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

                                   FORM 10-QSB


    ( X )     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES AND EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1998

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

             For the transition period from __________ to __________

                         Commission file number: 0-18271


                            MAGELLAN TECHNOLOGY, INC.
                    -----------------------------------------
             (Exact name of registrant as specified in its charter)


                  Utah                                  87-0467614
---------------------------------           -----------------------------------
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
 Incorporation or Organization)

13526 South 110 West
Draper, Utah                                                           84020
---------------------------------------                                -----
(Address of principal executive offices)                             (Zip Code)


Registrant's telephone number, including area code:   (801) 495-2211
                                                   ----------------------
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  and  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 the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date:

                                                             Outstanding at
           Class                                           September 30, 1998
          -----                                            ------------------
Common Stock, $.0002 par value                              17,599,536 shares


<PAGE>


                                   FORM 10-QSB

                       Financial Statements and Schedules
                            Magellan Technology, Inc.

                    For the Quarter Ended September 30, 1998

   The following financial statements and schedules of the registrant and its
               consolidated subsidiaries are submitted herewith:

                         PART I - FINANCIAL INFORMATION
                         ------------------------------
Item 1. Financial Statements

        Condensed consolidated balance sheet for September 30, 1998 and 
        year-end for December 31, 1997                                         3

        Condensed consolidated statement of operations for the three and six 
        months ended June 30, 1998 and 1997                                    4

        Condensed statement of cash flows for the six months ended 
        June 30, 1998 and 1997                                                 5

        Notes to condensed consolidated financial statements                   7

Item 2. Management's Discussion and Analysis of Financial Condition and 
        Results of Operations                                                  9

                           PART II - OTHER INFORMATION
                           ---------------------------
Item 1.           Legal Proceedings                                           12

Item 2.           Changes in Securities                                       12

Item 3.           Defaults upon Senior Securities                             12

Item 4.           Submission of Matters to a Vote of Security Holders         12

Item 5.           Other information                                           12

Item 6(a)                  Exhibits                                           12

Item 6(b)                  Reports on Form 8-K                                12

<PAGE>
<TABLE>
<S>                                                                                  <C>                 <C>   



                             MAGELLAN TECHNOLOGY, INC.
                                 AND SUBSIDIARIES

                       Condensed Consolidated Balance Sheets

                                                                                     Sep 30, 1998         Dec 31, 1997
                                      ASSETS                                          (Unaudited)           (Audited)
                                                                                    -------------        -------------
Current Assets:
 Cash                                                                                  $ 110,035            $ 111,402
 Accounts Receivable                                                                     296,142
 Inventories                                                                           1,805,598
 Other Current Assets                                                                    179,542              570,808
                                                                                    -------------        -------------
   Current Assets                                                                      2,391,317              682,210
                                                                                    -------------        -------------

 Property and Equipment, net                                                             975,327              336,421
 Licenses & Technology, net                                                            1,404,687                    -
 Goodwill, net                                                                           288,541              344,039
 Net Asset in Discontinued Operations                                                          -            1,325,027
                                                                                    -------------        -------------
   Total Assets                                                                      $ 5,059,872          $ 2,687,697
                                                                                    =============        =============
                                    LIABILITIES

Current Liabilities:     
 Accounts Payable                                                                      $ 949,394            $ 478,702
 Accrued Liabilities                                                                     340,596              206,749
 Line of Credit                                                                        3,020,824            2,210,022
 Related Party Notes Payable                                                           1,040,000              750,000
 Notes Payable                                                                            32,097                    -
 Current Portion of long-term debt                                                       440,622              173,537
                                                                                    -------------        -------------
   Current Liabilities                                                                 5,823,533            3,819,010

 Long-Term Debt                                                                          679,710              591,717
                                                                                    -------------        -------------
   Total Liabilities                                                                   6,503,243            4,410,727
                                                                                    -------------        -------------
                               STOCKHOLDERS' EQUITY

 Common Stock, par value $.0002 per share;
 50,000,000 shares authorized, 17,599,536 shares
 issued and outstanding as of September 30, 1998.                                          3,520                2,774

 Additional Paid-in Capital                                                            9,890,599            6,890,419
 Unearned Compensation                                                                  (157,151)            (236,000)
 Accumulated Deficit                                                                  (8,380,223)          (5,382,831)
 Current Earnings/(Loss)                                                              (2,800,116)          (2,997,392)
                                                                                    -------------        -------------
   Total Stockholders' equity                                                         (1,443,371)          (1,723,030)
                                                                                    -------------        -------------
     Total Liabilities and Stockholders' Equity                                      $ 5,059,872          $ 2,687,697
                                                                                    =============        =============
</TABLE>


