<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, 1998, 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 28, 1998 THERE WERE 4,646,186 SHARES OF THE ISSUER'S COMMON
STOCK OUTSTANDING.


<PAGE>

                       LORONIX INFORMATION SYSTEMS, INC.

                                     INDEX



PART I.  FINANCIAL INFORMATION                                         PAGE NO.

         ITEM 1. FINANCIAL STATEMENTS

                 CONDENSED CONSOLIDATED BALANCE SHEET                      1
                    AS OF MARCH 31, 1998

                 CONDENSED CONSOLIDATED STATEMENTS                         3
                    OF OPERATIONS FOR THE THREE MONTHS ENDED
                    MARCH 31, 1998 AND 1997

                 CONDENSED CONSOLIDATED STATEMENTS OF                      4
                    CASH FLOWS FOR THE THREE MONTHS ENDED 
                    MARCH 31, 1998 AND 1997

                 NOTES TO CONDENSED CONSOLIDATED FINANCIAL                 6
                    STATEMENTS

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


PART II.   OTHER INFORMATION

         ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS      11

         ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                         11


SIGNATURES.                                                               12

<PAGE>

                       PART I - FINANCIAL INFORMATION

                      LORONIX INFORMATION SYSTEMS, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEET

                                    ASSETS

<TABLE>
<CAPTION>
                                                            MARCH 31,
                                                              1998
                                                           -----------
                                                           (UNAUDITED)
<S>                                                        <C>
Current assets:
   Cash and cash equivalents                                $2,662,051
   Accounts receivable:
     Trade, net of allowance for doubtful accounts
       of $108,533                                           2,860,408
     Officers and employees                                    134,635
   Contracts in progress with earned revenue
     exceeding related progress billings                        77,567
   Inventory, net                                            1,479,777
   Prepaid expenses and other assets                           259,284
   Note receivable                                             108,669
   Notes receivable, related parties                            38,454
                                                           -----------
       Total current assets                                  7,620,845

   Property and equipment, net of accumulated
      depreciation of $1,916,761                             3,668,584
   Capitalized software costs, net of accumulated
      amortization of $954,415                                 828,045
   Notes receivable, related parties                            67,291
   Deposits and other assets                                    37,575
                                                           -----------
       Total assets                                        $12,222,340
                                                           -----------
                                                           -----------
</TABLE>

                                  (continued)
                                       1
<PAGE>

                       LORONIX INFORMATION SYSTEMS, INC.
               CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)

                     LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                            MARCH 31,
                                                              1998
                                                           (UNAUDITED)
                                                           -----------
<S>                                                        <C>
Current liabilities:
   Accounts payable                                           $675,255
   Accrued liabilities                                         247,450
   Facility mortgage                                            22,516
   Capital lease                                                10,780
   Customer deposits                                             9,100
   Deferred maintenance revenue                                 50,982
                                                           -----------
     Total current liabilities                               1,016,083

Facility mortgage                                              663,504
Capital lease                                                    6,288
                                                           -----------
     Total liabilities                                       1,685,875
                                                           -----------
                                                           -----------
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,
   4,646,186 shares                                              4,646
  Additional paid-in capital                                15,197,362
  Notes receivable from stockholders                          (147,883)
  Accumulated deficit                                       (4,517,660)
                                                           -----------
     Total stockholders' equity                             10,536,465
                                                           -----------
     Total liabilities and stockholders' equity            $12,222,340
                                                           -----------
                                                           -----------
</TABLE>


                See accompanying notes to financial statements.
                                       2
<PAGE>

                       LORONIX INFORMATION SYSTEMS, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED
                                                             MARCH 31,
                                                       1998         1997
                                                    ----------   ----------
                                                          (UNAUDITED)
<S>                                                 <C>          <C>
Systems, supplies and maintenance
  revenue                                           $1,903,869   $1,673,900
                                                    ----------   ----------
Operating costs and expenses:
  Cost of products sold                              1,003,563      808,068
  Operations and customer support                      347,924      406,983
  Selling, general and administrative                  899,677      874,152
  Research and development                             339,896      376,632
                                                    ----------   ----------
    Total cost and expenses                          2,591,060    2,465,835

    Loss from operations                              (687,191)    (791,935)

Other income (expense):
  Interest income, net                                  31,843       59,567
  Other expense                                        (12,447)      (9,068)
                                                    ----------   ----------
    Total other income                                  19,396       50,499

    Loss before income taxes                          (667,795)    (741,436)

