<PAGE>

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

                                      FORM 10-Q

(Mark One)

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

For the quarterly period ended    March 31, 1997
                               ------------------------------------------------
    [ ]  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:      1-10285 
                       --------------------------------------------------------

                            BIOMAGNETIC TECHNOLOGIES, INC.
-------------------------------------------------------------------------------
                (Exact name of registrant as specified in its charter)

    California                                            95-2647755
-------------------------------------------------------------------------------
(State or other jurisdiction of incorporation          (I.R.S. Employer
or organization)                                      Identification No.)

 9727 Pacific Heights Boulevard, San Diego, California        92121-3719
-------------------------------------------------------------------------------
(Address of principal executive offices)                      (zip code)

                                    (619) 453-6300

                 Registrant's telephone number, including area code)
-------------------------------------------------------------------------------
  (Former name, former address and formal fiscal year, if changed since last
                                       report)

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.                                          
                             [X] Yes       [   ] No

                  APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                     PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.                   [   ] Yes       [   ] No

                        APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

      As of April 1, 1997 Registrant had only one class of common stock of which
      there were 47,691,824 shares outstanding.

<PAGE>

PART I -- FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS


                            BIOMAGNETIC TECHNOLOGIES, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)

                                                        MARCH 31, 
                                                          1997     SEPTEMBER 30,
                                                      (UNAUDITED)     1996
                                                      -----------  -------------
ASSETS
Cash and cash equivalents                                   $825        $1,752
Short-term investments                                     2,695           744
Restricted cash and short-term investments                     0         6,085
Accounts receivable                                          548            17
Inventories                                                5,926         5,627
Prepaid expenses and other current assets                    288           338
                                                      -----------  -------------
     Total current assets                                 10,282        14,563
                                                      -----------  -------------
Property and equipment                                     9,521         9,478
  Less accumulated depreciation and  amortization         (8,805)       (8,570)
                                                      -----------  -------------

Net property and equipment                                   716           908
Restricted cash                                              180           500
Other assets                                                 340           279
                                                      -----------  -------------
     Total assets                                        $11,518       $16,250
                                                      -----------  -------------
                                                      -----------  -------------

LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Accounts payable                                          $2,207        $2,633
Accrued liabilities                                          748         1,897
Accrued salaries and employee benefits                       846           860
Customer deposits                                          9,100         9,208
Note payable-related party                                     0         3,000
                                                      -----------  -------------
     Total current liabilities                            12,901        17,598
Other liabilities                                              0            48
                                                      -----------  -------------
     Total liabilities                                    12,901        17,646
                                                      -----------  -------------
SHAREHOLDERS' (DEFICIT) EQUITY
Common stock -- no par value, 100,000,000 shares
  authorized; 47,691,824 and 39,974,222 shares issued and
  outstanding in March and September, respectively        81,554        78,467
Accumulated deficit                                      (82,937)      (79,863)
                                                      -----------  -------------
     Total shareholders' (deficit) equity                 (1,383)       (1,396)
                                                      -----------  -------------
     Total liabilities and shareholders' (deficit)
       equity                                            $11,518       $16,250 
                                                      -----------  -------------
                                                      -----------  -------------


See notes to consolidated financial statements 

                                          2

<PAGE>

                            BIOMAGNETIC TECHNOLOGIES, INC.
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                       (IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)


                            THREE MONTHS ENDED             SIX MONTHS ENDED
                                 MARCH 31,                     MARCH 31, 
                              1997          1996          1997          1996
                           --------      --------      --------       -------

