SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               AMENDMENT NO. 1 TO
                                  FORM 10-KSB/A

|X|      Annual Report pursuant to Section 13 or 15(d) of the
         Securities Act of 1934 (fee required)

For the fiscal year ended December 31, 1997, or

|_|      Transition report pursuant to Section 13 or 15(d) of the
         Securities Exchange Act of 1934 (no fee required)

For the transition period from ____________ to ______________.

Commission File No. 0-12575

                         ARIZONA INSTRUMENT CORPORATION
--------------------------------------------------------------------------------
           (Name of small business issuer as specified in its charter)

           Delaware                                             86-0410138
--------------------------------------------------------------------------------
(State or other jurisdiction of                                (IRS Employer
 incorporation or organization)                              Identification No.)

4114 East Wood Street, Phoenix, AZ                                  85040
--------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)

Issuer's telephone number, including area code:  (602) 470-1414

Securities registered pursuant to Section 12(b) of the Act:   None

Securities registered pursuant to Section 12(g) of the Act:   Common Stock, $.01
par value

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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

As of April 27,  1998,  the  aggregate  market value of the voting stock held by
non-affiliates of the registrant was $8,202,876.867.  The aggregate market value
is  computed  with  reference  to the  average bid and asked price of $1.3282 as
reported  on the Nasdaq  SmallCap  Market for April 27,  1998.  Shares of Common
Stock held by each  officer and director and by each person who owns 10% or more
of the  outstanding  Common Stock have been excluded in that such persons may be
deemed  to  be  affiliates.  This  determination  of  affiliate  status  is  not
necessarily conclusive.

|_|      Check if  disclosure  of  delinquent  filers in response to Item 405 of
         Regulation S-B is not contained herein,  and will not be contained,  to
         the best of Registrant's  knowledge, in definitive proxy or information
         statements incorporated by reference in Part III of this Form 10-KSB or
         any amendment to this Form 10-KSB.
<PAGE>
         As of April 27, 1998, 6,819,582 shares of Common Stock ($.01 par value)
were outstanding.

         Arizona Instrument Corporation (the "Company") hereby amends its Report
on Form 10-KSB for the year ended  December 31, 1997 by adding  thereto Items 9,
10, 11, and 12, as set forth below,  by amending Item 13 thereto,  and by adding
thereto the signature of the Company's principal accounting officer.


Item 9.  Directors, Executive Officers, Promoters and Control Persons.

         The  names of the  directors  and  certain  executive  officers  of the
Company, and certain information about them, are set forth below.

