<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  FORM 10-Q

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

              For the Quarterly Period Ended: SEPTEMBER 30, 1997

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

           For the Transition Period From            to           .
                                          ----------    ----------

                      Commission File Number:  0-27120


                           KENSEY NASH CORPORATION
           (Exact name of registrant as specified in its charter)



                DELAWARE                              36-3316412
      (State or other jurisdiction         (IRS Employer Identification No.)
      of incorporation or organization)



   MARSH CREEK CORPORATE CENTER, 55 EAST UWCHLAN AVENUE, SUITE 204, EXTON,
                             PENNSYLVANIA 19341
             (Address of principal executive offices and zip code)


     Registrant's telephone number, including area code:  (610) 524-0188


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes  X   No
                                               ---     ---

     As of October 31, 1997, there were outstanding 7,217,491 shares of Common
Stock, par value $.001, of the registrant.






                                       1

<PAGE>   2


                            KENSEY NASH CORPORATION

                        QUARTER ENDED SEPTEMBER 30, 1997



                                    INDEX


<TABLE>
<CAPTION>
                                                                            
                                                                                           PAGE
                                                                                           ----
<S>                                                                                      <C>
PART I - FINANCIAL INFORMATION


     ITEM 1.FINANCIAL STATEMENTS                                                                         
                 Condensed Consolidated Balance Sheets                                                   
                  as of September 30, 1997  (Unaudited) and June 30, 1997 ................    3             
                 
                 Condensed Consolidated Statements of Operations                                         
                  for the three months ended September 30, 1997 and 1996 (Unaudited) .....    4             
                 
                 Condensed Consolidated Statements of Stockholders' Equity as of                         
                  September 30, 1997 (Unaudited) and June 30, 1997 .......................    5             
                 
                 Condensed Consolidated Statements of Cash Flows                                         
                  for the three months ended September 30, 1997 and 1996 (Unaudited) .....    6             
            
                 Notes to Condensed Consolidated Financial Statements (Unaudited) ........    7             
            
     ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF                                                      
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS ...........................    9                   
            
            
PART II - OTHER INFORMATION                                                                                               
            
     ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K .............................................   12                   
            
           
SIGNATURES................................................................................   13                   
</TABLE>


                                       2
<PAGE>   3
PART I-FINANCIAL INFORMAITON

ITEM 1. FINANCIAL STATEMENTS

KENSEY NASH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                           SEPTEMBER 30,           JUNE 30,
                                                                                               1997                  1997
                                                                                          -----------------------------------
                                                                                               (UNAUDITED)
<S>                                                                                     <C>                     <C>
ASSETS                                                                                 
CURRENT ASSETS:                                                                    
 Cash and cash equivalents                                                                $   3,029,275          $    868,180
 Short-term investments                                                                       3,663,074             6,482,624
 Trade receivables                                                                              792,055             1,252,110
 Other receivables (including approximately $87,500 and $30,000 at                 
   September 30, 1997 and June 30, 1997, respectively, due from employees)                      437,881               431,668
 Inventory (Note 3)                                                                             824,506               735,922
 Prepaid expenses and other                                                                     358,532               295,232
                                                                                          -------------          ------------
    Total current assets                                                                      9,105,323            10,065,736
                                                                                   
PROPERTY, PLANT AND EQUIPMENT, AT COST                                             
 Leasehold improvements                                                                       3,207,005             3,207,005
 Machinery, furniture and equipment                                                           2,856,729             2,719,543
 Construction in progress                                                                        65,884                57,614
                                                                                          -------------          ------------
    Total property, plant and equipment                                                       6,129,618             5,984,162
 Accumulated depreciation                                                                    (2,177,147)           (1,978,405)
                                                                                          -------------          ------------
Net property, plant and equipment                                                             3,952,471             4,005,757
                                                                                          -------------          ------------
OTHER ASSETS:                                                                      
 Restricted investments (Note 5)                                                              2,419,965             2,419,965
 Leased property under capital leases, less accumulated amortization of            
   $98,628 and $115,550 at September 30, 1997 and June 30, 1997, respectively                    90,139               101,974
                                                                                          -------------          ------------
   Total other assets                                                                         2,510,104             2,521,939
                                                                                          -------------          ------------
TOTAL                                                                                     $  15,567,898          $ 16,593,432
                                                                                          =============          ============ 
LIABILITIES AND STOCKHOLDERS' EQUITY                                               
                                                                                   
