UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

(Mark One)

[ X ]  QUARTERLY REPORT  PURSUANT  TO  SECTION 13  OR 15(d)  OF  THE  SECURITIES
       EXCHANGE ACT OF 1934

For the quarterly period ended                   March 31, 1998
                              --------------------------------------------------

                                       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:   0-21214

                                ORTHOLOGIC CORP.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)
<TABLE>
<S>                                                                          <C>       
   Delaware                                                                  86-0585310
-------------------------------------------------------------------------------------------------------
(State of other jurisdiction of incorporation or organization)     (I.R.S. Employer Identification No.)
</TABLE>

 1275 W. Washington Street, Tempe, Arizona                              85281
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)

                                 (602) 437-5520
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                2850 S. 36th Street, #16, Phoenix, Arizona, 85034
--------------------------------------------------------------------------------
        (Former name, former address and former fiscal year, if changed
                               since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.  [ X ]  Yes     [   ]  No

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

       25,291,690 shares of common stock outstanding as of April 30, 1998
<PAGE>
                                ORTHOLOGIC CORP.



                                      INDEX

                                                                        Page No.
Part I     Financial Information

           Item 1.  Financial Statements

           Condensed Consolidated Balance Sheets
             March 31, 1998 and December 31, 1997-----------------------   1

           Consolidated Statements of Operations
             Three Months ended March 31, 1998 and 1997-----------------   2

           Consolidated Statements of Cash Flows
             Three Months ended March 31, 1998 and 1997-----------------   3

           Notes to Consolidated Financial Statements ------------------   4

           Item 2.  Management's Discussion and Analysis of
                    Financial Condition and Results of Operations-------   8


Part II    Other Information

           Item 1.  Legal Proceedings-----------------------------------  11

           Item 6.  Exhibits and Reports on Form 8-K -------------------  11
<PAGE>
                                OrthoLogic Corp.
                      Condensed Consolidated Balance Sheets
                                 (in thousands)
                                    Unaudited


                                                        March 31,   December 31,
                                                          1998         1997
                                                        ---------    ---------
ASSETS

Cash and cash equivalents                               $   1,386    $   7,783
Short-term investments                                      3,495        4,569
Accounts receivable                                        25,491       34,424
Inventory                                                  11,733       10,548
Prepaids and other current assets                           1,868        1,673
Deferred income taxes                                       2,592        2,596
                                                        ---------    ---------
   Total current assets                                    46,565       61,593

Furniture, rental fleet and equipment                      19,280       16,455
Accumulated depreciation                                   (6,117)      (4,934)
                                                        ---------    ---------
  Furniture and equipment, net                             13,163       11,521

Intangibles, net                                           31,464       29,898
Deposits and other assets                                     911           91
                                                        ---------    ---------
   Total Assets                                         $  92,103    $ 103,103
                                                        =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Accounts payable                                        $   3,859    $   2,896
Loan payable - current portion                                500          500
Obligations under co-promotion agreement                    1,000        2,000
Accrued liabilities                                         9,737       11,340
                                                        ---------    ---------
   Total current liabilities                               15,096       16,736
                                                        ---------    ---------

Deferred rent and capital lease obligation                     92          106
Loan payable - long term portion                              274          524
Obligations under co-promotion agreement                    1,000        1,000
                                                        ---------    ---------
   Total liabilities                                       16,462       18,366
                                                        ---------    ---------
   Committments and contingencies [Notes 3 & 5]

Stockholders' Equity

Common stock                                                   13           13
Additional paid-in capital                                119,475      119,413
Accumlated deficit                                        (43,847)     (34,689)
                                                        ---------    ---------
   Total stockholders' equity                              75,641       84,737
                                                        ---------    ---------

     Total Liabilities and Stockholders' Equity         $  92,103    $ 103,103
                                                        =========    =========

See notes to consolidated financial statements.
                                                                          Page 1
<PAGE>
                                OrthoLogic Corp.
                      Consolidated Statement of Operations
                      (in thousands, except per share data)
                                    Unaudited