<TABLE>
<CAPTION>
Name                                      Age        Principal Occupation
----                                      ---        --------------------
<S>                                       <C>        <C>
George G. Hays                            42         Chairman of the Board, President and Chief Executive
                                                     Officer of the Company.  Director of the Company
                                                     since November 1997.  Mr. Hays joined the Company
                                                     in March 1997 as Vice President of Finance, Chief
                                                     Financial Officer and Vice President of Manufacturing
                                                     of the Company.  In November 1997, Mr. Hays was
                                                     elected President and Chief Executive Officer of the
                                                     Company.  In January 1998, Mr. Hays was elected
                                                     Chairman of the Board of Directors.  Prior to joining
                                                     the Company, Mr. Hays was president and founder of
                                                     Hays Financial Group, Inc., an investment banking
                                                     firm, since 1986.  Mr. Hays is still President of Hays
                                                     Financial Group, Inc.
Walfred R. Raisanen                       63         Vice President of Engineering and Treasurer of the
                                                     Company.  Director of the Company since 1981.  He
                                                     served as Chairman of the Board of Directors from the
                                                     inception of the Company in 1982 until his resignation
                                                     in January 1998.  From 1986 until January 1998 he
                                                     served as Vice President of Research and
                                                     Development, and became Vice President of
                                                     Engineering in January 1998.  From 1981 until 1986 he
                                                     was the President and Treasurer of the Company.  Mr.
                                                     Raisanen was re-elected Treasurer in 1991.  From June
                                                     1976 until January 1981 he was President and a
                                                     Director of Motorola Process Control, Inc., the
                                                     predecessor to the Company.
</TABLE>
                                       -2-
<PAGE>
<TABLE>
<S>                                       <C>        <C>
S. Thomas Emerson                         57         Director of the Company since 1989. Independent
                                                     Management Consultant.  Chairman of Xantel
                                                     Corporation, a private company engaged in computer
                                                     communications, from August 1992 to January 1998.
                                                     Dr. Emerson was Chief Executive Officer of Syntellect
                                                     Incorporated, a manufacturer of voice response
                                                     systems, from 1984 to April 1992.  Prior to founding
                                                     Syntellect in 1984, Dr. Emerson was a founder of
                                                     Periphonics Corporation of Bohemia, New York where
                                                     he served for 14 years in various executive capacities.
Harold D. Schwartz                        72         Director of the Company since January 1998.
                                                     President of Chez & Schwartz, Incorporated, a
                                                     marketing and sales consulting firm, since 1973. Mr.
                                                     Schwartz currently serves on the Board of Directors of
                                                     Cobra Electronics Corporation, a public company.
Steven G. Zylstra                         43         Director of the Company since 1996.  Director of
                                                     Business Development for Simula Technologies, Inc.,
                                                     (a new subsidiary, formerly a division of Simula
                                                     Government Products, Inc.) of Phoenix, Arizona, since
                                                     1995.  The company specializes in the development and
                                                     production of high-tech transportation seating and
                                                     safety systems, composite technologies, and ballistic
                                                     armor systems.  From 1984 to 1995, Mr. Zylstra
                                                     served as General Manager of General Pneumatics
                                                     Corporation, Western Research Center, of Scottsdale,
                                                     Arizona.  He is a Co-Founder and Member of the
                                                     Governor's Arizona Science and Technology Council,
                                                     Co-Founder and Director of the Arizona Innovation
                                                     Network and Director of the Arizona Technology
                                                     Incubator, among other outside activities.
Susan Berry                               49         Secretary of the Company.  Ms. Berry was named
                                                     Secretary of the Company in early 1989.  She has
                                                     served as Human Resources Manager for the Company
                                                     since 1985.  Prior to her position with the Company,
                                                     Ms. Berry was in corporate administration for Inter-
                                                     Tel, Inc.
Linda Shepherd                            46         Controller and Chief Accounting Officer of the
                                                     Company.  Ms. Shepherd was named Controller and
                                                     Chief Accounting Officer in mid-1997.  Ms. Shepherd
                                                     has been an accountant for the Company since 1984.
                                                     Prior to her position with the Company, she served as
                                                     an accountant for a local trucking firm for nine years.
</TABLE>
                                       -3-
<PAGE>
<TABLE>
<S>                                       <C>        <C>
Allen D. Porter                           40         Vice President of Marketing of the Company.  Allen
                                                     D. Porter was named Vice President of Marketing in
                                                     1996.  Mr. Porter has been with the Company since
                                                     1985, working in sales, sales management and product
                                                     management.  Prior to his position with the Company,
                                                     he was program director for an Arizona-based
                                                     behavioral health agency.
</TABLE>
Compliance With Section 16(a) Reporting Requirements

         Under  the  securities  laws  of  the  United  States,   the  Company's
directors,  its executive officers, and any persons holding more than 10% of the
Company's  Common Stock are required to report  their  initial  ownership of the
Company's  Common  Stock and any  subsequent  changes in that  ownership  to the
Securities  and Exchange  Commission.  Specific due dates for these reports have
been  established and the Company is required to disclose any failure to file by
these dates.  All of these filing  requirements  were satisfied  during the year
ended December 31, 1997,  except that Quinn  Johnson,  a director of the Company
until January 1998, reported a December  disposition of shares on a Form 5 dated
February 3, 1998.

         Additionally,  the Company has not received copies of ownership reports
due from Bridge Capital Investors II, which formerly  beneficially owned greater
than 10% of the Company's  outstanding Common Stock, and thus has no information
regarding  whether  such reports have been filed or filed on a timely basis with
the Commission.  In making these  disclosures,  the Company has relied solely on
written  representations  of its directors and executive  officers and copies of
the reports that they have filed with the Commission.
                                       -4-
<PAGE>
Item 10.  Executive Compensation

                           SUMMARY COMPENSATION TABLE

The  following  table sets forth,  with respect to the years ended  December 31,
1995, 1996 and 1997, compensation awarded to, earned by or paid to the Company's
Chief Executive  Officer and each of the Company's other executive  officers who
were serving as an  executive  officer at December 31, 1997 and whose salary and
bonus  aggregated at least $100,000 for services  rendered to the Company during
fiscal 1997.

