UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
                         Washington, D.C. 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        June 30, 1997 
                                               ---------------- 
 
      Transition report under Section 13 or 15(d) of the Securities 
===   Exchange Act of 1934 
 
          For the transition period from _____________ to ______________ 
 
     Commission File Number: 0-12627 
                             ------- 
 
                    MEDICAL DISCOVERIES, INC. 
------------------------------------------------------------------------ 
(Exact Name of Small Business Issuer as Specified in Its Charter) 
 
            Utah                                87-0407858 
------------------------------------------------------------------------ 
(State or other jurisdiction        (I.R.S. Employer Identification No.) 
of incorporation or organization) 
 
 
           2985 North 935 East, Suite 9, Layton, UT  84041 
------------------------------------------------------------------------ 
              (Address of principal executive offices) 
 
 
                        (801) 771-0523 
----------------------------------------------------------------------- 
                  (Issuer's Telephone Number) 
 
  2040 East Murray-Holladay Road, Suite 116, Salt Lake City, UT  84117 
----------------------------------------------------------------------- 
        (Former Name, Former Address and Former Fiscal Year, 
                  if Changed Since Last Report) 
 
     Check whether the issuer (1) filed all reports required to be filed 
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or 
for such shorter period that the registrant was required to file such 
reports), and (2) has been subject to such filing requirements for the 
past 90 days.                                            X  Yes    No 
                                                        ===     === 
 
        APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY 
           PROCEEDINGS DURING THE PRECEDING FIVE YEARS 
 
 
     Check whether the registrant has filed all documents and reports 
required to be filed by Sections 12, 13, or 15(d) of the Exchange Act 
after the distribution of securities under a plan confirmed by a court. 
                                                           Yes   No 
                                                        ===   === 
 
                APPLICABLE ONLY TO CORPORATE ISSUERS 
 
     State the number of shares outstanding of each of the issuer's 
classes of common equity, as of the latest practicable date: 22,050,150 
                                                             ----------- 
as of July 31, 1997 
      --------------- 
 
     Transitional Small Business Disclosure Format (check one) 
 
                                                           Yes   X No 
                                                        ===     === 
<PAGE> 
                            PART I 
                    FINANCIAL INFORMATION 
 
ITEM 1.  FINANCIAL STATEMENTS 
 
The following financial statements are filed with this report: 
 
     Balance Sheets as of June 30, 1997 (unaudited) and June 30, 1996 
     (unaudited) 
 
     Statements of Operations for the Three-Month Periods ended 
     June 30, 1997 (unaudited) and June 30, 1996 (unaudited) 
     and the Six-Month Periods ended June 30, 1997 (unaudited) 
     and June 30, 1996 and since inception through June 30, 1997 
     (unaudited). 
 
     Statements of Cash Flows for the Six-Month Periods ended 
     June 30, 1997 (unaudited) and June 30, 1996 (unaudited) 
 
     Notes to Unaudited Financial Statements 
 
<PAGE> 
 
                   MEDICAL DISCOVERIES, INC. 
                 (A DEVELOPMENT STAGE COMPANY) 
                         BALANCE SHEET 
           AS OF JUNE 30, 1997 AND JUNE 30, 1996 
                          (UNAUDITED) 
 
                                       June 30, 1997         June 30, 1996 
                                       --------------        -------------- 
CURRENT ASSETS 
        Cash                            $   20,515            $    25,307 
        Accounts receivable                 49,033                 46,784 
        Prepaid expenses                     2,692                 10,780 
                                          ---------              ---------- 
          Total Current Assets              72,240                 82,871 
 
PROPERTY AND EQUIPMENT 
        Equipment                           79,313                 74,231 
        Less: Accumulated depreciation     (23,809)               (16,181) 
                                          ---------              ---------- 
          Net Property and Equipment        55,504                 58,050 
 
OTHER ASSETS 
        Deposits                             2,260                  1,170 
        Note receivable                      5,493                 30,586 
                                          ---------              ---------- 
          Total Other Assets                 7,753                 31,756 
 
Total Assets                            $  135,497            $   172,677 
                                        ===========           ============= 
CURRENT LIABILITIES 
     Accounts payable                   $  731,552            $   670,166 
     Accrued interest                        9,973                 26,039 
     Short term notes payable               51,000                      0 
     Current maturities of 
        notes payable                        2,924                  2,795 
                                        -----------             ----------- 
          Total Current Liabilities        795,449                699,000 
 
LONG TERM LIABILITIES 
     Notes payable                         317,194                318,708 
                                        -----------             ----------- 
          Total Long Term Liabilities      317,194                318,708 
 
