<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549

                                  FORM 10-QSB

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

For the quarterly period ended DECEMBER 31, 1995

                                       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 0-9570

                         LUTHER MEDICAL PRODUCTS, INC.
       (Exact name of small business issuer as specified in its charter)

CALIFORNIA                                        33-0468235
(State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization)                    Identification No.)

                    14332 CHAMBERS ROAD, TUSTIN, CA  92680
             (Address of principal executive offices)  (Zip Code)

                                (714) 544-3002
               (Issuer's telephone number, including area code)
             (Former name, former address and former fiscal year, 
                        if changed since last report.)

Check whether the issuer (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.

                                                  [X] Yes   [_] No

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

  COMMON STOCK NO STATED PAR VALUE--3,067,728 SHARES AS OF DECEMBER 31, 1995
<PAGE>
 
                                     INDEX

                         LUTHER MEDICAL PRODUCTS, INC.


<TABLE>
<S>                                                                   <C>
PART I - FINANCIAL INFORMATION
 
Condensed Consolidated Balance Sheet - December 31, 1995              3

Condensed Consolidated Statements of Operations - Three months 
ended December 31, 1995 and 1994, and six months ended December
31, 1995 and 1994                                                     4

Condensed Consolidated Statements of Cash Flows                       
Six months ended December 31, 1995 and 1994                           5
 
Notes to Condensed Consolidated Financial Statements                  6
 
Management's Discussion and Analysis of Financial           
Condition and Results of Operations                                   7,8
 
PART II - OTHER INFORMATION                                           9
 
Signature Page                                                        9
</TABLE> 

                                      -2-
<PAGE>

                 LUTHER MEDICAL PRODUCTS, INC. AND SUBSIDIARY
                     CONDENSED CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>  
                                             DEC. 31,1995
<S>                                          <C>
ASSETS                                       
 
CURRENT ASSETS
  Cash                                        $   428,438
  U.S. Treasury bills                           1,599,391
  Accounts receivable - net                       528,669
  Inventories - Note C                          1,441,054
  Other current assets                             87,802
                                              -----------
  TOTAL CURRENT ASSETS                          4,085,354
PROPERTY AND EQUIPMENT                          1,200,787
  Less accumulated depreciation                  (786,253)
                                              -----------
PROPERTY AND EQUIPMENT - NET                      414,534
 
OTHER ASSETS                                       10,198
                                              -----------
                                              $ 4,510,086
                                              ===========
 
 
LIABILITIES & STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES
 
  Accounts payable                                239,958
  Accrued payroll and related expenses             79,261
  Other accrued liabilities                       131,248
                                              -----------
  TOTAL CURRENT LIABILITIES                       450,467
                                              -----------
  
STOCKHOLDERS' EQUITY
  Preferred stock - no stated par value;
   10,000,000 shares authorized; none issued
   Common stock - no stated par value;
   25,000,000 shares authorized; issued and
   outstanding 3,067,728                        9,839,043
  Accumulated deficit                          (5,779,424)
                                              -----------
  NET STOCKHOLDERS' EQUITY                      4,059,619
                                              -----------
                                              $ 4,510,086
                                              ===========
</TABLE>

See notes to condensed consolidated financial statements.


                                      -3-
<PAGE>
 
                  LUTHER MEDICAL PRODUCTS, INC. AND SUBSIDIARY

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                               Three Months Ended December 31     Six Months Ended December 31
                                              --------------------------------   ------------------------------
                                                  1995                1994            1995            1994
                                              ------------        ------------   -------------    -------------
<S>                                           <C>                 <C>            <C>              <C>
Revenues                                       $  856,296           $ 712,047      $1,527,987       $1,423,892

Costs and Expenses:

       Cost of sales                              494,677             298,607         843,711          620,648

       Selling expense                            207,700             174,972         404,610          325,341

       General and administrative                 209,862             230,608         383,189          444,858

       Research and development                   106,995             109,032         209,231          208,349

       Depreciation and amortization               50,946              52,176         101,892          104,352

       Interest expense                             3,372              27,062          13,237           41,714
                                               ----------           ---------      ----------       ----------

Total costs and expenses                        1,073,552             892,457       1,955,870        1,745,262

Net loss before extraordinary item             $ (217,256)          $(180,410)     $ (427,883)      $ (321,370)