<TABLE>
<CAPTION>
                                            Annual Compensation               Long-Term Compensation
                                      ------------------------------------  --------------------------
                                                                                                         Pay-
                                                                                                         ----
                                                                                    Awards               outs
                                                                            ---------------------------  ----
                                                              Other         Re-             Securities
                                                              Annual        stricted        Underlying     LTIP
                                                              Compen-       Stock            Options/      Pay-   All Other
                                                                sation      Awards             SARs        outs   Compen-
Name and Principal Position   Year    Salary($)    Bonus          ($)           (#)           (#)(2)       ($)    sation($)
---------------------------   ----    ---------    -----      ------------  -------------    --------     -----   ---------
<S>                           <C>      <C>         <C>         <C>             <C>          <C>            <C>    <C>         
George G. Hays,               1997     113,749      6,300      4,050(1)        0             75,000         0     1,228(4)    
President and Chief                                                                                                       
Executive Officer (5)                                                                                                     
John P. Hudnall, Former       1997     157,700     18,750      4,950(1)        0                  0         0     1,762(4)    
President and Chief           1996     161,666     56,000      5,400(1)        0                  0         0     1,603(4)    
Executive Officer (6)         1995     154,400          0      5,400(1)        0            120,000(3)      0     1,518(4)    
Walfred R. Raisanen,          1997     166,740     29,250          0           0                  0         0     4,981(4)    
Vice President of             1996     153,622     42,000          0           0                  0         0     4,309(4)    
Engineering                   1995     147,262          0          0           0            100,000(3)      0     3,771(4)    
Allen D. Porter, Vice         1997     114,192          0          0           0                  0         0       650(4)    
President of Marketing        1996     105,762          0          0           0             55,000         0         0       
                              1995      87,040          0          0           0             15,000         0         0       
</TABLE>                                                 

(1)      Automobile allowance.

(2)      Consists entirely of stock options.

(3)      Represents  24,520 and 52,760 new option grants to Messrs.  Hudnall and
         Raisanen  respectively,  in 1995.  All remaining  options shown in this
         table as  granted in 1995  represent  repricing  of options  granted in
         prior
         years.

(4)      Life insurance premium payments.

(5)      Mr. Hays commenced his employment with the Company on March 10, 1997.

(6)      Mr.  Hudnall's  employment  with the Company was terminated on November
         15, 1997.
                                       -5-
<PAGE>
                    OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)

         The following  table sets forth  information  about stock option grants
during the last  fiscal  year to the  executive  officers  named in the  Summary
Compensation Table.


<TABLE>
<CAPTION>
                                                        Individual Grants
                           --------------------------------------------------------------------
                            Number of       % of Total
                            Securities      Option/SARs
                            Underlying       Granted
                          Options/SARs    to Employees in    Exercise or Base       Expiration
     Name                  Granted (#)      Fiscal Year        Pricing ($/Sh)         Date
--------------             -----------      -----------      ----------------       ---------- 
<S>                         <C>                <C>                <C>                <C> 
George G. Hays (2)          75,000(3)          94%                $1.81              5/2/2007
John P. Hudnall (4)             0               --                  --                  --
Walfred R. Raisanen             0               --                  --                  --
Allen D. Porter                 0               --                  --                  --
</TABLE>                                                          
----------------------

(1)      Consists entirely of stock options.

(2)      Mr. Hays commenced his employment with the Company on March 10, 1997.

(3)      Vest in five equal  installments with the first installment  vesting on
         May 2, 1998.

(4)      Mr.  Hudnall's  employment  with the Company was terminated on November
         15, 1997.
                                       -6-
<PAGE>
                 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                     AND FISCAL YEAR-END OPTION VALUE TABLE

         The  following  table  sets  forth  information  with  respect  to  the
executive  officers named in the Summary  Compensation  Table concerning  option
exercises during 1997 and the number and value of options outstanding at the end
of the last fiscal year.