                                        -----------             ----------- 
TOTAL LIABILITIES                        1,112,643              1,017,708 
                                        -----------             ----------- 
STOCKHOLDERS' EQUITY 
     Common Stock, no par value, 
        authorized 100,000,000           6,269,233              6,121,733 
        shares; 22,050,150 shares 
        issued and outstanding at 
        June 30, 1997 
     Retained deficit                   (7,073,879)            (6,794,264) 
     Subscription receivables             (172,500)               172,500 
                                        -----------             ----------- 
     Total Stockholders' Equity           (977,146)              (845,031) 
                                        -----------             ----------- 
 
TOTAL LIABILITIES AND 
   STOCKHOLDERS' EQUITY                 $  135,497            $   172,677 
                                        ===========            ============ 
<PAGE> 
 
                           MEDICAL DISCOVERIES, INC. 
                         (A DEVELOPMENT STAGE COMPANY) 
                           STATEMENT OF OPERATIONS 
             FOR THE PERIODS ENDED JUNE 30, 1997 AND JUNE 30, 1996 
                                 (UNAUDITED) 
<TABLE>
<S>                        <C>               <C>           <C>               <C>          <C>
 
                                                                                           Cumulative 
                              For the three months             For the six months          Amounts since 
                                 ended June 30,                  ended June 30,            November 20, 
                            --------------------------     --------------------------      1991 (date of 
                              1997               1996        1997               1996       inception) 
                            ----------        --------      ----------        --------     ----------- 
REVENUE 
  Clinical fees             $       0         $       0     $       0         $      0     $   108,200 
                            ----------        ----------    ----------        ----------   ------------ 
    Total Revenue                   0                 0             0                0         108,200 
 
EXPENSES 
  License                           0                 0             0                0       1,001,500 
  Research and development     29,363            89,517        29,664           150,248      1,736,720 
  General and administrative   57,037           403,007       218,721           579,525      4,188,507 
                            ----------        ----------    ----------        ----------   ------------ 
     Total Expenses            86,400           492,524       248,385           729,773      6,926,727 
                            ----------        ----------    ----------        ----------   ------------ 
NET LOSS FROM OPERATIONS      (86,400)         (492,524)     (248,385)         (729,773)    (6,818,527) 
 
OTHER INCOME / (EXPENSE)      (19,703)           (6,285)      (31,230)          (12,066)       (91,311) 
                            ----------        ----------    ----------        ----------   ------------ 
 
LOSS BEFORE INCOME TAXES     (106,103)         (498,809)     (279,615)         (741,839)    (6,909,838) 
  AND EXTRAORDINARY ITEM 
 
INCOME TAXES                        0                 0             0                0              0 
                            ----------        ----------    ----------        ----------   ------------ 
LOSS BEFORE EXTRAORDINARY    (106,103)         (498,809)     (279,615)         (741,839)    (6,909,838) 
  ITEM 
 
FORGIVENESS OF DEBT                 0                 0             0           673,486      1,235,536 
                            ----------        ----------    ----------        ----------   ------------ 
NET INCOME                  $(106,103)        $ 498,809     $(279,615)        $(68,353)    $(5,674,302) 
                            ==========        ==========    ==========        ==========   ============ 
 
INCOME / (LOSS) PER SHARE 
  Loss from continuing 
  operations                $  (0.00)         $    (0.02)   $   (0.01)       $    (0.03)     $   (0.36) 
  Gain from debt 
  forgiveness                   0.00                0.00         0.00              0.03           0.06 
                            -----------       -----------   ------------      -----------    ------------ 
  Income / (loss) per 
  share                     $  (0.00)         $    (0.02)   $   (0.01)        $    0.00      $   (0.29) 
                            ===========       ============  ============      ===========    ============ 
 
WEIGHTED AVERAGE NUMBER 
  OF SHARES                  21,879,944        22,603,903     21,778,359       22,308,461     19,267,551 
                            ===========       ============   ============     ===========    ============ 
</TABLE>

<PAGE> 
                            MEDICAL DISCOVERIES, INC. 
                         (A DEVELOPMENT STAGE COMPANY) 
                           STATEMENT OF CASH FLOWS 
            FOR THE PERIODS ENDED JUNE 30, 1997 AND JUNE 30, 1996 
                                 (UNAUDITED) 
 
 
                                                                 Cumulative 
                                     For the six months        Amounts since 
                                      ended June 30,           November 20, 
                                    --------------------       1991 (date of 
                                       1997        1996          inception) 
                                    ----------  ----------    ------------- 
OPERATING ACTIVITIES 
  Net income (loss) for the 
    period                         $ (279,615) $  (68,353)    $ (5,674,302) 
  Add non-cash items 
    Common stock issued for 
      services and license                  0     199,050        3,215,611 
    Reduction of legal costs                0           0         (130,000) 
    Depreciation                        7,628       5,915           25,269 
    Loss on disposal of equipment           0           0            6,330 
    Gain on debt restructuring              0    (673,486)      (1,235,536) 
    Write-off receivables                   0           0          193,965 
    Decrease (increase) in: 
      Receivables                      22,485      20,796           15,316 
      Prepaid Expenses                  8,088      65,860           (2,692) 
      Other assets                     (1,090)          0           (2,260) 
    Increase (decrease) in: 
     Accounts payable                  61,386     (28,060)         575,642 
     Accrued expenses                 (16,066)      2,365           31,454 
     Short term notes payable          51,000           0           51,000 
                                    ----------  ----------      ----------- 
Net Cash from Operations             (145,824)   (475,913)      (2,930,203) 
 
