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 June 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                                        87-046761
-------------------------------            -----------------------------------
(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                                      June 30, 1998
                --------                                   ------------------
Common Stock,  $.0002 par value                             17,599,536 shares






                                       1
<PAGE>




                                   FORM 10-QS

                       Financial Statements and Schedules
                            Magellan Technology, Inc.

                       For the Quarter Ended June 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 June 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                          5

                  Condensed statement of cash flows for the
                      six months ended June 30, 1998
                      and 1997                                              6

                  Notes to condensed consolidated
                      financial statements                                  8

Item 2.           Management's Discussion and Analysis
                      of Financial Condition and Results of
                      Operations                                            10

                           Part II - Other Information
                       ----------------------------------
Item 1.           Legal Proceedings                                         13

Item 2.           Changes in Securities                                     13

Item 3.           Defaults upon Senior Securities                           13

Item 4.           Submission of Matters to a Vote of
                      Security Holders                                      13

Item 5.           Other information                                         13

Item 6(a)         Exhibits                                                  13

Item 6(b)         Reports on Form 8-K                                       13





                                       2
<PAGE>




                            MAGELLAN TECHNOLOGY, INC.
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheet



ASSETS                                         June 30, 1998       Dec. 31, 1997
                                                 (Unaudited)          (Audited)
                                              ----------------   ---------------
Current Assets:

          Cash                                $     189,554       $     111,402

          Other Current Assets                    1,966,194             570,808
                                              ----------------    --------------
                       Current Assets             2,155,748             682,210
                                              ----------------    --------------
          Property and Equipment, net               509,832             336,421

          Licenses & Technology, net              1,443,099               -

          Goodwill, net                             306,574             344,039

          Net Asset in Discontinued Operations         -              1,325,027
                                               ---------------     -------------

                       Total Assets            $  4,415,253        $  2,687,697
                                                ==============      ============
















                                       3
<PAGE>



                            MAGELLAN TECHNOLOGY, INC.
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheet



LIABILITIES AND STOCKHOLDERS' EQUITY         June 30, 1997       Dec. 31, 1997
                                               (Unaudited)          (Audited)
                                           -----------------    ---------------
Current Liabilities:

       Current Portion of long-term debt     $    176,269        $     173,537

       Line of Credit                           2,270,022            2,210,022

       Notes Payable                              175,571                   -

       Related Party Notes Payable                450,000             750,000

       Accounts Payable                           746,305             478,702

       Accrued Liabilities                        369,912             206,749
                                            ---------------      --------------
            Current Liabilities                 4,188,079           3,819,010
   
Long-Term Debt                                    526,543             591,717
                                            ---------------      --------------
            Total Liabilities                   4,714,622           4,410,727
                                            ---------------      --------------
Stockholders' Equity:

   Common  Stock,   par  value  $.0002  
   per  share;   25,000,000   shares
   authorized,  17,599,536  shares 
   issued and  outstanding as of June 30,
   1998                                             3,520               2,774

          Additional Paid-in Capital            9,890,599           6,890,419

          Unearned Compensation                  (183,434)           (236,000)

          Retained Deficit                    (10,010,054)         (8,380,223)
                                            ---------------       -------------
            Total Stockholders' equity           (299,369)         (1,723,030)
                                            ---------------       -------------
  Total Liabilities and Stockholder's Equity $  4,415,253        $  2,687,697
                                            ===============       =============





                                       4
<PAGE>




                            MAGELLAN TECHNOLOGY, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Operations
                                   (Unaudited)

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


                                                                 Three Months Ended                        Six Months Ended
                                                                        June 30,                                 June 30,
                                                       ------------------------------------    ------------------------------------
                                                            1998                1997                1998                1997
                                                       ---------------    -----------------    ----------------    ----------------
Revenue from Sales:                                          $ 735,969                 $ -           $ 978,586                 $ -

Cost of Sales:                                                 179,220                   -             225,939                   -
                                                      -----------------   -----------------    ----------------    ----------------
                                                    
Gross Margin:                                                  556,749                   -             752,647                   -