<PAGE>

<TABLE>
<S>                                                         <C>               <C>               <C>              <C>    

                            MAGELLAN TECHNOLOGY, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Operations
                                   (Unaudited)

                                                                  Three Months Ended                  Nine Months Ended
                                                                    September 30,                       September 30,
                                                          -------------     -------------     -------------     -------------
                                                               1998              1997              1998              1997
                                                          -------------     -------------     -------------     -------------
 Revenue from Sales                                         $ 876,493               $ -       $ 1,855,079               $ -
 Cost of Sales                                                105,836                 -           331,775                 -
                                                          -------------     -------------     -------------     -------------
   Gross Margin                                               770,657                 -         1,523,304                 -

Operating Expenses:
 Selling, General & Administrative                          1,281,257           378,218         2,756,173           845,036
 Depreciation & Amortization                                   93,710             5,329           184,301            12,988
 Compensation Expense - Stock Options                          26,283                 -           180,099                 -
 R & D Expenses                                               446,690           207,436         1,089,461           499,103
                                                          -------------     -------------     -------------     -------------
    Total Operating Expenses                                1,847,940           590,983         4,210,034         1,357,127
                                                          -------------     -------------     -------------     -------------
 Income/(Loss) from Operations:                            (1,077,283)         (590,983)       (2,686,730)       (1,357,127)

Other Income/(Expense):
 Equity in Income/(Loss) of Joint Venture                           -            29,307            (5,050)           (9,251)
 Interest Expense                                             (93,002)          (46,521)         (288,359)          (92,446)
 Gain on sale of Joint Venture                                      -                 -           180,023                 -
 Other, net                                                         -                 -                 -            (7,038)
                                                          -------------     -------------     -------------     -------------
    Net Income/(Loss)                                    $ (1,170,285)       $ (608,197)     $ (2,800,116)     $ (1,465,862)
                                                          =============     =============     =============     =============

    Net Income/(Loss) per share                               $ (0.07)          $ (0.04)          $ (0.17)          $ (0.10)
                                                          ============      =============     =============     =============

 Weighted average shares outstanding                       16,140,035        14,448,893        16,140,035        14,448,893
                                                          ============      =============     =============     =============
</TABLE>
<PAGE>
<TABLE>
<S>                                                                             <C>                   <C>    



                            MAGELLAN TECHNOLOGY, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

                                                                                       Nine Months Ended
                                                                                         September 30,
                                                                                -------------        -------------
                                                                                    1998                 1997
Cash Flows form Operating Activities:                                           -------------        -------------
 Net Income/(Loss)                                                              $ (2,800,116)       $ (1,465,862)
 Adjustments to Reconcile Net Income/(Loss)
   to Net Cash used in Operating Activities:
     Depreciation & Amortization                                                     184,301              12,988
     Stock Compensation                                                              180,099                   -
     Equity in Loss of Joint Venture                                                   5,050               9,251
     (Gain) on Sale of Assets                                                       (180,023)                  -
 (Increase)/Decrease in:
   Accounts Receivable                                                              (296,142)                  -
   Other Current Assets                                                               15,273            (327,945)
   Inventories                                                                    (1,429,605)                  -
 Increase/(Decrease) in:
   Accounts Payable                                                                  470,692             204,695
   Accrued Liabilities                                                               133,847              27,936
                                                                                -------------        -------------
 Net Cash Used in Operating Activities                                            (3,716,624)         (1,538,937)
                                                                                -------------        -------------
Cash Flows from Investing Activities:
 Purchase of Machinery and Equipment                                                (719,271)            (42,420)
 Sale of Investment in Subsidiary                                                  1,500,000                   -
                                                                                -------------        -------------
 Net Cash Provided by/(Used in) Investing Activities                                 780,729             (42,420)
                                                                                -------------        -------------
Cash Flows from Financing Activities:
 Proceeds from Related Party Notes                                                 1,040,000                   -
 Net Proceeds from Notes Payable & Line of Credit                                  1,789,450           1,590,000
 Proceeds from Issuance of Common Stock                                                                    7,500
 Net Proceeds from/(Payment on) Long-term Debt                                       105,078             (16,931)
                                                                                -------------        -------------
 Net Cash Provided by/(Used in) Financing Activities:                              2,934,528           1,580,569
                                                                                -------------        -------------
 Net Decrease in cash                                                                 (1,367)               (788)

 Cash, Beginning of Period                                                           111,402              88,687
                                                                                -------------        -------------
 Cash, End of Period                                                               $ 110,035            $ 87,899
                                                                                =============        =============
</TABLE>
<PAGE>




