FORM 10-QSB

                   SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, DC  20549



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

For the quarterly period ended May 31, 1998

Commission File Number: 1-11140

                       OPHTHALMIC IMAGING SYSTEMS
         (Exact name of registrant as specified in its charter)

           CALIFORNIA                          94-3035367
   (State of Incorporation)         (IRS Employer Identification No.)

             221 LATHROP WAY, SUITE I, SACRAMENTO, CA  95815
                (Address of principal executive offices)

                             (916) 646-2020
                       (Issuer's telephone number)

Check  whether  the issuer (1) has 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.

     Yes   XX       No

As  of  July 14, 1998, 4,155,428 shares of common stock, at no par value,
were outstanding.

<PAGE>1

                    PART I     FINANCIAL INFORMATION


ITEM 1.   FINANCIAL STATEMENTS


<PAGE>2 
                       Ophthalmic Imaging Systems

                         Condensed Balance Sheet

                              May 31, 1998

                               (Unaudited)


ASSETS
Current assets:
     Cash and equivalents                              $       81,615
     Accounts receivable, net                                 963,972
     Inventories, net                                         879,441
     Prepaid expenses and other current assets                 92,111
                                                       --------------  
Total current assets                                        2,017,139
Furniture and equipment, net of accumulated
     depreciation and amortization of $870,643                432,691
Other assets                                                   18,772
                                                        -------------
                                                        $   2,468,602
                                                        =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Borrowings under line of credit                    $     125,147
     Borrowings under note payable to 
       significant shareholder                                910,027
     Accounts payable                                         504,954
     Accrued liabilities                                    1,666,405
     Accrued warrant appreciation right                       262,113
     Deferred extended warranty revenue                       122,281
     Customer deposits                                        279,116
     Current portion of other notes payable                       186
                                                        ------------- 
Total current liabilities                                   3,870,229

Notes payable, less current portion                                --

Commitments

Stockholders' deficit:
  Preferred stock, no par value, 20,000,000 
     shares authorized; none issued or outstanding                 --
  Common stock, no par value, 20,000,000 shares 
     authorized; 4,155,428 issued and outstanding          10,492,365
  Deferred compensation                                      (243,519)
  Accumulated deficit                                     (11,650,473)
                                                        -------------- 
Total stockholders' deficit                                (1,401,627)
                                                        --------------
                                                        $   2,468,602
                                                        =============
SEE ACCOMPANYING NOTES.

<PAGE>3

                             Ophthalmic Imaging Systems
                        Condensed Statements of Operations

                                    (Unaudited)

<TABLE>
<CAPTION>
                                                 Three months ended                          Nine Months Ended
                                                       May 31,                                     May 31
                                               1998               1997                        1998              1997
<S>                                 <C>                <C>                <C>       <C>               <C>
Net revenues                              $  1,377,830       $  1,975,085                $  4,747,864      $  5,144,738
Cost of sales                                  889,882          1,103,344                   3,098,530         3,021,321
                                          -------------------------------                ------------------------------
Gross Profit                                   487,948            871,741                   1,649,334         2,123,417

Operating expenses:
     Sales and marketing                       524,586            463,893                   1,585,422         1,352,504
     General and administrative                538,645            132,176                   1,792,003           664,852
     Research and development                  206,647            256,808                     608,352           754,234
                                          -------------------------------                ------------------------------
          Total operating expenses           1,269,878            852,877                   3,985,777         2,771,590
                                          -------------------------------                -------------------------------
Income (loss) from operations                (781,930)             18,864                 (2,336,443)         (648,173)
Other expense, net                            (15,199)           (15,196)                    (44,078)          (42,475)
                                          -------------------------------                -------------------------------
Net income (loss)                         $  (797,129)       $     3,668                 $(2,380,521)    $    (690,648)
                                          ===============================                =============================== 
Shares used in the calculation of
basic net income (loss) per share           4,155,428          3,729,433                   3,989,687         3,729,433
                                          ===============================                ===============================
Basic net income (loss) per share         $     (0.19)       $      0.00                 $     (0.60)    $       (0.19)
                                          ===============================                ===============================
Shares used in the calculation of
diluted net income (loss) per share         4,155,428          4,692,334                   3,989,687         3,729,433
                                          ===============================                ===============================
Diluted net income (loss) per share       $     (0.19)       $      0.00                 $     (0.60)    $       (0.19)
                                          ===============================                =============================== 
</TABLE>


SEE ACCOMPANYING NOTES.

<PAGE>4

                          Ophthalmic Imaging Systems
                      Condensed Statements of Cash Flows

                   Increase (Decrease) in Cash and Equivalents)
                         
                                 (Unaudited)

<TABLE>
<CAPTION>
                                                            Nine months ended
                                                                 May 31,
                                                        1998                        1997
<S>                                              <C>                       <C>    
Operating activities:
Net loss                                            $ (2,380,521)             $    (690,648)
Adjustments to reconcile net loss to net cash
  used in operating activities:
    Depreciation and amortization                         95,812                    103,964
    Stock option compensation expense                     97,375                        --
    Net decrease (increase) in current assets
      other than cash and equivalents                    596,477                   (726,751)
    Net increase (decrease) in current liabilities
      other than short-term borrowings                   753,406                    (19,846)
                                                    -------------             -------------- 
Net cash used in operating activities                   (837,451)                (1,333,281)
Investing activities:
Purchases of furniture and equipment                    (147,721)                  (152,526)
Net (increase) decrease in other assets                  (11,387)                    18,032
                                                    -------------             --------------- 
Net cash used in investing activities                   (159,108)                  (134,494)
Financing activities:
Principal payments on notes payable                       (2,048)                    (4,751)
Net proceeds from borrowings under note
   payable to significant shareholder                    910,027                         --
Net repayments of line-of-credit borrowings             (185,855)                   (50,000)
Net proceeds from sale of common stock                   213,750                    641,346
                                                   --------------             --------------
Net cash provided by financing activities                935,874                    586,595
                                                   --------------             --------------
Net decrease in cash and equivalents                     (60,685)                  (881,180)
Cash and equivalents at beginning of period              142,300                  1,051,325
                                                   --------------             --------------
Cash and equivalents at end of period              $      81,615              $     170,145
                                                   ==============             ==============
</TABLE>

See accompanying notes.