REVENUES
Product sales               $1,503          $120        $1,536          $135
Service revenue                 52            95           186           179
Interest income                 90           125           178           285
Other income (expense)         254             0           315           (64)
                           --------      --------      --------       -------
   Total revenues            1,899           340         2,215           535
                           --------      --------      --------       -------
EXPENSES
Production costs               999           144         1,084           549
Service costs                   57            30            72            51
Research and development       888         1,986         1,888         3,510
Marketing and sales            473           761         1,240         1,503
General and administrative     438           565           935         1,133
Interest expense                 2             2            70            10
                           --------      --------      --------       -------
   Total expenses            2,857         3,488         5,289         6,756
                           --------      --------      --------       -------
NET LOSS                     $(958)      $(3,148)      $(3,074)      $(6,221)
                           --------      --------      --------       -------
                           --------      --------      --------       -------

NET LOSS PER SHARE          $(0.02)       $(0.08)       $(0.07)       $(0.16)
                           --------      --------      --------       -------
                           --------      --------      --------       -------

WEIGHTED AVERAGE NUMBER OF  
   SHARES OUTSTANDING       47,692        39,935        43,833        39,929
                           --------      --------      --------       -------
                           --------      --------      --------       -------


                    See notes to consolidated financial statements
                                          3

<PAGE>

                            BIOMAGNETIC TECHNOLOGIES, INC.
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)
                                    (IN THOUSANDS)


                                                           SIX MONTHS ENDED
                                                               MARCH 31,
                                                            1997          1996
                                                         --------      --------

OPERATING ACTIVITIES
  Net loss                                               $(3,074)      $(6,221)
  Adjustments to reconcile net loss to net
   cash used for operating activities:
       Depreciation and amortization                         235           459
        Interest expense                                       0             9
  Changes in operating assets & liabilities:
     Restricted cash                                       6,405             0
     Accounts receivable                                    (531)          108
     Inventories                                            (298)         (968)
     Prepaid and other current assets                         49           156
     Other assets                                            (61)
     Accounts payable                                       (426)         (139)
     Accrued liabilities                                  (1,148)         (220)
     Accrued salaries and employee benefits                  (14)
     Customer deposits                                      (108)        2,055
     Other liabilities                                       (48)           24
                                                         --------      --------
         Net cash provided by (used for) operating 
           activities                                        981        (4,737)
                                                         --------      --------
INVESTING ACTIVITIES
  Change in short-term investments                        (1,951)        4,069
  Capital expenditures                                       (44)         (598)
                                                         --------      --------
         Net cash (used for) provided by investing
           activities                                     (1,995)        3,471
                                                         --------      --------
FINANCING ACTIVITIES
  Proceeds from issuance of common stock, net of
    issuance costs                                         3,087             0
  Proceeds from sale of common stock                                        11
  Repayment of notes payable                              (3,000)            0
                                                         --------      --------
         Net cash provided by  financing activities           87            11
                                                         --------      --------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS        (927)       (1,255)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD           1,752         2,314
                                                         --------      --------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                  $825        $1,059
                                                         --------      --------
                                                         --------      --------

                   See notes to consolidated financial statements.
                                          4

<PAGE>

                            BIOMAGNETIC TECHNOLOGIES, INC.
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



1.  BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements included herein
include the accounts of Biomagnetic Technologies, Inc. and its subsidiary (the
"Company") and have been prepared in accordance with the rules and regulations
of the Securities and Exchange Commission.  Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations.  Although the Company believes that the
disclosures made in this report are adequate to make the information not
misleading, it is suggested that these financial statements be read in
connection with the financial statements and notes thereto included in the
Company's annual report on Form 10-K for the fiscal year ended September 30,
1996.

In the opinion of the Company, the accompanying unaudited financial statements
contain all adjustments,  consisting only of normal recurring accruals,
necessary to present fairly its financial position at March 31, 1997 and the
results of operations and its cash flows for the periods presented.

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

2.  NET LOSS PER SHARE

Shares used in computing net loss per share include the weighted average of
common stock outstanding.  Common stock equivalents are antidilutive and are
excluded from the computation of net loss per share.

