<PAGE>

                                       
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC. 20549
                                   FORM 10-QSB


(MARK ONE)

         [X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                  EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31,
                  1999 OR

         [   ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                  EXCHANGE ACT FOR THE TRANSITION PERIOD FROM ______ TO ______.


                         COMMISSION FILE NUMBER: 0-24738


                        LORONIX INFORMATION SYSTEMS, INC.
        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)



            NEVADA                                              33-0248747
(STATE OR OTHER JURISDICTION OF                               (IRS EMPLOYER
 INCORPORATION OR ORGANIZATION)                             IDENTIFICATION NO.)


                                       
                    820 AIRPORT ROAD, DURANGO, COLORADO 81301
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                    ISSUER'S TELEPHONE NUMBER: (970) 259-6161



         CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO BE FILED 
BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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. YES __X__ NO _____


         AS OF APRIL 16, 1999, THERE WERE 4,803,276 SHARES OF THE ISSUER'S 
COMMON STOCK OUTSTANDING.

<PAGE>

                        LORONIX INFORMATION SYSTEMS, INC.

                                      INDEX


<TABLE>
<S>                                                                          <C>
PART I.     FINANCIAL INFORMATION                                            PAGE NO.
                                                                             --------
                ITEM 1.    FINANCIAL STATEMENTS

                           CONDENSED CONSOLIDATED BALANCE SHEET                  1
                              AS OF MARCH 31, 1999

                           CONDENSED CONSOLIDATED STATEMENTS                     3
                              OF OPERATIONS FOR THE THREE MONTHS ENDED
                              MARCH 31, 1999 AND 1998

                           CONDENSED CONSOLIDATED STATEMENTS OF                  4
                              CASH FLOWS FOR THE THREE MONTHS ENDED
                              MARCH 31, 1999 AND 1998

                           NOTES TO CONDENSED CONSOLIDATED FINANCIAL             5
                              STATEMENTS

                ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF               7
                           FINANCIAL CONDITION AND RESULTS OF OPERATIONS


PART II.   OTHER INFORMATION

                ITEM 1.    LEGAL PROCEEDINGS                                    14

                ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K                     14


SIGNATURES.                                                                     15
</TABLE>

<PAGE>

                                       
                         PART I - FINANCIAL INFORMATION

                        LORONIX INFORMATION SYSTEMS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET

                                    ASSETS

<TABLE>
<CAPTION>
                                                                                     MARCH 31,
                                                                                        1999
                                                                               -----------------------
                                                                                    (UNAUDITED)
<S>                                                                            <C>
Current assets:                                                                 
     Cash and cash equivalents                                                             $3,072,575
     Accounts receivable:
        Trade, net of allowance for doubtful accounts
           of $478,434                                                                      4,259,174
        Officers and employees                                                                 26,828
     Inventory, net                                                                         2,004,973
     Prepaid expenses and other assets                                                        149,558
     Notes receivable, related parties                                                         38,454
                                                                               -----------------------

            Total current assets                                                            9,551,562

     Property and equipment, net of accumulated
          depreciation of $2,662,446                                                        4,029,605
     Capitalized software costs, net of accumulated
          amortization of $1,400,092                                                          934,710
     Notes receivable, related parties                                                         28,838
     Accounts receivable - officers and employees                                             132,856
     Deposits and other assets                                                                 24,432
                                                                               -----------------------

             Total assets                                                                 $14,702,003
                                                                               -----------------------
                                                                               -----------------------
</TABLE>

                                  (continued)

                                       1
<PAGE>

                         LORONIX INFORMATION SYSTEMS, INC.
                       CONDENSED CONSOLIDATED BALANCE SHEET

                       LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                      MARCH 31,
                                                                                         1999
                                                                                -----------------------
                                                                                     (UNAUDITED)
<S>                                                                             <C>
Current liabilities:
     Current installments of long-term debt                                                    $80,733
     Current installments of capital lease obligations                                           6,288
     Accounts payable                                                                        2,226,177
     Accrued liabilities                                                                       946,530
     Accrued commissions                                                                       267,000
                                                                                -----------------------

          Total current liabilities                                                          3,526,728

     Long-term debt, excluding current installments                                          1,055,946
                                                                                -----------------------

           Total liabilities                                                                 4,582,674
                                                                                -----------------------
                                                                                -----------------------

Stockholders' equity:
   Preferred stock, $.001 par value.  Authorized 2,000,000
     shares; no shares issued and outstanding.                                                -
   Common stock, $.001 par value.  Authorized 20,000,000
     shares; issued and outstanding 4,802,836 shares.                                            4,803
   Additional paid-in capital                                                               15,718,699
   Notes receivable from stockholders                                                        (147,883)
   Accumulated deficit                                                                     (5,456,290)
                                                                                -----------------------

          Total stockholders' equity                                                        10,119,329
                                                                                -----------------------

          Total liabilities and stockholders' equity                                       $14,702,003
                                                                                -----------------------
                                                                                -----------------------
</TABLE>

                                       
    See accompanying notes to condensed consolidated financial statements.