<TABLE>
<CAPTION>
                                                           Number of Unexercised            
                                                          Options/SARs at Fiscal        Value of Unexercised in-the-
                                                          ----------------------           Money Options/SARs at
                                                            Year-End (#)(1)               Fiscal Year End ($)(3)
                                                            ---------------               ----------------------
                                                         Exercisable   Unexercisable    Exercisable     Unexercisable
                           Shares                        -----------   -------------    -----------     -------------
                          Acquired        Value
                             on         Realized
       Name              Exercise(#)     ($)(2)
---------------------    -----------    --------
<S>                         <C>           <C>              <C>           <C>                <C>              <C>
George G. Hays (4)            0             0                    0        75,000             (6)              (6)
John P. Hudnall (5)           0             0               24,000        72,000             (6)              (6)
Walfred R. Raisanen           0             0               40,000        60,000             (6)              (6)
Allen D. Porter               0             0               17,000        53,000             (6)              (6)
</TABLE>


(1)      No SARs are outstanding.

(2)      Calculated  based  on the  closing  price  as  reported  on the  Nasdaq
         SmallCap  Market for the date of  exercise  minus the  exercise  price,
         multiplied by the number of shares acquired on exercise.

(3)      Value as of  December  31, 1997 is based upon the average bid and asked
         price of $0.90 as reported on the Nasdaq  SmallCap  Market for December
         31, 1997, minus the exercise price,  multiplied by the number of shares
         underlying the
         options.

(4)      Mr. Hays commenced his employment with the Company on March 10, 1997.

(5)      Mr.  Hudnall's  employment  with the Company was terminated on November
         15, 1997.

(6)      None of these options were in-the-money on December 31, 1997.


Employment/Change of Control Arrangements

         Effective  January 1, 1998,  the  Company  entered  into an  employment
agreement  with  George G. Hays  pursuant  to which Mr.  Hays agreed to serve as
President and Chief Executive Officer.  The agreement provides for a base annual
salary of $165,000,  subject to merit increases,  plus an annual incentive bonus
of at least 30% of annual salary based on an incentive  bonus plan  administered
by the Board of  Directors.  Mr.  Hays is also  entitled to  participate  in any
benefit  arrangements  available  to  executive  officers of the  Company.  Upon
termination of the employment  agreement  without cause, Mr. Hays is entitled to
receive an amount equal to the compensation due him over the balance of the term
of the employment  agreement,  and to participate in applicable benefit programs
for the balance of the term
                                       -7-
<PAGE>
of the  employment  agreement.  The agreement  terminates on March 31, 2000, and
will  automatically   renew  for  additional  one-year  terms  until  notice  of
non-renewal  by  the  Company.   This  agreement  replaces  Mr.  Hays'  previous
employment agreement with the Company dated April 1, 1998, pursuant to which he
was employed as Vice President and Chief Financial Officer.

         Effective  November  5, 1992,  the  Company  entered  into a  five-year
employment  agreement  with Walfred R. Raisanen  pursuant to which Mr.  Raisanen
agreed to serve as Vice President of Research and  Development for a base annual
salary  of  $120,000,  which  is  to be  adjusted  annually  for  cost-of-living
increases. Mr. Raisanen's employment agreement has been renewed according to its
terms  effective  November 5, 1997. Mr. Raisanen is also entitled to participate
in any benefit arrangements available to executive officers of the Company. Upon
termination  of the  employment  agreement  by the Company  without  cause,  Mr.
Raisanen is entitled to receive a cash payment equal to the compensation due him
over the balance of the term of the employment agreement,  and to participate in
applicable  benefit  programs  for the  balance  of the  term of the  employment
agreement

         Effective  June  3,  1996,  the  Company   entered  into  a  three-year
employment  agreement with John P. Hudnall,  the Company's  former President and
Chief  Executive  Officer.  The  Board of  Directors  terminated  Mr.  Hudnall's
employment on November 15, 1997. The agreement provided for a base annual salary
of $165,542, which was to be adjusted annually for cost-of-living increases. Mr.
Hudnall was also entitled to participate in any benefit  arrangements  available
to  executive  officers  of the  Company.  Upon  termination  of the  employment
agreement by the Company  without cause,  Mr. Hudnall was entitled to receive an
amount  equal to the  compensation  due him over the  balance of the term of the
employment agreement,  and to participate in applicable benefit programs for the
balance of the term of the employment agreement.