3.  INVENTORIES

The composition of inventories is as follows:
                                                                          
                                                                          
                                      March 31,              September 30,
                                        1997                     1996     
                                     ---------               ------------
    Raw materials                    $   475                     $546
    Work-in process                    4,073                    3,356
    Finished goods                     1,378                    1,725
                                     ---------               ------------
                                      $5,926                   $5,627    
                                     ---------               ------------
                                     ---------               ------------
             
4.  MAGNES-Registered Trademark- WHOLE HEAD SYSTEM PRODUCTION AND DELIVERY RISK

The Company's backlog at March 31, 1997 amounted to $14,149,000 and is composed
primarily of orders for the new Magnes 2500 Whole Head Magnetic Source Imaging
System ("Magnes 2500 WH") The Company has shipped seven (7) of its  Magnes 2500
WH systems and as of March 31, 1997 has received two (2) final acceptances. The
delay in receipt of customer acceptances is primarily due to a hardware upgrade,
the need for which was not identified prior to installing the systems at
customer sites, and additional software development required to meet customer
contractual agreements. The required hardware upgrades were shipped to customer
sites during the quarter, and were either installed or in the process of
installation at the customer sites requiring the upgrades.  The Company
anticipates that the additional system hardware upgrade and software
developments will be completed for the remaining shipped systems during the
third and fourth quarters of fiscal year 1997, although there can be no
assurances that this will be accomplished.  In the event that the hardware
upgrade and software development are not completed as anticipated, the remaining
customer final acceptances could be further delayed, which could have a material
adverse effect on the cash flow and cash resources of the Company.

                                       5

<PAGE>

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

Except for the historical information contained herein, the following discussion
may contain (and the Notes to the Consolidated Financial Statements may contain)
forward-looking statements that involves risks and uncertainties.  The Company's
future results could differ materially from those discussed here.  Factors that
could cause or contribute to such differences include, but are not specifically
limited to, failure to satisfy performance obligations, timely product
development, changes in economic conditions in various markets the Company
serves, and uncertainty regarding the Company's patents and propriety rights, as
well as the other risks detailed in this section.  The Company does not
undertake to update the results discussed herein as a result of changes in risks
or operating results.

Biomagnetic Technologies, Inc. ("BTi") is a leader in magnetic source imaging
("MSI") and has developed the Magnes system, an instrument designed to assist in
the noninvasive diagnosis of a broad range of medical disorders.  The Magnes
system developed by the Company uses advanced superconductor technology to
measure and locate the source of magnetic fields created by the human body. 
While traditional medical imaging methods provide anatomical detail, the
measurement of the body's magnetic fields by MSI provides information about
normal and abnormal functions of the brain, heart and other organs.  The Company
is focusing the development of its technology on potentially large commercial
market applications such as brain surgery, the diagnosis and surgical planning
for treatment of epilepsy and life-threatening cardiac arrhythmias.

OVERVIEW

Since 1984, the primary business of the Company has been the development of
magnetic source imaging ("MSI") systems that measure magnetic fields generated
by the human body and assist in the noninvasive diagnosis of a broad range of
medical disorders.  The measurement of the body's magnetic fields by MSI
provides information about the normal and abnormal functions of the brain, heart
and other organs. BTi is focusing the development of its MSI system on large
potential commercial market applications such as brain surgery and the diagnosis
of and surgical planning for treatment of epilepsy and life-threatening cardiac
arrhythmias.

Nineteen (19) Magnes systems were installed in medical and research institutions
worldwide at the end of the second quarter 1997.  To date, more than 5,000 MSI
examinations have been performed on patients and control subjects at the
Company's application development sites. Related findings by BTi and its
collaborators have been published in more than 75 scientific and medical papers.
Since the first reimbursement for MSI procedures was received in September 1993,
77 insurance companies have approved reimbursement for certain MSI procedures
performed with the Company's Magnes MSI systems.  
 