                                       2
<PAGE>

                        LORONIX INFORMATION SYSTEMS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                           THREE MONTHS ENDED
                                                                               MARCH 31,
                                                                        1999                1998
                                                                   ------------------------------------
                                                                               (UNAUDITED)
<S>                                                                <C>                    <C>
Systems, supplies and maintenance
   Revenue                                                             $7,390,036           $1,903,869
                                                                   ---------------     ----------------
Operating costs and expenses:
  Cost of revenue                                                       4,003,867            1,003,563
  Operations and customer support                                         530,135              347,924
  Selling, general and administrative                                   1,886,853              899,677
  Research and development                                                382,908              339,896
                                                                   ---------------     ----------------
        Total cost and expenses                                         6,803,763            2,591,060

        Income (loss) from operations                                     586,273            (687,191)

Other income (expense):
  Interest income                                                          31,396               31,843
  Interest expense                                                       (29,847)             (16,823)
  Other (expense) income, net                                               (667)                4,376
                                                                   ---------------     ----------------
                                                                              882               19,396

          Income (loss) before income taxes                               587,155            (667,795)

Income tax expense                                                         32,000                  800
                                                                   ---------------     ----------------

          Net income (loss)                                              $555,155           ($668,595)
                                                                   ---------------     ----------------
                                                                   ---------------     ----------------

Basic income (loss) per share                                               $0.12              ($0.14)
                                                                   ---------------     ----------------
                                                                   ---------------     ----------------

Diluted income (loss) per share                                             $0.11              ($0.14)
                                                                   ---------------     ----------------
                                                                   ---------------     ----------------

Weighted-average shares outstanding                                     4,734,279            4,646,186
                                                                   ---------------     ----------------
                                                                   ---------------     ----------------

Diluted weighted-average shares outstanding                             5,008,413            4,646,186
                                                                   ---------------     ----------------
                                                                   ---------------     ----------------
</TABLE>

     See accompanying notes to condensed consolidated financial statements

                                       3
<PAGE>
                                       
                              LORONIX INFORMATION
                                 SYSTEMS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                              THREE MONTHS ENDED
                                                                                   MARCH 31,
                                                                             1999            1998
                                                                         ----------------------------
                                                                         (UNAUDITED)      (UNAUDITED)
<S>                                                                      <C>              <C>
Cash flows from operating activities:
   Net income (loss)                                                         $555,155       $(668,595)
   Adjustments to reconcile net income (loss) to net cash used in
     operating activities:
       Depreciation and amortization                                          336,635          293,394
       (Gain) loss on disposal of capital equipment                           (4,570)              221
       Loss (gain) on foreign currency exchange                                   833          (4,215)
       Changes in operating assets and liabilities:
          Increase in accounts receivable, net                            (1,862,862)        (379,815)
          Increase in inventory, net                                        (121,855)          (3,225)
          Decrease in prepaid expenses and other assets                         8,948          571,596
          Increase (decrease) in accounts payable                           1,541,092        (179,279)
          Increase (decrease) in accrued liabilities and commissions          694,570        (181,796)
                                                                         ------------    ------------
                Net cash provided by (used in) operating activities         1,147,946        (551,714)
                                                                         ------------    ------------

Cash flows from investing activities:
   Capital expenditures                                                     (123,064)         (51,754)
   Proceeds from disposal of capital equipment                                  9,454             -
   Decrease in notes receivable, related parties                                9,613           29,770
   Decrease in deposits and other assets                                       12,043            7,940
   Capitalized software                                                     (101,640)        (100,760)
                                                                         ------------    ------------
                Net cash used in investing activities                       (193,594)        (114,804)
                                                                         ------------    ------------

Cash flows from financing activities:
    Payments on bank borrowings                                              (17,945)             -
    Payments on facility mortgage                                             (6,075)          (5,555)
    Payments on capital lease                                                 (2,695)             -
    Proceeds from exercise of stock options                                   519,679             -
                                                                         ------------    ------------
                Net cash provided by (used in) financing activities:          492,964          (5,555)
                                                                         ------------    ------------

Net increase (decrease) in cash                                             1,447,316        (672,073)
Cash and cash equivalents, beginning of year                                1,625,259        3,334,124
                                                                         ------------    ------------
Cash and cash equivalents, end of March                                    $3,072,575       $2,662,051
                                                                         ------------    ------------
                                                                         ------------    ------------




Supplemental cash flow information:
   Interest paid                                                              $29,847          $16,823
                                                                         ------------    ------------
                                                                         ------------    ------------
   Income taxes paid                                                            -                 $800
                                                                         ------------    ------------
                                                                         ------------    ------------

Noncash investing activities:
  In 1999 the Company transferred inventory valued at $41,932 to property and
     equipment.
  In 1998 the Company transferred inventory valued at $34,496 to property and
     equipment.
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

                         LORONIX INFORMATION SYSTEMS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                          (MARCH 31, 1999 - UNAUDITED)


NOTE 1:  BASIS OF PRESENTATION

         The accompanying condensed consolidated financial statements have 
been prepared in accordance with Securities and Exchange Commission 
requirements for interim financial statements. Therefore, they do not include 
all of the information and footnotes required by generally accepted 
accounting principles for complete financial statements. The financial 
statements should be read in conjunction with the Form 10-KSB for the year 
ended December 31, 1998 of Loronix Information Systems, Inc. (the "Company").

         The results of operations for the interim periods shown in this 
report are not necessarily indicative of results to be expected for the full 
year. In the opinion of management, the information contained herein reflects 
all adjustments necessary to make the results of operations for the interim 
periods a fair statement of such operations. All such adjustments are of a 
normal recurring nature.

NOTE 2:  EARNINGS PER SHARE

         The Company presents net income and net loss per share in accordance 
with SFAS No. 128, "Earnings per Share." As required by SFAS No. 128, the 
Company must present basic and diluted net income and net loss per share as 
defined. Basic net income and net loss per common share is computed using the 
weighted average number of common shares outstanding during the period. 
Diluted net income and net loss per common share is computed to incorporate 
the incremental dilutive shares issuable upon the assumed exercise of stock 
options. All prior period net income and net loss per common share 
information are presented in accordance with SFAS No. 128.