                                                                                   
CURRENT LIABILITIES:                                                               
 Accounts payable                                                                         $     147,044          $    522,311
 Accrued expenses                                                                               283,579               323,850
 Current portion of line of credit and capital lease obligations (Note 4)                       106,678                42,702
 Deferred revenue                                                                                13,755                 5,000
                                                                                          -------------          ------------
   Total current liabilities                                                                    551,056               893,863
                                                                                          -------------          ------------
DEFERRED REVENUE - ROYALTIES (Note 2)                                                         2,920,813             3,000,000
LINE OF CREDIT AND OBLIGATIONS UNDER  CAPITAL                                      
  LEASES, long-term portion (Note 4)                                                            496,473               572,623
                                                                                          -------------          ------------
   Total liabilities                                                                          3,968,342             4,466,486
                                                                                          -------------          ------------
COMMITMENTS AND CONTINGENCIES (Note 5)                                             
                                                                                   
STOCKHOLDERS' EQUITY:                                                              
 Preferred stock, $.001 par value, 100,000 shares authorized,                      
   no shares issued or outstanding at September 30, 1997 and June 30, 1997         
 Common stock, $.001 par value, 25,000,000 shares authorized,                      
   7,215,321 and 7,198,251 shares issued and outstanding at                        
   September 30, 1997 and June 30, 1997,  respectively                                            7,215                 7,198
 Capital in excess of par value                                                              34,356,080            34,203,807
 Accumulated deficit                                                                        (22,763,739)          (22,084,059)
                                                                                          -------------          ------------
   Total stockholders' equity                                                                11,599,556            12,126,946
                                                                                          -------------          ------------
TOTAL                                                                                     $  15,567,898          $ 16,593,432
                                                                                          =============          ============
</TABLE>

See notes to condensed consolidated financial statements.


                                      3
<PAGE>   4





KENSEY NASH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                    THREE MONTHS ENDED
                                                                                       SEPTEMBER 30,
                                                                            ------------------------------------
                                                                                  1997                   1996
<S>                                                                              <C>                <C>
REVENUES (Note 1):                               
 Net sales                                                                       $   534,061         $   603,746
 Research and development                                                            733,331             619,363
 Milestone fees                                                                                        1,050,000
 Royalty income                                                                      297,898              55,000
                                                                                 -----------         -----------
      Total revenues                                                               1,565,290           2,328,109
                                                                                 -----------         -----------
OPERATING COSTS AND EXPENSES:                                                                                  
Cost of products sold                                                                816,090             558,440
Research and development                                                           1,185,385           1,084,292
Selling, general and administrative                                                  364,217             471,727
                                                                                 -----------         -----------
      Total operating costs and expenses                                           2,365,692           2,114,459
                                                                                 -----------         -----------
(LOSS) INCOME FROM OPERATIONS                                                       (800,402)            213,650
                                                                                 -----------         -----------
OTHER INCOME (EXPENSE):                                                                                        
 Interest income                                                                     133,665             178,157
 Interest expense                                                                    (14,584)           (171,752)
 Other                                                                                 1,641                 658
                                                                                 -----------         -----------
      Total other income - net                                                       120,722               7,063
                                                                                 -----------         -----------
NET (LOSS) INCOME                                                                $  (679,680)        $   220,713
                                                                                 ===========         ===========
(LOSS) EARNINGS PER COMMON SHARE  (Note 1)                                       $     (0.09)        $      0.03
                                                                                 ===========         ===========
WEIGHTED AVERAGE COMMON                                                                                        
 SHARES OUTSTANDING (Note 1)                                                       7,205,400           7,389,318
                                                                                 ===========         ===========
                                                        
</TABLE>


See notes to condensed consolidated financial statements.




