<PAGE>
 
                                   FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                  QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
                    OF THE SECURITIES EXCHANGE ACT OF 1934


      For the Quarter ended June 30, 1997 Commission file number 0-28492
                           -------------                               
--------------------------------------------------------------------------------
                            INNOVASIVE DEVICES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


               Massachusetts                        04-3132641
--------------------------------------------------------------------------------
        (State or other jurisdiction of           (I.R.S. Employer
        incorporation or organization)           Identification No.)

                  734 Forest Street,  Marlborough  MA  01752
--------------------------------------------------------------------------------
                   (Address of principal executive offices)

       Registrant's telephone number, including area code  508/460-8229
                                                           ------------

                                      N/A
--------------------------------------------------------------------------------
              Former name, former address and former fiscal year,
                         if changed since last report.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

                            (1)  YES  X    NO      
                                    ----     ----

                            (2)  YES  X    NO     
                                    ----     ----

The number of shares outstanding of the registrant's common stock as of 
August 14, 1997 was  9,154,072.
<PAGE>
 
                            INNOVASIVE DEVICES, INC.

                                     INDEX
<TABLE> 
<CAPTION> 
                                                                                        Page
                                                                                        ----
<S>                                                                                     <C> 
Part I: Financial Information

  Item 1.  Condensed Consolidated Financial Statements
 
              Condensed Consolidated Balance Sheet at June 30, 1997 (unaudited)
              and December 31, 1996                                                       3
 
              Condensed Consolidated Statement of Operations (unaudited) for
              the Three and Six Months Ended June 30, 1997 and 1996                       4
 
              Condensed Consolidated Statements of Cash Flows (unaudited) for
              the Six Months Ended June 30, 1997 and 1996                                 5
 
              Notes to Unaudited Condensed Consolidated Financial Statements              6
 
  Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                                            8
 
 PART II.  Other Information                                                             11
Signatures                                                                               13
                                                                
Exhibit Index                                                                            14
 
</TABLE>

                                       2
<PAGE>
 
<TABLE>
<CAPTION>
 
                   Part I - Financial Information
 
                   Item 1.  Financial Statements
 
                      INNOVASIVE DEVICES, INC.
                Condensed Consolidated Balance Sheet
                           (in thousands)
 
ASSETS                                     June 30,    December 31,
                                             1997          1996
                                        ---------------------------
<S>                                       <C>          <C>
                                          (unaudited)
Current assets:
     Cash and cash equivalents              $  4,170       $ 12,825
     Marketable securities                    14,789          9,861
     Accounts receivable, net of
      allowance for doubtful 
      accounts of $99 at June 30, 1997
      and $89 at December 31, 1996,            
      respectively                             1,152            759 
     Inventories                               1,786            859
     Prepaid expenses                            206            112
                                        ---------------------------
         Total current assets                 22,103         24,416
 
     Fixed assets, net                         1,832            922
     Other assets, net                         1,256             25
                                        ---------------------------
 
                                            $ 25,191       $ 25,363
                                        ===========================
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
     Accounts payable                       $    778       $    628
     Accounts payable to related party           343            170
     Other current liabilities                   806            777
     Current portion of note payable              73              -
                                        ---------------------------
         Total current liabilities             2,000          1,575
                                        ---------------------------
 
Note payable                                     529              -
                                        ---------------------------
 
Stockholders' equity:
     Common stock                                  1              1
     Additional paid-in capital               54,989         39,789
     Accumulated deficit                     (31,501)       (16,002)
     Deferred compensation                      (827)             -
                                        ---------------------------
                                              22,662         23,788
                                        ---------------------------
 
                                            $ 25,191       $ 25,363
                                        ===========================
 
</TABLE>

  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.