INVESTING ACTIVITIES 
  Purchases of equipment               (5,082)    (10,685)     $   (78,942) 
  Payments received on note 
    receivable                              0           0           52,629 
                                    ----------   -----------   ------------ 
Net Cash from Investing Activities     (5,082)    (10,685)         (26,313) 
 
 
 
FINANCING ACTIVITIES 
  Payment of notes payable             (1,385)          0           (4,743) 
  Increase in notes payable                 0      13,989          316,700 
  Equity contributed                        0           0          131,374 
  Proceeds from issuance of 
     common stock                     147,500     574,485        2,533,700 
                                    ----------  ----------     ------------ 
    Net Cash from Financing 
      Activities                      146,115     588,474        2,977,031 
                                    ----------  ----------     ------------ 
NET INCREASE / (DECREASE) IN CASH      (4,791)    101,876           20,515 
 
CASH, BEGINNING PERIOD                 25,306      37,833                0 
 
CASH ENDING PERIOD                  $  20,515   $ 139,709       $   20,515 
                                    ==========  ==========      =========== 
<PAGE> 
                          MEDICAL DISCOVERIES, INC. 
 
                        NOTES TO FINANCIAL STATEMENTS 
                               June 30, 1997 
 
NOTES TO UNAUDITED FINANCIAL STATEMENTS 
 
 
The unaudited financial statements include the accounts of Medical 
Discoveries, Inc. and include all adjustments which are, in the opinion 
of management, necessary to present fairly the financial position as of 
June 30, 1997 and the results of operations and changes in financial 
position for the six-month period ended June 30, 1997.  The results 
of operations for the six months ended June 30, 1997 are not 
necessarily indicative of the results to be expected for the entire year. 
 
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. 
 
DIRECTOR OF APPLICATIONS RESEARCH. 
As MDI moves into the pre-clinical, pre-commercialization phase of its 
product development, it is an absolute necessity that the company 
establishes a well organized, thoroughly documented approach to 
investigating research applications, identifying research sites, and 
effectively monitoring progress.  This requires that the company hire a 
proven scientist with a strong background in biochemical and 
bacteriological research; someone who is adept in the clinical research 
setting, as well as possessing an astute scientific mind.  MDI is pleased to 
announce that John Griesgraber has accepted the newly created position 
of Director of Applications Research.  Mr. Griesgraber brings experience 
in the fields of scientific research, product development and biochemical 
research as related to metabolic disease states.  He was formerly 
President, Founder and co-owner of Terra Marine Bio-chemical. Bio- 
organics and chemical processes for international distribution. 
Previously, he held positions as a Research Associate at the University of 
California, San Diego, the Salk Institute, La Jolla, California, and was an 
Applications Engineer at IVAC Corporation during its early stages of 
development and growth.  Mr. Griesgraber's knowledge,experience and 
familiarity with wound planning, organization and implementation 
brings renewed vigor to Dr. Novick's USA Scientific Research Team. 
<PAGE> 
SCIENTIFIC RESEARCH AND DEVELOPMENT PROGRAM IN JAPAN. 
"Electrically hydrolyzed saline" ("Function Water" as it is known in 
Japan) has received rapid and intense attention in Japan.  In support of 
this technology, the Japanese government has established a special 
organization to study the applications for this technology.  The name for 
this organization is the Function Water Foundation.  Japan currently has 
as many as 35 separate companies developing products to make the 
benefits of "Function Water" available for a wide variety of 
applications.  The activity in Japan is an excellent opportunity to develop key 
relationships that will enhance the company's understanding and 
development of these technologies as MDI prepares to enter worldwide 
markets in the future.  MDI must be aware, active and involved with 
respect to this technological development.  The company has therefore 
appointed Shouji Kubota, Ph.D., to head up MDI's Scientific Research and 
Development program in Japan.  Dr. Kubota's reputation is well 
established and widely respected.  He is a specialist in the understanding 
and development of electrically hydrolyzed saline solutions (Function 
Water"), and has published an authoritative text on this subject.  Dr. 
Kubota is currently the president of The Society for the Study of water 
Design.  This Society was established in 1987, for the purpose of 
investigating and developing the potential and future applications of 
Function Water.  Dr. Kubota has been president of this Society since 1995. 
Previously, Dr. Kubota was with the Hitachi Institute of Hitachi 
Seisakusyo where he had a distinguished 25 year career.  He is also 
Adjunct Professor in the Engineering Department at Ibaragi University, 
and serves as vice-president of the Society of Subtle Energy Institute. 
 