                             MAGELLAN TECHNOLOGY, INC.
                                 AND SUBSIDIARIES

                  Condensed Consolidated Statements of Cash Flows
                                    (Unaudited)

                                                       Nine Months Ended
                                                          September 30,      
                                              -------------        -------------
                                                   1998                 1997
Cash paid during the period for:              -------------        -------------

 Interest                                       $ 247,851             $ 40,178
                                              =============        =============

 Income Taxes                                         $ -                  $ -
                                              =============        =============

Nonmonetary Financing and Investing Activities:

 During May 1998,  the  Company  acquired  the net assets of Digital  Health for
 $1,453,125 with the issuance of common stock and additional debt.

 During the first nine months of 1998,  $1,650,000  of notes  payable to related
 parties and $46,551 of accrued  interest payable were converted to common stock
 of the Company.


<PAGE>




                            MAGELLAN TECHNOLOGY, INC.
                                AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements

(1)           The unaudited condensed  consolidated financial statements include
              the accounts of Magellan  Technology,  Inc.  (The Company) and its
              wholly owned subsidiaries, BioMeridian Corporation (formerly known
              as  ProHealth,  Inc.  and prior to that known as  Satellite  Image
              Systems,  Inc.  (SIS,  Inc.) and SIS Jamaica,  LTD (SIS  Jamaica),
              SkyHook Technologies,  Inc. (SkyHook),  which the Company acquired
              effective  October 15, 1996, and BioMeridian  International,  Inc.
              (BioMeridian)   (formerly  BioSource,   Inc.)  which  the  Company
              acquired  effective  October 15, 1997. The  acquisition of SkyHook
              included the issuance of 4,874,936 shares of Magellan common stock
              and cash  for all of the  outstanding  shares  of  SkyHook  common
              stock.   The   transaction   was   accounted  for  as  a  purchase
              transaction. The acquisition of BioSource included the issuance of
              225,000  shares of Magellan  common  stock and cash for all of the
              outstanding  shares of BioSource common stock. The transaction was
              accounted for as a purchase  transaction.  The Company  recognized
              goodwill of $358,997 in connection with the BioSource transaction.
              On August 1, 1996 the  Company  transferred  its  interest  in the
              assets,  liabilities,  and  operations  of SIS,  Inc. to Satellite
              Image Systems,  LLC (SIS,  LLC), a joint venture.  On May 12, 1998
              the Company  sold its 46.5%  interest in SIS,  LLC. In  connection
              with the sale the company  recognized a gain of $180,023.  On June
              15, 1998 the Company completed the acquisition of certain licenses
              and  technology of Digital  Health,  LLC in exchange for 1,375,000
              shares of common  stock and  $250,000  in cash  payable in monthly
              installments of $15,000.

(2)           The unaudited condensed  consolidated financial statements include
              all adjustments  (consisting of normal recurring items) which are,
              in the  opinion of  management,  necessary  to present  fairly the
              financial position of the company as of September 30, 1998 and the
              results of operations for the nine months ended September 30, 1998
              and 1997 and cash flows for the nine months  ended  September  30,
              1998 and 1997. The results of operations for the nine months ended
              September 30, 1998 are not  necessarily  indicative of the results
              to be expected for the entire year.

(3)           (Loss) per share is based on the weighted  average  number of 
              shares  outstanding at September 30, 1998 and 1997, respectively.

(4)           Effective  May 12, 1998 the Company  entered  into an agreement to
              sell its  46.5%  interest  in SIS,  LLC.  Terms  of the  agreement
              include an initial  payment of $1,500,000 and additional  payments
              not to exceed  $1,000,000  that  will be  earned  over the next 27
              months based upon the operating results of SIS, LLC. $1,200,000 of
              the funds received were used to retire a  non-revolving  term line
              of credit.  The balance of the funds was used for working  capital
              purposes.
<PAGE>

(5)           On  May  19,  1998  the  company  entered  into  a new  $3,000,000
              revolving  line  of  credit  agreement.  Obligations  under  prior
              separate line of credit  agreements for $750,000 and $745,000 were
              retired  with  proceeds  from the new  revolving  line of  credit.
              During the three  months  ended  September  30,  1998 the  Company
              borrowed an additional  $751,158  under the new revolving  line of
              credit.  The  proceeds  were used to purchase  inventory  and fund
              operations.  The new revolving  line of credit  matures on May 19,
              1999 and is secured by the Company's inventory and receivables and
              by the  personal  guarantees  of  the  Company's  Chief  Executive
              Officer, a Director, and a major shareholder.  As of September 30,
              1998 the Company had an  outstanding  balance of $2,996,158  under
              the new revolving  line of credit.  Notes payable at September 30,
              1998 also include a small line of credit for $24,666.