         The Company's  1991 Option Plan  provides  that options  granted to any
executive officer or director of the Company will become immediately exercisable
and vested in full upon the occurrence,  before the expiration or termination of
such option,  of (a) delivery of written  notice of a  stockholders'  meeting at
which the stockholders will consider a proposed merger,  sale of assets or other
reorganization  of the Company,  (b) the acquisition by any person of securities
representing  25% or more of the total  number of votes  entitled to be case for
the election of directors of the Company, (c) commencement of a tender offer for
the stock of the Company,  or (d) failure,  at any annual or special  meeting of
stockholders  following an election contest,  of any of the persons nominated by
the Company to win election seats on the board of directors.

         The  Company's  1991 Option Plan further  provides  that subject to the
above  provisions,  in the event a merger  or  similar  reorganization  that the
Company does not survive,  a sale of all or  substantially  all of the assets of
the Company,  or the  dissolution  and  liquidation of the Company,  shall cause
every option outstanding under the 1991 Option Plan to terminate,  to the extent
not then  exercised,  except to the extent that any  surviving  entity agrees to
assume the 1991 Option Plan and/or the obligations under any such option.

Compensation of Directors

         Outside  directors are currently paid $1,000 plus expenses per Board or
committee meeting attended. Pursuant to the 1991 Stock Option Plan, non-employee
directors are automatically  granted options exercisable for 2,500 shares at the
market  price on the date of grant upon  joining the Board and on each January 1
thereafter. The options become exercisable six months after grant and expire two
years
                                       -8-
<PAGE>
after  termination of Board  service.  Directors who are employees are only paid
their expenses (if any) for attendance at meetings.


Item 11.      Security Ownership of Certain Beneficial Owners and Management

         The following  table sets forth  information  regarding the  beneficial
ownership  of the  Company's  Common Stock at April 27, 1998 with respect to (i)
each director and director nominee of the Company,  (ii) each executive  officer
named in the Summary  Compensation  Table set forth herein,  (iii) all directors
and executive  officers as a group, and (iv) each person known by the Company to
be the  beneficial  owner  of more  than  5% of the  outstanding  shares  of the
Company's Common Stock:

                  Shares of Common Stock Beneficially Owned (1)
                  ---------------------------------------------


                                      Number                  Percent
Name and Address (2)                 of Shares                of Total
--------------------                 ---------                --------
George G. Hays (6)                   92,000                     1.3%
                                             
Walfred R. Raisanen (3)              216,400                    3.1%
                                             
S. Thomas Emerson (3)                40,000                      (4)
                                             
John P. Hudnall (7)                  58,000                      (4)
                                             
Harold D. Schwartz (3)(8)            154,350                    2.2%
                                             
Steven G. Zylstra (3)                8,100                       (4)
                                             
Allen D. Porter (3)                  35,671                      (4)
                                             
All directors and executive          643,647                    9.4%
officers as a group (3) (5)          
(9 persons)

----------------------------------------


(1)      Beneficial  ownership is determined in accordance with the rules of the
         Securities  and  Exchange  Commission  ("SEC") and  generally  includes
         voting or investment  power with respect to  securities.  In accordance
         with SEC rules,  shares  which may be acquired  upon  exercise of stock
         option which are  currently  exercisable  or which  become  exercisable
         within 60 days of the date of the table are deemed  beneficially  owned
         by the  optionee.  Except as  indicated  by  footnote,  and  subject to
         community property laws where applicable, the persons or entities named
         in the table above have sole voting and  investment  power with respect
         to all shares of Common Stock shown as beneficially owned by them.

(2)      Unless otherwise indicated,  the beneficial owner's address is: 
         c/o the Company, 4114 East Wood Street, Phoenix, Arizona 85040.