                                       3
<PAGE>
 
<TABLE>
<CAPTION>
 
                                INNOVASIVE DEVICES, INC.
                     Condensed Consolidated Statement of Operations
                    (In thousands, except per share data; unaudited)
 
 
                                            Three months ended       Six months ended
                                                 June 30,                June 30,
                                         ------------------------------------------------
                                             1997        1996        1997         1996
                                         ------------------------------------------------
 
<S>                                       <C>          <C>        <C>          <C>
Net sales                                 $    1,751   $  1,088   $    3,414   $   1,890
 
Cost of sales                                    510        414        1,020         752
                                        ------------------------------------------------
 
     Gross profit                              1,241        674        2,394       1,138
 
Selling, general and administrative
     expenses                                  1,856      1,157        3,351       2,248
Research and development                         927        596        1,757       1,178
Purchased in-process research and
     development                              13,370          -       13,370           -
                                        ------------------------------------------------
 
     Loss from operations                    (14,912)    (1,079)     (16,084)     (2,288)
 
Interest income, net                             286        112          585         174
                                        ------------------------------------------------
 
     Net loss                             ($  14,626)    ($ 967)   ($ 15,499)  ($  2,114)
                                        ================================================

Net loss per share                           ($ 2.00)   ($ 0.16)     ($ 2.12)    ($ 0.37)
                                        ================================================
 
     Shares used in computing net loss
        per share                              7,328      5,882        7,294       5,669
                                        ================================================
</TABLE>



                The accompanying notes are an integral part of 
              these condensed consolidated financial statements.

                                       4
<PAGE>
 
                      INNOVASIVE DEVICES, INC.
           Condensed Consolidated Statement of Cash Flows
                      (In thousands; unaudited)

<TABLE> 
<CAPTION> 
                                                 Six months ended
                                                      June 30,
                                               ---------------------
                                                1997           1996
                                               ------         ------ 
<S>                                       <C>             <C>
Cash flows from operating activities
     Net loss                               $ (15,499)       $(2,114)
     Adjustments to reconcile net loss                     
      to net cash                                          
        provided by (used for)                             
         operating activities:                             
        Depreciation and amortization             191            138
        Purchased in-process research                                
         and development                       13,370              - 
        Changes in assets and                              
         liabilities:                                      
               Accounts receivable, net          (381)          (383)
               Inventories                       (692)          (252)
               Prepaid expenses                   (83)           (79)
               Other assets                         -            ( 6)
               Accounts payable                     6           (220)
               Accounts payable to                                   
                related party                     173             93 
               Other current liabilities          (62)           349
                                             ----------    ---------
                                                           
Net cash used for operating activities         (2,977)        (2,474)
                                             ----------    ---------
 
Cash flows from investing activities
     Purchases of fixed assets                   (404)          (179)
     Purchases of marketable securities        (8,125)             -
     Redemption of marketable securities        3,197              -
     Acquisition of business, net of             
      cash acquired                              (372)             -          
                                             ----------    ---------
Net cash used for investing activities         (5,704)          (179)
                                             ----------    ---------
 
Cash flows from financing activities
     Proceeds from issuance of
      preferred stock, net of
      issuance costs                                 -           926
     Proceeds from issuance of common
      stock, net of issuance costs                  26        21,496
                                             ----------    ---------
 
Net cash provided by financing                       
 activities                                         26        22,422 
                                             ----------    ---------
 
Net increase (decrease) in cash and              
 cash equivalents                               (8,655)       19,769 
 
Cash and cash equivalents at beginning           
 of period                                      12,825         5,052 
                                             ----------    ---------
 
Cash and cash equivalents at end of             
 period                                        $ 4,170       $24,821 
                                             ==========    =========
 
</TABLE>



The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                       5
<PAGE>
 
                            INNOVASIVE DEVICES, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


1.  BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of
Innovasive Devices, Inc. (the "Company") include, in the opinion of management,
all adjustments (consisting of normal recurring adjustments) considered
necessary for a fair presentation of the Company's financial position as of June
30, 1997 and the results of operations for the three and six month periods ended
June 30, 1997 and 1996.  Results of operations for interim periods are not
necessarily indicative of those to be achieved for the full year.

Pursuant to accounting requirements of the Securities and Exchange Commission
(the "SEC") applicable to quarterly reports on Form 10-Q , the accompanying
unaudited condensed consolidated financial statements and these notes do not
include all disclosures required by generally accepted accounting principles for
complete financial statements.  Accordingly, these statements should be read in
conjunction with the financial statements and accompanying notes contained in
the Company's Annual Report on Form 10-K for the year ended December 31, 1996
filed with the SEC on March 26, 1997.


