to the Agreement and Plan of
               Merger among AccuMed, AccuMed Acquisition Corp. and Ampersand
               Medical Corporation dated February 7, 2001.



                                      -12-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>v72486ex10-1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>

<PAGE>   1

                                                                    EXHIBIT 10.1


                                     SECURED
                                 PROMISSORY NOTE

$225,000.00                                                      March 30, 2001
                                                              Chicago, Illinois


     1. FOR VALUE RECEIVED, AccuMed International, Inc. ("Maker"), whose
principal place of business is located at 920 North Franklin Street, Suite 402,
Chicago, Illinois 60610, hereby promises to pay to the order of Ampersand
Medical Corporation ("Payee"), whose principal place of business is located at
414 North Orleans, Suite 510, Chicago, Illinois 60610, the principal sum of TWO
HUNDRED TWENTY FIVE THOUSAND AND NO/100 DOLLARS ($225,000.00), at the place and
in the manner hereinafter provided, together with interest thereon at the rates
described below.

     2. Interest shall accrue on the balance of principal from time to time
unpaid under this Note prior to the Maturity Date (as hereinafter defined) at an
annual rate equal to Prime plus two and one-half percent (2 1/2%). For purposes
hereof, "Prime" shall mean the rate of interest from time to time announced by
LaSalle Bank, National Association ("Bank"), as its Prime Rate, which is not
necessarily the Bank's lowest or most favorable rate of interest at any given
time. Interest shall be computed on the basis of a year consisting of 360 days
and shall be based on the actual number of days during the period for which
interest is being charged.

     3. Principal and interest under this Note shall be due and payable on the
earlier to occur of the following: (i) termination of the contemplated merger
transaction as outlined in the Merger Agreement (as such term is defined in
paragraph 4 hereof); and (ii) May 31, 2001 or such later date as the parties to
the Merger Agreement may, from time to time, establish as the termination date
of the Merger Agreement by amendment thereto (such payment due date being
hereinafter referred to as the "Maturity Date"); provided, however, the Maturity
Date shall be automatically extended (without requiring a written amendment
hereto) to such later date, if any, as Maker and Payee agree by amendment of the
date specified in Section 4.4(a)(v) of the Merger Agreement (as such term is
hereinafter defined).

     4. This Note is executed and delivered in connection with that certain
Agreement and Plan of Merger, dated as of February 7, 2001 by and between Payee
and Maker (the "Merger Agreement"), pursuant to which the parties thereto have
agreed to enter into the merger described therein. This Note evidences an
Additional Loan (as such term is defined in the Merger Agreement) from Payee to
Maker referred to in paragraph 1.12 of the Merger Agreement.

     5. From and after the Maturity Date, or during any period in which an Event
of Default (as hereinafter defined) exists under this Note, Maker shall pay
interest on the balance of principal then remaining unpaid at an annual rate
(the "Default Rate") equal to Prime plus five percent (5%). The interest
accruing under this paragraph 5 shall be immediately due and payable by Maker to
the holder of this Note on demand and shall be additional indebtedness evidenced
by this Note.



<PAGE>   2



     6. Maker reserves the privilege, without penalty or premium therefor, to
prepay all or any part of the principal balance of this Note at any time and
from time to time upon two (2) business days prior written notice to Payee of
its intention to do so.

     7. All payments and prepayments on account of the indebtedness evidenced by
this Note shall be first applied to accrued and unpaid interest on the unpaid
principal balance of this Note, and second to all other sums then due Payee
hereunder.

     8. All payments of principal and interest hereunder shall be paid by check
or in coin or currency and shall be made at Payee's principal place of business,
as hereinabove set forth. Payment made by check shall be deemed paid on the date
Payee receives such check; provided, however, that if such check is subsequently
returned to Payee unpaid due to insufficient funds or otherwise, the payment
shall not be deemed to have been made and shall continue to bear interest until
collected. If payment hereunder becomes due and payable on a Saturday, Sunday or
legal holiday under the laws of the State of Illinois, the due date thereof
shall be extended to the next succeeding business day, and interest shall be
payable thereon at the then applicable interest rate during such extension.