                                      4

<PAGE>   5





KENSEY NASH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                           
                                                                           CAPITAL
                                                  COMMON STOCK            IN EXCESS
                                          ---------------------------       OF PAR        ACCUMULATED
                                          SHARES               AMOUNT       VALUE          DEFICIT            TOTAL
<S>                                     <C>                 <C>       <C>            <C>                <C>             
BALANCE, JUNE 30, 1996                   7,156,493         $   7,156    $33,815,216     $(21,821,583)      $12,000,789
 Exercise of stock options                  41,758                42        388,591                            388,633
 Net loss                                                                                   (262,476)         (262,476)
                                         ---------         ---------     ----------     ------------       -----------
BALANCE, JUNE 30, 1997                   7,198,251             7,198     34,203,807      (22,084,059)       12,126,946
 Exercise of stock options                  17,070                17        152,273                            152,290
 Net loss                                                                                   (679,680)         (679,680)
                                         ---------         ---------     ----------     ------------       -----------
BALANCE, SEPTEMBER 30, 1997 (Unaudited)  7,215,321         $   7,215    $34,356,080     $(22,763,739)      $11,599,556
                                         =========         =========     ==========     ============       ===========

See notes to condensed consolidated financial statements.
</TABLE>


                                      5
<PAGE>   6




KENSEY NASH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                        THREE MONTHS ENDED
                                                                                           SEPTEMBER 30,
                                                                              -----------------------------------
                                                                                      1997             1996
<S>                                                                          <C>                 <C>
OPERATING ACTIVITIES:
 Net (loss) income                                                            $      (679,680)     $   220,713
 Adjustments to reconcile net (loss) income to net cash used in                              
   operating activities:                                                                     
   Depreciation and amortization                                                      210,577          159,793
   Interest expense not requiring cash                                                                 166,513
 Changes in assets and liabilities which provided (used) cash:                               
   Accounts receivable                                                                453,842         (360,963)
   Prepaid expenses and other current assets                                          (63,300)          89,492
   Inventory                                                                          (88,584)         (87,252)
   Accounts payable and accrued expenses                                             (415,538)        (332,085)
   Deferred revenue                                                                   (70,432)
                                                                              ---------------      -----------
   Net cash used in operating activities                                             (653,115)        (143,789)
                                                                              ---------------      -----------
INVESTING ACTIVITIES:                                                                        
 Additions to property, plant and equipment                                          (145,456)        (587,305)
 Sale of investments                                                                2,819,550          913,222
                                                                              ---------------      -----------
    Net cash provided by investing activities                                       2,674,094          325,917
                                                                              ---------------      -----------
FINANCING ACTIVITIES:                                                                        
 Principal payments under capital leases                                              (12,174)         (11,813)
 Net advance repayments                                                                                (20,000)
 Proceeds from issuance of common stock                                                                 72,249
 Exercise of stock options                                                            152,290
                                                                              ---------------      -----------
    Net cash provided by financing activities                                         140,116           40,436
                                                                              ---------------      -----------
INCREASE IN CASH AND CASH EQUIVALENTS                                               2,161,095          222,564
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                          868,180        4,549,707
                                                                              ---------------      -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                                        $     3,029,275      $ 4,772,271
                                                                              ===============      ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                                            
 Cash paid for interest                                                       $        14,584      $     5,239
                                                                              ===============      ===========
 Cash paid for income taxes                                                   $                    $
                                                                              ===============      ===========
See notes to condensed consolidated financial statements.
</TABLE>

                                       6

<PAGE>   7




                            KENSEY NASH CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                  (UNAUDITED)