(3)      Includes  shares  issuable upon exercise of options which are currently
         exercisable  or become  exercisable  within 60 days of May 13,  1997 as
         applicable for each of the following individuals:

                           Hays           90,000 shares
                           Raisanen       60,000 shares
                           Emerson        20,000 shares
                           Hudnall        48,000 shares
                           Schwartz        2,500 shares
                           Zylstra         7,500 shares
                           Porter         26,000 shares
                                       -9-
<PAGE>
(4)      Less than one percent.

(5)      Includes  39,000 shares  issuable upon exercise of options (in addition
         to shares issuable upon exercise of options indicated in note 3).

(6)      Mr. Hays commenced his employment with the Company on March 10, 1997.

(7)      Mr.  Hudnall's  employment  with the Company was terminated on November
         15, 1997.

(8)      Mr.  Schwartz  joined the  Company's  Board of Directors on January 14,
         1998.


Item 12.      Certain Relationships and Related Transactions

         Settlement  Agreement.  On December 9, 1997,  Horizon  Engineering  and
Testing,  Inc.  ("Horizon"),  the  Company  and Quinn  Johnson,  entered  into a
Settlement Agreement (the "Settlement  Agreement") pursuant to which the parties
thereto  released each other from all claims arising under the Merger  Agreement
and Employment  Agreement  described below, and agreed to disburse 12,331 of the
49,030  shares of the  Company's  Common  Stock held in escrow  pursuant  to the
Merger  Agreement to the Company,  with the remaining  shares being disbursed to
Mr. Johnson as agent for the Horizon shareholders.  Mr. Johnson was President of
Horizon until his  resignation  from that position in September  1996, and was a
Director  of the Company  until his  resignation  from that  position in January
1998.

         Merger  Agreement.  On  September  30,  1992,  Horizon  was merged (the
"Merger") into a wholly-owned subsidiary of the Company pursuant to an Agreement
of Merger  (the  "Merger  Agreement").  Shareholders  of Horizon  received  cash
consideration  of  $190,000  and shares of the  Company's  Common  Stock.  Quinn
Johnson held 90% of the  outstanding  stock of Horizon at the time of the Merger
and received  529,328 shares of Common Stock in connection with the Merger.  The
Company  agreed to register  the shares of the  Company's  Common  Stock  issued
pursuant to the Merger Agreement under  applicable  federal and state securities
laws at any time after  April 1, 1993 upon the request of holders of 25% of such
shares and to keep such  registration  effective through September 30, 1995. Mr.
Johnson  has  agreed  to  indemnify  Horizon  and the  Company  against  certain
liabilities in connection  with the Company's  acquisition  of Horizon,  and has
placed  49,030  shares of the  Company's  Common  Stock in escrow in  connection
therewith.  The parties have agreed to release the escrowed  shares  pursuant to
the Settlement Agreement described above.

         Employment  Agreement.  Mr.  Johnson  served as  President  of  Horizon
pursuant to an Employment  Agreement  dated  September 30, 1992.  The Employment
Agreement  provided for a base salary of $125,000 over its four-year  term, with
annual adjustments tied to increases in the Consumer Price Index. The Employment
Agreement also provided for an annual bonus equal to (i) 15% of Horizon's pretax
profit (as defined)  with  respect to pretax  profit  representing  up to 15% of
Horizon's  gross  revenues;  and (ii) 20% of  Horizon's  pretax  profit  on that
portion of the pretax profit in excess of 15% of gross revenues,  with a maximum
bonus over the term of the four-year  agreement equal to $700,000.  In the event
of  termination of the Employment  Agreement by the Company  without cause,  Mr.
Johnson was entitled to receive (i) the  difference  between  $700,000 and bonus
payments prior to termination;  plus (ii) an amount equal to the then-applicable
annual base salary.