Operating Expenses:

      Selling, General and Administrative                      907,569             239,877           1,474,916             466,585
      Depreciation & Amortization                               53,948               4,536              90,590               7,892
      Compensation Expense - Stock Options                     127,533                                 153,816
      R & D Expenses                                           322,116             154,643             642,772             291,667
                                                      -----------------   -----------------    ----------------    ----------------
                                                     
         Total Operating Expenses                            1,411,166             399,056           2,362,094             766,144
                                                      -----------------   -----------------    ----------------    ----------------
                                                     
Income (Loss) from Operations:                                (854,417)           (399,056)         (1,609,447)           (766,144)

Other Income (Expense):

      Equity in Loss of Joint Venture                           (4,852)              6,129              (5,050)            (38,558)
      Interest Expense                                        (102,212)            (28,855)           (195,357)            (45,925)
      Gain on sale of Joint Venture                            180,023                                 180,023
      Other, net                                                                    (7,790)                                 (7,038)
                                                      -----------------   -----------------    ----------------    ----------------
                                                     
         Net Income (Loss)                                  $ (781,458)         $ (429,572)       $ (1,629,831)         $ (857,665)
                                                      =================   =================    ================    ================
                                                     
         Net Income (Loss) per share                           $ (0.05)            $ (0.03)            $ (0.11)            $ (0.06)
                                                      =================   =================    ================    ================
                                                   

Weighted average shares outstanding                         15,447,560          13,628,338          15,447,560          13,628,338
                                                      =================   =================    ================    ================
</TABLE>

                                       5
<PAGE>




                            MAGELLAN TECHNOLOGY, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)
                                                                              
<TABLE>
<S>                                                                                <C>                 <C>   

                                                                                           Six Months Ended
                                                                                               June 30,

Cash Flows form Operating Activities:                                                    1998               1997
                                                                                   ----------------   ----------------
          Net Income (Loss)                                                         $ (1,629,831)      $    (857,665)
          Adjustments to Reconcile Net Income (Loss)
          to Net Cash used in Operating Activities:
                       Depreciation & Amortization
                                                                                           90,590               7,892
                       Stock Compensation                                                 153,816
                       Equity in Loss of Joint Venture                                      5,050              38,558
                       (Gain) on Sale of Assets                                          (180,023)
                       (Increase) in:
                                   Accounts Receivable                                  (376,820)                   -
                                   Other Current Assets                                  (79,527)             (97,690)
                                   Inventory                                            (939,038)
                                   Cash Deposits                                                -                   -
                                   Capitalized Software, Net                                    -                   -
                       Increase in:
                                   Accounts Payable                                       267,603              53,780
                                   Accrued Liabilities                                    163,163              31,468
                                   Deferred Revenue                                             -                   -
                                                                                    ----------------     --------------
                       Net Cash used in Operating Activities                          (2,525,017)            (823,657)

Cash Flows from Investing Activities:
          Purchase of Machinery and Equipment                                           (216,511)             (23,687)
          Sale of Investment in Subsidiary                                              1,500,000
                                                                                     ---------------     ---------------
                       Net Cash used in Investing Activities                            1,283,489             (23,687)

Cash Flows from Financing Activities:
          Net Proceeds from Notes Payable and Line of Credit                            1,382,122             830,000
          Proceeds from the Issuance of Common Stock Options                                                    7,500
          Reduction of Long-Term Debt                                                    (62,442)             (27,615)
                                                                                     ---------------      --------------
                       Net Cash Provided by (Used in) Financing Activities:             1,319,680             809,885
                                                                                     ---------------      --------------
                       Net Decrease in cash                                                78,152             (37,459)

Cash, Beginning of Period                                                                 111,402              88,687
                                                                                     ---------------      --------------
Cash, End of Period                                                                 $     189,554       $      51,228
                                                                                     ===============      ==============
</TABLE>
                                                            6
                                       <PAGE>



 



                            MAGELLAN TECHNOLOGY, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)
                       
                                                  Six Months Ended
                                                      June 30,
                                            ----------------------------
                                                 1998           1997
                                            ------------    ------------
Cash paid during the period for:

          Interest                          $  152,630       $   28,379
                                            ============    ============
          Income Tax                        $        -       $        -
                                                                       

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 six 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.