     9. An Event of Default shall occur hereunder if: (1) any amount payable
hereunder is not paid when due; or (2) Maker shall otherwise fail to perform any
of the promises to be performed by Maker hereunder or under any security
agreement with Payee relating thereto; or (3) Maker or any person who is or
shall become primarily or secondarily liable for any payment hereunder, who is a
natural person, dies; or (4) Maker or any other party liable with respect to any
payment hereunder, or any guarantor or accommodation endorser or third party
pledgor, shall make any assignment for the benefit of creditors, or there shall
be commenced by or against Maker or any such party any bankruptcy, receivership,
insolvency, reorganization, dissolution or liquidation proceedings, or there
shall be the entry of any judgment, levy, attachment, garnishment or other
process, or the filing of any lien, against any of the Collateral (as such term
is defined in the Security Agreement referred to in paragraph 12 hereof); or (5)
in the opinion of Payee, acting in good faith, there is any deterioration or
impairment of any of the Collateral, or any actual decline or depreciation in
the value or market price thereof that causes the Collateral to become
unsatisfactory as to value, and the Payee has provided Maker with written notice
describing the basis of such opinion, and if Maker has failed, within five (5)
business days after receiving such notice to (x) provide documents effectively
refuting such opinion to Payee's satisfaction, or (y) provide additional
Collateral to eliminate the deficit or pay down the indebtedness in an amount
sufficient to erase such deficit; or (6) there is a determination by Payee that
a material adverse change has occurred in the financial condition of the Maker
from the condition set forth in the most recent financial statement of Maker
furnished to Payee, or from the financial condition of the Maker most recently
disclosed to Payee in any manner; or (7) Maker shall fail to do any commercially
reasonable act necessary to preserve or maintain the value and collectability of
the Collateral; or (8) Maker shall fail, within five (5) business days after
receiving a written request by Payee, to permit inspection by Payee (during
normal business hours) of Maker's books and records pertaining to the
Collateral; or (9) any guarantor of this Note shall discontinue or contest the
validity of such guaranty; or (10) there shall occur any


<PAGE>   3

material adverse event that causes a change in the financial condition of Maker,
or that would have a material adverse effect on the business of Maker.

     10. At the election of the holder hereof, whenever Maker shall be in
default as aforesaid (an "Event of Default"), and all applicable cure periods
have expired without a cure having been effected, then without demand or notice
of any kind, the entire unpaid principal amount hereof, and all interest accrued
thereon, shall become immediately due and payable. Failure of the holder to
exercise such election shall not constitute a waiver of the right to exercise
the same in the event of any subsequent Event of Default. No holder hereof
shall, by any act of omission or commission, be deemed to waive any of its
rights, remedies or powers hereunder or otherwise unless such waiver is in
writing and signed by the holder hereof, and then only to the extent
specifically set forth therein. The rights, remedies and powers of the holder
hereof, as provided in this Note, are cumulative and concurrent, and may be
pursued singly, successively or together against Maker and any security given at
any time to secure the repayment hereof, all at the sole discretion of the
holder hereof. If any suit or action is instituted or attorneys are employed to
collect this Note or any part thereof, Maker promises and agrees to pay all
costs of collection, including reasonable attorneys' fees and court costs.

     11. Maker hereby (i) waives presentment and demand for payment, notice of
nonpayment and of dishonor, protest of dishonor, and notice of protest; and (ii)
waives any and all lack of diligence and delays in the enforcement of the
payment hereof.

     12. This Note is secured by that certain Security Agreement, dated as of
the date hereof, pursuant to which Maker has pledged certain of its assets and
property, as described therein, as security for the payment hereof.

     13. This Note evidences a business loan that comes within the purview of
Section 205/4, paragraph (1)(c) of Chapter 815 of the Illinois Compiled
Statutes, as amended. Maker agrees that the obligation evidenced by this Note is
an exempted transaction under the Truth In Lending Act, 15 U.S.C., Section 1601,
et seq.

     14. Time is of the essence hereof.

     15. This Note is governed and controlled as to validity, enforcement,
interpretation, construction, effect and in all other respects by the statutes,
laws and decisions of the State of Illinois, without regard to conflicts of laws
principles. This Note may not be changed or amended orally but only by an
instrument in writing signed by the party against whom enforcement of the change
or amendment is sought.

     16. This Note has been made and delivered at Chicago, Illinois and all
funds disbursed to or for the benefit of Maker will be disbursed in Chicago,
Illinois.