         Stock options and warrants outstanding at March 31, 1999 totaled 
1,417,974. For the three months ended March 31, 1999, 274,134 shares, 
representing the dilutive effect of stock options, were included in computing 
the diluted net income per share. Warrants totaling 240,000 shares were not 
included in computing the diluted net income per share because the effect 
would have been antidilutive. Stock options and warrants totaling 1,302,548 
shares for the three months ended March 31, 1998 were not included in 
computing the diluted net loss per share because the effect would have been 
antidilutive.

NOTE 3:  SEGMENT INFORMATION

         The Company has identified two primary segments: digital video 
recording products ("CCTVware(R) Products") and digital identification 
products ("ID Products"). Segment selection was based upon internal 
organization structure and the availability of financial results.

<TABLE>
<CAPTION>
                                                  CCTVware              ID              Total
                                              -----------------------------------------------------
<S>                                           <C>                       <C>            <C>
          
           First Quarter 1999
           Sales                                    $ 6,801,000          $ 589,000      $7,390,000
           Cost of Goods Sold                         3,701,000            303,000       4,004,000
                                              -----------------------------------------------------

              Segment Margin                        $ 3,100,000          $ 286,000      $3,386,000

           Segment gross margin %                         45.6%              48.6%           45.8%

           Additions to capitalized software         $   93,000           $  9,000       $ 102,000

           Software amortization                     $   99,000          $  23,000       $ 122,000

           Capitalized software                     $ 1,365,000          $ 970,000      $2,335,000
           Accumulated amortization                     567,000            833,000       1,400,000
                                              -----------------------------------------------------

              Net book value of capitalized
                 software costs                      $  798,000          $ 137,000       $ 935,000
</TABLE>

                                       5
<PAGE>

<TABLE>
<CAPTION>
                                                  CCTVware              ID              Total
                                              -----------------------------------------------------
<S>                                           <C>                       <C>             <C>
           First Quarter 1998
           Sales                                    $ 1,539,000          $ 365,000      $1,904,000
           Cost of Goods Sold                           827,000            177,000       1,004,000
                                              -----------------------------------------------------

              Segment Margin                         $  712,000          $ 188,000       $ 900,000

           Segment gross margin %                         46.3%              51.5%           47.3%

           Additions to capitalized software         $   94,000           $  7,000       $ 101,000

           Software amortization                     $   61,000          $  34,000        $ 95,000

           Capitalized software                      $  848,000          $ 935,000      $1,783,000
           Accumulated amortization                     222,000            733,000         955,000
                                              -----------------------------------------------------

              Net book value of capitalized
                 software costs                      $  626,000          $ 202,000       $ 828,000
</TABLE>

NOTE 4:  LEGAL PROCEEDINGS

         On October 17, 1997, the Company received notice that it had been 
named as a defendant in a patent infringement lawsuit brought by a 
competitor, Prima Facie, Inc. ("PFI"), in the U.S. District Court for the 
District of Maryland. The lawsuit alleged that the Company's CCTVware Transit 
product infringed certain claims of two patents held by PFI and that the 
Company has interfered with PFI's business relationships. The claim was 
amended in June 1998 to allege infringement by the Company's other CCTVware 
products. The suit seeks injunctive relief against further infringement and 
damages. The lawsuit also names one of the Company's domestic dealers as a 
co-defendant. The Company believes that these claims are without merit and is 
defending itself vigorously.

         On July 6, 1998, the Company filed counterclaims against PFI. These 
counterclaims include a request for Declaratory Judgment of Patent Invalidity 
and six other counterclaims. The Company and PFI have agreed to separate the 
patent infringement claims from all other claims and resolve the patent 
infringement issues first. To date, no trial has been scheduled.











                                       6
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATIONS

         The following discussion and analysis should be read in conjunction 
with the Company's condensed consolidated financial statements and the notes 
related thereto included herein.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 
1998

         REVENUE

         The Company's revenue is derived from sales of systems and supplies 
and from maintenance services. Historically, systems and supplies have 
accounted for greater than 90% of total revenue, with systems accounting for 
a substantial majority of total revenue. The Company expects this trend to 
continue for the foreseeable future. Revenue increased from $1,904,000 in the 
first quarter of 1998 to $7,390,000 in the first quarter of 1999, 
representing a 288% increase. Revenue in the first quarter of 1998 and 1999 
included approximately $1,516,000, or 80% of total revenue, and approximately 
$6,741,000, or 91% of total revenue, respectively, of CCTVware Products. The 
Company attributes the increase in revenue to growing demand in the market 
for digital video recording technology.

         COSTS AND EXPENSES

         COST OF REVENUE. The cost of revenue, consisting principally of the 
costs of hardware components and supplies as well as software amortization, 
increased from $1,004,000 in the first quarter of 1998 to $4,004,000 in the 
first quarter of 1999, and represented 53% and 54% of revenue, respectively. 
The increase in the cost of revenue as a percentage of revenue was primarily 
attributable to a shift in the product mix.

         OPERATIONS AND CUSTOMER SUPPORT. Operations and customer support 
expenses increased from approximately $348,000 in the first quarter of 1998 
to approximately $530,000 in the first quarter of 1999, and represented 18% 
and 7% of revenue, respectively. The increase in such expenses in absolute 
terms resulted primarily from headcount and compensation-related increases 
and increases in travel, recruiting and supplies expenses. These increased 
expenses were associated with increased business levels and more customer 
installations and support. The decrease in these expenses in percentage terms 
is the result of substantially higher revenue in the first quarter of 1999.

         SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and 
administrative expenses increased from $900,000 in the first quarter of 1998 
to $1,887,000 in the first quarter of 1999, and represented 47% and 26% of 
revenue, respectively. The increase in such expenses in absolute terms 
resulted primarily from headcount and compensation-related increases and an 
increase in legal fees associated with the Company's patent litigation with 
PFI. To a lesser extent, the increase in such expenses in absolute terms also 
resulted from increases in travel, telecommunications, maintenance and 
depreciation expenses and an increase in the provision for doubtful accounts. 
The decrease in these expenses in percentage terms is the result of 
substantially higher revenue in the first quarter of 1999.

         RESEARCH AND DEVELOPMENT. Research and development expenses, net of 
capitalized software costs, increased from approximately $340,000 in the 
first quarter of 1998 to approximately $383,000 in the first quarter of 1999, 
and represented 18% and 5% of revenue, respectively. The increase in such 
expenses in absolute terms resulted primarily from headcount and 
compensation-related increases. The decrease in these expenses in percentage 
terms is the result of substantially higher revenue in the first quarter of 
1999.

         INTEREST INCOME. Interest income decreased slightly from 
approximately $32,000 in the first quarter of 1998 to approximately $31,000 
in the first quarter of 1999. This decrease was due to a reduction in the 
average cash available for investment.

         INTEREST EXPENSE. Interest expense increased from approximately 
$17,000 in the first quarter of 1998 to approximately $30,000 in the first 
quarter of 1999 as a result of increased bank borrowings.

                                       7
<PAGE>

         INCOME TAX EXPENSE. In the first quarter of 1998, an income tax 
expense of approximately $1,000, representing minimum estimated California 
franchise tax, was recorded. In the first quarter of 1999, income tax expense 
of $32,000 was estimated at 5.5% of pre-tax income after giving effect to the 
carry-forward of net operating losses.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

         During each of the three month periods ended March 31, 1998 and 
1999, the Company  financed its  operations  primarily from working capital.

         The Company's principal uses of cash during each of the three month 
periods ended March 31, 1998 and 1999 were to: (i) fund operating activities 
in 1998; (ii) acquire property and equipment; and (iii) invest in the 
development of software.

         During the first three months of 1998, the Company's cash and cash 
equivalents decreased from $3,334,000 at December 31, 1997 to $2,662,000 at 
March 31, 1998. Net cash used in operating activities of $552,000 consisted 
primarily of losses of $669,000, increases in accounts receivable and 
decreases in accounts payable and accrued liabilities and commissions of 
$741,000 offset by depreciation and amortization and a decrease in prepaid 
expenses and other assets of $865,000. Net cash used in investing activities 
of $115,000 consisted primarily of $52,000 of capital expenditures and 
$101,000 of capitalized software offset by a decrease in notes receivable, 
related parties.

         During the first three months of 1999, the Company's cash and cash 
equivalents increased from $1,625,000 at December 31, 1998 to $3,073,000 at 
March 31, 1999. Net cash provided by operating activities of $1,148,000 
consisted primarily of income of $555,000, depreciation and amortization and 
increases in accounts payable and accrued liabilities and commissions of 
$2,572,000 offset by increases in accounts receivable and inventory of 
$1,985,000. Net cash used in investing activities of $194,000 consisted 
primarily of $123,000 of capital expenditures and $102,000 of capitalized 
software. Net cash provided by financing activities consisted primarily of 
proceeds from the exercise of stock options of $520,000 offset by payments on 
bank borrowings, facility mortgage and capital leases of $27,000.

         At March 31, 1999, the Company had $6,025,000 in working capital, 
including $4,259,000 of trade accounts receivable and $2,005,000 of 
inventory. Days sales outstanding, calculated using an average accounts 
receivable balance, were approximately 46 days as of March 31, 1999, compared 
to 128 days for the same period a year ago. The Company has provided and may 
continue to provide payment term extensions to certain of its customers from 
time to time. As of March 31, 1999, the Company had payment term extensions 
outstanding of approximately $350,000.

         The Company's inventory balance at March 31, 1999 and 1998 was 
$2,005,000 and $1.480,000, respectively. Annualized inventory turns, 
calculated using an average inventory balance, were 7.8 and 2.4 as of March 
31, 1999 and 1998, respectively.

         The Company's principal sources of liquidity are its cash and cash 
equivalents and cash generated from operating activities, if any. The Company 
also has available up to a $1,000,000 line of credit based on a percentage of 
the Company's eligible accounts receivable. The line of credit facility 
expires in May 1999 and the Company expects to renew this credit facility. 
The line of credit has not been used to date. The Company anticipates capital 
expenditures for the remainder of 1999 of approximately $450,000. Further, 
the Company may expand its existing facility at the La Plata County airport 
by 20,000 square feet. The cost for such expansion is estimated to be 
approximately $700,000. The Company believes that, based on its current 
financial projections, it has sufficient working capital, inclusive of its 
line of credit facility, to meet its capital requirements and fund operations 
for at least the next twelve months.

YEAR 2000 CONVERSION

         Many computer systems may experience problems handling dates beyond 
1999. Therefore, some computer hardware and software will need to be modified 
prior to 2000 in order to remain functional. The Company has completed its 
initial assessment of the readiness and compliance of its computer-based 
products available for sale and is currently assessing its computer-based 
systems used internally, and the Company expects to 

                                       8
<PAGE>

implement successfully the system and programming changes necessary to 
address year 2000 issues by September 1999. The Company does not believe that 
the cost of such actions will have a material effect on the Company's results 
of operations or financial condition. There can be no assurance, however, 
that there will not be a delay in, or increased costs associated with, the 
implementation of such changes, and the Company's inability to implement such 
changes on a timely basis could have an adverse effect on future results of 
operations, liquidity or financial condition.