                                       7
<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  conducted by 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 as of June 30, 1998 and the results of operations  for the six
         months  ended June 30,  1998 and 1997 and cash flows for the six months
         ended June 30,  1998 and 1997.  The results of  operations  for the six
         months  ended  June 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 June 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 were used for working capital purposes.

                                       8
<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
         June 30, 1998 the Company borrowed an additional $750,000 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 June 30, 1998 the Company had
         an  outstanding  balance of $2,245,000  under the new revolving line of
         credit.  Notes  payable at June 30,  1998 also  include a small line of
         credit for approximately $25,000.

(6)      During  the six  months  ended  June  30,  1998  the  Company  borrowed
         $1,000,000 from the Company's Chief Executive Officer, or from entities
         controlled by this individual,  under seven separate $100,000 unsecured
         note payable  agreements and under two separate $150,000 unsecured note
         payable  agreements.  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  for
         $250,000 and $100,000 respectively. 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  approximately
         $46,500  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.




















                                       9
<PAGE>


                         PART I - FINANCIAL INFORMATION


ITEM 2 - Management's  Discussion  and Analysis of Financial  Condition and
         Results of Operations

Six-month period ended June 30, 1998 compared to the six-month period ended June
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, 1998 and the acquisition
of certain  licenses and technology from Digital Health,  LLC effective June 15,
1998,  the focus of the company for the six month period ended June 30, 1998 has
changed  significantly  when compared to the  activities of the six month period
ended June 30, 1997. Accordingly, no comparison between current and prior year's
operating results is meaningful.

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

Results of SkyHook

During  the  three  months  ended  June  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  compliments the SkyHook ECMS which
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 compliment the ECMS
product, the company can effectively meet the varying needs of its customers.

Results of BioMeridian

For the three months ended June 30, 1998 BioMeridian  achieved sales revenues of
$735,969  which resulted in a second  quarter  operating  loss of $49,755.  This
compares  favorably  with first  quarter sales of $242,617  which  resulted in a
first quarter operating loss of $132,864. 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.
BioMeridan   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 to for growth in
the alternative health care marketplace.

                                       10
<PAGE>

Results of SIS, LLC

Since the  formation of SIS, LLC, the Company has accounted for the earnings and
transactions of SIS, LLC under the equity method of accounting.  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.  For the three  months  ended June 30,  1998 the
Company's  books  reflect a net loss of $4,852,  its 46.5%  share of the loss of
SIS, LLC through May 12, 1998.

Operations for the Six-month period ended June 30, 1998

Results of SkyHook

During the six months ended June 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 six months  ended June 30, 1998  BioMeridian  achieved  sales  revenues
  of $978,586  which  resulted in an  operating  loss of $182,619.

Results of SIS, LLC

For the six months ended June 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.

                                       11
<PAGE>

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 June 30, 1998 the  Company  borrowed an
additional  $750,000 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 June 30, 1998 the Company
had an  outstanding  balance  of $  2,245,000  under the new  revolving  line of
credit.

During the six months ended June 30, 1998 the Company  borrowed  $1,000,000 from
the Company's  Chief  Executive  Officer,  or from  entities  controlled by this
individual,  under seven separate $100,000 unsecured note payable agreements and
under two separate $150,000 unsecured note payable agreements. 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.

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. 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   currently   consuming
approximately $210,000 of cash 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    International,    Inc.
("BioMeridian"),  has also  experienced  operating  losses  during the six-month
period ended June 30, 1998. The Company is forecasting profitable operations for
BioMeridian commencing the third 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.



                                       12
<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)      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.

         (b)      None.








                                   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                                         August 12, 1998
------------------------                                    ---------------
Douglas M. Angus                                                  Date
Vice President - Finance



                                                                   EXHIBIT 6 (a)