2.  Inventories

Inventories consist of the following:
<TABLE>
<CAPTION>
                                June 30,    December 31,
                                  1997          1996
                                ------------------------
                                (unaudited)
<S>                            <C>          <C>
Raw materials                      $  930          $ 282
Work-in-process                       203            117
Finished goods                        653            460
                                ------------------------
                
Totals                             $1,786          $ 859
                                ========================
</TABLE>
3.  Net Loss Per Share (unaudited)

Net loss per share is determined by dividing the net loss by the weighted
average number of common stock outstanding during the period.  The weighted
average number of common stock outstanding during the period prior to and
including the Company's initial public offering ("IPO") on June 5, 1996 includes
the effect of the assumed conversion of all convertible preferred stock prior to
the actual conversion which occurred upon the closing of the Company's IPO.
Accordingly, net loss per share for the three and six month period ending June
30, 1996 is presented on a pro forma basis.

Pursuant to SEC Staff Accounting Bulletin 83,  common stock equivalents,
although anti-dilutive, issued at prices below the offering price per share
during the twelve months preceding the initial public offering of the Company's
common stock have also been included in the calculation of net loss per share
using the treasury stock method as if outstanding from January 1, 1996 through
March 31, 1996.

In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No.128 ("SFAS No. 128"), "Earnings
Per Share." This statement establishes and simplifies standards for computing
and presenting earnings per share. SFAS No. 128 will be effective for interim
and annual periods ending after December 15, 1997, and requires the restatement
of all previously reported earnings per share data that are presented. Early
adoption of SFAS 128 is not permitted. SFAS No. 128 replaces primary and fully
diluted earnings per share with basic and diluted earnings per share. As the
Company has historically reported net losses, earnings per share as computed
under the provisions of SFAS No. 128 will not differ from the earnings per share
amounts previously reported by the Company.

                                       6
<PAGE>
 
                            INNOVASIVE DEVICES, INC.
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


4.  Deferred compensation

In 1997, the Company issued, under the 1996 Omnibus Stock Plan, 21,500 common
stock options to members of its scientific advisory board and 127,000 common
stock options to certain consultants in conjunction with the acquisition of
MedicineLodge, Inc. (Note 4).  The estimated value of these options totaled
approximately $848 and was recorded as deferred compensation which is being
amortized over the vesting period of the options.  The estimated value of each
option grant was calculated on the date of grant using the Black-Scholes option-
pricing model.


5.  Acquisition

On June 27, 1997, the Company, through a newly formed subsidiary, acquired
substantially all of the operating assets of MedicineLodge, Inc. ("MLI"), in
exchange for 1,885,000 shares of the Company's common stock valued at $14,326
and the assumption of certain liabilities.  The acquisition has been accounted
for under the purchase method and, accordingly, the purchase price has been
allocated based on the estimated fair value of assets purchased and liabilities
assumed upon acquisition. A portion of the purchase price was allocated to in-
process research and development, resulting in a charge to the Company's
operations of $13,370.  The excess of cost over the fair value of net assets
acquired (goodwill) of $1,231 is being amortized over ten years on a straight-
line basis.  The operating results of MLI are included in the Company's results
from the date of acquisition.

The following unaudited pro forma summary combines the results of operations of
the Company and MLI as if the acquisition had occurred at the beginning of 1997
and 1996, after giving effect to certain adjustments, including the write off of
purchased in-process research and development and amortization of goodwill.  The
unaudited pro forma summary does not necessarily reflect the results of
operations as they would have been if the Company and MLI had constituted a
single entity during such periods.

<TABLE>
<CAPTION>
                                     Six months ended
                                         June 30,
                                    -------------------
                                      1997       1996
                                    --------  ---------
<S>                                  <C>       <C>
Net sales                            $  3,958  $  2,657
Net loss                              (16,453)  (15,522)
Net loss per share                      (1.79)    (2.05)
 
</TABLE>

                                       7
<PAGE>
 
                            INNOVASIVE DEVICES, INC.