(6)           During  the nine  months  ended  September  30,  1998 the  Company
              borrowed $1,590,000 from the Company's Chief Executive Officer, or
              from entities controlled by this individual,  under eight separate
              $100,000 unsecured note payable agreements,  two separate $150,000
              unsecured note payable agreements, two separate $200,000 unsecured
              note payable  agreements,  and one $90,000  unsecured note payable
              agreement.  Each note payable bears interest at 12% and is payable
              upon demand.  The Company also  borrowed  $350,000 from two of its
              major shareholders under two separate note payable agreements, one
              for  $250,000  and one  for  $100,000.  Each  note  payable  bears
              interest at 12% and is payable upon  demand.  The funds from these
              transactions were used to finance operations.

(7)           Effective  February 27, 1998,  $1,150,000  of related  party notes
              payable  were  converted  to  common  stock  of  the  Company.  In
              addition,  accrued  interest  payable on the  related  party notes
              payable of $46,551  was used by the  related  parties to  exercise
              warrants to  purchase  common  stock.  Effective  April 29,  1998,
              $500,000 of related party notes  payable were  converted to common
              stock of the Company.


<PAGE>

                         PART I - FINANCIAL INFORMATION


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

Nine-month  period ended  September 30, 1998 compared to the  nine-month  period
ended September 30, 1997

Due to the formation of SIS, LLC effective August 1, 1996 and the acquisition of
SkyHook  Technologies,  Inc.  effective  October 15, 1996,  the  acquisition  of
BioMeridian  (formerly BioSource) effective October 21, 1997 and the acquisition
of certain  licenses and technology from Digital Health,  LLC effective June 15,
1998,  the focus of the company for the nine month  period ended  September  30,
1998 has changed significantly when compared to the activities of the nine month
period ended September 30, 1997. Accordingly,  no comparison between current and
prior year's operating results is meaningful.

Operations for the three-month period ended September 30, 1998

Results of SkyHook

During the three  months  ended  September  30,  1998 the Company  continued  to
aggressively  pursue  development  and marketing of the SkyHook  External  Cargo
Management  System  (SkyHook  ECMS).  The Company also  continued to improve the
SkyHook Light Ariel Delivery System  (SkyHook LADS).  This new lower cost system
is  designed  to carry  three or four  separate  loads  with total  system  load
capacity of 12,000 pounds. The SkyHook LADS complements the SkyHook ECMS that is
designed to carry three or six separate  loads with a total  system  capacity of
36,000 pounds.  With the  introduction of the LADS system to complement the ECMS
product, the company can effectively meet the varying needs of its customers.

Results of BioMeridian

For the three  months  ended  September  30,  1998  BioMeridian  achieved  sales
revenues of  $876,493,  which  resulted  in a third  quarter  operating  loss of
$205,056.  Sales in the second quarter of $735,969 resulted in an operating loss
of  $49,755.  The  increased  loss is  primarily  due to a  one-time  expense of
approximately  $150,000  associated  with  the  annual  symposium  presented  in
Phoenix,   Arizona  by  the  Company  to  demonstrate   its  products  to  sales
representatives  and potential buyers.  Benefits from the costs of the symposium
are  expected  to be  realized  during  the next  year  resulting  in  increased
revenues.  BioMeridian  continues to focus its efforts on enhancing domestic and
international  distribution  channels  for  its  MSA  products.   Management  of
BioMeridian  believes that the company is now well  positioned for growth in the
alternative health care marketplace.
<PAGE>

Operations for the Nine-month period ended September 30, 1998

Results of SkyHook

During the nine  months  ended  September  30,  1998 both the  SkyHook  ECMS and
SkyHook LADS were tested and demonstrated  with potential  customers.  Marketing
and sales  professionals  have  participated  in several  trade  shows and other
marketing  activities.  These activities included  demonstrations of the product
and visits to potential customers. Both products have received favorable reviews
in industry publications.  Notwithstanding these continued favorable preliminary
results, there is no assurance that marketing of the SkyHook ECMS or the SkyHook
LADS will be successful.

Results of BioMeridian

For the nine months ended September 30, 1998 BioMeridian achieved sales revenues
of $1,855,079  that resulted in an operating loss of $387,675.  On June 15, 1998
the Company completed an agreement to acquire certain licenses and technology of
Digital  Health,  LLC,  a  competitor  to  BioMeridian  in the  Meridian  Stress
Assessment  ("MSA")  marketplace.  The  combined  companies  have  pooled  their
resources and expertise. BioMeridian continues to focus its efforts on enhancing
domestic  and  international   distribution   channels  for  its  MSA  products.
Management of BioMeridian  believes that the company is now well  positioned for
growth in the alternative health care marketplace.