         Non-Competition  Agreement.  Pursuant  to a  Non-Competition  Agreement
dated  September 30, 1993, and in  consideration  of a cash payment of $350,000,
Mr.  Johnson  agreed to refrain from  competing  with Horizon until the later of
September 30, 1998 or two years after leaving the employment of Horizon, subject
to earlier termination under certain circumstances.
                                      -10-
<PAGE>
         Stock Registration. Pursuant to registration rights previously granted,
the  Company  filed a shelf  registration  statement  with  the  Securities  and
Exchange  Commission  ("SEC")  relating to 3,781,003  shares of its Common Stock
issued in connection with private placements in September 1992 and November 1993
and in  connection  with the  acquisition  of Horizon in  September  1992.  Also
included in the  registration  are 209,000  shares of Common Stock issuable upon
the exercise of warrants issued to Cruttenden & Co., Inc. ("Cruttenden") and its
assignees in connection with Cruttenden's  activities as placement agent for the
November  1993  private  placement.  The  registration  statement  was  declared
effective  by the SEC in  February  1994.  The  Company  has agreed that it will
maintain the  effectiveness  of the  registration  statement (i) until  November
1996, with respect to the shares issued in the November 1993 private  placement;
(ii) until  September  1995,  with respect to the shares issued in the September
1992 private  placement and the Horizon  acquisition;  and (iii) until two years
after  exercise,  with respect to shares  issuable upon exercise of the warrants
referred to above.  The  registration  statement as  originally  filed  included
465,001 shares  beneficially owned by Quinn Johnson,  which shares were acquired
by Mr. Johnson in connection  with the  acquisition of Horizon by the Company in
September 1992. In connection with the registration, Mr. Johnson agreed that his
registered  and other sales of the  Company's  Common Stock shall not exceed the
volume  limitations  set forth in Rule 144 under the  Securities Act of 1933, as
amended, subject to certain exceptions. The registration statement also includes
20,000  shares and 20,000  shares  beneficially  owned by S. Thomas  Emerson,  a
director of the Company,  and Stanley Weiss,  a former  director of the Company,
which shares were acquired in the November 1993 private  placement.  The Company
and the holders of the shares of Common Stock included in the registration  have
agreed to indemnify each other against certain liabilities.

         Other.
         ------

         During  September  1993,  the  Company  loaned  $45,000  to  Walfred R.
Raisanen,  a  director  and  executive  officer of the  Company.  The loan bears
interest at 10% per annum, is collateralized by a pledge of 15,000 shares of the
Company's  Common Stock and $30,000 of the cash value of a life insurance policy
covering Mr. Raisanen. During 1996, a $10,000 principal payment was made on this
loan, leaving a remaining balance of $35,000.  The note inducing this loan bears
interest at 10% and was due in December 1997. This loan has been paid in full.

         During April 1994, the Company  loaned $10,000 to John P. Hudnall,  the
former President and Chief Executive Officer of the Company. The note evidencing
this loan bears interest at 10% and was due in December 1997. This loan has been
paid in full by mutual  agreement  of the  Company  and Mr.  Hudnall  out of Mr.
Hudnall's  severance  payments  pursuant to the  termination  of his  employment
agreement. See "Employment/Change in Control Arrangements."

Item 13.      Exhibits and Reports on Form 8-K.

Financial  Statements.  The  following is a list of the  consolidated  financial
statements of Arizona  Instrument  Corporation and its subsidiaries  included in
Item 8 of Part II of the Company's Form 10-KSB filed on March 31, 1998.

Independent auditors' report.

Consolidated balance sheets - December 31, 1997 and 1996.

Consolidated  statements of operations - Years ended December 31, 1997, 1996 and
1995

Consolidated statements of shareholders' equity - Years ended December 31, 1997,
1996 and 1995
                                      -11-
<PAGE>
Consolidated  statements of cash flows - Years ended December 31, 1997, 1996 and
1995

Notes to consolidated financial statements

(a)      The following  exhibits are incorporated by reference or are filed with
         this Form 10-KSB, as indicated:

3.1      Composite of Certificate  of  Incorporation  of Registrant,  as amended
         through July 5, 1994.  Incorporated by reference from Registrant's Form
         8-A filed on June 26, 1996 (the "June 1996 8-A")

3.2      Bylaws of Registrant,  as amended.  Incorporated  by reference from the
         June 1996 8-A.

10.1*    Registrant's  1985 Stock Option Plan.  Incorporated  by reference  from
         Registrant's  Form 10-KSB for the year ended December 31, 1985 filed in
         March 1986.

10.2*    Registrant's  1985 Stock Purchase Plan.  Incorporated by reference from
         Registrant's Form S-8 filed on August 5, 1996.