     17. The obligations and liabilities of Maker under this Note shall be
binding upon and enforceable against Maker and its successors and assigns. This
Note shall inure to the benefit of and may be enforced by Payee and its
successors and assigns.


<PAGE>   4




     18. In the event one or more of the provisions contained in this Note shall
for any reason be held to be invalid, illegal or unenforceable in any respect by
a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision of this Note, and this
Note shall be construed as if such invalid, illegal or unenforceable provision
had never been contained herein. Payee shall not collect a rate of interest on
the principal balance under this Note in excess of the maximum contract rate of
interest permitted by applicable law. All interest found in excess of that rate
of interest allowed and collected by Payee shall be applied to the principal
balance in such manner as to prevent the payment and collection of interest in
excess of the rate permitted by applicable law.

     IN WITNESS WHEREOF, Maker has executed this Note as of the date first
hereinabove written.



                                ACCUMED INTERNATIONAL, INC.

                                By:  /s/ PAUL F. LAVALLEE
                                     ------------------------------------------
                                     Paul F. Lavallee, Chairman of the Board
                                     and Chief Executive Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>v72486ex10-2.txt
<DESCRIPTION>EXHIBIT 10.2
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 10.2


                                     SECURED
                                 PROMISSORY NOTE

$150,000.00                                                         May 1, 2001
                                                              Chicago, Illinois


     1. FOR VALUE RECEIVED, AccuMed International, Inc. ("Maker"), whose
principal place of business is located at 920 North Franklin Street, Suite 402,
Chicago, Illinois 60610, hereby promises to pay to the order of Ampersand
Medical Corporation ("Payee"), whose principal place of business is located at
414 North Orleans, Suite 510, Chicago, Illinois 60610, the principal sum of ONE
HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($150,000.00), at the place and in the
manner hereinafter provided, together with interest thereon at the rates
described below.

     2. Interest shall accrue on the balance of principal from time to time
unpaid under this Note prior to the Maturity Date (as hereinafter defined) at an
annual rate equal to Prime plus two and one-half percent (2 1/2%). For purposes
hereof, "Prime" shall mean the rate of interest from time to time announced by
LaSalle Bank, National Association ("Bank"), as its Prime Rate, which is not
necessarily the Bank's lowest or most favorable rate of interest at any given
time. Interest shall be computed on the basis of a year consisting of 360 days
and shall be based on the actual number of days during the period for which
interest is being charged.

     3. Principal and interest under this Note shall be due and payable on the
earlier to occur of the following: (i) termination of the contemplated merger
transaction as outlined in the Merger Agreement (as such term is defined in
paragraph 4 hereof); and (ii) May 31, 2001 or such later date as the parties to
the Merger Agreement may, from time to time, establish as the termination date
of the Merger Agreement by amendment thereto (such payment due date being
hereinafter referred to as the "Maturity Date"); provided, however, the Maturity
Date shall be automatically extended (without requiring a written amendment
hereto) to such later date, if any, as Maker and Payee agree by amendment of the
date specified in Section 4.4(a)(v) of the Merger Agreement (as such term is
hereinafter defined).

     4. This Note is executed and delivered in connection with that certain
Agreement and Plan of Merger, dated as of February 7, 2001 by and between Payee
and Maker (the "Merger Agreement"), pursuant to which the parties thereto have
agreed to enter into the merger described therein. This Note evidences an
Additional Loan (as such term is defined in the Merger Agreement) from Payee to
Maker referred to in paragraph 1.12 of the Merger Agreement.

     5. From and after the Maturity Date, or during any period in which an Event
of Default (as hereinafter defined) exists under this Note, Maker shall pay
interest on the balance of principal then remaining unpaid at an annual rate
(the "Default Rate") equal to Prime plus five percent (5%). The interest
accruing under this paragraph 5 shall be immediately due and payable


                                       1
<PAGE>   2

by Maker to the holder of this Note on demand and shall be additional
indebtedness evidenced by this Note.

     6. Maker reserves the privilege, without penalty or premium therefor, to
prepay all or any part of the principal balance of this Note at any time and
from time to time upon two (2) business days prior written notice to Payee of
its intention to do so.