   Item 2.   Management's Discussion and Analysis of Financial Condition and
                             Results of Operations

OVERVIEW

Since its inception, Innovasive Devices, Inc. (the "Company") has been primarily
engaged in the development, manufacture and marketing of proprietary devices and
instrumentation which facilitate the reattachment of soft tissue structures,
such as ligaments and tendons, to bones and other tissues. The Company has a
limited operating history and has expended significant resources to fund
research and development, the establishment of its manufacturing capabilities
and the expansion of its marketing and sales organization. The Company plans to
continue investing aggressively in these areas. The Company's sales are
principally derived from the sale of its family of ROC tissue fasteners and
related surgical instrumentation. The Company commenced commercial shipments of
its first ROC fastener during 1994 and has since expanded its product offering
to include the IDeal Arthroscopic Suture Fastener System, the ROC XS and Mini
ROC suture fasteners and the Innovasive COR system for the repair of
osteochondral defects.

On June 27, 1997, the Company acquired substantially all of the assets,
including intellectual property related to orthopaedic medicine, and assumed
substantially all of the liabilities of MedicineLodge, Inc., a Delaware
corporation ("MLI") in exchange for 1,885,000 shares of the Company's common
stock. MLI was a privately held designer, developer and manufacturer of
orthopaedic medical devices, particularly implantable systems and related
instrumentation used in minimally invasive arthroscopic procedures to repair
injuries to the knee, and had approximately 30 employees located at its Logan,
Utah offices. A portion of the purchase price was allocated to in-process
research and development, resulting in a charge to the Company's operations of
$13,370,000. The excess of cost over the fair value of net assets acquired
(goodwill) of $1,231,000 is being amortized over ten years on a straight-line
basis. The operating results of MLI are included in the Company's results from
the date of acquisition.

The following information should be read in conjunction with the unaudited
condensed financial statements and notes thereto included in this Quarterly
Report and with the Financial Statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations contained in the
Company's Annual Report on Form 10-K filed with the SEC on March 26, 1997.

Any statements in this report expressing the beliefs and expectations of
management regarding the Company's future results and performance are forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are based on current
expectations that involve a number of risks and uncertainties. The Company
wishes to caution readers not to place undue reliance on any such forward-
looking statements, which speak only as of the date made. Such forward looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical earnings and those presently
anticipated or projected. These risks include the receipt of regulatory
approvals, progress of product development programs, clinical efficacy of and
market demand for the products. Certain of such risks and uncertainties are
described in Exhibit 99 of the Company's Annual Report on Form 10-K filed with
the Securities and Exchange Commission on March 26, 1997.

Results of Operations

Three Months Ended June 30, 1997 compared to the Three Months Ended June 30,
1996

Net sales for the second quarter of 1997 of $1,751,000 increased $663,000 from
$1,088,000 for the same period in the prior year. This increase resulted
primarily from sales of the Innovasive COR system and increased unit sales of
ROC suture fasteners. The COR system, introduced in October 

                                       8
<PAGE>
 
1996, is used to repair osteochondral defects in the knee. In June 1997, the
Company introduced the ROC EZ, an improved version of the original ROC fastener
used in hardbone applications, and the CuffLink, used to augment tunnels made in
the bone for rotator cuff repair procedures. Domestic net sales increased during
the second quarter of 1997 over the second quarter of 1996 as a result of an
increase in the unit sales of the Company's ROC, ROC XS and Mini Roc suture
fasteners and COR systems. International net sales decreased during the second
quarter of 1997 from the second quarter of 1996 primarily as a result of an
initial stocking sale of ROC tissue fasteners and related surgical instruments
to a distributor in Japan in the second quarter of 1996.

Gross profit increased to $1,241,000 in the second quarter of 1997 from $674,000
in the second  quarter of 1996.  As a percentage of sales, gross profit
increased to 70.9% in the second quarter of 1997 from 61.9% in the second
quarter of 1996.  The increase in gross profit was due primarily to the improved
mix of ROC suture fasteners and COR systems sold in the period and higher sales
volumes which resulted in improved manufacturing efficiencies.

Selling, general and administrative expenses increased to $1,856,000 in the
second quarter of 1997 from $1,157,000 in the second quarter of 1996.  The
increase resulted primarily from the expansion of the domestic direct sales
force, increased salary and travel costs, higher selling commissions resulting
from higher sales volume, increased advertising costs and the increased
administrative costs associated with operating as a public company.

Research and development expenses increased to $927,000 in the second quarter of
1997 from $596,000 in the second quarter of 1997. The increase was primarily
attributable to higher salary and recruitment costs associated with additional
personnel required to support new product development.  Increases also occurred
in expenses related to product development costs and patent preparation and
filing costs associated with product development programs.