Results of SIS, LLC

For the nine months ended  September 30, 1998 the Company's  books reflect a net
loss of $5,050, its 46.5% share of the loss of SIS, LLC through May 12, 1998. On
May 12, 1998 the Company  entered into an  agreement to sell its 46.5%  interest
SIS,  LLC.  Terms of the  agreement  include a  $1,500,000  initial  payment and
additional  payments not to exceed  $1,000,000 that will be earned over the next
27 months based upon the performance of SIS, LLC.

Liquidity and Capital Resources

On May 19, 1998 the company  entered  into a new  $3,000,000  revolving  line of
credit agreement. Obligations under prior separate line of credit agreements for
$750,000 and $745,000 were retired with proceeds from the new revolving  line of
credit. During the three months ended September 30, 1998 the Company borrowed an
additional  $751,158 under the new revolving  line of credit.  The proceeds were
used to purchase inventory and fund operations. The new revolving line of credit
matures  on  May  19,  1999  and  is  secured  by the  Company's  inventory  and
receivables  and by the personal  guarantees  of the Company's  Chief  Executive
Officer,  a Director,  and a major  shareholder.  As of  September  30, 1998 the
Company had an outstanding balance of $2,996,158 under the new revolving line of
credit.
<PAGE>

During the nine months ended September 30, 1998 the Company borrowed  $1,590,000
from the Company's Chief Executive Officer,  or from entities controlled by this
individual, under eight separate $100,000 unsecured note payable agreements, two
separate  $150,000  unsecured  note payable  agreements,  two separate  $200,000
unsecured  note  payable  agreements,  and one $90,000  unsecured  note  payable
agreement.  Each note payable bears  interest at 12% and is payable upon demand.
The Company also borrowed $350,000 from two of its major  shareholders under two
separate note payable  agreements,  one for $250,000 and one for $100,000.  Each
note payable  bears  interest at 12% and is payable upon demand.  The funds from
these transactions were used to finance operations. Effective February 27, 1998,
$1,150,000 of related party notes payable were  converted to common stock of the
Company.  In  addition,  accrued  interest  payable on the  related  party notes
payable of $46,551  was used by the  related  parties to  exercise  warrants  to
purchase common stock. Effective April 29, 1998, $500,000 of related party notes
payable were converted to common stock of the Company.

The Company's wholly owned subsidiary,  SkyHook Technologies,  Inc. ("SkyHook"),
is still in the  development  stage and is not  expected to generate any revenue
through  sales of  products  or  services  until late 1998 or early  1999.  As a
result,  the Company  must rely solely on its lines of credit and its ability to
raise additional debt and equity financing in order to finance continued product
development,  sales and marketing,  and all operating  activities related to the
SkyHook and its  products.  On-going  operations  of the Company are expected to
consume approximately $200,000 each month and the Company expects to continue to
incur substantial additional expenses in connection with the finalization of the
development of the SkyHook product lines and their  introduction into the market
place.

Another wholly owned subsidiary,  BioMeridian Int'l, Inc.  ("BioMeridian"),  has
also experienced  operating losses during the nine-month  period ended September
30, 1998.  The Company is  forecasting  profitable  operations  for  BioMeridian
commencing the fourth quarter 1998.

There can be no assurance that the Company will be able to obtain needed debt or
equity  capital  required to operate on terms  favorable to the Company.  If the
Company is unable to raise  additional  capital,  the  ability of the Company to
successfully  market and  distribute  its  products  and  services  through  its
operating subsidiaries and its financial condition would be materially adversely
affected.



<PAGE>


                                             PART II - OTHER INFORMATION

Item 1.           Legal proceedings:        None.

Item 2.           Changes in Securities:    None.

Item 3.           Defaults upon Senior Securities:   None.

Item 4.           Submission of Matters to a Vote of Security Holders: None.

Item 5.           Other information:

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

                  (a)       None.

                  (b)      The Company filed a Report on Form 8-K dated June 15,
                           1998 reporting the  acquisition  of certain  licenses
                           and technology of Digital Health, LLC.


<PAGE>


                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                            MAGELLAN TECHNOLOGY, INC.
                            -------------------------
                                  (Registrant)




\s\Douglas M. Angus                                       November 15, 1998


------------------------                                  -----------------
Douglas M. Angus                                                Date
Vice President - Finance