<PAGE>5

                       Ophthalmic Imaging Systems

                 Notes to Condensed Financial Statements

        Three and Nine Month Periods ended May 31, 1998 and 1997

                               (Unaudited)


Note 1.  Basis of Presentation

The accompanying unaudited condensed balance sheet as of May 31, 1998,
condensed statements of operations for the three and nine month periods  ended
May 31, 1998 and 1997 and the condensed statements of cash flows for the three
and  nine  month  periods  ended  May  31, 1998 and 1997 have been prepared in
accordance with generally accepted accounting principles for interim financial
information  and with the instructions to  Form  10-QSB  and  Item  310(b)  of
Regulation S-B.   Accordingly,  they do not include all of the information and
footnote disclosures required by  generally accepted accounting principles for
complete financial statements.  It is suggested that these condensed financial
statements be read in conjunction with  the  audited  financial statements and
notes thereto included in the registrant's (the Company's)  Annual  Report for
the  Fiscal  Year  Ended  August  31, 1997 on Form 10-KSB.  In the opinion  of
management,  the  accompanying  condensed  financial  statements  include  all
adjustments, consisting only of normal  recurring adjustments, necessary for a
fair  presentation  of  the  Company's  financial   position  and  results  of
operations  for  the  periods presented.  The results of  operations  for  the
period ended May 31, 1998  are  not  necessarily  indicative  of the operating
results for the full year.

Certain amounts in the fiscal 1997 financial statements have been reclassified
to conform with the presentation in the fiscal 1998 financial statements.

Note 2.  Net Income (Loss) Per Share

In  1997,  the  Financial  Accounting  Standards  Board  issued  Statement  of
Financial  Accounting  Standards No. 128, "Earnings per Share".  Statement 128
replaced the previously  reported primary and fully diluted earnings per share
with basic and diluted earnings per share.  Unlike primary earnings per share,
basic earnings per share excludes  any  dilutive effects of options, warrants,
and convertible securities.  Diluted earnings per share is very similar to the
previously reported fully diluted earnings  per  share.  All net income (loss)
per share amounts for all periods have been presented,  and  where  necessary,
restated to conform to the Statement 128 requirements.

<PAGE>6
Note 2.  Net Income (Loss) Per Share (continued)

The  following  table  sets  forth the computation of basic and diluted income
(loss) per share:

<TABLE>
<CAPTION>
                                                                Unaudited                       Unaudited
                                                           Three Months Ended               Nine Months Ended
                                                                 May 31,                         May 31,
<CAPTION>
                                                     1998              1997             1998             1997
<S>             <C>                            <C>               <C>              <C>              <C>

Numerator for basic and diluted net
income (loss) per share                          $  (797,129)        $  3,668      $  (2,380,521)    $  (690,648)
                                                 ================================================================
Denominator for basic net income (loss) 
per share:
   Weighted average shares                         4,155,428         3,729,433        3,989,687        3,729,433

Effect of dilutive securities:
   Employee stock options                                 --           361,259               --              --
   Warrants and other                                     --           601,642               --              --
                                                 ----------------------------------------------------------------
Dilutive potential common shares                          --           962,901               --              --
                                                 ----------------------------------------------------------------
Denominator for diluted net income
(loss) per share                                   4,155,428         4,692,334        3,989,687        3,729,433
                                                 =================================================================
Basic net income (loss) per share                   $  (0.19)          $  0.00        $  (0.60)        $  (0.19)
                                                 =================================================================
Diluted net income (loss) per share                 $  (0.24)          $  0.00        $  (0.65)        $  (0.19)
                                                 =================================================================
</TABLE>

Note 3.  Line of Credit

In  April  1995, the Company entered into a revolving line of credit agreement
(the "Credit  Agreement")  with  a  bank  (the  "Bank")  which,  after several
amendments,  expired on November 7, 1997.  The maximum amount available  under
the terms of the  Credit  Agreement  was  $750,000 and was based upon eligible
outstanding  accounts  receivable  balances.    Borrowings  under  the  Credit
Agreement bore interest at the Bank's prime lending  rate  plus  three percent
and were secured by virtually all assets of the Company.  The Credit Agreement
also  contained certain restrictive covenants which provided for, among  other
things,  certain working capital and net worth balance and ratios.  The Credit
Agreement  was  subsequently  converted to a full recourse accounts receivable
credit agreement.

<PAGE>7

Note 3.  Line of Credit (continued)

On  November  18, 1997, the Company entered into an accounts receivable credit
agreement (the  "Agreement")  with the Bank, and all amounts outstanding under
the Credit Agreement were considered  to  be  the  initial  advance  under the
Agreement.   The  Agreement  allows  for up to an 80% advance rate on eligible
accounts  receivable  balances,  and the  maximum  borrowing  base  under  the
Agreement is $1.2 million.  The Bank has full recourse against the Company and
the Agreement expires in November  1998.   Borrowings under the Agreement bear
interest at the bank's prime lending rate plus 4%.  In addition, the Bank will
charge monthly an administrative fee equal to  the  greater  of   1/2 % of the
average  daily  balance  for  the  month  or  $1,200.  Under the terms of  the
Agreement,  borrowings  are  secured by substantially  all  of  the  Company's
assets.  At May 31, 1998, approximately  $125,000  was  outstanding  under the
Agreement.

Note 4.  Private Placement

In  November  1995,  the  Company  completed  a private placement of 1,368,421
shares of its common stock with detachable warrants.   The  net  proceeds from
this offering was approximately $1,075,000.  Along with each share  of  common
stock  issued,  the  purchasers  were  given an "A Warrant" and "B Warrant" to
purchase shares of the Company's common stock.  The A and B Warrants per share
exercise prices were $1.25 and $1.75, respectively.   The  A  and  B  Warrants
expired on February 19, 1997, as amended, and November 21, 1997, respectively.

The  private  placement  underwriter  was  issued  a  warrant ("C Warrant") to
purchase 250,000 shares of the Company's common stock at  $.95 per share.  The
number  of  shares  exercisable  as well as the per share exercise  price  are
subject to adjustment upon the occurrence  of  certain  events.   This warrant
expires on November 21, 1999.  In addition, the underwriter will receive  as a
commission 10% of the proceeds received by the Company upon exercise of the  A
and B Warrants described above.