       Forgiveness of debt                       (122,958)                           (122,958)
                                               ----------           ---------      ----------       ----------

Net loss after extraordinary item              $  (94,298)          $(180,410)     $ (304,925)      $ (321,370)
                                               ==========           =========      ==========       ==========

Weighted average number of
shares outstanding ('000)                           3,018               2,982           3,002            2,982

Loss per share before extraordinary item       $     (.07)          $    (.06)     $     (.14)      $     (.11)

Loss per share after extraordinary item        $     (.03)          $    (.06)     $     (.10)      $     (.11)
</TABLE>

See notes to condensed consolidated financial statements.

                                      -4-
<PAGE>
 
                  LUTHER MEDICAL PRODUCTS, INC. AND SUBSIDIARY

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                      FOR THE SIX MONTHS ENDED DECEMBER 31
<TABLE>
<CAPTION>
 
                                                           1995          1994
                                                        ----------    ---------
<S>                                                     <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                   $ (304,925)   $(321,370)
Net loss
Adjustments to reconcile net loss to net cash
  used by operating activities:
    Depreciation and amortization                          101,892      104,352
    Changes in operating assets and liabilities:
      Accounts and other receivables                      (157,441)      13,554
      Inventories                                         (252,662)    (437,866)
      Prepaid expenses and other assets                        619      (80,988)
      Accounts payable                                      98,765     (129,675)
      Accrued payroll and related expenses                    (836)     (49,967)
      Accrued interest                                     (28,875)       7,492
      Other accrued liabilities                           (196,167)       1,173
                                                        ----------    ---------
      Net cash used                                       (739,630)    (893,295)
                                                        ----------    ---------
 
INVESTING ACTIVITIES:
Proceeds from sale of U.S. Treasury bills                1,111,203
Purchases of property and equipment                        (36,385)     (66,735)
                                                        ----------    ---------
Net cash (used) provided in investing activities         1,074,818      (66,735)
                                                        ----------    ---------
 
FINANCING ACTIVITIES:
Proceeds from sales of common stock                        208,330       72,885
Proceeds from collection of notes receivable from
  stockholder                                              183,444
Proceeds from issuance of notes payable                                 850,000
Principal payments of debt                                (481,250)     (43,750)
                                                        ----------    ---------
Net cash (used) provided by financing activities           (89,476)     879,135
                                                        ----------    ---------
Net increase (decrease) in cash                            245,712      (80,895)
Cash, beginning of year                                    182,726      216,366
                                                        ----------    ---------
Cash, at end of six months                              $  428,438    $ 135,471
                                                        ==========    =========
</TABLE>

See notes to condensed consolidated financial statements


                                      -5-
<PAGE>
 
                 LUTHER MEDICAL PRODUCTS, INC. AND SUBSIDIARY


             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                               DECEMBER 31, 1995

NOTE A - BASIS OF PREPARATION

The accompanying condensed consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-B.  Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.  In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included.  Operating results for the six-month period ending December 31,
1995 are not necessarily indicative of the results that may be expected for the
year ended June 30, 1996.  For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-KSB.

NOTE B - LOSS PER SHARE

Loss per share is calculated using the weighted average number of shares
outstanding.  Common stock equivalents were not included because their effect
would be antidilutive.

NOTE C - INVENTORIES

The components of inventory consist of the following:
<TABLE>
<CAPTION>
 
                          Dec. 31,1995   June 30, 1995
                          ------------   -------------
<S>                       <C>            <C>
Raw material               $  407,003      $  279,830
Work in process               481,835         395,113
Finished goods                552,216         513,449
                           ----------      ----------
                           $1,441,054      $1,188,392
                           ==========      ==========
</TABLE>