                                                     Three months ended March 31
                                                     ---------------------------
                                                          1998          1997
                                                       --------      --------
REVENUES                                                          
  Net sales                                            $  8,763      $  9,572
  Net rentals                                            10,346         7,730
                                                       --------      --------
     Total Revenues                                      19,109        17,302
                                                       --------      --------
COST OF REVENUES                                                  
  Cost of goods sold                                      2,452         2,714
  Cost of rentals                                         1,964         2,032
                                                       --------      --------
     Total Cost of Revenue                                4,416         4,746
                                                       --------      --------

GROSS PROFIT                                             14,693        12,556
                                                                  
OPERATING EXPENSES                                                
  Selling, general and administrative                    23,821        12,889
  Research and development                                  498           576
  Restructuring and other charges                          (399)         --
                                                       --------      --------
     Total Operating Expenses                            23,920        13,465
                                                       --------      --------
                                                                  
OPERATING LOSS                                           (9,227)         (909)
                                                                  
OTHER INCOME                                                      
  Grant/Other revenue                                      --              74
  Interest income                                            97           562
                                                       --------      --------
     Total Other Income                                      97           636
                                                       --------      --------
                                                                  
LOSS BEFORE INCOME TAXES                                 (9,130)         (273)
                                                                  
Provision for income taxes                                 --            --
                                                       --------      --------
                                                                  
NET LOSS                                               $ (9,130)     $   (273)
                                                       ========      ========
                                                                  
BASIC EARNINGS PER SHARE                                          
------------------------                                          
                                                                  
NET LOSS PER COMMON WEIGHTED SHARES                               
OUTSTANDING                                            $  (0.36)     $  (0.01)
                                                       ========      ========
WEIGHTED AVERAGE NUMBER OF                                        
COMMON SHARES OUTSTANDING                                25,267        25,038
                                                       ========      ========
DILUTED EARNINGS PER SHARE                                        
--------------------------                                        
                                                                  
NET LOSS PER COMMON AND                                           
DILUTIVE SHARES                                        $  (0.36)     $  (0.01)
                                                       ========      ========
                                                                  
WEIGHTED SHARES OUTSTANDING                            $ 25,277      $ 25,038
                                                       ========      ========
See notes to consolidated financial statements                  
                                                                          Page 2
<PAGE>                                                                   
                                OrthoLogic Corp.
                      Consolidated Statements of Cash Flows
                                 (in thousands)
                                    Unaudited
<TABLE>
<CAPTION>
                                                                          Three Months Ended March 31
                                                                          ---------------------------
                                                                               1998          1997
                                                                               ----          ----
<S>                                                                         <C>           <C>      
OPERATING ACTIVITIES
    Net Loss                                                                $ (9,130)     $   (273)
              Noncash items:
              Depreciation and amortization                                    2,181         1,321
              Other                                                             --             (11)

              Net change in Other Operating items:
              Accounts receivable                                             (3,757)          (85)
              Inventory                                                       (1,184)         (419)
              Allowance for bad debts                                         10,723          (741)
              Prepaids and other current assets                                 (191)         (835)
              Deposits and other assets                                          (70)            2
              Accounts payable                                                   963            40
              Accrued liabilities                                             (1,591)         (335)
                                                                            --------      -------- 
                                Cash flows used in operating activities       (2,056)       (1,336)
                                                                            --------      -------- 

INVESTING ACTIVITIES
              Purchase of fixed assets, net                                   (3,342)         (532)
              Cash paid for acquisitions, net of other effects                   (81)      (18,210)
              Investment in Chrysalis                                           (750)         --
              Sales (Purchases) of short term investments                      1,073        18,664
              Collection of note receivable                                     --            --
              Intangible from dealer transactions                               --            (463)
                                                                            --------      -------- 
                                Cash flows used in investing activities       (3,100)         (541)
                                                                            --------      -------- 

FINANCING ACTIVITIES
              Payments on Capital Leases                                        (274)         --
              Payments on Loan Payable                                          --            --
              Payments under co-promotion agreement                           (1,000)         --
              Proceeds from issuance of common stock                            --            --
              Foreign exchange                                                   (28)         --
              Net proceeds from stock option exercises                            61           113
                                                                            --------      -------- 
                                Cash flows used in financing activities       (1,241)          113
                                                                            --------      -------- 

