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, 1999
                                               ----------------

      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)

                                       N/A
   -------------------------------------------------------------------------
              (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:  26,656,959 as of November 16,
1999.

     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,  1999  (unaudited)  and  December  31,  1998
     (unaudited)

     Statements of Operations  for the  Three-Month  Periods ended June 30, 1999
     (unaudited) and June 30, 1998 (unaudited) and since inception  through June
     30, 1999 (unaudited)

     Statements  of Cash Flows for the  Three-Month  Periods ended June 30, 1999
     (unaudited) and June 30, 1998 (unaudited)

     Notes to Unaudited Financial Statements



<PAGE>

                            MEDICAL DISCOVERIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONDENSED CONSOLIDATED BALANCE SHEET
                    AS OF JUNE 30, 1999 AND DECEMBER 31, 1998
                                   (UNAUDITED)

                                       June 30, 1999          December 31, 1998
                                       --------------         ------------------
CURRENT ASSETS
        Cash                          $        719            $     84,847
        Accounts receivable                  2,822                   2,716
        Inventory                          160,820                 158,225
        Prepaid expenses                     2,741                  10,973
                                      -------------           -------------
          Total Current Assets             167,102                 256,761

PROPERTY AND EQUIPMENT
        Equipment                          108,521                 108,521
        Less: Accumulated depreciation     (45,591)                (39,610)
                                      -------------           -------------
          Net Property and Equipment        62,930                  68,911

OTHER ASSETS                                   900                   1,409

Total Assets                          $    230,932            $    327,081
                                      =============           =============
CURRENT LIABILITIES
     Accounts payable                 $  1,741,726            $  1,399,414
     Accrued interest                       72,593                  44,129
     Current maturities of:
        Notes payable                      351,717                 191,717
        Convertible notes payable          200,983                 250,983
                                      -------------           -------------
          Total Current Liabilities      2,367,019               1,886,246

STOCKHOLDERS' EQUITY
     Common Stock, no par value,
        authorized 100,000,000           9,691,250               9,661,250
        shares; 26,543,625 shares
        issued and outstanding at
        June 30, 1999
     Retained deficit                  (11,714,837)            (11,107,915)
     Subscription receivables             (112,500)                112,500
                                      -------------           -------------
     Total Stockholders' Equity         (2,136,087)             (1,559,165)
                                      -------------           -------------

TOTAL LIABILITIES AND
   STOCKHOLDERS' EQUITY               $    230,932            $    327,081
                                      =============           =============


<PAGE>


                            MEDICAL DISCOVERIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF OPERATIONS
              FOR THE PERIODS ENDED JUNE 30, 1999 AND JUNE 30, 1998
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                                                              Cumulative
                              For the three months             For the six months            Amounts since
                                 ended June 30,                  ended June 30,               November 20,
                            ------------------------------   -----------------------------   1991 (date of
                                  1999               1998          1999              1998       inception)
                            -----------        -----------   -----------       -----------   -------------
<S>                         <C>                <C>           <C>               <C>           <C>
REVENUE
  Revenue and fees          $        0         $   10,574    $        0        $   12,847    $    126 609
  Interest                           0                432             0             1,158          23,406
                            -----------        -----------   -----------       -----------   -------------
    Total Revenue                    0             11,006             0            14,005         150,015

COST OF GOODS SOLD                   0              3,750             0             5,000           7,750
                            -----------        -----------   -----------       -----------   -------------
GROSS MARGIN                         0              7,256             0             9,005         142,265

EXPENSES
  License                            0                  0             0                 0       1,001,500
  Research and development     306,736             71,662       365,373           145,487       2,637,664
  General and administrative    79,144             96,109       182,791           209,032       7,800,311
                            -----------        -----------   -----------       -----------   -------------
     Total Expenses            385,880            167,771       548,164           354,519      11,439,475
                            -----------        -----------   -----------       -----------   -------------
NET LOSS FROM OPERATIONS      (385,880)          (160,515)     (548,164)         (345,514)    (11,297,210)

OTHER INCOME / (EXPENSE)       (14,364)           (12,051)      (58,758)          (26,219)       (253,586)
                            -----------        -----------   -----------       -----------   -------------

LOSS BEFORE INCOME TAXES      (400,244)          (172,566)     (606,922)         (371,733)    (11,550,796)
  AND EXTRAORDINARY ITEM

INCOME TAXES                         0                  0             0                 0               0
                            -----------        -----------   -----------       -----------   -------------
LOSS BEFORE EXTRAORDINARY     (400,244)          (172,566)     (606,922)         (371,733)    (11,550,796)
  ITEM

FORGIVENESS OF DEBT                  0                  0             0                 0       1,235,536
                            -----------        -----------   -----------       -----------   -------------
NET INCOME                  $ (400,244)        $ (172,566)   $ (606,622)       $ (371,733)   $(10,315,260)
                            ===========        ===========   ===========       ===========   =============