     7. All payments and prepayments on account of the indebtedness evidenced by
this Note shall be first applied to accrued and unpaid interest on the unpaid
principal balance of this Note, and second to all other sums then due Payee
hereunder.

     8. All payments of principal and interest hereunder shall be paid by check
or in coin or currency and shall be made at Payee's principal place of business,
as hereinabove set forth. Payment made by check shall be deemed paid on the date
Payee receives such check; provided, however, that if such check is subsequently
returned to Payee unpaid due to insufficient funds or otherwise, the payment
shall not be deemed to have been made and shall continue to bear interest until
collected. If payment hereunder becomes due and payable on a Saturday, Sunday or
legal holiday under the laws of the State of Illinois, the due date thereof
shall be extended to the next succeeding business day, and interest shall be
payable thereon at the then applicable interest rate during such extension.

     9. An Event of Default shall occur hereunder if: (1) any amount payable
hereunder is not paid when due; or (2) Maker shall otherwise fail to perform any
of the promises to be performed by Maker hereunder or under any security
agreement with Payee relating thereto; or (3) Maker or any person who is or
shall become primarily or secondarily liable for any payment hereunder, who is a
natural person, dies; or (4) Maker or any other party liable with respect to any
payment hereunder, or any guarantor or accommodation endorser or third party
pledgor, shall make any assignment for the benefit of creditors, or there shall
be commenced by or against Maker or any such party any bankruptcy, receivership,
insolvency, reorganization, dissolution or liquidation proceedings, or there
shall be the entry of any judgment, levy, attachment, garnishment or other
process, or the filing of any lien, against any of the Collateral (as such term
is defined in the Security Agreement referred to in paragraph 12 hereof); or (5)
in the opinion of Payee, acting in good faith, there is any deterioration or
impairment of any of the Collateral, or any actual decline or depreciation in
the value or market price thereof that causes the Collateral to become
unsatisfactory as to value, and the Payee has provided Maker with written notice
describing the basis of such opinion, and if Maker has failed, within five (5)
business days after receiving such notice to (x) provide documents effectively
refuting such opinion to Payee's satisfaction, or (y) provide additional
Collateral to eliminate the deficit or pay down the indebtedness in an amount
sufficient to erase such deficit; or (6) there is a determination by Payee that
a material adverse change has occurred in the financial condition of the Maker
from the condition set forth in the most recent financial statement of Maker
furnished to Payee, or from the financial condition of the Maker most recently
disclosed to Payee in any manner; or (7) Maker shall fail to do any commercially
reasonable act necessary to preserve or maintain the


                                       2
<PAGE>   3


value and collectability of the Collateral; or (8) Maker shall fail, within five
(5) business days after receiving a written request by Payee, to permit
inspection by Payee (during normal business hours) of Maker's books and records
pertaining to the Collateral; or (9) any guarantor of this Note shall
discontinue or contest the validity of such guaranty; or (10) there shall occur
any material adverse event that causes a change in the financial condition of
Maker, or that would have a material adverse effect on the business of Maker.

     10. At the election of the holder hereof, whenever Maker shall be in
default as aforesaid (an "Event of Default"), and all applicable cure periods
have expired without a cure having been effected, then without demand or notice
of any kind, the entire unpaid principal amount hereof, and all interest accrued
thereon, shall become immediately due and payable. Failure of the holder to
exercise such election shall not constitute a waiver of the right to exercise
the same in the event of any subsequent Event of Default. No holder hereof
shall, by any act of omission or commission, be deemed to waive any of its
rights, remedies or powers hereunder or otherwise unless such waiver is in
writing and signed by the holder hereof, and then only to the extent
specifically set forth therein. The rights, remedies and powers of the holder
hereof, as provided in this Note, are cumulative and concurrent, and may be
pursued singly, successively or together against Maker and any security given at
any time to secure the repayment hereof, all at the sole discretion of the
holder hereof. If any suit or action is instituted or attorneys are employed to
collect this Note or any part thereof, Maker promises and agrees to pay all
costs of collection, including reasonable attorneys' fees and court costs.

     11. Maker hereby (i) waives presentment and demand for payment, notice of
nonpayment and of dishonor, protest of dishonor, and notice of protest; and (ii)
waives any and all lack of diligence and delays in the enforcement of the
payment hereof.