NET INCREASE (DECREASE) IN CASH AND
    CASH EQUIVALENTS                                                          (6,397)       (1,764)
CASH AND CASH EQUIVALENTS,
    BEGINNING OF PERIOD                                                        7,783        13,494
                                                                            --------      -------- 
CASH AND CASH EQUIVALENTS, END OF PERIOD                                    $  1,386      $ 11,730
                                                                            ========      ========
</TABLE>
See notes to consolidated financial statements 
                                                                          Page 3
<PAGE>
                                ORTHOLOGIC CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.    Financial Statement Presentation
      --------------------------------

      The  consolidated  financial  statements  have been prepared in accordance
      with generally accepted accounting  principles and include the accounts of
      the OrthoLogic Corp. and its subsidiaries (the "Company"). All significant
      intercompany accounts and transactions have been eliminated.

      The consolidated  balance sheet as of March 31, 1998, and the consolidated
      statements of  operations  and cash flows for the three months ended March
      31, 1998 and 1997 are  unaudited,  however,  in the opinion of management,
      include all adjustments  (consisting only of normal recurring adjustments)
      necessary for the fair presentation of the financial position,  results of
      operations  and cash  flows.  The  results of  operations  for the interim
      periods are not  necessarily  indicative of the results to be expected for
      the  complete  fiscal year.  The Balance  Sheet as of December 31, 1997 is
      derived from the Company's  audited financial  statements  included in the
      1997 annual  report.  It is suggested that these  financial  statements be
      read in  conjunction  with the  financial  statements  and  notes  thereto
      included in the Company's 1997 Annual Report.

2.    Acquisition
      -----------

      On March 3, 1997 and March 12, 1997, the Company  acquired  certain assets
      and assumed certain  liabilities of Toronto Medical Corp.  ("Toronto") and
      Danninger Medical Technology,  Inc. ("DMTI").  After paying certain of the
      assumed  liabilities,  the net cash outlay was approximately  $7.5 million
      for Toronto and $10.7 million for DMTI. Both  acquisitions  were accounted
      for as a purchase  which  resulted in goodwill of $4.5 million for Toronto
      and $9.5 million for DMTI. The goodwill is being amortized over 20 years.

      Had the  Toronto  and DMTI  acquisitions  occurred  on  January  1,  1997,
      combined  unaudited pro forma results for the three months ended March 31,
      1997 would have been $19.2 million net revenues,  ($764,000)  net earnings
      (loss),  and (0.3) net earnings  (loss) per common share.  The  operations
      were fully integrated in the Company's financial  statements for the first
      quarter of 1998.

3.    Co-promotion Agreement
      ----------------------

      The  Company  entered  into  an  exclusive,  co-promotion  agreement  (the
      "Agreement") with Sanofi Pharmaceuticals, Inc. ("Sanofi") on June 23, 1997
      for the purpose of marketing  Hyalgan,  a hyaluronic  acid sodium salt, to
      orthopaedic  surgeons in the United  States for the  treatment  of pain in
      patients  with  osteoarthritis  of  the  knee.  The  initial  term  of the
      agreement  ends on December 31, 2002.  Upon the  expiration of the initial
      term,  Sanofi may  terminate  the  agreement,  extend the agreement for an
      additional  one-year  period,  or enter into a revised  agreement with the
      Company. Upon termination of the Agreement, Sanofi
                                                                          Page 4
<PAGE>
      must pay the Company an equal to 50% of the gross compensation paid to the
      Company, pursuant to the Agreement, for the immediately preceding year.

      The Company is paid a  commission  which is based upon the number of units
      sold at the  wholesale  acquisition  costs less  amounts for  distribution
      costs,  discounts,  rebates  and  returns.  In  addition,  the  Company is
      obligated:  to use its best efforts to market and promote Hyalgan;  to pay
      Sanofi a royalty of 10% of the net selling price,  as defined;  and to pay
      the  manufacturer  of  Hyalgan a  product  transfer  price and a  pro-rata
      portion of a 10% royalty on combined annual net sales of Hyalgan by Sanofi
      and the  Company in excess of $30  million.  In  addition,  the Company is
      obligated to pay a total of $4.0 million during the first eighteen  months
      of the agreements.  During 1997 and the first quarter of 1998, the Company
      paid $2.0 million of this amount.  The Company has recorded the  remaining
      $2.0 million as a liability in its financial statements.