In  February 1998, the underwriter sold its rights under the C Warrant and the
C Warrant  was  exercised  for all 250,000 shares exercisable thereunder.  The
net proceeds recognized from  the exercise of said C Warrant was approximately
$213,750 (see Note 6).

<PAGE>8

Note 5.  Nonstatutory Stock Option Plan

In   October  1997,  the  Company's  board  of  directors  approved  the  1997
Nonstatutory  Stock  Option  Plan  (the  "Plan")  under  which  all  officers,
employees,  directors  and  consultants may participate.  The Plan expires  in
October 2002.  Options granted  under the Plan are non-qualified stock options
and will have a term of not longer than ten (10) years from the date of grant,
unless otherwise specified in the option agreement.  The exercise prices under
the Plan will generally be at 100%  of  the fair market value of the Company's
common  stock  on the date of grant.  The maximum  number  of  shares  of  the
Company's common  stock  which  may  be  optioned  and  sold under the Plan is
1,000,000, of which 793,000 options remained available for  granting as of May
31,  1998.   As of May 31, 1998, stock options to purchase 207,000  shares  at
exercise prices  of between $1.09 and $1.94 were granted and outstanding under
the Plan and none of the granted options were exercised.

Note 6.  Stock Purchase Agreement

On February 25, 1998, the Company entered into a Stock Purchase Agreement (the
"Stock  Purchase  Agreement")  with  Premier Laser Systems, Inc., a California
corporation ("Premier") pursuant to which,  among  other  things:  (i) Premier
agreed  to  commence a tender offer ("Tender Offer") to acquire all shares  of
the Company's  common  stock not held by Premier or its affiliates in exchange
for a combination of cash  and Premier securities; and (ii) the Company agreed
to recommend that shareholders  tender  their  shares  of the Company's common
stock  in  the  Tender  Offer  and  not  to solicit any competing  acquisition
proposals.  As a condition to the Stock Purchase Agreement, the Company agreed
to amend its Rights Agreement ("Rights Agreement")  dated  as  of December 31,
1997,  by and between the Company and American Securities Transfer,  Inc.,  as
rights agent,  to  permit  Premier  to  acquire  up  to 51.3% of the Company's
outstanding  Common  Stock in private transactions to be  made  simultaneously
with the execution of the Stock Purchase Agreement.

<PAGE>9

Note 6.  Stock Purchase Agreement (continued)

Under  the Stock Purchase Agreement, pursuant to the Tender Offer, each of the
Company's  shareholders  will  receive,  in  exchange  for  each  share of the
Company's  common  stock:  (i)  $1.75  per share in cash; (ii) $0.25 in  value
(measured by a formula in the Stock Purchase  Agreement)  of  Premier  Class A
Common Stock; and (iii) one Class C and one Class D Warrant (collectively, the
"Warrants").  Each  Warrant  will  be  exercisable  for  fractional  shares of
Premier common stock having a value (at the measurement date as defined in the
Stock  Purchase  Agreement)  of $0.25, but the exercisability of such Warrants
will be conditional upon the achievement  of  certain  sales  targets  for the
Company's  products.   No  fractional  shares  of Premier common stock will be
issued  pursuant  to  the  Tender  Offer, and the Company's  shareholders  who
otherwise  would be entitled to receive  a  fractional share of Premier common
stock will receive a cash payment in lieu thereof.   It  is  anticipated  that
following  consummation  of  the Tender Offer, Premier will engage in a merger
transaction in which the remaining  holders of the Company's common stock will
receive an economic benefit similar to that being paid in the Tender Offer.

The Tender Offer will be extended to  any shares of the Company's common stock
which  are unconditionally issued or allotted  upon  the  exercise  of  vested
options  granted under the Company's stock option plans or otherwise until the
expiration  date  of  the Tender Offer.  In addition, option holders under the
Company's stock option  plans  will  be  offered  an opportunity to cancel any
unexercised  options  in  return for the grant of comparable  Premier  options
(after giving effect to an  exchange ratio based on a value of $2.18 per share
of the Company's common stock), to purchase Premier common stock.

The Company has been advised that the cash portion of the Private Acquisitions
(as defined below), the Warrant  exercise  and  the proposed Tender Offer (and
any proposed merger), and the fees and costs incurred  or  to  be  incurred in
connection therewith, have been and will be paid from existing cash  and other
working  capital of Premier and that no outside sources of funds or borrowings
will be used.

Simultaneous  with  execution of the Stock Purchase Agreement, Premier entered
into  individual  purchase   agreements  ("Purchase  Agreement"  or  "Purchase
Agreements") with three shareholders,  including a director of the Company and
JB Oxford & Company ("JBO"), providing for these parties to sell to Premier an
aggregate of 730,360 shares of the Company's  common stock.  Additionally, JBO
sold to Premier, pursuant to the terms of the JBO Purchase Agreement, warrants
(the "JBO Warrants") to purchase 250,000 shares of the Company's common stock.
Premier exercised the JBO Warrants on February  26,  1998  (the purchases made
pursuant  to  the  Purchase  Agreements  are referred to collectively  as  the
"Private Acquisitions").

<PAGE>10

Note 6.  Stock Purchase Agreement (continued)

The  purchase of the Company's shares pursuant to the Private Acquisitions and
the exercise of the JBO Warrants have increased Premier's beneficial ownership
of the  Company's  common  stock  to  an  aggregate  of  2,131,758  shares, or
approximately  51.3% of the outstanding shares of the Company's common  stock.
The total consideration  paid  by  Premier  for  the  Company's  common  stock
pursuant  to  the  Private Acquisitions was approximately $2,137,185, or $2.18
per share, which consideration  was  paid  for  in  a  combination of cash and
Premier securities in approximately the same relative amounts as to be paid to
the Company's stockholders under the terms of the Stock Purchase Agreement.

The Purchase Agreement with the Company's director provides  for  recession if
Premier fails to make, or withdraws, abandons, or terminates the Tender  Offer
without purchasing all shares validly tendered and not withdrawn.

In  order to permit the Private Acquisitions and the offer contemplated by the
Stock  Purchase  Agreement,  the  Board  of  Directors  of  the Company, after
considering the terms of the Stock Purchase Agreement and an  opinion rendered
by  the  Company's  independent  financial  advisors  as  to  the fairness  of
Premier's  offer  to  the  shareholders of the Company, amended the  Company's
Rights Agreement.