NOTE 1 --CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

      BASIS OF PRESENTATION

      The condensed consolidated balance sheet at June 30, 1997 and the
      condensed consolidated statement of stockholders' equity at June 30, 1997
      have been condensed from the audited financial statements at that date.
      The condensed consolidated balance sheet at September 30, 1997, the
      condensed consolidated statements of operations for the three months
      ended September 30, 1997 and 1996 and the condensed consolidated
      statements of cash flows for the three months ended September 30, 1997
      and 1996 have been prepared by Kensey Nash Corporation (the "Company")
      and have not been audited by the Company's Independent Auditors.  In the
      opinion of management, all adjustments (which include only normal
      recurring adjustments) necessary to present fairly the financial
      position, results of operations and cash flows at September 30, 1997 and
      for all periods presented have been made.

      Certain information and note disclosures normally included in the
      Company's annual financial statements prepared in accordance with
      generally accepted accounting principles have been condensed or omitted.
      These condensed consolidated financial statements should be read in
      conjunction with the financial statements and notes thereto included in
      the Company's June 30, 1997 consolidated financial statements filed with
      the Securities and Exchange Commission on Form 10-K.  The results of
      operations for the period ended September 30, 1997 are not necessarily
      indicative of operating results for the full year.

      NET (LOSS) INCOME PER SHARE
      For the three months ended September 30, 1997 and 1996, net (loss) income
      per share is computed using the weighted average number of shares of
      common stock outstanding.  Common equivalent shares from options are
      included in the computation (using the treasury stock method) when their
      effect is dilutive.

      CASH AND CASH EQUIVALENTS
      Cash and cash equivalents represent cash in banks and short-term
      investments having an original maturity of less than three months.

      INVESTMENTS
      Investments at September 30, 1997 and June 30, 1997 consist of short-term
      Certificates of Deposit, Government Bonds and U.S. Treasury Bills.  In
      accordance with Statement of Financial Accounting Standards ("SFAS") No.
      115, Accounting for Certain Investments in Debt and Equity Securities,
      the Company has classified its entire investment portfolio as
      available-for-sale securities except for those pledged as collateral
      which are included in restricted investments (see Note 5).
      Available-for-sale securities are reported at fair value with unrealized
      gains and losses included in shareholders' equity (at September 30, 1997,
      amortized cost approximates fair market value).  Realized gains and
      losses are included in interest income.

      EXPORT SALES
      Export sales from the Company's U.S. operations to unaffiliated customers
      in Europe totaled $22,485 and $126,195 for the three months ended
      September 30, 1997 and 1996, respectively.

                                       7



<PAGE>   8



NOTE 2 -- DEFERRED REVENUE - ROYALTIES

      Upon receipt of pre-market approval for the 8 French ("F") size
      Angio-Seal device (the "Angio-Seal") from the Food and Drug
      Administration (the "FDA") on September 30, 1996, the Company received a
      $3 million advance on future royalties under the Company's licensing
      agreement  (the "Licensing Agreement") with American Home Products
      Corporation ("AHP").  Such advance has been recorded as deferred revenue.
      The Licensing Agreement provides for certain minimum royalty payments
      ("Minimum Royalty") during the first five years after receiving FDA
      approval (each royalty year begins on October 1 and ends on September
      30).  As stipulated in the Licensing Agreement, the $3 million advance
      will be reduced in each period by 50% of royalties earned in excess of
      the Minimum Royalty in any royalty year.  The remainder of royalties
      earned will be received as cash proceeds by the Company.  At September
      30, 1997, the Company had exceeded the first royalty year Minimum Royalty
      by $158,374, and has therefore reduced  the deferred revenue balance by
      50% of such excess, to $2,920,813.  As the Company cannot reasonably
      estimate the excess, if any, of future royalty payments over the Minimum
      Royalty in each year, the entire balance has been classified as long-term
      at September 30, 1997.