         COMPUTER-BASED PRODUCTS AVAILABLE FOR SALE. The Company has two 
primary product lines available for sale which are CCTVware Products and ID 
Products.

         CCTVWARE PRODUCTS. The Company has created and executed a series of 
tests to determine the possible problems year 2000 might have on the 
operation of its CCTVware Products version 1.2. These tests indicated that 
year 2000 did not adversely affect the performance of the CCTVware Products, 
and the Company expects that these products will operate successfully in the 
days leading up to and following the year 2000. To date, the Company has not 
completed its testing to determine what effect, if any, leap years may have 
on the operation of the CCTVware Products. The Company expects to complete 
its initial testing of the leap year issue within the next two months and 
expects these products will operate successfully.

         A key component of determining the Company's year 2000 state of 
readiness is to identify those areas of operation where CCTVware Products 
incorporate software and hardware products supplied by third party vendors 
and thus, where year 2000 problems may arise as a result of products supplied 
by third parties. Third-party software products include, but are not limited 
to: Microsoft Windows NT 4.0 Server, Microsoft Windows NT 4.0 Workstation, 
Microsoft Windows 95, Microsoft SQL Server 6.5 and Microsoft Visual C++. 
Third party hardware products include, but are not limited to: video capture 
cards, export cards, network switches, motherboards, modems and various 
workstations. Because CCTVware Products are dependent, in certain respects, 
on products supplied by third-party vendors, an important part of the 
Company's year 2000 effort is to contact those vendors who supply products 
that the Company considers critical to the operation of the CCTVware Products 
and gauge their year 2000 compliance efforts. The Company has sent letters to 
various vendors and is in the process of receiving and analyzing the 
responses to determine the year 2000 state of readiness of such vendor 
supplied products. Responses and tests to date indicate that certain 
third-party supplied products do not appear to adversely affect the 
performance of the CCTVware Products with respect to the year 2000 issue.

         The Company has released and expects to release new versions of its 
CCTVware Products in the future. The Company will continue to audit and test 
compliance with year 2000 performance of its internally developed products.

         ID PRODUCTS. The Company has created and executed a series of tests 
to determine the possible problems the year 2000 will have on the operation 
of those ID Products which the Company continues to support. Such ID products 
include: ImageSHARE for NT versions 2.5 and 3.1, ImageSHARE Express 1.1, and 
Instant ID 2.0. These tests indicated that if configured properly, the year 
2000 will not adversely affect the performance of the ID Products, and the 
Company expects that these products will operate successfully in the days 
leading up to and following the year 2000.

         Certain of the Company's ID Products also include interfaces to 
various access control applications including: Ccure with Badges 1.66; Ccure 
with ImageSHARE 1.21; Radionics Ready Key with ImageSHARE 1.21; Mulitnet with 
ImageSHARE 1.21; Card Key with Badges 1.6x; Casi Rusco with ImageSHARE 1.21; 
Casi Rusco with Badges 1.66+; DAQ with ImageSHARE 1.21; Oracle Based DAQ with 
IMAGESHARE 1.21 and ICAM with ImageSHARE 1.21. The interface design 
methodology used to integrate the ID Products are primarily controlled by the 
access control vendors. The Company can make no assurances that these 
interfaces are year 2000 compliant.

         A key component of determining the Company's year 2000 state of 
readiness is to identify those areas of operation where ID Products 
incorporate hardware and software products supplied by third-party vendors 
and thus, where year 2000 problems may arise as a result of products supplied 
by third parties. Third-party hardware products include, but are not limited 
to: computers; network adapter cards; video capture cards; controller cards; 
printers; encoders; cameras and various types of cabling. For older ID 
Product configurations, many of the third-party vendor hardware products are 
no longer manufactured or supported by the supplier. The Company can make no 
assurances that these devices are year 2000 compliant. At risk are older 
computers that may have embedded problems in the basic input/output system 
("BIOS") for processing year 2000 dates. Certain routines within the ID 

                                       9
<PAGE>

Products use the BIOS date information to calculate current dates. Computers 
that possess this problem will require the BIOS to be updated and/or the 
computer replaced. Third-party software products include, but are not limited 
to: Microsoft Windows 3.1 and 3.11; Microsoft Windows NT 4.0 Workstation; 
Microsoft Windows 95 and 98; Microsoft SQL Server; Microsoft Access; Paradox; 
Informix; Sybase; IBM DB2; Microsoft Foxpro; Oracle; Microsoft Visual C++; 
Borland 3.1, 4.5 and 5.01; Strategic Reporting's ReportSmith and various Open 
DataBase Connectivity drivers provided by Intersolv, Microsoft and IBM. 
Because ID Products are dependent, in certain respects, on products supplied 
by third-party vendors, an important part of the Company's year 2000 
compliance effort is to contact those vendors who supply products that the 
Company considers critical to the operation of ID Products and gauge their 
year 2000 compliance efforts. The Company has sent letters to various vendors 
and is in the process of receiving and analyzing the responses to determine 
the year 2000 state of readiness of such vendor supplied products. Responses 
and tests to date indicated that certain third-party supplied products do not 
appear to adversely affect the performance of the ID Products with respect to 
the year 2000 issue.