Income tax (expense) benefit                              (800)     210,962
                                                    ----------   ----------
    Net loss                                         ($668,595)   ($530,474)
                                                    ----------   ----------
                                                    ----------   ----------
Basic and diluted loss per share                        ($0.14)      ($0.11)
                                                    ----------   ----------
                                                    ----------   ----------
Weighted-average shares outstanding                  4,646,186    4,661,936
                                                    ----------   ----------
                                                    ----------   ----------
</TABLE>

                  See accompanying notes to financial statements.
                                       3
<PAGE>

                      LORONIX INFORMATION SYSTEMS, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED
                                                                  MARCH 31,
                                                              1998         1997
                                                           ----------   ----------
                                                            (UNAUDITED)  (UNAUDITED)
<S>                                                        <C>          <C>
Cash flows from operating activities:
 Net loss                                                   ($668,595)   ($530,474)
 Adjustments to reconcile net loss to net cash used in
  operating activities:
   Depreciation and amortization                              293,394      226,344
   Loss on disposal of capital equipment                          221        5,140
   Gain on foreign currency exchange                           (4,215)           -
   Provision for deferred income taxes                              -     (211,594)
   Changes in operating assets and liabilities:
    Increase in accounts receivable, net                     (395,417)    (493,488)
    Decrease in contracts in progress with earned revenue
     exceeding related progress billings                      638,196            -
    Increase in inventory, net                                 (3,225)    (787,667)
    Increase in prepaid expenses and other assets             (66,600)    (140,854)
    (Decrease) increase in accounts payable                  (179,279)     335,886
    Decrease in accrued liabilities                           (33,554)     (63,221)
    Decrease in customer deposits                            (134,312)           -
    Decrease in deferred revenue                              (12,488)      (2,772)
                                                           ----------   ----------
       Net cash used in operating activities                 (565,874)  (1,662,700)
                                                           ----------   ----------
Cash flows from investing activities:
 Capital expenditures                                         (51,754)    (437,498)
 Proceeds from disposal of capital equipment                                15,000
 Decrease in notes receivable                                  45,372       12,682
 Decrease (increase) in deposits and other assets               6,498       (2,734)
 Capitalized software                                        (100,760)    (116,000)
                                                           ----------   ----------
       Net cash used in investing activities                 (100,644)    (528,550)
                                                           ----------   ----------
Cash flows from financing activities:
 Payments on facility mortgage                                 (5,555)           -
                                                           ----------   ----------
Net decrease in cash                                         (672,073)  (2,191,250)
Cash and cash equivalents, beginning of year                3,334,124    6,126,484
                                                           ----------   ----------
Cash and cash equivalents, end of March                    $2,662,051   $3,935,234
                                                           ----------   ----------
                                                           ----------   ----------
</TABLE>
                                  (continued)
                                       4
<PAGE>

                        LORONIX INFORMATION SYSTEMS, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED
                                                           MARCH 31,
                                                       1998         1997
                                                   -----------  -----------
                                                   (UNAUDITED)  (UNAUDITED)
<S>                                                <C>          <C>
Supplemental cash flow information:
   Interest paid                                     $16,823           -
                                                     -------        ----
                                                     -------        ----
   Income taxes paid                                    $800        $800
                                                     -------        ----
                                                     -------        ----
Noncash investing activities:
  In 1998 the Company transferred inventory valued at $34,496 to property 
     and equipment.
  In 1997 the Company transferred inventory valued at $101,590 to property 
     and equipment.
</TABLE>


                  See accompanying notes to financial statements.
                                       5
<PAGE>

                      LORONIX INFORMATION SYSTEMS, INC.
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                        (MARCH 31, 1998 - 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 Loronix Information Systems, Inc.'s Form 10-KSB for the year
ended December 31, 1997.

     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:   REPORTING COMPREHENSIVE INCOME

     Effective January 1, 1998, the Company adopted the Financial Accounting 
Standards Board SFAS 130, REPORTING COMPREHENSIVE INCOME.  This Statement 
established standards for reporting and display of comprehensive income and 
its components (revenue, expenses, gains and losses) in a full set of 
general-purpose financial statements.  Reclassification of financial 
statements for earlier periods provided for comparative purposes is required. 
 The adoption of this statement had no material impact to the Company's 
financial condition or results of operation as of March 31, 1998 and for the 
three month periods ended March 31, 1998 and 1997. 

                                       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
Loronix Information Systems, Inc.'s (the "Company") condensed consolidated
financial statements and the notes related thereto included herein.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

     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 $1.67 million in the first quarter
of 1997 to $1.90 million in the first quarter of 1998, representing a 14%
increase.  Revenue in the first quarter of 1997 and 1998 included approximately
$720,000, or 43%, and $1.51 million, or 79%, of digital recording related
products ("CCTVware-Registered Trademark- Products"), respectively.