In fiscal 1995, BTi announced development of the Magnes 2500 WH, an expansion of
the existing Magnes I and Magnes II systems product line.  Development of the
Magnes 2500 WH hardware was substantially completed in fiscal year 1996. The
Magnes 2500 WH allows simultaneous examination of the entire brain and is
designed for evaluating ambulatory or critically ill patients in a seated or
fully reclined position. The Company commenced shipments of its Magnes 2500 WH
prior to the end of fiscal year 1996. However, although the Company received
provisional acceptance from two customers, no final acceptances were received
either in fiscal year 1996 or in the first quarter of fiscal year 1997 which
ended December 31, 1996. In the second quarter of fiscal year 1997 which ended
March 31, 1997, the Company received its first final acceptances from two
customers for its Magnes 2500 WH system. The delay in receipt of customer final
acceptances is primarily due to a hardware upgrade, the need for which was not
identified prior to installing the systems at customer sites, and additional
software development required to meet customer contractual requirements.

The current price of BTi's MSI systems ranges from approximately $1.5 to $2.5
million, depending upon system configuration.  A significant portion of the
Company's sales have been, and are expected to continue to be, in foreign
markets.  The Company generally prices its European sales in the currency of the
country in which the product is sold and the prices of such products in dollars
will vary as the value of the dollar fluctuates against the quoted foreign
currency price.  There can be no assurance that currency fluctuations will not
reduce the dollar return to the Company on such sales.  The Company periodically
enters into forward exchange contracts to hedge such foreign currency exposure.

                                       6

<PAGE>

RESULTS OF OPERATIONS

Total revenues for the second quarter of fiscal 1997 were $1,899,000 compared to
$340,000 for the second quarter of fiscal 1996. Net loss in the second quarter
of fiscal 1997 amounted to $958,000 compared to a net loss of $3,148,000 for the
comparable period in the prior fiscal year. The increase in revenues for the
second quarter resulted from the final acceptances of two (2) Magnes 2500 WH
systems, whereas, in the prior year's second quarter there were no Magnes 2500
WH systems shipped or accepted.
  
Revenues for the first six months of fiscal 1997 amounted to $2,215,000 compared
to $535,000 for the first six months of the prior fiscal year 1996.  The net
loss for the same periods was $3,074,000, and $6,221,000, respectively.  The
revenues for the first six months of fiscal 1997 resulted from the sale and
final acceptance of two (2) Magnes 2500 WH systems and service contract income
for Magnes I and Magnes II systems, whereas in the first six months of fiscal
1996 the Company's revenue consisted solely of  Magnes components and service
contract income for Magnes I and Magnes II systems, sold in prior fiscal years.
  
Research and development expenses  amounted to $888,000 and $1,888,000 for the
three and six month periods ended March 31, 1997.  In fiscal year 1996 these
expenses amounted to $1,986,000 and $3,510,000, respectively, for the comparable
periods.  The decrease is due to reduction of research and development expenses
related to the Magnes 2500 WH system.

Marketing and sales expenses which amounted to $473,000 in the second quarter of
fiscal 1997, decreased by $288,000 versus the comparable period in fiscal 1996.
For the six months of fiscal 1997 these expenses amounted to $1,240,000 a
decrease of $263,000 versus the same period of the prior year.  The current
quarter and first half year decreases resulted primarily from the restructure of
operations, including a reduction in personnel, which commenced in December
1996.

General and Administrative expenses amounted to $438,000 and $935,000 for the
three and six month periods ended March 31, 1997. In fiscal year 1996 these
expenses amounted to $565,000 and $1,133,000, respectively for the comparable
periods.  The decrease reflects expense reductions initiated in December 1996 in
connection with the restructuring of  operations of the Company. 

Order backlog for the Company's products at March 31, 1997 was $14,149,000, as
compared to $11,959,000 at March 31, 1996 and $16,254,000 at September 30, 1996.
In the second quarter of fiscal year 1997 the receipt of final customer
acceptances of two (2) Magnes 2500 WH systems, and the reporting of $1,503,000
of product revenue associated with the two systems is the primary factor for the
reduction in backlog as of March 31, 1997 as compared to the September 30, 1996
backlog.  There were no new system orders received in either the first or second
quarter of the current fiscal year.  Final customer acceptances of the remaining
shipped Magnes 2500 WH systems are pending for the reasons stated above.