         From 1989 through 1997, the Company developed eleven different ID 
Products including: Badges 1.64 - 1.66; Loronix Color Image Management System 
Foxpro Based; Dos Based Foxpro BW Imaging System; ImageSHARE V (Visitor BW, 
Foxpro); ImageSHARE I (Color Foxpro); ImageSHARE 1.21; Laser ID Card Creator; 
Entry Check; BoldImage and BoldImage Express; and Color Card Creator. Between 
1996 and 1999, the Company recognized that the unavailability of peripheral 
replacement equipment from third-party vendors and inadequate technical 
resources made it infeasible for the Company to continue to support these 
products. Accordingly, the Company notified its customers that it would no 
longer support these products and made available upgrade options to allow 
customers to migrate to newer products that would be supported by the Company.

         COMPUTER-BASED SYSTEMS USED INTERNALLY. The Company uses various 
computer-based systems to operate its business on a day-to-day basis. These 
systems include, but are not limited to: (i) software programs, including 
Macola (for accounting, customer order processing, purchasing and inventory 
control), CardKey Access Control, Novell Network Operating System, 
SourceSafe, Microsoft Windows and various software application programs, and 
(ii) hardware devices, including servers, hubs, proximity readers, motion 
detectors, phone systems and personal computers.

         In 1998, the Company upgraded its Macola software to the year 2000 
compliant version. The Company is currently assessing its other internal 
computer-based systems to determine their susceptibility to the year 2000 
issue. The Company expects to complete its assessment and incorporate any 
required fixes to ensure compatibility with year 2000 by September 1, 1999.

         COST OF YEAR 2000 CONVERSION. To date, the Company estimates that it 
has spent less than $18,000 of incremental external spending on the year 2000 
issue and estimates that future external costs associated with its year 2000 
compliance efforts will not exceed $50,000.

        CONTINGENCY PLANS. The Company has not yet completed its assessment 
of the reasonably likely worst case scenario of Non-Information Technology 
Business Systems and/or Information Technology Systems failures and related 
consequences. Although the Company does not anticipate any significant issues 
relating to year 2000, it intends to create contingency plans as information 
becomes available indicating areas of non-compliance that could have an 
adverse effect on the Company's future results of operations, liquidity or 
financial condition.

CERTAIN FACTORS BEARING ON FUTURE RESULTS

         The statements in the second sentence of the paragraph under the 
caption "Revenue", the third sentence of the fifth paragraph and the third, 
fifth, sixth, seventh and eighth sentences in the seventh paragraph under the 
caption "Financial Condition, Liquidity and Capital Resources", the second 
and third sentences of the first paragraph, the second and fourth sentences 
of the third paragraph, the fifth paragraph, the third sentence of the sixth 
paragraph, the last sentence of the eleventh paragraph, the twelfth paragraph 
and the second sentence of the thirteenth paragraph under the caption "Year 
2000 Conversion", the first, second and fifth sentences under the caption 
"Capital Requirements" below, the third sentence under the caption 
"Dependence on a Major Customer" below, the third and sixth sentences under 
the caption "Year 2000 Issues" below, the fourth sentence under the caption 
"Proprietary Rights", the first sentence under the caption "Variability of 
Operating Results" below and the first sentence under the caption "Volatility 
of Stock Price are forward-looking statements. In addition, the Company may 
from time to time make oral forward-looking statements. The following are 
certain important factors that could cause actual results to differ 
materially from those projected in any such forward-looking statements.

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<PAGE>

         CAPITAL REQUIREMENTS. The Company believes that, based on its 
current projections, it has sufficient working capital to meet its 
requirements for at least the next 12 months. However, to the extent that the 
Company experiences growth generally, or the Company's CCTVware line of 
products generates high demand, or the Company receives extraordinarily large 
orders for certain CCTVware products from large business, institutional or 
government buyers, the Company's capital requirements may exceed the 
Company's available capital resources. Additionally, the Company has suffered 
losses in seven of the past nine quarters, and such losses, which may occur 
in the foreseeable future, would diminish the Company's cash and cash 
equivalents. There can be no assurance that the Company will be able to raise 
equity or debt financing on favorable terms, or at all. If the Company fails 
in such circumstances to raise additional capital as needed, the Company 
would likely be required to reduce the scope of its product development, 
selling and marketing activities and other operations, which would have a 
material adverse effect on the Company's business, operating results and 
financial condition.

         DISTRIBUTION RELATIONSHIPS. The Company believes its success in 
penetrating markets for its CCTVware Products and ID Products depends in part 
on its ability to maintain distribution relationships with manufacturing 
representatives, dealers and systems integrators and to cultivate additional, 
similar relationships. There can be no assurance that the Company will be 
successful in maintaining or expanding its distribution relationships. The 
loss of certain distribution relationships could have a negative impact on 
the Company's revenue stream. Further, there can be no assurance that the 
businesses with whom the Company has developed such relationships, some of 
whom have significantly greater financial and marketing resources than the 
Company, will not develop and market products in competition with the Company 
or will not otherwise discontinue their relationships with the Company.

         COMPETITION. The markets for the Company's CCTVware Products and ID 
Products are extremely competitive. Competitors include a broad range of 
companies that develop and market products for the identification and 
surveillance markets. Competitors in the identification market include: (i) 
in film-based systems, Polaroid Corporation, and (ii) in digital-based 
systems, Polaroid Corporation, Data Card Corporation, Dactek International, 
Inc., Imaging Technology Corporation, G & A Imaging, Goddard Technology 
Corporation and Laminex, Inc., as well as many other organizations. 
Competitors in the surveillance market include numerous VCR suppliers and 
digital recording suppliers including, among others: (i) TVX, Inc. and Prima 
Facie, Inc. for the Transit product; and (ii) Dedicated Micros, Inc., 
Sensormatic Corporation, Primary Image, Ltd., Alpha Systems Lab and NICE 
Systems, Ltd. for the M Series products. Loronix has not yet identified any 
competitors, other than VCR suppliers, for its Enterprise and Vision products.