Note 7.  Promissory Note with Significant Shareholder

On  April  30,  1998,  the  Company executed a promissory note (the "Note") in
favor of Premier Laser Systems,  Inc.,  a  California corporation ("Premier").
Borrowings  against the Note are available to  the  Company  in  the  form  of
periodic advances.   The  maximum principal amount available under the Note is
$500,000,  which principal amount  outstanding,  together  with  any  and  all
accrued interest,  is  payable the earlier of (i) written demand by Premier or
(ii) April 30, 1999.  Under the terms of the Note, borrowings bear interest at
the rate of 8 1/2 % per  annum,  are  secured  by  substantially  all  of  the
Company's  assets and are subordinate to borrowings against the Line of Credit
with the Company's Bank (see Note 3).

At  May  31, 1998,  approximately  $900,000  in  principal  and  interest  was
outstanding under the Note and the Company and Premier were in negotiations to
increase the maximum principal amount available under the Note accordingly.

<PAGE>11

Note 8.  Subsequent Events (continued)

The Company and Premier are currently in discussion concerning the possibility
of revising the Stock Purchase Agreement to provide for an all cash offer (see
Note 6).

At  May  31, 1998, the amounts advanced by Premier under the Note exceeded the
originally  stated maximum amount.  Accordingly, during the fourth quarter the
parties have  agreed  in principle to increase the maximum principal amount to
cover all advances to date  plus  anticipated  future  advances.   The maximum
principal amount available under the Note is expected to be not less than $1.5
million.   It  is  anticipated  that  an amendment to the Note reflecting  the
revised terms will be executed in the near term (see Note 7).

<PAGE>12

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

THE  STATEMENTS BELOW INCLUDE STATEMENTS THAT ARE "FORWARD LOOKING  STATEMENTS"
WITHIN THE MEANING OF SECTION 21A OF THE SECURITIES ACT OF 1933, AS AMENDED, IN
SECTION  21E  OF  THE SECURITIES ACT OF 1934, AS AMENDED, AND IS SUBJECT TO THE
SAFE  HARBOR CREATED  THEREBY.   FUTURE  OPERATING  RESULTS  MAY  BE  ADVERSELY
EFFECTED  AS A RESULT OF A NUMBER OF FACTORS ENUMERATED IN THE COMPANY'S PUBLIC
REPORTS.

The Company,  a  California  corporation,  is  engaged in the business of
designing,  developing,  manufacturing and marketing  ophthalmic  digital
imaging systems and has derived  substantially  all  of its revenues from
the sale of such products.

Since its inception, the Company's products have addressed  primarily the
needs of the ophthalmic fluorescein angiography market, and more recently
the  indocyanine  green ("ICG") market.  While the Company believes  that
the overall angiography  market  has  modest growth potential, sustaining
growth  in  its  traditional angiography equipment  business  may  become
increasingly difficult due to increased competition.

During  the  past quarter,  the  Company's  product  development  efforts
continued to be  primarily involved with features and enhancements to its
existing products  targeting various telemedicine applications, including
screening,  remote  consultation   and  distance  learning,  as  well  as
exploration of new products.

On February 25, 1998, the Company entered into a Stock Purchase Agreement
(the "Stock Purchase Agreement") with  Premier  Laser  Systems,  Inc.,  a
California  corporation  ("Premier"),  pursuant  to  which,  among  other
things: (i) Premier agreed to commence a tender offer ("Tender Offer") to
acquire  all shares of the Company's common stock not held by Premier  or
its affiliates  in  exchange  for  a  combination  of  cash  and  Premier
securities;  and  (ii)  the Company agreed to recommend that shareholders
tender their shares of the Company's common stock in the Tender Offer and
not to solicit any competing  acquisition  proposals.   As a condition to
the  Stock  Purchase  Agreement, the Company agreed to amend  its  Rights
Agreement ("Rights Agreement")  dated  as  of  December  31,  1997 by and
between  the  Company  and American Securities Transfer, Inc., as  rights
agent,  to permit Premier  to  acquire  up  to  51.3%  of  the  Company's
outstanding   common   stock   in   private   purchase   agreements  made
simultaneously  with the execution of the Stock Purchase Agreement.   For
additional information  regarding  the  terms and conditions of the Stock
Purchase Agreement, see the Company's Form 8-K filed on March 9, 1998, as
referenced in Part II, Item 6 of this Form 10-QSB and Note 8 of the Notes
to Condensed Financial Statements.

The  Company's results of operations have  historically  fluctuated  from
quarter  to  quarter  due  to a number of factors and are not necessarily
indicative  of the results to  be  expected  for  any  future  period  or
expected for  the  fiscal  year  ending August 31, 1998.  There can be no
assurance  that  revenue  growth  or profitability  can  be  achieved  or
sustained in the future.

<PAGE>13

The following discussion should be read in conjunction with the unaudited
interim financial statements and the  notes  thereto  which are set forth
elsewhere in this Report on Form 10-QSB.  In the opinion  of  management,
the   unaudited   interim   period   financial   statements  include  all
adjustments,  all  of which are of a normal recurring  nature,  that  are
necessary for a fair presentation of the results of the periods.

RESULTS OF OPERATIONS

The Company incurred  a  net loss of $797,129, or $.19 per share, for the
third quarter of fiscal 1998  as  compared  to  net  income of $3,668, or
breakeven, for the third quarter of fiscal 1997.  The  Company incurred a
net loss of $2,380,521, or $.60 per share, for the first  nine  months of
1998 versus a net loss of $690,648, or $.19 per share, for the comparable
period  of 1997.  The per share figures are diluted amounts in accordance
with Financial  Accounting  Standards  No.  128  (see  Note 2 of Notes to
Condensed Financial Statements).

The  1998  figures reflect the adverse impact on revenues  and  corporate
operations  resulting  from  efforts  associated  with  the  contemplated
transaction with Premier.  The Company has incurred significant costs and
professional  fees  and expenses in connection therewith, while diverting
management's attention  and  selling efforts away from the Company's core
operations during this period.