     COSTS AND EXPENSES

     COST OF PRODUCTS SOLD.  The cost of products sold, consisting principally
of the costs of hardware components and supplies as well as software
amortization, increased from $808,100 in the first quarter of 1997 to $1.0
million in the first quarter of 1998, and represented 48% and 53% of revenue,
respectively.  The increase in the cost of products sold as a percentage of
revenue was primarily attributable to a shift in the Company's product mix away
from identification products ("ID Products") and toward CCTVware Products, which
have a higher cost of product sold as a percentage of revenue.

     OPERATIONS AND CUSTOMER SUPPORT.  Operations and customer support expenses
decreased from $407,000 in the first quarter of 1997 to $347,900 in the first
quarter of 1998, and represented 24% and 18% of revenue, respectively. The
decrease in such expenses resulted primarily from headcount and related
compensation decreases and decreases in travel and supplies expenses.

     SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and administrative
expenses increased from $874,200 in the first quarter of 1997 to $899,700 in the
first quarter of 1998, and represented 52% and 47% of revenue, respectively. The
increase in such expenses resulted primarily from increases in travel expenses
and accounting and legal fees.

     RESEARCH AND DEVELOPMENT.  Research and development expenses, net of
capitalized software costs, decreased from $376,600 in the first quarter of 1997
to $339,900 in the first quarter of 1998, and represented 22% and 18% of
revenue, respectively.  The decrease in such expenses resulted primarily from
headcount and related compensation decreases and decreases in recruiting
expenses.

     INTEREST INCOME, NET.  Net interest income decreased from $59,600 in the
first quarter of 1997 to $31,800 in the first quarter of 1998.  This decrease
was due to a reduction in cash available for investment.

     INCOME TAX EXPENSE/BENEFIT.  An income tax benefit of $211,000 for the
first quarter of 1997 was estimated at 29% of the pretax loss.  An income tax
expense of $800, representing minimum estimated California franchise tax, was
recorded for the first quarter of 1998.  Further, in the first quarter of 1998,
any tax benefit from the operating loss was offset by an increase in the
valuation allowance for deferred tax assets.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     During the three months ended March 31, 1997 and 1998, the Company financed
its operations primarily from working capital.

                                       7
<PAGE>

     The Company's principal uses of cash during the three months ended 
March 31, 1997 and 1998 were to (i) fund operating activities; (ii) acquire 
property and equipment; and (iii) invest in the development of software.

     During the first three months of 1997, the Company's cash and cash 
equivalents decreased from $6,126,500 at December 31, 1996 to $3,935,200 at 
March 31, 1997.  Net cash used in operating activities of $1.7 million 
consisted primarily of losses of $530,500, increases in deferred income tax 
assets, accounts receivable, inventory, prepaid expenses and other assets and 
a decrease in accrued liabilities offset by depreciation and amortization and 
an increase in accounts payable.  During the first three months of 1997, the 
Company's inventory levels increased by $787,700.  This increase resulted 
primarily from the procurement of certain components necessary for the 
assembly of the Company's CCTVware Transit and Solo products in anticipation 
of expected demand. Net cash used in investing activities of $528,600 
consisted primarily of $437,500 of capital expenditures and $116,000 of 
capitalized software.

     During the first three months of 1998, the Company's cash and cash
equivalents decreased from $3,334,100 at December 31, 1997 to $2,662,100 at
March 31, 1998.  Net cash used in operating activities of $550,300 consisted
primarily of losses of $668,600, increases in accounts receivable and prepaid
expenses and other assets and decreases in accounts payable, accrued
liabilities, customer deposits and deferred revenue of $822,500 offset by
depreciation and amortization and decreases in notes receivable and contracts in
progress with earned revenue exceeding related progress billings of $947,200. 
Net cash used in investing activities consisted primarily of $51,800 of capital
expenditures and $100,800 of capitalized software.

     At March 31, 1998, the Company had $6.6 million in working capital, 
including $2.9 million of trade accounts receivable and $1.5 million of 
inventory.  Of the $2.9 million of trade accounts receivable, approximately 
$1.1 million was recorded in conjunction with March 1998 sales.  Further, an 
additional $638,200 of trade accounts receivable was recorded in March 1998 
representing milestone billings associated with a long-term contract (the 
"Aramco Contract") with Aramco Services Company, the U.S. subsidiary of 
Aramco, a Saudi Arabian multinational corporation, ("Aramco").  Payment of 
the $638,200 was received in April 1998.  An additional $309,000 accounts 
receivable balance is due from Aramco and is expected to be received in the 
second quarter of 1998. Days sales outstanding, calculated using an average 
accounts receivable balance, were approximately 128 days as of  March 31, 
1998, compared to 90 days for the same period a year ago.