     12. This Note is secured by that certain Security Agreement, dated as of
the date hereof, pursuant to which Maker has pledged certain of its assets and
property, as described therein, as security for the payment hereof.

     13. This Note evidences a business loan that comes within the purview of
Section 205/4, paragraph (1)(c) of Chapter 815 of the Illinois Compiled
Statutes, as amended. Maker agrees that the obligation evidenced by this Note is
an exempted transaction under the Truth In Lending Act, 15 U.S.C., Section 1601,
et seq.

     14. Time is of the essence hereof.

     15. This Note is governed and controlled as to validity, enforcement,
interpretation, construction, effect and in all other respects by the statutes,
laws and decisions of the State of Illinois, without regard to conflicts of laws
principles. This Note may not be changed or amended orally but only by an
instrument in writing signed by the party against whom enforcement of the change
or amendment is sought.




                                       3
<PAGE>   4


     16. This Note has been made and delivered at Chicago, Illinois and all
funds disbursed to or for the benefit of Maker will be disbursed in Chicago,
Illinois.

     17. The obligations and liabilities of Maker under this Note shall be
binding upon and enforceable against Maker and its successors and assigns. This
Note shall inure to the benefit of and may be enforced by Payee and its
successors and assigns.

     18. In the event one or more of the provisions contained in this Note shall
for any reason be held to be invalid, illegal or unenforceable in any respect by
a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision of this Note, and this
Note shall be construed as if such invalid, illegal or unenforceable provision
had never been contained herein. Payee shall not collect a rate of interest on
the principal balance under this Note in excess of the maximum contract rate of
interest permitted by applicable law. All interest found in excess of that rate
of interest allowed and collected by Payee shall be applied to the principal
balance in such manner as to prevent the payment and collection of interest in
excess of the rate permitted by applicable law.

     IN WITNESS WHEREOF, Maker has executed this Note as of the date first
hereinabove written.



                                   ACCUMED INTERNATIONAL, INC.

                                   By:  /s/ PAUL F. LAVALLEE
                                        ---------------------------------------
                                        Paul F. Lavallee, Chairman of the Board
                                        and Chief Executive Officer




                                       4

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>v72486ex10-3.txt
<DESCRIPTION>EXHIBIT 10.3
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 10.3



                                AMENDMENT NO. 1
                                       TO
                          AGREEMENT AND PLAN OF MERGER
                                  BY AND AMONG
                          ACCUMED INTERNATIONAL, INC.,
                            ACCUMED ACQUISITION CORP.
                                       AND
                          AMPERSAND MEDICAL CORPORATION


        THIS AMENDMENT NO. 1 is made and entered into as of the 10th day of May,
2001, by and among AccuMed International, Inc., a Delaware corporation
("AccuMed"), AccuMed Acquisition Corp., a Delaware corporation ("Acquisition
Sub"), and Ampersand Medical Corporation ("Ampersand").

                                   WITNESSETH:

        WHEREAS, the parties hereto have heretofore entered into that certain
Agreement and Plan of Merger dated as of February 7, 2001 (the "Merger
Agreement"), pursuant to which AccuMed will be merged with and into Acquisition
Sub and thereby become a wholly-owned subsidiary of Ampersand; and

        WHEREAS, the parties hereto have determined that it would be in their
respective best interests to modify and amend certain terms and provisions of
the Merger Agreement, and the directors of each of the parties hereto have
unanimously approved such modifications and amendments and directed the
respective officers of the parties to give effect to such changes;

        NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledge, the parties hereto hereby agree as
follows:

1.             Closing Date; Termination Date.

               (a) The last sentence of Section 1.11 of the Merger Agreement is
hereby amended to change the date set forth therein from "May 31, 2001" to "July
31, 2001."

               (b) The tenth and thirteenth lines of Section 4.4 (a)(iii), the
eighth, ninth, eighteenth and nineteenth lines of Section 4.4(a)(iv), the second
line of Section 4.4(a)(v), and the fourth line of Section 5.5, of the Merger
Agreement are each hereby amended to change the dates set forth therein from
"May 31, 2001" to "July 31, 2001."

               (c) In the event that the Registration Statement has not become
effective on or prior to June 17, 2001, then all references in the Merger
Agreement to "July 31, 2001" shall automatically, without further action by the
parties hereto, be amended to "September 30, 2001," such amendment to become
effective as of June 17, 2001.