The  Company's  revenues  for the  third  quarter  of  fiscal  1998  were
$1,377,830, representing a decrease of approximately 30% from revenues of
$1,975,085 for the third quarter  of fiscal 1997.  Revenues for the first
nine  months  of  fiscal  1998  were  $4,747,864,   or   a   decrease  of
approximately  8%  versus  $5,144,738 for the comparable period of  1997.
One of the primary reasons for the significantly decreased revenue levels
during the third quarter of  1998  versus  the  third quarter of 1997 was
revenues  recognized during the second and third quarters  of  1997  from
deliveries  against  orders  received  during  the first quarter of 1997,
which orders were carried over in an unusually high  deliverable  backlog
from  the  first  quarter  of  fiscal  1997.   Additionally,  pending the
completion of certain software upgrades, the Company deferred delivery of
units against several orders during the recently completed third quarter.
Delivery of these units began toward the end of the third quarter and are
anticipated to continue during the fourth quarter of 1998.  As  indicated
above, sales during the third quarter and first nine months of 1998  were
also  adversely  impacted  by  management's efforts being directed to the
negotiations with Premier and less  time  devoted  to  the  generation of
sales.

<PAGE>14

Gross   margins   before   operating   expenses  ("gross  margins")  were
approximately 35% during the third quarter  ended  May  31,  1998  versus
approximately 44% for the comparable quarter of 1997.  For the nine-month
period  ended  May  31,  1998,  gross  margins  were approximately 35% as
compared to approximately 41% during the comparable  period of 1997.  The
decrease  in  gross  margin  percentage  during  the  third  quarter  was
attributable  primarily  to  the  significantly decreased revenue  levels
during the third quarter of 1998 and,  to  a  lesser  extent, the adverse
impact of increased reserves for potential field upgrades  recognized for
certain  systems  delivered  during the 1998 third quarter.  Furthermore,
the increase of such reserves for systems delivered during the first nine
months of 1998 was a principal  factor  for the decrease in gross margins
for the nine month period of 1998 as compared to 1997.

As  a  percentage  of  revenues,  sales  and marketing  and  general  and
administrative expenses accounted for approximately 77% of total revenues
during the third quarter of fiscal 1998 versus approximately 30% of total
revenues during the comparable third quarter  of  fiscal  1997.   For the
first nine months of fiscal 1998 and fiscal 1997, such expenses accounted
for approximately 71% and 39% of total revenues for the respective  nine-
month  periods.   Expense  levels also increased to $1,063,231 during the
third quarter of 1998 versus  $596,069  during the third quarter of 1997.
For the first nine months of 1998, expense levels increased to $3,377,425
from  $2,017,356  during  the comparable period  of  1997.   The  primary
factors  contributing  to these  increases  were  significant  investment
banking, legal and other  professional costs recognized during the second
and third quarters of 1998  associated  with the negotiation of the Stock
Purchase  Agreement, the costs related to  additional  senior  management
personnel hired  during  the  fourth  quarter  of fiscal 1997, as well as
increased  compensation  expense  recognized  in  connection  with  stock
options   issued  to  non-employees  and  non-directors.    The   Company
anticipates  expenses  in this area will continue to run above historical
levels.

Research and development  expenses,  as  a  percentage  of revenues, were
approximately  15% in the third quarter of 1998 versus approximately  13%
in the third quarter  of 1997.  For the first nine months of fiscal 1998,
such expenses accounted  for  approximately  13%  of  total  revenues  as
compared  to  approximately  15%  during  the  comparable period of 1997.
Expense levels decreased in actual dollar terms  to  $206,647  during the
third  quarter  of  1998  from  $256,808  in 1997.  During the first nine
months of fiscal 1998, expense levels also  decreased  in  actual  dollar
terms  to $608,352 versus $754,234 in 1997.  The Company has focused  its
research  and  development  efforts  on  current product enhancements and
reducing cost configurations for its current products.

Other expense was $15,036 during the third  quarter of fiscal 1998 versus
$15,196 during the third quarter of 1997.  For  the  first nine months of
1998 and 1997, other expense was $43,915 and $42,475,  respectively.  The
primary component of other expenses in all periods presented  is interest
and  related expenses associated with borrowings against existing  credit
lines with the Company's Bank and against the promissory note executed in
favor  of Premier during the third quarter of 1998 (see Note 7 and Note 8
of Notes to Condensed Financial Statements).

<PAGE>15

LIQUIDITY AND CAPITAL RESOURCES

The Company's operating activities used cash of $837,451 during the first
nine months  of  fiscal  1998 and $1,333,281 during the comparable period
for 1997.  Cash used in operating  activities in the first nine months of
1998 was expended principally to fund  the  net  loss  during the period.
This amount was partially offset by collection of accounts receivable and
increases  in  customer  deposits  and accrued liabilities,  particularly
those  liabilities  accrued in conjunction  with  significant  investment
banking, legal and other  professional costs recognized during the second
and third quarters of 1998  associated  with the negotiation of the Stock
Purchase Agreement.  The cash used by operations  in  1997  was  expended
primarily  to  fund  the  net loss during the period and the increase  in
accounts receivable associated  with  timing of product deliveries toward
the end of the period, which amount was  partially  offset by a reduction
in inventory levels during the period.

Cash  used  in investing activities was $159,108 during  the  first  nine
months of 1998  as  compared to $134,494 during the same period for 1997.
The Company's primary investing activities consist of equipment and other
capital asset acquisitions.   The  Company  does  not  currently have any
pending material commitments regarding capital expenditures.   While  the
Company  had  anticipated  that it would continue to upgrade its existing
management information and corporate  communications systems, the Company
will defer significant capital acquisition  decisions  as a result of the
contemplated acquisition of the Company.  To the extent  that any capital
expenditures  are made, the Company anticipates that the source  of  such
funds may be any  one  or  more  of the following sources: (i) borrowings
under an existing credit agreement,  if  available; (ii) working capital;
or (iii) other financing arrangements, if  any, available to the Company,
including loans or other advances made to, or  on  behalf of, the Company
by Premier.  In this regard, in the recently completed third quarter, the
Company executed a promissory note if favor of Premier  (the  "Note")  as
discussed in further detail below.