ADDITION TO MDI'S MEDICAL SCIENTIFIC ADVISORY BOARD. 
MDI has added Dr. Dennis E. Winson, DDS to MDI's Medical Scientific 
Advisory Board.  Dr. Winson is Associate Professor in the Department of 
Periodontics at the University of Maryland, and maintains his clinical 
practice in Bethesda.   Dr. Winson is an Officer in the American Academy 
of Periodontology, and has been on its Board of Trustees since 1990.  Dr. 
Winson's Expertise in the field of periodontal disease and dentistry is a 
valuable addition to our scientific and research efforts as MDI investigates 
potential applications of its technologies in the dental area of medicine. 
 
APPOINTMENT OF REGULATORY AFFAIRS CONSULTANT. 
The strength of  MDI will, undoubtedly, be based not only on its abilities 
to further develop and refine its core technologies, but also to produce 
revenue generating opportunities for the company.  In order to achieve 
revenues, MDI must chart a timely and an effective course in order to 
obtain FDA approval for the sales of its products in the United States. 
To this end, the company has engaged the services of Dr. Jur Strobos, MD, 
Esquire, of the law firm of Greenberg and Traurig, Washington, DC, to 
assist MDI as its Regulatory Affairs consult.  Dr. Strobos received his 
medical degree from the University of Chicago,  and has over twenty 
years experience in Medicine at both Georgetown  University and George 
Washington University School of Medicine.  In 1987, Dr. Strobos received 
his Juris Doctorate from the University of Pennsylvania and insurance 
litigation, and Food And Drug Administrative Law.  From 1992 to 1995 
Dr. Strobos was Director, Policy Research Staff, Office of Policy for the US 
Food and Drug Administration.  At Greenberg and Traurig, Dr. Strobos' 
expertise is in the area of regulatory approvals as it pertains to 
biotechnology and pharmaceutical applications. 
 
These new appointment s and changes in MDI'S science and technology 
group will strengthen and advance the company's core technologies with 
a strong, effective and focused professional program under the overall 
leadership and guidance of Dr. Novick and his USA and Japanese teams. 
<PAGE> 
PATENT ACTIVITY. 
Recently MDI received notification from the United States Patent Office 
that yet another patent is pending on the company's core technologies. 
The latest Continuation In Part (CIP) is entitled: "System and Method For 
Electrolyzing Fluids for Use as Anti-Microbial Agents".  This latest news 
brings a total of 3 patents to the company, adding strength on which MDI 
can build and protect its business. 
 
ADDITIONAL FUNDING IS REQUIRED. 
 
It is clear that MDI will need to raise additional capital to fund our FDA 
and international regulatory approvals process.  Additionally, each of the 
research and testing programs in progress continues to show promise and 
generate valuable scientific data, and therefore, requires appropriate 
levels of funding.  Management intends to raise substantial additional 
funds in private stock offerings in the near future in order to meet its 
near-term funding requirements with a special emphasis in Japan.  In the 
future, management anticipates the need to raise substantial additional 
funds in public stock offerings as well. As additional funds are raised, the 
Company intends to commence paying salaries to its officers.  The Company 
also intends at that time to hire additional technical and administrative 
personnel.  The bulk of any additional funding will likely be spent on 
continued research, testing, and patent protection with respect to MDI-P.   
<PAGE> 
                              PART II 
                         OTHER INFORMATION 
 
ITEM 1.  LEGAL PROCEEDINGS 
 
The Company is not currently involved in any litigation and there has been no 
change in any with regard to any potential legal dispute since the filing of 
the Company's 10QSB for the period ended June 30, 1996. 
 
 
ITEM 2.  CHANGES IN SECURITIES 
 
     N/A 
 
 
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES 
 
     N/A 
 
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 
 
     N/A 
 
 
ITEM 5.  OTHER INFORMATION 
 
     N/A 
 
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K 
 
     (a)     Exhibits required by Item 601 of Regulation S-B. 
 
     The following are exhibits to this Form 10-QSB. 
 
EXHIBIT NUMBER     DESCRIPTION 
--------------     ----------- 
 
27                 Financial Data Schedule. 
 
     (b)  Reports on Form 8-K 
 
          N/A 
 
SIGNATURES 
 
     In accordance with the requirements of the Exchange Act, the 
registrant caused this report to be signed on its behalf by the 
undersigned, thereunto duly authorized. 
 
 
 
                                       MEDICAL DISCOVERIES, INC. 
 
 
 
Date: August 14, 1997                     /s/ Lee F. Kulas 
                                       --------------------------- 
                                       President and Chief Executive Officer