As a result of the Company's transaction with MLI, the Company incurred a charge
to operations of $13,370,000 representing the portion of the purchase price
allocated to in-process research and development.

Interest income increased to $286,000 in the second quarter of 1997 from
$112,000 in the second quarter of 1996, primarily as a result of the interest
received on the investment of the proceeds of the initial public offering closed
during the second quarter of 1996.

As a result of the foregoing, the net loss for the second quarter of 1997 was 
$14,626,000. The net loss, prior to the in-process research and development 
charge of $13,370,000, increased to $1,256,000 from a loss of $967,000 in the 
second quarter of 1996.

SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996

Net sales for the first six months of 1997 of $3,414,000 increased $1,524,000
from $1,890,000 for the same period in the prior year. This increase resulted
primarily from sales of the Innovasive COR system and increased unit sales of
ROC suture fasteners. The COR system, introduced in October 1996, is used to
repair osteochondral defects in the knee. In June 1997, the Company introduced
the ROC EZ, an improved version of the original ROC fastener used in hardbone
applications, and the CuffLink, used to augment tunnels made in the bone for
rotator cuff repair procedures. Domestic net sales increased during the first
six months of 1997 over the same period in the prior year as a result of an
increase in the unit sales of the Company's ROC, ROC XS and Mini Roc suture
fasteners and COR systems. International net sales decreased during the first
six months of 1997 from the same

                                       9
<PAGE>
 
period in the prior year primarily as a result of an initial stocking sale of
ROC tissue fasteners and related surgical instruments to a distributor in Japan
in the second quarter of 1996.

Gross profit increased to $2,394,000 for the first six months of 1997 from
$1,138,000 for the first six months of 1996.  As a percentage of sales, gross
profit increased to 70.1% for the first six months of 1997 from 60.2% for the
first six months of 1996. The increase in gross profit was due primarily to the
improved mix of ROC suture fasteners and COR systems sold in the period and
higher sales volumes which resulted in improved manufacturing efficiencies.

Selling, general and administrative expenses increased to $3,351,000 for the
first six months of 1997 from $2,248,000 for the first six months of 1996. The
increase resulted primarily from the expansion of the domestic direct sales
force, increased salary and travel costs, higher selling commissions resulting
from higher sales volume, increased sample expenses and the increased costs
associated with operating as a public company.

Research and development expenses increased to $1,757,000 for the first six
months of 1997 from $1,178,000 for the first six months of 1996. The increase
was primarily attributable to product development costs and patent preparation
and filing costs associated with product development programs.   Increases also
occurred in expenses related to salary and recruitment costs associated with
additional personnel required to support new product development.

As a result of the Company's transaction with MLI, the Company incurred a charge
to operations of $13,370,000 representing the portion of the purchase price
allocated to in-process research and development.

Net interest income increased to $585,000 for the first six months of 1997 from
$174,000 for the first six months of 1996, primarily as a result of the interest
received on the investment of the proceeds of the initial public offering closed
during the second quarter of 1996.

As a result of the foregoing, the net loss for the first six months of 1997 was 
$15,499,000. The net loss, prior to the in-process research and development 
charge of $13,370,000, increased to $2,129,000 for the first six months of 1997 
from a loss of $2,114,000 for the same period in the prior year.

LIQUIDITY AND CAPITAL RESOURCES
 
As of June 30, 1997, working capital amounted  to $20.1 million as compared to
$22.8 million at December 31, 1996.

Cash used in the Company's operations amounted to $3.0 million for the first six
months of 1997 and was comprised of the net loss of $15.5 million, less a non-
cash adjustment of $13.4 million for in process research and development
resulting from the transaction with MLI, and a net increase in working
capital requirements including an increase in accounts receivable as a result of
higher sales levels and an increase in inventories to support new product
introductions, partially offset by an increase in trade payables.

Cash used for investing activities totaled $5.7 million for the first six months
of 1997 resulting from net purchases of marketable securities totaling $4.9
million, capital equipment expenditures totaling $404,000 and direct transaction
costs related to the MLI transaction of $372,000. The Company invests its excess
cash in marketable securities with maturities of less than two years.

The Company expects that its balance of cash, cash equivalents and marketable
securities will be adequate to fund the near term cash requirements for
operations, working capital and fixed assets.