The  Company  generated cash of $935,874 from financing activities during
the first nine  months  of fiscal 1998 as compared to $586,595 during the
same  period  of  fiscal  1997.   The  sources  of  cash  from  financing
activities in 1998 were the  net  proceeds  from  the exercise of certain
warrants issued pursuant to a private placement of  the  Company's common
stock in November 1995 and borrowings under the Note, which  amounts were
partially  offset  by  net  repayments  of  borrowings  under  the Credit
Agreement.  The cash generated from financing activities during the  1997
period was principally  the  net  proceeds  from  the exercise of certain
other warrants issued pursuant to a private placement  of  the  Company's
common stock in November 1995, and, to a lesser extent, net proceeds from
the  exercise  of  stock options issued to employees, which amounts  were
partially offset by  repayments of borrowings under the Credit Agreement.
Principal repayments on  notes  payable to parties other than Premier was
negligible in both 1998 and 1997.

<PAGE>16

As indicated in Note 3 of the Notes to Condensed Financial Statements, on
November 18, 1997, the Company entered into an accounts receivable credit
agreement (the "Agreement") with  the  Bank,  and all amounts outstanding
under  the  Credit Agreement were considered to be  the  initial  advance
under the Agreement.   The Agreement allows for up to an 80% advance rate
on eligible accounts receivable  balances, and the maximum borrowing base
under the Agreement is $1.2 million.   The Bank has full recourse against
the Company and the Agreement expires in November 1998.  Borrowings under
the Agreement bear interest at the Bank's prime lending rate plus 4%.  In
addition, the Bank will charge monthly an administrative fee equal to the
greater of  1/2 % of the average daily balance  for  the month or $1,200.
Under the terms of the Agreement, borrowings are secured by substantially
all of the Company's assets.  At May 31, 1998, approximately $125,000 was
outstanding under the Agreement.

Additionally, as indicated in Note 7 of the Notes to Condensed  Financial
Statements, on April 30, 1998, the Company executed the Note.  Borrowings
against  the  Note  are  available to the Company in the form of periodic
advances.  The maximum principal  amount  available  under  the  Note  is
$500,000,  which  principal amount outstanding, together with any and all
accrued interest, is payable the earlier of (i) written demand by Premier
or (ii) April 30, 1999.   Under  the  terms  of the Note, borrowings bear
interest at the rate of 8 1/2 % per annum, are  secured  by substantially
all of the Company's assets and are subordinate to borrowings against the
Agreement  with  the  Company's  Bank  as  discussed  immediately  above.
Approximately  $900,000  in principal and interest was outstanding  under
the Note at May 31, 1998 and  the  Company  and  Premier are currently in
negotiations to increase the maximum principal amount available under the
Note accordingly. The parties have agreed in principle  to  increase  the
maximum  principal  amount  under  the Note to cover all advances to date
plus anticipated future advances.  The maximum principal amount available
under the Note is expected to be not  less  than  $1.5  million.   It  is
anticipated  that  an  amendment to the Note reflecting the revised terms
will be executed in the near term.

The  Company believes that  its  existing  cash  balances  together  with
ongoing  collections  of  its  accounts  receivable,  available borrowing
capacity under the Agreement and financing arrangements with Premier will
be adequate to meet its liquidity and capital requirements  in  the  near
term.   Principal  and  interest  amounts due under the alternative stock
appreciation  right  with  the  Bank, which  amounts  were  approximately
$262,000 as of May 31, 1998, are  currently  due; however, no request for
payment has yet been made.  If demand for payment  were to be made by the
Bank, the Company would have to seek financing to make such payment.

There  can  be  no  assurance,  however,  that  any  of the  contemplated
financing  arrangements  described  herein  will  be  available  and,  if
available, can be obtained on terms favorable to the Company.

<PAGE>17

                      PART II     OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 2.  CHANGES IN SECURITIES

In  October  1997,  the  Company's  board  of  directors  approved  the  1997
Nonstatutory  Stock  Option  Plan  (the  "Plan")  under  which  all officers,
employees,  directors  and consultants may participate.  The Plan expires  in
October 2002.  Options granted under the Plan are non-qualified stock options
and will generally have  a  term  of  ten  (10) years from the date of grant,
unless  otherwise  specified in the option agreement.   The  exercise  prices
under the Plan will  generally  be  at  100%  of the fair market value of the
Company's common stock on the date of grant.  The maximum number of shares of
the Company's common stock which may be optioned  and  sold under the Plan is
1,000,000,  of which 798,000 options remained available for  granting  as  of
February 28,  1998.   As  of  February  28,  1998,  stock options to purchase
202,000 shares at exercise prices of between $1.09 and $1.38 were granted and
outstanding under the Plan and none of the granted options were exercised.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES

None.

ITEM 5.  OTHER INFORMATION

In  a  letter  dated  May  27,  1998 from NASDAQ, the Company was notified by
NASDAQ  that,  in  accordance  with  the   terms   of   the   NASDAQ  Listing
Qualifications  Panel  decision  dated  March 23, 1998, the Company's  common
stock was deleted from the NASDAQ SmallCap Market effective with the close of
business on that date.  Pursuant to the NASDAQ  Listing  Qualifications Panel
decision,  the Company's securities were be delisted on the  earlier  of  the
completion date  of  the Tender Offer by Premier or May 20, 1998 (see Exhibit
99.1).

In  a  letter dated March 3, 1998 from the Boston Stock Exchange ("BSE"), the
Company  was  notified by BSE, that, due to the Company's  noncompliance with
the BSE requirement to maintain capital and surplus of at least $500,000, BSE
suspended the Company's common stock from trading as of the close of business
on March 3, 1998  and  filed  for  delisting with the Securities and Exchange
Commission.

<PAGE>18

ITEM 5.  OTHER INFORMATION (continued)

On  June  30,  1998,  William  L.  Mince,  the  Company's President and Chief
Operating Officer, vacated his positions with the Company in contemplation of
the transaction with Premier (see Exhibit 99.3).

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  The  exhibits  listed on the accompanying Index to Exhibits below
     are filed as a part  hereof  and are incorporated by reference as
     noted.

(b)  A  Form  8-K  was  filed on March 9, 1998, to report under Item 1
     thereof that the Company  and Premier Laser Systems, Inc. entered
     into a Stock Purchase Agreement  dated  as  of February 25, 1998,
     and  to report under Item 5 thereof, the Company's  amendment  to
     its Rights  Agreement,  dated  as  of  December 31, 1997, between
     Ophthalmic  Imaging  Systems  and American  Securities  Transfer,
     Inc.,  a  copy of which Form 8-K  will  be  made  available  upon
     request to the Company at its principal offices.