<PAGE>   2

               2. Ampersand Loan Obligations. The first sentence of Section
1.12(b) of the Merger Agreement is hereby deleted in its entirety and replaced
by the following:

               "Ampersand and AccuMed also hereby agree that if by February 28,
        2001 the Merger and the transactions contemplated hereby have not been
        consummated, then Ampersand shall loan additional monies (the
        "Additional Loans") to AccuMed as and when needed by AccuMed for use in
        its ordinary and usual business operations on the same terms and
        conditions as the Full Loan, except that:

               (i) simultaneously with the making of each Additional Loan, the
        collateral securing the Full Loan under the Security Agreement shall be
        increased in accordance with the terms of the Security Agreement in
        order to secure such Additional Loan as well, and AccuMed shall issue
        and deliver to Ampersand a new promissory note, substantially in the
        form of the Replacement Note, evidencing such Additional Loan;

               (ii) such Additional Loans shall be made on the first day of each
        month through and including the month in which the Merger and the
        transactions contemplated hereby are consummated or the month in which
        this Agreement is terminated in accordance with the provisions hereof,
        whichever comes first;

               (iii) the Additional Loans to be made on March 1, 2001 and April
        1, 2001 shall be made automatically, without any request therefor being
        necessary, and each shall be in the amount of Two Hundred Twenty-Five
        Thousand Dollars ($225,000);

               (iv) the Additional Loan to be made on May 1, 2001 shall be made
        automatically, without any request therefor being necessary, and shall
        be in the amount of One Hundred Fifty Thousand Dollars ($150,000);

               (v) the Additional Loans to be made on June 1, 2001 and the first
        day of each month thereafter until the Merger closes or the Merger
        Agreement is terminated, shall be made automatically, without any
        request therefor being necessary, in the amount of One Hundred Thousand
        Dollars ($100,000); provided, however, that upon the written request of
        AccuMed, delivered to Ampersand in accordance with the provisions hereof
        no less than two (2) business days prior to the last day of the month
        immediately preceding the scheduled payment date of the Additional Loan,
        each such Additional Loan shall have added to it such amount as AccuMed
        shall request in the aforesaid notice, so long as: (1) the total amount
        of the Additional Loan made on the relevant date does not exceed Two
        Hundred Twenty-Five Thousand Dollars ($225,000), and (2) said notice
        sets forth the specific business uses to which such added amount shall
        be put, which uses shall be reasonably satisfactory to Ampersand in
        order to obligate Ampersand to loan such added amount to AccuMed
        hereunder; and



                                       2
<PAGE>   3

               (vi) prior to the making of each Additional Loan, AccuMed and
        Ampersand shall identify on a schedule or schedules to be attached to
        the Security Agreement sufficient additional collateral to secure such
        Additional Loans in accordance with the terms and conditions of the
        Security Agreement."

        3. Defined Terms. All capitalized terms not defined herein shall have
the meanings ascribed to them in the Merger Agreement.

        4. Continuing Effect of Original Agreement; Effective Date of Changes.
Except for the modifications and amendments specifically set forth herein, the
Merger Agreement shall continue in full force and effect as originally written.
Subject to the provisions of Section 1(c) of this Amendment, the modifications
and amendments set forth herein shall become immediately effective as of the
date first hereinabove set forth.

        5. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Illinois, without taking into account
any provisions regarding choice of law.

        IN WITNESS WHEREOF, each party has hereto caused this Agreement to be
executed on its behalf by its duly authorized officer as of the date first
hereinabove set forth.

ACCUMED INTERNATIONAL, INC                   AMPERSAND MEDICAL CORPORATION



By:    /s/ PAUL F. LAVALLEE                  By:   /s/ PETER P. GOMBRICH
    -------------------------------              -------------------------------
        Paul F. Lavallee,                           Peter P. Gombrich,
        Chairman of the Board and                   Chairman of the Board and
        Chief Executive Officer                     Chief Executive Officer

                                             ACCUMED ACQUISITION CORP.



                                             By:   /s/ PETER P. GOMBRICH
                                                 -------------------------------
                                                    Peter P. Gombrich, President



                                       3
</TEXT>
</DOCUMENT>
</SUBMISSION>