INCOME / (LOSS) PER SHARE
  Loss from continuing
  operations                $    (0.02)        $    (0.01)   $    (0.02)       $    (0.02)   $      (0.61)
  Gain from debt
  forgiveness                     0.00               0.00          0.00              0.00            0.07
                            -----------        -----------   -----------       -----------   -------------
  Income / (loss) per
  share                     $    (0.02)        $    (0.01)   $    (0.02)       $    (0.02)   $      (0.54)
                            ===========        ===========   ===========       ===========   =============

WEIGHTED AVERAGE NUMBER
  OF SHARES                  26,479,559         23,577,472    26,476,608        23,376,004      18,988,442
                            ===========        ===========   ===========       ===========   =============

</TABLE>

<PAGE>

                            MEDICAL DISCOVERIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF CASH FLOWS
              FOR THE PERIODS ENDED JUNE 30, 1999 AND JUNE 30, 1998
                                   (UNAUDITED)

                                                                 Cumulative
                                    For the six months          Amounts since
                                      ended June 30,            November 20,
                                   -------------------------    1991 (date of
                                       1999         1998         inception)
                                   -----------   -----------    -------------
OPERATING ACTIVITIES
  Net income (loss) for the
    period                         $ (606,922)   $ (371,733)    $(10,314,019)
  Add non-cash items
    Common stock options issued
      for services                                                 2,336,303
    Common stock issued for
      services and license             30,000             0        3,559,986
    Reduction of legal costs                0             0         (130,000)
    Depreciation                        5,981         7,520           47,050
    Loss on disposal of equipment           0             0           30,364
    Gain on debt restructuring              0             0       (1,235,536)
    Write-off receivables                   0             0          193,965
    Decrease (increase) in:
      Receivables                        (106)       19,109           10,351
      Inventory                        (2,595)       (6,750)        (160,820)
      Prepaid Expenses                  8,232         8,154           (2,741)
      Other assets                        509           940             (900)
    Increase (decrease) in:
      Accounts payable                373,334       190,945        1,584,576
      Accrued expenses                 (2,561)        5,911           94,074
                                    ----------   -----------    ------------
Net Cash from Operations             (194,128)     (145,904)      (4,008,049)

INVESTING ACTIVITIES
  Purchases of equipment                    0        (4,000)        (132,184)
  Payments received on note
    receivable                              0             0          130,000
  Investment in Regenere                    0       (75,000)         (75,000)
                                    ----------   -----------    ------------
Net Cash from Investing Activities          0       (79,000)          (2,184)

FINANCING ACTIVITIES
  Increase in notes payable           160,000             0          406,806
  Payment of notes payable            (50,000)       (1,591)         (97,287)
  Increase in notes payable                 0             0          316,700
  Equity contributed                        0             0          131,374
  Proceeds from issuance of
     common stock                           0       431,680        3,253,359
                                    ----------   -----------    ------------
    Net Cash from Financing
      Activities                      110,000       430,089        4,010,952
                                    ----------   -----------    ------------
NET INCREASE / (DECREASE) IN CASH     (84,128)      205,185              719

CASH, BEGINNING PERIOD                 84,847           764                0
                                    ----------   -----------    ------------
CASH ENDING PERIOD                  $     719    $  205,949     $        719
                                    ==========   ===========    ============

<PAGE>

                            MEDICAL DISCOVERIES, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 1999


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, 1999 and the
results of  operations  and changes in financial  position  for the  three-month
period ended June 30, 1999. The results of operations for the three months ended
June 30, 1999 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.

OPERATIONS AND LIQUIDITY.

MDI  booked no  revenue  for the period  from  January 1, 1999 to June 30,  1999
compared  to  $12,847  in  revenue  for the same  period  in 1998.  The  Company
discontinued sales of imported  functional water machines in 1998 which resulted
in the absence of revenue.  MDI spent $365,373 in research and development costs
during the first six months of 1999  compared to $145,487 for the same period in
last year. The increased  spending reflects the accrual of $218,000 for expenses
previously incurred at Harvard and an outside research lab for MDI-P and MDI-HCS
product testing.  General and administrative  costs decreased to $182,791 during
the six-month  period ended June 1999 from $209,032 for the same period in 1998.
This  reduction  in  spending  was  mainly  due to  the  Company's  scaled  back
operations  due to  cash  shortages.  In May  1999,  the  Company  depleted  its
remaining cash accounts and suspended payments to creditors.

Funding for  on-going  operations  is discussed  in the  "Additional  Funding is
Required"  section below. In an attempt to find additional  funding,  members of
the board  made  short-term  loans to MDI to allow the  Company to  continue  to
present its plans to potential investors. As discussed below, the Company signed
a letter of intent in October  1999 with a funding  group to provide  additional
funding for operations.  As part of the due diligence  efforts  discussed below,
the Company borrowed  $20,000 to maintain  operations from the funding group. If
these funds are exhausted before due diligence investigations are completed, the
Company will seek additional debt from the funding group.