10.3*    Registrant's  1991 Stock Option Plan.  Incorporated  by reference  from
         Registrant's Form S-8 filed on June 28, 1996.

10.4     Amended and Restated  Export-Import  Guaranteed Business Loan Agreement
         between  Registrant  and  Silicon  Valley  Bank  dated  February  1993.
         Incorporated  by reference from  Registrant's  Form 10-KSB for the year
         ended December 31, 1992 filed in March 1993 (the "1992 10-KSB").

10.5     Warrant Purchase  Agreement between  Registrant and Silicon Valley Bank
         dated  December  14,  1991.  Incorporated  by  reference  from the 1992
         10-KSB.

10.6     Loan Modification  Agreement between Registrant and Silicon Valley Bank
         dated November 7, 1995.  Incorporated by reference to Registrant's Form
         10-KSB for the year ended  December  31,  1995 filed on March 29,  1996
         (the "1995 10-KSB").

10.7     Promissory  Note  between  Registrant  and  Silicon  Valley  Bank dated
         November 7, 1995. Incorporated by reference to the 1995 10-KSB.

10.8     Loan Modification  Agreement between Registrant and Silicon Valley Bank
         dated March 24, 1997.  Incorporated by reference to  Registrant's  Form
         10-KSB for the year ended  December  31,  1997 filed on March 31,  1998
         (the "1997 10-KSB").

10.9     Promissory Note between  Registrant and Classic  Syndicate,  Inc. dated
         April 15, 1996. Incorporated by reference to the 1995 10-KSB.

10.10    Warrant Agreement  between  Registrant and Cruttenden & Co., Inc. dated
         November 30, 1993.  Incorporated  by reference from  Registrant's  Form
         10-QSB for the quarter  ended  September 30, 1993 filed on November 30,
         1993 (the "September 1993 10-QSB").

10.11    Lease Agreement between Registrant and Wood Street Limited  Partnership
         dated  September 1, 1993.  Incorporated by reference from the September
         1993 10-QSB.

10.12*   Employment  Agreement between  Registrant and Walfred R. Raisanen dated
         November 5, 1992. Incorporated by reference to the 1992 10-KSB.

10.13*   Employment  Agreement between Registrant and George G. Hays dated April
         1, 1997.  Incorporated by reference from  Registrant's  Form 10-QSB for
         the quarter ended March 31, 1997 filed on May 15, 1997.
                                      -12-
<PAGE>
10.14*   Employment  Agreement  between  Registrant  and  George G.  Hays  dated
         January 1, 1998. Incorporated by reference to the 1997 10-KSB.

10.15    Settlement  Agreement  among  Registrant,  Horizon  Acquisition Co. and
         Horizon Engineering and Testing, Inc. Filed herewith.

11.1     Statement  re  computation  of  per  share  earnings.  Incorporated  by
         reference to the 1997 10-KSB.

21.1     Subsidiaries  of  Registrant.  Incorporated  by  reference  to the 1997
         10-KSB.

23.1     Consent of Deloitte & Touche.  Incorporated  by  reference  to the 1997
         10-KSB.

27.      Financial Data Schedule.  Incorporated by reference to the 1997 10-KSB.

----------------------
* Management  contract or compensatory plan or arrangement  required to be filed
pursuant to Item 13(a) of Form 10- KSB.

(b)      The following Form 8-K was filed by Registrant  during the last quarter
         of the period covered by this Form 10- KSB:

         Form 8-K filed November 26, 1997 reporting  under Item 5 that George G.
         Hays had been  appointed  President  and  Chief  Executive  Officer  of
         Registrant,  and  John P.  Hudnall  had  resigned  from  the  Board  of
         Directors and his employment as President and Chief  Executive  Officer
         of Registrant had been terminated.

                                      -13-
<PAGE>
                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934 the  Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                                      ARIZONA INSTRUMENT CORPORATION




Date:  April 28, 1998                 By: /s/ George G. Hays
                                          -------------------
                                          George G. Hays
                                          President and Chief Executive Officer



                                      By: /s/ Linda Shepherd
                                          -------------------
                                          Linda Shepherd
                                          (Principal Accounting Officer)
                                      -14-