      The Company's sales force began to promote Hyalgan in the third quarter of
      1997.

4.    Licensing Agreement
      -------------------

      The  Company  announced  in January  1998 that it has  acquired a minority
      equity  interest in a biotech  firm,  Chrysalis  BioTechnology,  Inc.  for
      $750,000.  As part of the  transaction,  the  Company  has been  awarded a
      nine-month   world-wide   exclusive  option  to  license  the  orthopaedic
      applications of Chrysalin, a patented 23-amino acid peptide that has shown
      promise in  accelerating  the  healing  process.  Chrysalis  is  currently
      developing the technology to stimulate the skin-wound  healing process and
      has completed an extensive  pre-clinical  safety and efficiency profile of
      the product. In pre-clinical  animal studies,  Chrysalin was also shown to
      double the rate of fracture healing with a single injection into the fresh
      fracture gap. The Company's  agreement with Chrysalis contains  provisions
      for the  Company to  continue  and expand its option to license  Chrysalin
      contingent upon regulatory approvals,  successful pre-clinical trials, and
      certain trials and certain milestone payments to Chrysalis by the Company.
      The cost of performing the pre-clinical and clinical trials will be funded
      by the Company.  The Company will pursue  commercialization  of Chrysalin,
      initially  seeking  Food and Drug  Administration  approval  for the human
      clinical trials for the fracture-healing  indication. The Company projects
      that  Chrysalin  could  receive all the  necessary  FDA  approvals  and be
      introduced in the market during 2000. There can be no assurance,  however,
      that  the  clinical  trials  will  result  in  favorable  data or that FDA
      approvals, if sought, will be obtained.

5.    Litigation
      ----------

      During 1996  certain  lawsuits  were filed in the United  States  District
      Court for the District of Arizona against the Company and certain officers
      and  directors  alleging  violations  of Section  10(b) of the  Securities
      Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder.

      Plaintiffs in these  actions  allege that  correspondence  received by the
      Company from the U.S. Food and Drug  Administration (the "FDA") pertaining
      principally to the promotion of
                                                                          Page 5
<PAGE>
      the  Company's   OrthoLogic  Bone  Growth   Stimulator  was  material  and
      undisclosed,  leading to an artificially inflated stock price.  Plaintiffs
      further alleged practices referenced in that correspondence  operated as a
      fraud  against  plaintiffs.  Plaintiffs  further  allege that once the FDA
      letter became known, a material  decline in the stock price of the Company
      occurred, causing damage to the plaintiffs.

      All plaintiffs seek class action status, unspecified compensatory damages,
      fees and  costs.  Plaintiffs  also seek  extraordinary,  equitable  and/or
      injunctive  relief as permitted by law. The actions were  consolidated for
      all  purposes  in the United  States  District  Court for the  District of
      Arizona and lead  plaintiffs and counsel were  appointed.  The Company and
      its officers and  directors  moved to dismiss the  consolidated  amendment
      complaint  for  failure  to  state  a  claim.   The  Court  dismissed  the
      consolidated amended complaint in its entirety against the Company and its
      officers and  directors but gave  plaintiffs  leave to amend all claims to
      cure all  deficiencies.  An amended complaint was filed in April, 1998 and
      the Company  plans to move again to dismiss the complaint on virtually the
      same grounds as it did before.

      In  addition,  the Company has been  served with a  substantially  similar
      action filed in Arizona  state court  alleging  state law causes of action
      grounded in the same set of facts.  This  action  remains  stayed  pending
      further developments in the Federal consolidated class action.

      In addition to the foregoing,  a shareholder derivative complaint alleging
      among  other  things,  breach of  fiduciary  duty in  connection  with the
      conduct  alleged in the  aforesaid  federal and state court class  actions
      have also been filed in Arizona state court.  That action  remains  stayed
      pending further developments in the Federal consolidated class action.