NOTE 3 -- INVENTORY

      Inventory primarily includes the cost of material utilized in the
      processing of the Company's products.  Inventory is as follows:



<TABLE>
<CAPTION>
                               SEPTEMBER 30, 1997   JUNE 30, 1997   
                               ------------------  ---------------- 
              <S>                      <C>               <C>        
              Raw Materials              $758,578          $649,262 
              Work in Process              65,928            86,660 
                                         --------          -------- 
              Total                      $824,506          $735,922 
                                         ========          ======== 
</TABLE>

NOTE 4 -- LINE OF CREDIT

      In February 1997, the Company replaced an existing $100,000 revolving
      credit and term loan agreement bearing interest at a fixed rate of 8.75%
      with a $500,000 revolving credit and term loan agreement ("the Revolver")
      bearing interest at the prime rate of interest (8.5% at September 30,
      1997).  The Revolver called for interest only payments until December 1,
      1997 at which time it converted to a term loan due in 60 monthly
      installments of principal and interest.  In October  1997, the Revolver
      was increased to $2 million and the date on which it converts to a term
      loan was extended to August 1, 1998.  The Revolver is collateralized by
      the business assets of the Company.  At September 30, 1997, the Company
      had borrowed $500,000 under the Revolver.


NOTE 5 -- COMMITMENTS AND CONTINGENCIES

      The Company has pledged $2,419,965 in investments as collateral to secure
      certain bank loans to employees which were used by such employees for the
      payment of taxes incurred by such employees as the result of the receipt
      of Common Stock in settlement of the employee stock rights.  In exchange
      for the Company pledging collateral for such loans, each affected
      employee has pledged their Common Stock as collateral to the Company.
      The balance outstanding on such employee loans was $2,241,371 at
      September 30, 1997.


NOTE 6 -- INCOME TAXES
      As of June 30, 1997, the Company had net operating loss carryforwards 
      for federal and state tax purposes totaling $18.3 and $1.2 million, 
      respectively.  As such, no provision has been made for income taxes for 
      the three months ended September 30, 1997.


                                       8

<PAGE>   9

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

     OVERVIEW
     The Company is a medical device company focused on the commercialization
and continuing development of a line of absorbable medical devices for the
sealing of arterial punctures created during diagnostic and therapeutic
cardiovascular procedures such as angiography, angioplasty, atherectomy and the
placement of stents.  The Company's proprietary principal product, the 8 French
("F") Angio-Seal device (the "Angio-Seal"), has been designed to provide a safe,
effective and rapid method of sealing arterial punctures.  The Company  is
developing other sizes of the Angio-Seal, including 6F and 10F sizes (together
with Angio-Seal, the "Angio-Seal Product Line"), to address broader market
applications.  In addition to its involvement with the Angio-Seal Product Line,
the Company manufactures its proprietary collagen for use by third parties and
has expanded its design and manufacturing capabilities in absorbable polymers. 
The Company is also developing a rotary catheter for application in opening
occluded bypass grafts.


     The Company has a strategic relationship with AHP whereby AHP has the
worldwide marketing and manufacturing rights to the Angio-Seal Product Line.
The Angio-Seal was approved for sale in Europe (CE Mark) in September 1995
and in the United States in September 1996.  The Angio-Seal is also being sold
in Canada, Australia, Saudi Arabia and Israel.


   THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED
   SEPTEMBER  30, 1996


     Revenues for these periods consisted of net sales, research and development
revenue, milestone fees and royalty income.  Revenues decreased 33% to
$1,565,000 in the three months ended September 30, 1997 from $2,328,000 in the
three months ended September 30, 1996.  Net sales of products decreased 12% to
$534,000 from $604,000 for the three months ended September 30, 1997 and 1996,
respectively.  Research and development revenues increased 18% to $733,000 from
$619,000 for the three months ended September 30, 1997 and 1996, respectively. 
The decrease in net sales was mainly attributable to a decrease in device
production as the Company transitions from the supply of subassemblies to the
supply of completed devices for distribution to the European marketplace to
AHP.  The increase in research and development revenues relates to increased
activity in contract research and development from AHP for the 6F and 10F
clinical trial programs, which were started in July 1997, and for additional
sizes of and product enhancements to the Angio-Seal Product Line.  The $1.05
million milestone fee in the three months ended September 30, 1996 represented
the final milestone under the License Agreement with AHP which was earned by
the Company upon receipt of FDA pre-market approval.  Royalty income increased
442% to $298,000 from $55,000 in the three months ended September 30, 1997 and
1996, respectively.  This increase reflected increased demand in the European
market versus the same quarter a year earlier as well as the commencement of
Angio-Seal sales in the U.S..   As the Company and AHP increase production and
continue to market the Angio-Seal in the United States and in Europe, the
Company expects royalty income to become a significant source of revenue. 
Royalty rates are based on volume of units sold and are comparable in both the
domestic and foreign licensing agreements with AHP.

     Cost of products sold increased 46% to $816,000 in the three months ended
September 30, 1997 from $558,000 in the three months ended September 30, 1996.
This increase primarily reflected additional fixed manufacturing overhead costs
related to the Company's expansion which have not yet been fully absorbed due
to the Company's current production levels.

     Research and development expense, including regulatory and clinical
expense, increased 9% to $1,185,000 in the three months ended September 30,
1997 from $1,084,000 in the three months ended September 30, 1996.  This
increase was primarily due to increases in outside expenses and clinical trial
activity in conjunction with the development of the Angio-Seal Product Line, as
well as increased



                                       9



<PAGE>   10


activity within the rotary technology program.  The Company expects research
and development expense to continue at recent levels, if not slightly increase,
as it continues development of additional sizes of the Angio-Seal, investigates
and develops new products, conducts clinical trials, seeks regulatory approval
for its products and researches manufacturing process improvements related to
the collagen and polymer business.

     Selling, general and administrative expense decreased 23% to $364,000 in
the three months ended September 30, 1997 from $472,000 in the three months
ended September 30, 1996.  This decrease was primarily due to favorable trends
in certain outside professional fees.

     Interest expense decreased 92% to $15,000 in the three months ended
September 30, 1997 from $172,000 in the three months ended September 30, 1996.
This decrease was due to the repayment of the AHP Credit Agreement upon receipt
of FDA approval of the Angio-Seal on September 30, 1996.  Interest income
decreased to $134,000 in the three months ended September 30, 1997 from
$178,000 in the three months ended September 30, 1996.  The decrease was due to
a decline in investment balances primarily attributable to the repayment of the
AHP Credit Agreement as well as capital expenditures and funding for the
Company's normal operating activities.

     LIQUIDITY AND CAPITAL RESOURCES

     Net cash used in the Company's operating activities during the three
months ended September 30, 1997 and 1996 was $653,000 and $144,000,
respectively.  The increase in net cash used in operating activities was
primarily due to a net loss of  $680,000 for the period ended September 30,
1997 compared to net income of $221,000 for the period ending September 30,
1996.  Changes in asset and liability balances for the three months ended
September 30, 1997 resulted in a $184,000 use of cash in operating activities
offset by a $211,000 non-cash adjustment for depreciation expense.

     Capital expenditures were $145,000 for the three months ended September
30, 1997, primarily representing expansion of the Company's manufacturing
capabilities.

     The Company's cash, cash equivalents and short-term investments were
$6,692,000 at September 30, 1997.  In addition, the Company has pledged
$2,420,000 in investments (not included in the $6,692,000) as collateral to
secure bank loans made to employees for the payment of taxes incurred by such
employees as a result of their receipt of Common Stock in settlement of the
employee stock rights at the time of the IPO.  In exchange for the Company's
pledging this collateral, the employees have pledged their Common Stock as
collateral to the Company.