LIQUIDITY, CAPITAL RESOURCES 

At March  31, 1997 the Company had net working capital deficit of $2,619,000, an
increase in deficit of $616,000 from the end of the first quarter of the current
fiscal year, and a decrease of $416,000 from the September 30, 1996 net working
capital deficit of $3,035,000. The increase in the working capital deficit is
primarily due to  the loss of $959,000 in the second quarter of this year. 
 
Current liabilities at March 31, 1997 include customer deposits totaling
$9,100,000, of which $2,959,000 is secured by standby letters of credit through
a credit facility with a bank.

Based on the Company's current operating plans, capital and working capital
expenditures necessary to support the completion of engineering development, and
production of the Company's products through September 30, 1997 are expected to
substantially exceed cash generated from operations and will result in a further
decline in the Company's liquidity.  As of March 31, 1997 five of the Magnes
2500 WH systems  were shipped and installed but were not sufficiently complete
to permit final customer acceptances due to the need for certain hardware
upgrades and additional operations software required by the customers.
Recognition of revenue on these systems can, therefore, not take place until
these customer requirements are completed. 

                                       7

<PAGE>

The Company's ability to meet its expected cash needs during fiscal 1997 will
depend on a number of factors, including the Company's ability to timely
complete the Magnes 2500 WH system hardware upgrade at all customer sites at
which systems are installed, and Magnes 2500 WH software development, the
market's acceptance and sales of the Magnes WH system, as well as the Company's
ability to raise working capital as may be needed which cannot be accurately
predicted at this time.  The Company may also attempt to obtain additional
sources of funding through government grants and strategic alliances with other
entities.  However, there can be no assurance that additional funds will be
available when needed and on terms favorable to the Company, that grant
applications will be approved or funded, that applications of the Company's
technology will be successfully developed or that any agreements will be reached
related to strategic alliances.  Should additional funding not be available, the
Company would be required to significantly reduce the scope of its operations.

ADDITIONAL RISK FACTORS

The Company believes that the Magnes 2500 WH final development will be completed
in fiscal year 1997.  Although significant effort continues to be expended to
complete the engineering development so that the remaining shipments will be
accepted by the customers prior to the end of fiscal year 1997, there can be no
assurance that this will be accomplished.  In the event such development is not
completed as anticipated, customer final acceptances will be further delayed,
which would have a further material adverse effect on the Company's cash flow
and cash resources. Furthermore, the Company generally recognizes revenues on a
contract only after customer final acceptance of the system.  Thus, there is a
delay varying typically from one month to three or more months (or, in the case
of special problems as have been experienced with Magnes 2500 WH, longer) from
the time shipment takes place and the system is installed at the customer site,
tested and adjusted and final acceptance is obtained from the customer before
revenue is recognized by the Company.

Further delay in final customer acceptances would necessitate the need to obtain
additional working capital during fiscal year 1997 since $2,959,000 of customer
deposits are secured and are, therefore, not available to be used as working
capital until such time as system shipments take place, are installed and
accepted by the customer, and the customer deposit guarantees are released.

To date the Company has been engaged principally in research and development
activities, and has made only low volume sales to research and medical
institutions primarily in Europe and Japan, and has not made any MSI system
sales for commercial/clinical use in the U.S.  Such sales require prior FDA
approval.  The Company has secured FDA approval for its Magnes I System, has
received 510(k) clearance to market its Magnes II System in the U.S., and has
an application pending for 510(k) clearance for its Magnes 2500 WH system. There
can, however, be no assurance that the Company will receive such approval in the
near future or at all.  