                                       10
<PAGE>
 
                            INNOVASIVE DEVICES, INC.

                          PART II -- OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS
         -----------------

         None

ITEM 2.  CHANGES IN SECURITIES
         ---------------------

         None

Item 3.  DEFAULTS UPON SENIOR SECURITIES
         -------------------------------

         None

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

The Company's Annual and Special Meeting of Stockholders was held on June 27,
1997 in Boston, Massachusetts. All matters submitted to a vote of the Company's
stockholders were described in the Company's Proxy Statement dated June 6, 1997.
At the meeting, the shareholders:

(1)  elected the following directors for terms expiring in 1999 and 2000:

<TABLE> 
<CAPTION> 
                              TERM       TOTAL VOTE FOR      TOTAL VOTE WITHHELD
                             EXPIRES      EACH DIRECTOR       FROM EACH DIRECTOR
                             -------     --------------      -------------------
<S>                          <C>          <C>                    <C>
Thomas C. McConnell           2000         5,754,592              431,999
Robert R. Momsen              2000         6,184,991                1,600
Richard B. Caspari, M.D.      2000         6,184,891                1,700
Alan Chervitz                 1999         5,699,900              486,691
</TABLE> 

(2)  approved the acquisition of MedicineLodge, Inc. assets and liabilities and 
     the issuance of common stock therefor;


     For                 5,106,870
     Against                 3,250
     Abstain               430,699
     Broker Non-Votes      645,772
 
(3)  approved the Company's 1996 Omnibus Stock Plan as amended by the Board of
     Directors;
 
     For                 4,459,631
     Against               868,899
     Abstain               212,289
     Broker Non-Votes      645,772
 
(4)  approved the Company's 1996 Non-Employee Directors Stock Option Plan as
     Amended by the Board of Directors;
 
     For                  4,621,167
     Against                487,502
     Abstain                471,950

                                       11
<PAGE>
 
     Broker Non-Votes       605,972
 
(5)  ratified the Board of Directors' selection of Price Waterhouse LLP as the
     Company's independent auditors for the fiscal year ending December 31,
     1997.
 
 
     For                   6,100,475
     Against                     500
     Abstain                  53,516
     Broker Non-Votes         32,100
 

Item 5.   Other Information
          -----------------

             None

Item 6.   Exhibits and Reports on Form 8-K
          ---------------------------------

        a.  See Exhibit Index, Page 14

        b.  Reports on Form 8-K

        On July 10, 1997 the Company filed a Current Report on Form 8-K, as
        amended on Form 8-K/A filed on July 30, 1997, to disclose, under the
        heading of Item 2, Acquisition or Disposition of Assets, the acquisition
        of substantially all of the assets, including intellectual property
        related to orthopaedic medicine, and assumption of substantially all of
        the liabilities of MedicineLodge, Inc., a Delaware corporation.

                                       12
<PAGE>
 
SIGNATURES

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

INNOVASIVE DEVICES, INC,

Date:    August 14, 1997    By:/s/ Richard D. Randall
                            --------------------------
         Richard D. Randall
         President, Chief Executive Officer
         and Director
         (Principal Executive Officer)

Date:    August 14, 1997    By:/s/ James V. Barrile
                            ------------------------
         James V. Barrile
         Executive Vice President of Finance,
         Chief Financial Officer and Treasurer
         (Principal Financial Officer)

                                       13
<PAGE>
 
                            INNOVASIVE DEVICES, INC.
                                 EXHIBIT INDEX
<TABLE>
<CAPTION>
 
EXHIBIT                                                                   PAGE
<S>                                                                       <C>
 
  10.1     EMPLOYMENT AGREEMENT, DATED JUNE 27, 1997, BETWEEN REGISTRANT    15
           AND ALAN CHERVITZ
 
  10.2     EMPLOYMENT AGREEMENT, DATED JUNE 27, 1997, BETWEEN REGISTRANT    21
           AND T. WADE FALLIN

  10.3     CONSULTING AGREEMENT, DATED JUNE 27, 1997, BETWEEN REGISTRANT    27
           AND RICHARD B. CASPARI, M.D.
 
  11.1     STATEMENT REGARDING COMPUTATION OF NET LOSS PER SHARE            33
 
</TABLE>

                                       14