                                      -6-

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS

Total consolidated revenues for the second quarter of fiscal year 1996 increased
20% to $856,000 from $712,000 for the prior year's quarter.  In March of 1995,
the Company sold five of its patents related to stickless needle technology to
Johnson & Johnson Medical, Inc. ("JJMI"), the corporate successor to Critikon,
for $4.7 million.  JJMI was the exclusive licensee under these patents pursuant
to a royalty license agreement entered into in 1987.  Royalty income from other
sources therefore decreased to $3,000 for the second quarter of fiscal 1996, as
compared to $125,000 for the same period last year, as a result of the
termination of the above-mentioned license agreement.  The Company's catheter
products generated revenues of $827,000, as compared to $586,000 for the prior
year's quarter, an increase of 41%.  In 1994, the Company modified its agreement
with Pharmacia Deltec Inc. ("Pharmacia") from an exclusive to a non-exclusive
distributor relationship and established a network of specialty distributors.
Sales to Pharmacia decreased 80% to $30,000 during the quarter ended December
31, 1995, compared to $150,000 for the same period last year. Sales to the newly
appointed distributors increased to $431,000, or 61%, compared to $268,000 for
the prior year's quarter.  Sales to OEM customers were $162,000 as compared to
$88,000 for the prior year's quarter, an increase of 84%.  Catheter sales to
international distributors increased by $132,000 or 236%, partially as a result
of a backorder to a distributor being shipped in the second quarter of fiscal
1996.  Interest income increased to $26,000 during the quarter ended December
31, 1995 from $1,000 for the same period last year, as a result of the Company's
increased cash balances that resulted from the patent sale to JJMI.  For the
first six months of fiscal 1996, total revenues increased over last year's
period by 20% to $1,528,000.

Cost of revenues as a percentage of net sales for the three months ended
December 31, 1995 increased from 42% to 58%.  For the first six months of fiscal
1996, cost of revenues were 55% as compared to 44% in the first six months of
fiscal 1995.  The increase is mainly attributable to no royalty income from
Critikon in fiscal year 1996.

Selling expenses increased by $33,000 for the quarter and by $80,000 for the six
months ended December 31, 1995. The increase for both periods is mainly
attributable to increased marketing efforts such as extensive product training
programs to support the Company's distributor network. General and
administrative expenses decreased by $21,000 for the quarter and by $62,000 for
the six months period which was mainly due to lower legal expenses.  Research
and development expenses decreased by $2,000 for the second quarter of fiscal
1996 and increased by $1,000 for the first six months of fiscal 1996.
Depreciation and amortization expense decreased by $1,000 for the quarter and by
$2,000 for the six months ended December 31, 1995.  Interest expense decreased
from $27,000 to $3,000 during the quarter and decreased from $42,000 to $13,000
for the six months period due to lower debt balances.


                                      -7-
 
<PAGE>

On November 6, 1995, the Company repaid the note payable to Sims Deltec, Inc.
("SIMS"), formerly known as Pharmacia Deltec Inc.  Pursuant to an agreement
between the Company and Sims, Sims accepted $400,000 as full and final payment
for the note payable of $481,250 plus accrued interest.

The settlement of this debt including accrued interest is reflected in the
Company's income statement  as forgiveness of debt in the amount of $123,000.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1995, the Company had working capital of $3.6 million and its
principal sources of liquidity consisted of $2.0 million in cash and cash
equivalents.  Net cash used by operating activities for the six months ended
December 31, 1995, was $740,000, mainly as the result of the net loss of
$305,000, the increase in accounts and other receivables of $157,000 and the
increase in inventories of $253,000.  The inventory increase is mainly
attributable to component purchases for the production of a new OEM product to
be shipped to Boston Scientific Corporation in the third quarter of fiscal year
1996.  With respect to investing activities, the Company made purchases of
property and equipment totaling $36,000.  Financing activities used $89,000 as a
result of payment of the note payable to SIMS, collection of a note receivable
from a stockholder and proceeds from sales of common stock from the exercise of
stock options and warrants.

The Company has no long-term commitments other than an annual lease obligation
of between $130,000 and $151,000 for its facilities through 1998, a minimum
annual royalty of $60,000 for a proprietary polymer material and consulting fees
of $396,000 payable to National Contracts Inc. over a two-year period, $147,000
which was paid through December 31, 1995.


                                      -8-
 
<PAGE>
 
                          PART II - OTHER INFORMATION

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

None


(b) Reports on Form 8-K

There were no reports on Form 8-K filed for the three months ended December 31,
1995.



                                   SIGNATURES

In accordance with the requirements of the Securities Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



LUTHER MEDICAL PRODUCTS, INC.

By: /s/ David Rollo                    Date: February 13, 1996
   -------------------------           -----------------------
   David Rollo
   Chief Financial Officer


                                      -9-