<PAGE>19

                                SIGNATURES

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

                                            OPHTHALMIC IMAGING SYSTEMS
                                                   (Registrant)
   

                                      By:   STEVEN R. VERDOONER

                                            Steven R. Verdooner,
                                        Chief Executive Officer and Chief
                                        Financial Officer (principal executive
                                        officer and principal financial and
                                        accounting officer)


Dated:  July 15, 1998

<PAGE>20

                            INDEX TO EXHIBITS

<TABLE>
<CAPTION>
     Exhibit  NUMBER            DESCRIPTION OF EXHIBIT                                       Footnote REFERENCE
<S>        <C>                  <C>                                                        <C>        DESCRIPTION OF EXHIBIT


             2.1                Stock  Purchase  Agreement, dated as of February 25, 1998,        (13)
                                by and between Registrant and Premier Laser Systems, Inc.
             3.1                Articles of Incorporation of the Registrant, as amended.            *
             3.1(a)             Amendment  to  Articles  of  Incorporation (Certificate of        (11)
                                Determination   of   Preferences  of   Series   A   Junior
                                Participating  Preferred   Stock   of  Ophthalmic  Imaging
                                Systems).
             3.2                Amended Bylaws of the Registrant.                                   *
             4.1                See Exhibits 3.1 and 3.2 for provisions of the Articles of          *
                                Incorporation,  as  amended, and the amended Bylaws of the
                                Registrant defining the  rights of holders of Common Stock
                                of the Registrant.
             4.2                Specimen of Stock Certificate.                                      *
             4.3                Rights  Agreement,  dated as of December 31, 1997, between        (10)
                                Registrant  and  American   Securities   Transfer,   Inc.,
                                including form of Rights Certificate attached thereto.
             4.4                Amendment  to  Rights  Agreement, dated as of February 25,        (14)
                                1998, between Registrant and American Securities Transfer,
                                Inc.
             10.1               Lease  Agreement,  dated  as of July 10, 1987, between the          *
                                Registrant  (as  tenant)  and   Transamerica/Emkay  Income
                                Properties I, as amended on July  23,  1990  and  June 11,
                                1991.
             10.1(a)            Seventh Amendment to lease effective as of July 18, 1996.          (7)
             10.2               Employment  Agreement,  dated  March 27, 1992, between the          *
                                Registrant and Dennis J. Makes.
             10.2(a)            Amendment  dated June 30, 1993 to the Employment Agreement         (1)
                                between the Registrant and Dennis J. Makes dated March 27,
                                1992.
<PAGE>21
             10.3               Confidentiality  Agreement,  dated  March 27, 1992 between          *
                                the Registrant and Dennis J. Makes.
             10.4               Confidentiality  Agreement,  dated  March 27, 1992 between          *
                                the Registrant and Steven R. Verdooner.
             10.5               Confidentiality  Agreement,  dated  March 27, 1992 between          *
                                the Registrant and Richard Wullaert.
             10.6               Consulting  Agreement, dated January 23, 1992, between the          *
                                Registrant and G. Peter Halberg, M.D.
             10.7               Assignment   dated   October   23,  1990  of  U.S.  Patent          *
                                Application  for  Apparatus and Method  for  Topographical
                                Analysis of the Retina  to  the  Registrant  by  Steven R.
                                Verdooner,  Patricia  C.  Meade,  and Dennis J. Makes  (as
                                recorded on Reel 5490, Frame 423 in  the Assignment Branch
                                of the U.S. Patent and Trademark Office).
             10.8               Form  of  International Distribution Agreement used by the          *
                                Registrant  and  sample  form of End User Software License
                                Agreement.
             10.9               Original  Equipment Manufacturer Agreement, dated April 1,          *
                                1991, between the Registrant and SONY Medical Electronics,
                                a division of SONY Corporation of America.
             10.10              Original   Equipment   Manufacturer/Value  Added  Reseller          *
                                Agreement, dated May 7,  1991,  between the Registrant and
                                Eastman Kodak Company.
             10.11              The  Registrant's  1992 Nonstatutory Stock Option Plan and          *
                                sample form of Nonstatutory Stock Option Agreement.
             10.12              Common   Stock  and  Warrant  Purchase  Agreement  ("Stock          *
                                Purchase Agreement"),  dated as of February 8, 1992, among
                                the Registrant, Jonnie R. Williams, Kathleen M. O'Donnell,
                                as Trustee of Irrevocable Trust No. 6, FBO F.E. O'Donnell,
                                Jr., M.D., Steven R. Verdooner and Dennis J. Makes.

<PAGE>22

             10.12(a)           Amendment  No.  1 to Stock Purchase Agreement, dated March          *
                                25,  1992,  among  the  Registrant,  Jonnie  R.  Williams,
                                individually,  Jonnie   R.   Williams,   as   Trustee   of
                                Irrevocable  Trust No. 1, Rambert Simmons, and Kathleen M.
                                O'Donnell, as Trustee of Irrevocable Trust No. 6, FBO F.E.
                                O'Donnell, Jr., M.D.
             10.13              Cross-Indemnification  Agreement, dated February 14, 1991,          *
                                among  Dennis  Makes,  Steven   Verdooner,   and   Richard
                                Wullaert.
             10.14              Key   Man   Life  Insurance  Policies  in  the  amount  of          *
                                $1,000,000 for  each  of  Dennis  J.  Makes  and Steven R.
                                Verdooner, with the Registrant as the named beneficiary.
             10.15              Warrant  dated  February 12, 1993 issued by the Registrant         (1)
                                to Steven R. Verdooner to purchase 50,000 shares of Common
                                Stock.
             10.16              Stock Option Plan.                                                 (1)
             10.17              Promissory  Note dated January 4, 1993 from the Registrant         (1)
                                to  Western  Financial  Savings  Bank  in  the  amount  of
                                $25,209.83 due in full by January 4, 1998.
             10.18              Rental  Agreement  dated  May  1,  1994 by and between the         (2)
                                Registrant and Robert J. Rossetti.
             10.19              Security   and  Loan  Agreement  (with  Credit  Terms  and         (3)
                                Conditions)  dated  April  12,  1995  by  and  between the
                                Registrant and Imperial Bank.
             10.19(a)           General  Security  Agreement  dated  April 12, 1995 by and         (3)
                                between the Registrant and Imperial Bank.
             10.19(b)           Warrant dated November 1, 1995 issued by the Registrant to         (4)
                                Imperial Bank to purchase 67,500 shares of Common Stock.
             10.19(c)           Amended Loan and Security Agreement (with Credit Terms and         (4)
                                Conditions) dated November 1, 1995.
             10.19(d)           Registration  Rights  Agreement  dated  November  1,  1995         (4)
                                between the Registrant and Imperial Bank.
             10.19(e)           Amended Loan and Security Agreement (with Credit Terms and         (6)
                                Conditions) dated April 4, 1996.