PHARMACEUTICAL DRUG DISCOVERY AND DEVELOPMENT ACTIVITIES

Due to the absence of available  funding,  the Company suspended its testing and
development  program  efforts.  Based on work previously  completed,  Dr. Aldona
Baltch,   Albany  ,  New  York,  has  submitted  a  manuscript   describing  the
antimicrobial activity of MDI-P against several species of bacteria. Significant
killing was observed at dilutions of up to 1:10,000 for Candida  Albacans.  This
will be the first full paper to be published on MDI-P.

MDI HEALTHCARE SYSTEMS, INC. CONSUMER PRODUCTS SUBSIDIARY

MDI's consumer product subsidiary,  MDI HealthCare Systems,  Inc., (MDI-HCS) has
been unable to record any sales due to the absence of funds.  MDI-HCS  continues
to maintain  contact  with the groups  where it has  previously  executed  sales
agreements.

The  success of MDT-HCS  depends on the  Company's  ability to raise  additional
funds to properly launch its products and the response of competitive  products.
See "Additional Funding is Required" section below.

ADDITIONAL FUNDING IS REQUIRED

Management  intends  to raise  substantial  additional  funds in  private  stock
offerings  in  the  near  future  in  order  to  meet  its   near-term   funding
requirements.   In  the  future,   management  anticipates  the  need  to  raise
substantial   additional  funds  in  public  stock  offerings  as  well.  It  is
anticipated  that  shareholders may experience  substantial  dilution due to the
current financial  position of the Company.  The funds to be raised will be used
in the  following  areas:  1) the launch of MDl-HCS,  2) continued  research for
MDI-P, 3) payment and payment  arrangements  for the Company's  obligations,  4)
commencement of payment of salaries to Company personnel, and 5) at such time as
funds become available, payment of prior debts of the Company.

SUBSEQUENT EVENTS

As of  November  16,  1999,  had  experienced  two  significant  events:  1) the
termination Mr. Lee Kulas as President and CEO, and 2) the execution of a letter
of intent outlining terms of additional funding.

As of May 31, 1999, the Company stopped accruing salary for Mr. Kulas as well as
for other  principals  in the  Company.  On  September  15,  1999,  the Board of
Directors  officially  terminated the employment  contract of Mr. Lee Kulas,  to
allow Mr. Kulas to pursue other  interests.  Mr. Kulas remains a director of the
Company.

In  October  1999,  the  Company  signed  a letter  of  intent  with an  outside
investment   group.   The  letter   provides  for  a  complete   due   diligence
investigation.  If MDI completes due diligence investigations successfully,  MDI
and the investment group will form a joint venture to sell MDI-HCS products. The
Company plans for the joint venture to generate cash for further  development of
MDI-P. MDI has also initiated discussions with the investment group for a direct
investment in MDI.

Under the terms of the joint venture, the investment group will provide funds of
$750,000 to the joint  venture and will extend a $150,000 line of credit to MDI.
MDI will  assign all rights it owns in HCS  products to the joint  venture.  MDI
will  own 42  percent  of the  joint  venture.  In  exchange  for  the  $750,000
contributed  to the joint  venture and the line of credit  extended to MDI,  the
investment  group  will  receive  25,000,000  shares of MDI stock,  which  would
represent an ownership interest of approximately 48 percent of the Company.

In early December 1999, the investment group notified MDI that its due diligence
investigations  would  require  up to an  additional  120 days.  As a  temporary
measure to provide funds to MDI, the  investment  group has made two  short-term
loans totaling $32,000 to the Company.  These short-term loans will be converted
to draws  against  the  $150,000  line of credit  contemplated  by the letter of
intent.  MDI  plans to  request  additional  funds as  required  during  the due
diligence period.  In addition,  the Company has signed an agreement with a term
of 120 days granting a company  controlled by the  investment  group to sell MDI
HealthCare  Systems  products.  The  purpose  of the  agreement  is to allow the
Company to begin to market its products  immediately  pending the  completion of
the due diligence and subsequent  joint venture and funding issues  contemplated
in the letter of intent.

With the exception of the actual reported financial results and other historical
information,  the statements made in the Management's Discussion and Analysis of
Financial  Condition and Results of Operations  and elsewhere in this report are
forward  looking  statements  that involve  risks and  uncertainties  that could
affect actual future results. Such risks and uncertainties  include, but are not
limited to: the  regulatory  environment,  the technical and  engineering  risks
associated  with new product  development,  the  availability  of  funding,  the
cooperation  of the Company's  creditors,  the ability of the Company to attract
and retain competent personnel,  consumer acceptance of HCS products,  favorable
negotiations  with  partners in the  proposed  joint  venture,  the  presence of
possible competitors, and competing technologies.

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 10Q for the quarter ended March 31, 1999.


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

<PAGE>

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: November 19, 1999                /s/ David Walker
                                       ---------------------------
                                       Chairman of the Board
Officer