      In March  1998,  the former  owner of the CPM assets  acquired in the DMTI
      acquisition  filed a  lawsuit  in the Court of  Common  Pleas in  Franklin
      County,  Ohio against the Company.  The plaintiff alleges that the Company
      breached the acquisition  agreement by not satisfying certain  liabilities
      it assumed in the acquisition  and that the Company  breached an ancillary
      agreement   for  the  temporary   provision  of  services   following  the
      acquisition.  Plaintiff has also demanded from the Court of Common Pleas a
      declaration  that the  Company is not  entitled  to cash  escrowed  in the
      acquisition.  The Company had previously  requested  delivery to it of the
      escrowed cash and demanded indemnification for the plaintiff's breaches of
      representations  and warranties in the  acquisition  agreement.  The costs
      associated  with defending  these  allegations  and the potential  outcome
      cannot be  determined at this time and  accordingly,  no estimate for such
      costs have been included in these financial statements.

      Management  believes  that the  allegations  are  without  merit  and will
      vigorously defend them.

      At March 31,  1998,  the  Company  is  involved  in  various  other  legal
      proceedings that arose in the ordinary course of business. In management's
      opinion, the ultimate resolution of
                                                                          Page 6
<PAGE>
      these  other  legal  proceedings  will not have a  material  affect on the
      financial position, results of operations, or cash flow of the Company.

6.    New Accounting Pronouncements
      -----------------------------

      Effective  January 1, 1998,  the Company  adopted  Statement  of Financial
      Accounting  Standard  No. 130  "Reporting  Comprehensive  Income." For the
      quarter  ended  March 31,  1998,  net  income  approximated  comprehensive
      income.

7.    Debt
      ----

      Subsequent  to quarter end, the Company  signed an addendum to an accounts
      receivable  revolving line of credit agreement reducing the line of credit
      balance from $10 million to $7.5 million.

8.    Allowance For Doubtful Accounts
      -------------------------------

      The allowance for doubtful  accounts was increased by  approximately  $9.3
      million  during  the first  quarter  of 1998  over and  above  the  normal
      quarterly activity.  The increase was a result of a management decision to
      focus resources on collection of current sales and on  re-engineering  the
      overall process of billing and collections.  It is no longer considered to
      be as cost effective to expend significant  resources on the collection of
      the older receivables as had been done in the past.
                                                                          Page 7
<PAGE>
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS


The following is  management's  discussion of significant  factors that affected
the Company's interim financial condition and results of operations. This should
be read in conjunction  with  Management's  Discussion and Analysis of Financial
Condition and Results of Operations  included in the Company's  Annual Report on
Form 10-K for the year ended December 31, 1997.

Results of Operations

Revenues

OrthoLogic's  revenues increased 10% to $19.1 million from $17.3 million for the
same  period a year ago.  The  increase is  primarily  the result of revenue for
Hyalgan  which was launched in July 1997.  Revenue from the  Continuous  Passive
Motion  rentals  was  greater  than  expected  during  the  quarter,  offsetting
declining sales of fracture fixation devices.

Gross Profit

Gross profit  increased from $12.6 million in the first quarter of 1997 to $14.7
million in the first  quarter of 1998.  Gross profit as a percentage  of revenue
was 77% for the three  months  ended  March  31,  1998  compared  to 73% for the
comparable period during 1997.

Selling, General and Administrative Expenses

Selling,  general and  administrative  (SG&A)  expenses for the first quarter of
1998 were $23.8 million,  up $10.9 million from the  comparable  period in 1997.
The increase from 1997 is due in part to the variable costs  associated with the
increased revenue.  The first quarter of 1998 also included the costs associated
with the acquisition previously discussed.