         The Company believes that the principal competitive factors in its 
markets include: system performance and functionality, price, system 
configuration flexibility, ease-of-use, system maintenance costs, quality, 
reliability, customer support and brand name. Further, the Company believes 
that its primary competitive strengths include system performance and 
functionality, system configuration flexibility and ease-of-use. Larger, more 
established companies with substantially greater technical, financial and 
marketing resources than the Company, such as Data Card Corporation, 
Sensormatic Corporation and NICE Systems, Ltd., could use such resources to 
undermine the Company's ability to compete effectively for sales and market 
share. In addition, there can be no assurance that any of the Company's 
products will be competitive in the face of advances in product technology 
developed by the Company's current or future competitors.

         LEGAL PROCEEDINGS. On October 17, 1997, the Company received notice 
that it had been named as a defendant in a patent infringement lawsuit 
brought by a competitor, Prima Facie, Inc. ("PFI"), in the U.S. District 
Court for the District of Maryland. The lawsuit alleges that the Company's 
CCTVware Transit product infringes certain claims of two patents held by PFI 
and that the Company has interfered with PFI's business relationships. The 
claim has been amended to allege infringement by the Company's other CCTVware 
Products. The suit seeks injunctive relief against further infringement and 
damages. The lawsuit also names one of the Company's domestic distributors as 
a codefendant. Although the Company believes these claims are without merit 
and is defending itself vigorously, an adverse result in the litigation could 
have a negative impact on the Company's business, operating results and 
financial condition. More specifically, if the claims of PFI are upheld as 
valid, enforceable and infringed, the Company might be held liable for a 
substantial damage award and would be required to obtain a license from PFI 
or be required to redesign its products to avoid infringement. There can be 
no assurance that a license would be available from PFI, or if available, 
would be available on terms acceptable to the Company or that the Company 
would be able to redesign its products to avoid infringement. Accordingly, an 
adverse determination in the pending judicial proceedings could prevent the 
Company from manufacturing and selling its CCTVware products which would 
almost certainly adversely affect the Company's business, operating results 
and financial 

                                       11
<PAGE>

condition. Additionally, the Company has incurred and continues to incur 
substantial expenses in its litigation with PFI, and there can be no 
assurance that the Company will not continue to incur such expenses for some 
considerable amount of time.

         INTERNATIONAL SALES. The Company is seeking to expand its 
international presence by developing new distribution channels in certain 
foreign countries where it has not previously had a presence. International 
sales are subject to a number of risks, including political and economic 
instability, unexpected changes in regulatory requirements, tariffs and other 
trade barriers, fluctuating exchange rates and the possibility of greater 
difficulty in accounts receivable collection. There can be no assurance that 
these and other factors will not have a material adverse effect on the 
Company's future international sales, if any, and, consequently, the 
Company's business, operating results and financial condition.

         DEPENDENCE ON A MAJOR CUSTOMER. In 1998, sales to Dayton Hudson 
Corporation accounted for 38% of the Company's revenue. Dayton Hudson is not 
obligated to purchase any minimum levels of the Company's products, and 
although Dayton Hudson Corporation has placed additional orders with the 
Company which accounted for 31% of the first quarter 1999 revenue, there can 
be no assurance that any further business will arise from this customer. Any 
significant reduction in product sales to Dayton Hudson Corporation that 
cannot be replaced with new business may materially and adversely affect the 
Company's business, operating results and financial condition.

         YEAR 2000 ISSUES. The "year 2000 issue" arises because most computer 
systems and programs were designed to handle only a two-digit year, not a 
four-digit year. When the year 2000 begins, these computers may interpret 
"00" as the year 1900 and could either stop processing date-related 
computations or could process them incorrectly. The Company has taken steps 
to implement new information systems and migrate to year 2000 compliant 
software for its accounting, customer order processing, purchasing and 
inventory control software, and accordingly, the Company does not currently 
anticipate any internal year 2000 issues from this software. However, the 
Company could be adversely impacted by year 2000 issues related to other 
internally used computer-based systems and issues faced by major suppliers, 
customers, vendors and distributors with which the Company interacts. The 
Company has completed its initial testing program to gauge the year 2000 
compliance of its products, and the Company has corresponded with certain 
third parties to determine whether they are year 2000 compliant. The Company 
will evaluate and follow up on the responses to determine the impact that 
third parties who are not year 2000 compliant may have on the operations and 
products of the Company. As a result of the unprecedented and potentially 
complex nature of the year 2000 issue however, there can be no assurance that 
this issue will not have a material and adverse impact on the business, 
operating results and financial condition of the Company, despite the 
Company's efforts.

         DEPENDENCE ON NEW PRODUCTS. The market for the Company's products is 
characterized by ongoing technological development and evolving industry 
standards. The Company's success will depend upon its ability to enhance its 
current products and to introduce new products which address technological 
and market developments and satisfy the increasingly sophisticated needs of 
customers. For instance, the Company has released several products based on 
its CCTVware technology. There can be no assurance that the Company will be 
successful in developing, marketing and selling sufficient volumes of its new 
CCTVware products or developing and marketing on a timely basis any other 
fully functional product enhancements or new products that respond to the 
technological advances by others. There also can be no assurance that the 
Company's new products will be accepted by customers.