     The Company increased its $500,000 bank revolving line of credit to $2.0
million in September 1997, but has not taken any further advances under such
facility at September 30, 1997.  Upon FDA approval of the Angio-Seal on
September 30, 1996, the Company recorded a $3,000,000 advance on future
royalties from AHP as deferred revenue.  As specified in the Licensing
Agreement, the advance will be reduced by 50% of royalties earned in excess of
the annual minimum royalty for each royalty year.  At September 30, 1997, the
Company had exceeded the first royalty year Minimum Royalty by $158,374, and
has therefore reduced the deferred revenue balance by 50% of such excess, to
$2,920,813.

     On November 13, 1997, the Company announced that it had acquired a
portfolio of puncture closure patents and patent applications which will result
in a 33% to 50% increase in royalties paid to the Company for the Angio-Seal
product by Sherwood-Davis & Geck ("SD&G"), a subsidiary of AHP.  The
intellectual property was acquired from two doctors who had licensed their
inventions to AHP in 1995.  The licenses were subsequently transferred to SD&G,
who holds a worldwide exclusive license to the acquired patents and will
continue to do so. As a result of acquiring the patents, the Company will be
entitled to earn the royalty fees formerly paid by SD&G to the doctors for each
Angio-Seal device sold, commencing January 1, 1998.


                                       10



<PAGE>   11


     The Company anticipates that its results of operations will fluctuate for
the foreseeable future due to a number of factors.  Such factors include: AHP's
performance in the manufacturing, marketing and distribution of the Angio-Seal
Product Line; the Company's pursuit of additional regulatory approvals in the
United States and in countries outside of Europe, including Japan; the results
of ongoing and planned clinical trials for the Angio-Seal and other products;
the acceptance of the Company's products in the marketplace; and competitive
products generally, and in particular, those designed for the sealing of
arterial site punctures.

     The Company plans to continue to expend substantial resources to fund
clinical trials to gain regulatory approvals and make additional marketing
claims and to continue to expand research and development activities for the
Angio-Seal, rotary technology and biomaterials products.

     The Company believes its cash and cash equivalents on hand, combined with
cash generated from operations, will be sufficient to meet the Company's
operating and capital requirements through at least the next twelve months.
However, should the Company significantly expand its efforts in any one of its
current product lines, enter into agreements for the development of new
products or find a suitable merger or acquisition candidate, the Company may
consider additional sources of capital based on requirements and market
conditions at the time.

     Statements contained in this Form 10-Q that are not historical facts are
forward-looking statements that are made pursuant to the Safe Harbor provisions
of the Private Securities Litigation Reform Act of 1995.  The Company cautions
that a number of important factors could cause the Company's actual results for
fiscal year 1998 and beyond to differ materially from those in any
forward-looking statements made by, or on behalf of, the Company. These
important factors include, without limitation, the timing of future regulatory
approvals, announcements of technological innovations or the introduction of
new products by the Company or its competitors, the time, effort and priority
level that AHP attaches to the Angio-Seal and AHP's ability to successfully
manufacture and market the Angio-Seal, the Company's ability to manufacture
Angio-Seal components, competition by other developers of puncture closure
devices, general business conditions in the healthcare industry and general
economic conditions.  Results of operations in any past period should not be
considered indicative of the results to be expected for future periods.
Fluctuations in operating results may also result in fluctuations in the price
of the Common Stock.


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<PAGE>   12


                          PART II - OTHER INFORMATION

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

     A. Exhibits.

        None

     B. Reports on Form 8-K.

        None

     C. Financial Data Schedule


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<PAGE>   13


                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                       KENSEY NASH CORPORATION


Date:  November 14, 1997               By:   /s/ Joseph W. Kaufmann
                                             ----------------------------------
                                             Joseph W. Kaufmann
                                             President, Chief Executive Officer 
                                             and Chief Financial Officer






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