<PAGE>23

             10.19(f)           Amended Loan and Security Agreement (with Credit Terms and         (7)
                                Conditions) dated July 12, 1996.
             10.19(g)           Amended Loan and Security Agreement (with Credit Terms and         (7)
                                Conditions) dated November 21, 1996.
             10.19(h)           Amended Loan and Security Agreement (with Credit Terms and         (8)
                                Conditions) dated June 3, 1997.
             10.19(i)           Amended Loan and Security Agreement (with Credit Terms and         (9)
                                Conditions) dated August 28, 1997.
             10.19(j)           Amended Loan and Security Agreement (with Credit Terms and         (9)
                                Conditions) dated October 24, 1997.
             10.19(k)           Amended Loan and Security Agreement (with Credit Terms and         (9)
                                Conditions) dated November 3, 1997.
             10.19(l)           Amended Loan and Security Agreement (with Credit Terms and         (9)
                                Conditions) dated November 21, 1997.
             10.19(m)           Agreement  of Purchase of Receivable (Full Recourse) dated         (9)
                                November 18, 1997 between Registrant and Imperial Bank.
             10.20              Purchase  Agreements  dated  November 21, 1995 between the         (4)
                                Registrant, JB Oxford & Company and certain Investors.
             10.20(a)           Warrant  Agreement  dated  November  21,  1995 between the         (4)
                                Registrant, JB Oxford & Company and certain Investors.
             10.20(b)           First  Amendment Warrant Agreement dated November 21, 1996         (7)
                                between  the  Registrant,  JB Oxford & Company and certain
                                Holders.
             10.20(c)           Registration  Rights  Agreement  dated  November  21, 1995         (4)
                                between  the  Registrant,  JB Oxford & Company and certain
                                Investors.
             10.21              Employment  Agreement  dated November 20, 1995 between the         (4)
                                Registrant and Steven R. Verdooner.
             10.22              Employment  Agreement  dated November 20, 1995 between the         (4)
                                Registrant and R. Michael Clark.

<PAGE>24
             10.23              Employment  Agreement  dated  July  14,  1997  between the         (9)
                                Registrant and William L. Mince.
             10.25              The  Registrant's  1995 Nonstatutory Stock Option Plan and         (5)
                                sample form of Nonstatutory Stock Option Agreement.
             10.26              The  Registrant's  1997 Nonstatutory Stock Option Plan and        (12)
                                sample form of Nonstatutory Stock Option Agreement.
             10.27              Promissory  Note  dated April 30, 1998 from the Registrant        (15)
                                to Premier Laser Systems,  Inc.  in  the maximum amount of
                                $500,000  due  in  full upon the earlier  of  (i)  written
                                demand by Premier or (ii) April 30, 1999.
             10.28              Security Agreement dated April 30, 1998 by and between the        (15)
                                Registrant and Premier Laser Systems, Inc.
             27                 Financial Data Schedule (for SEC use only).                       (15)
             99.1               Press release dated June 1, 1998.                                 (15)
</TABLE>

*  Incorporated  by  reference  to  the  like-numbered  exhibits  previously  
   filed with Registrant's Registration Statement on Form S-18, number 
   33-46864-LA.

(1)  Incorporated  by  reference  to the Registrant's Annual Report on Form 
     10-KSB for the fiscal year ended August 31, 1993 filed on November 26, 
     1993.

(2) Incorporated by reference to the  Registrant's  Annual  Report on Form 
    10-KSB for the fiscal year ended August 31, 1994 filed on November 29, 1994.

(3) Incorporated by reference to the Registrant's Quarterly Report on Form 
    10-QSB for the quarterly period ended May 31, 1995 filed on July 14, 1995.

(4) Incorporated by reference to the Registrant's Annual Report  on  Form  
    10-KSB for the fiscal year ended August 31, 1995 filed on November 29, 1995.

(5) Incorporated  by  reference  to  the  Registrant's Registration Statement on
    Form S-8 filed on May 28, 1996, number 333-0461.

(6) Incorporated by reference to the Registrant's Quarterly Report on Form 
    10-QSB for the quarterly period ended May 31, 1996 filed on July 15, 1996.

<PAGE>25

(7) Incorporated  by  reference  to the Registrant's Annual Report on Form 
    10-KSB for the fiscal year ended August 31, 1996 filed on November 29, 1996.

(8) Incorporated by reference to the Registrant's Quarterly Report on Form 
    10-QSB for the quarterly period ended May 31, 1997 filed on July 15, 1997.

(9) Incorporated by reference to the  Registrant's  Annual  Report on Form 
    10-KSB for the fiscal year ended August 31, 1997 filed on December 1, 1997.
          
(10)  Incorporated by reference to Exhibit 1 of the Registrant's  Form 8-K 
      filed on January 2, 1998.

(11)  Incorporated  by  reference  to  Exhibit  A of Exhibit 1 of the 
      Registrant's Form 8-K filed on January 2, 1998.
          
(12)  Incorporated by reference to the Registrant's Quarterly Report on Form 
      10-QSB for the quarterly period ended November 30, 1997 filed on January
      14, 1998.

(13)  Incorporated  by reference to Exhibit 2.1 of the Registrant's Form 8-K 
      filed on March 9, 1998.

(14)  Incorporated  by reference to Exhibit 4.1 of the Registrant's Form 8-K 
      filed on March 9, 1998.

(15)  Exhibit included herewith.