         MANAGEMENT AND EMPLOYEES. The Company's future success depends in 
significant part upon the continued service of its key technical and senior 
management personnel and its continuing ability to attract and retain highly 
qualified technical and managerial personnel in the future. The Company has 
in the past encountered some difficulties in fulfilling its hiring needs in 
the Durango, Colorado employment market, and there can be no assurance that 
the Company will be successful in hiring and retaining qualified employees in 
the future.

         PROPRIETARY RIGHTS. The Company is not aware that its products, 
trademarks or other proprietary rights infringe on the proprietary rights of 
any third parties, except that a claim of infringement has been asserted 
against the Company by PFI (see Part II, Item 1 - Legal Proceedings and "Risk 
Factors -Legal Proceedings"). The Company has already expended considerable 
resources and funds towards defending itself in this infringement litigation 
and an adverse result in this litigation with PFI could have a negative 
impact on the financial position and results of operations of the Company. 
Further, there can be no assurance that other third parties will not assert 

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<PAGE>

infringement claims against the Company in the future with respect to current 
or future products. As the number of software products in the industry 
increases and the functionality of these products further overlaps, the 
Company believes that software developers may become increasingly subject to 
infringement claims. Any such claims against the Company, with or without 
merit, could result in costly litigation or might require the Company to 
enter into royalty or licensing agreements. Such royalty and licensing 
agreements, if required, may not be available on terms acceptable to the 
Company.

         VARIABILITY OF OPERATING RESULTS. The Company's revenue and 
operating results have fluctuated significantly from quarter to quarter, and 
may continue to fluctuate, due to a combination of factors. These factors 
include relatively long sales cycles for certain products, the timing or 
cancellation of orders from major customers, the timing of new product 
introductions by the Company or its competitors, the Company's use of 
third-party distribution channels, the fulfillment of large one-time orders 
to particular customers and general economic conditions and other factors 
affecting capital spending. For example, a longer than expected sales cycle 
for the CCTVware Products initially delayed anticipated revenue. 
Additionally, the Company generally ships orders in the quarter in which such 
orders are received, and accordingly, revenue in any quarter is substantially 
dependent on the orders booked and shipped in that quarter. The Company has 
typically recognized a substantial portion of its revenue in the last month 
of the quarter, with much of this revenue concentrated in the last two weeks 
of the quarter. Because the Company's operating expense levels are relatively 
fixed and based, to some extent, on anticipated revenue levels, a small 
variation in revenue can cause significant variations in operating results 
from quarter to quarter and may result in losses. Due to all of the 
foregoing, the Company believes that period-to-period comparisons of its 
results of operations are not necessarily meaningful and should not be relied 
upon as indications of future performance.

         PRODUCT OBSOLESCENCE. The Company's current products and products 
under development are limited in number and concentrated primarily in the 
markets for identification and surveillance products. The life cycles of the 
Company's products are difficult to estimate due in large measure to changing 
and developing technology as well as the unknown future effect of products 
introduced by the Company's competition. Price reductions or declines in 
demand for the Company's products, whether as a result of competition, 
technological change or otherwise, would have a materially adverse effect on 
the Company's business, operating results and financial condition.

         VOLATILITY OF STOCK PRICE. The market price of the Company's Common 
Stock has experienced significant volatility, and is likely to continue to be 
significantly affected by factors such as actual or anticipated fluctuations 
in the Company's operating results, the Company's failure to meet or exceed 
published earnings estimates, changes in earnings estimates or 
recommendations by securities analysts, announcements of technological 
innovations, new products or new contracts by the Company or its existing or 
potential competitors, developments with respect to patents, copyrights or 
proprietary rights, adoption of new accounting standards affecting the 
software industry, general market conditions and other factors. In addition, 
the stock market has from time to time experienced significant price and 
volume fluctuations that have particularly affected the market prices for the 
common stock of technology companies which have often been unrelated to the 
operating performance of such companies. These broad market fluctuations may 
materially adversely affect the market price of the Company's common stock. 
There can be no assurance that the trading price of the Company's Common 
Stock will not experience substantial volatility in the future.








                                       13
<PAGE>

PART II.    OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

         On October 17, 1997, the Company received notice that it had been 
named as a defendant in a patent infringement lawsuit brought by a 
competitor, Prima Facie, Inc. ("PFI"), in the U.S. District Court for the 
District of Maryland. The lawsuit alleged that the Company's CCTVware Transit 
product infringed certain claims of two patents held by PFI and that the 
Company has interfered with PFI's business relationships. The claim was 
amended in June 1998 to allege infringement by the Company's other CCTVware 
products. The suit seeks injunctive relief against further infringement and 
damages. The lawsuit also names one of the Company's domestic dealers as a 
co-defendant. The Company believes that these claims are without merit and is 
defending itself vigorously.

         On July 6, 1998, the Company filed counterclaims against PFI. These 
counterclaims include a request for Declaratory Judgment of Patent Invalidity 
and six other counterclaims. The Company and PFI have agreed to separate the 
patent infringement claims from all other claims and resolve the patent 
infringement issues first. To date no trial has been scheduled.

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   27  Financial Data Schedule

         (b)   No reports on Form 8-K were filed by the Company during the 
               quarter ended March 31, 1999.








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<PAGE>


                                   SIGNATURES


         In accordance with 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.


                                       Loronix Information Systems, Inc.

May 7, 1999                            /s/ Jonathan C. Lupia
-----------                            ---------------------
   Date                                Jonathan C. Lupia,
                                       Chief Operating Officer and
                                       Chief Financial Officer






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