The Company is dependent on its Magnes systems as its principal product for
which there are currently few demonstrated clinical applications.  Additional
clinical applications development needs to be conducted with the MSI system at
major medical centers before the Company can begin to penetrate the commercial
clinical market.  There can be no assurance that a market will develop for
diagnostic or monitoring uses of the MSI system.

The Company's commercial success is highly dependent on the availability of
reimbursement for procedures using its MSI system.  To date reimbursements from
third-party payors are on a case-by-case basis.  As of March 31, 1997, and since
the initial payment in September 1993, there have been a total of 162
reimbursements from 77 different third party payors in the U.S. There is no
assurance that third party reimbusements will become more widely available.
Reimbursement is not currently provided for such procedures by the United States
government, nor is there any assurance that the U.S. government will authorize
or budget for such procedures in the future. The Company also cannot predict
what legislation relating to its business or the health care industry may be
enacted in the future, including legislation relating to third party
reimbursement, or what effect such legislation may have on the results of its
operations.  Regardless of legislation, industry trends are not favorable for
generous third-party reimbursement of diagnostic procedures requiring big-ticket
equipment.

The Company operates in an industry characterized by rapid technological change.
New products using other technologies or improvement of existing products may
reduce the size of the potential markets for the Company's products, and may
render them obsolete or non-competitive by competitors' development of new or
different products using technology or imaging modalities that may provide or be
perceived as providing greater value than the Company's products.

                                       8

<PAGE>

Additionally, there has been recently, and continues to be, ongoing significant
price competition from the Company's competitors for the currently limited
number of whole head magnetic source imaging systems being purchased worldwide. 
This aggessive competition is likely to affect potential profitability of the
Company's whole head system, the extent to which is not presently determinable. 


                                       9

<PAGE>

                   PART II--OTHER INFORMATION


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company held its Annual Meeting of Shareholders on March 18, 1997 and
proxies for such meeting were solicited pursuant to Regulation 14.  There was no
solicitation in opposition to the Company's nominees for directors as listed in
the proxy statement and all  such nominees were elected.  In addition, the
following matters were adopted by the Shareholders at the Annual Meeting.

(a) Amend the Articles of Incorporation to increase  the authorized number of
    shares of Common Stock from 60,000,000 to 100,000,000.

         For - 43,737,215      Against - 143,000      Abstain - 109,161

(b) Approve the Company's 1997 Stock Incentive Plan (the "Option Plan") 
    reserving 3,000,000 shares of Common Stock for issuance over the 10 year 
    term of the Option Plan.

         For - 35,256,231      Against - 296,910      Abstain - 104,711

(c) Amend the 1992 Employee Stock Purchase Plan (the "Purchase Plan") to 
    increase by the number of shares of Common Stock authorized for issuance 
    over the term of the Purchase Plan by an additional 450,000 shares.  

         For - 38,666,126      Against - 259,413      Abstain -105,811

(d) To ratify the selection of Price Waterhouse LLP as independent accountants
    for the fiscal year ending September 30, 1997

         For - 43,870,215      Against - 36,600       Abstain - 90,661

There were 1,205,098 broker nonvotes for the elections of directors and item (d)
above.


ITEM 6 . EXHIBITS AND REPORTS ON FORM 8-K.

No reports on Form 8-K have been filed during the quarter ended March 31, 1997. 
The exhibits filed as part of this report are listed below.


         EXHIBIT NO.              DESCRIPTION
         -----------              -----------
             3.1                  Certificate of Amendment of Articles of 
                                  Incorporation
             27                   Financial Data Schedule


                                      10

<PAGE>

                                      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.


BIOMAGNETIC TECHNOLOGIES, INC.



                  April 25, 1997            /s/ D. Scott Buchanan
Date                                        ------------------------------
                                            D. Scott Buchanan
                                            President and Chief Executive
                                            Officer

                  April 25, 1997            /s/ Herman Bergman
Date                                        ------------------------------
                                            Herman Bergman
                                            Vice President of Finance, Chief
                                            Financial Officer
                                            Secretary

                                      11