     The Company's inventory balance at March 31, 1998 and 1997 was $1.5 million
and $1.7 million, respectively.  Annualized inventory turns, calculated using an
average inventory balance, were 2.4 and 2.1 as of March 31, 1998 and 1997,
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 $2.5 million line of credit based on a percentage of
the Company's eligible accounts receivable.  The line of credit facility expires
in May 1998 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 1998 of approximately $450,000.  The Company believes it
has sufficient working capital to meet its capital requirements and fund
operations for at least the next twelve months.

CERTAIN FACTORS BEARING ON FUTURE RESULTS

     The statements in the third sentence under the caption "Revenue", and the
fifth sentence of the fifth paragraph and the third, fifth and sixth sentences
of the seventh paragraph under the caption "Financial Condition, Liquidity and
Capital Resources" are forward-looking statements.  In addition, the Company may
from time to time make oral forward-looking statements.  The following are
important factors that could cause results to differ materially from those
projected in any such forward-looking statements.

     DISTRIBUTION RELATIONSHIPS.  The Company believes its success in
penetrating markets for its ID Products and CCTVware Products depends in part on
its ability to maintain distribution relationships with manufacturing
representatives, dealers, systems integrators and distributors 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 adversely affect the
Company's business, operating results and financial condition.  Further, there
can be no assurance that the businesses with which 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's products or will not otherwise discontinue 

                                       8
<PAGE>

their relationships with the Company.  For instance, an original equipment 
manufacturer that used to sell the Company's ID Products elected to produce 
its own identification products and currently competes with the Company.

     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 1996, Aramco and the Aramco Contract
accounted for 56% of the Company's revenue.  The Company has completed
substantially all of its obligations under the Aramco Contract and other sales
associated with Aramco and currently has no reason to believe that it will not
collect the approximately $388,000 remaining payments to be made thereunder. 
However, there can be no assurance that events or conditions may not occur which
could threaten the Company's ability to collect the remaining amounts owed by
Aramco which could result in a material adverse effect on the Company's
business, operating results and financial condition.  The Company does not
currently anticipate that Aramco will generate any material revenue for the
Company in the foreseeable future.

     COMPETITION.  Certain of the Company's current and prospective 
competitors have substantially greater technical, financial and marketing 
resources than the Company.  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.  
Moreover, while the Company believes that the price/performance 
characteristics of its ID products are currently competitive, increased 
competition from low-cost, low-functionality identification systems have 
created, and will continue to create, pricing pressures which could 
materially and adversely affect the Company's ID Products business, operating 
results and financial condition.

     PROPRIETARY RIGHTS. The Company is not aware that its products, trademarks
or other proprietary rights infringe on the proprietary rights of any other
third parties, except that a claim of infringement has been asserted against the
Company by Prima Facie, Inc.  An adverse result in this litigation with Prima
Facie, Inc. could have a negative impact on the financial position and results
of operations of the Company.  There can be no assurance that other third
parties will not assert 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.

     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
results of operations or financial position.

     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.

                                       9
<PAGE>

     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 has delayed
anticipated revenue, delays in the awarding of municipal contracts to the
Company for CCTVware Products delayed the booking of substantial orders and the
conclusion of the Aramco Contract has led to a sharp decrease in the Company's
ID Product 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.

     LEGAL PROCEEDINGS.  On October 17, 1997, the Company received notice that
it has been named as a defendant in a patent infringement lawsuit brought by a
competitor, Prima Facie, Inc., 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 Prima Facie, Inc. and that the
Company has interfered with Prima Facie, Inc.'s business relationships.  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 intends to
defend itself vigorously, an adverse result in the litigation could have a
negative impact on the financial position and the results of operations of the
Company.

     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.

     CAPITAL REQUIREMENTS.  The Company believes that it has sufficient working
capital to meet its requirements for at least the next 12 twelve 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 extraordinary 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 each of the past 5 quarters, and such losses, which may
continue in the foreseeable future, will 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, financial condition and results of operation.

     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.

                                       10
<PAGE>

PART II.  OTHER INFORMATION

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

          None

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, 1998. 







                                       11
<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 11, 1998                           /s/ Jonathan C. Lupia
------------                           -----------------------------------
   Date                                Jonathan C. Lupia
                                       Chief Financial Officer



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