The SG&A  expenses  include an increase  of $9.3  million in the  allowance  for
uncollectable accounts over the normal quarterly provision.  As part of a larger
project to re-engineer the sales,  billings and collection  process for enhanced
efficiencies,  the Company obtained independent  evaluation of its billing files
and collection  strategies in April of 1998. The information  obtained from this
study prompted  management to change its focus for future collection  efforts to
be  primarily on the more recent  sales.  The cost of  continuing  to manage the
older accounts  receivable balances to the extent that had been done in the past
is no longer  considered as cost  effective  for the Company.  This shift in the
emphasis  for the  collections  policy  prompted the Company to increase the bad
debt reserve for the outstanding  balances of the older  receivables.  Excluding
bad debt,  total  SG&A  expenses  decreased  to 66% of total  sales in the first
quarter of 1998, from 68% in 1997.
                                                                          Page 8
<PAGE>
Research and Development

Research and  development  (R&D) expenses were $498,000 for the first quarter of
1998 compared to $576,000 for the comparable  1997 period.  The decrease was due
to the unveiling of a new, single coil version of the OL-1000, no longer in R&D.
The device extends the fracture healing benefits of the OL-1000 to the thigh and
the long bone of the upper arm, extending from the shoulder to the elbow, and is
suitable  for  the  treating  non-union  fractures  in  most  areas  for  larger
individuals.

Other Income and Expenses

There was a reversal of expenses  charged to restructuring in a prior period for
$399,000.  Other  income  declined to $97,000 in the first  quarter of 1998 from
$636,000  during the same period in 1997. This decrease is attributed to (1) the
Company has not  participated in any research grant projects in the current year
and (2) the  reduction  in the  amount  in cash and  investments  has  yielded a
reduction in the interest  income  earned in the quarter to $97,000 in 1998 from
$562,000 in 1997.

Liquidity and Capital Resources

On March 31, 1998, the Company had cash and investments of $4.9 million compared
to $12.3 million at December 31, 1997.  The decrease in cash and  investments is
primarily the result of a $1 million payment under a co-promotion  agreement,  a
$1.2 million increase in inventory, and a $1.6 million increase in fixed assets,
mostly for the Ortho Rehab  rental  fleet  business.  In  addition,  in January,
OrthoLogic  acquired a $750,000  equity  interest in a biotech  firm,  Chrysalis
BioTechnology, Inc., located in Galveston, Texas.

Subsequent  to quarter  end,  the  Company  signed an  addendum  to an  accounts
receivable  revolving  line of  credit  agreement  reducing  the line of  credit
balance from $10 million to $7.5 million and removing the  equipment  advance of
$2.5  million.  The  Company  anticipates  that its  cash on hand and the  funds
available  from this line of credit  will be  sufficient  to meet the  Company's
projected cash and working capital  requirements  for the next 12 months.  There
can be no  assurance,  however,  that  this will  prove to be the  case.  If the
Company were required to obtain additional financing in the future, there can be
assurance  that such sources of capital will be available on terms  favorable to
the Company, if at all.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain of the  statements,  contained in this document that are not  historical
facts,  including,  without  limitation,   statements  of  future  expectations,
projections  of results of operations  and financial  condition,  statements and
future economic  performance  and other  forward-looking  statements  within the
meaning of the Private Securities  Litigation Reform Act of 1995, are subject to
know and unknown  risks,  uncertainties  and other  factors  which may cause the
actual results,  performance or achievement of the Company to differ  materially
from those contemplated in such forward-looking  statements.  In addition to the
specific  matters referred to herein,  important  factors which may cause actual
results to differ from those contemplated in
                                                                          Page 9
<PAGE>
such  forward-looking  statements  include:  (i) the  results  of the  Company's
efforts to  implement  its  business  strategy;  (ii)  actions of the  Company's
competitors and the Company's ability to respond to such actions;  (iii) changes
in  governmental  regulation,  tax rates and similar  matters;  (iv) other risks
detailed in the Company's other filings with the  Commission;  and (v) the costs
and results of pending litigation.
                                                                         Page 10
<PAGE>
PART II - OTHER INFORMATION


Item 1.   Legal Proceedings

          See the  information under  the caption  "Item 5 - Litigation" in  the
          notes to consolidated financial statements above.

Item 6.   Exhibits and Reports on Form 8-K

                   (a) See Exhibit Index  following the Signatures page which is
                       incorporated herein by reference.

                   (b)  Reports on Form 8-K

                        None
                                                                         Page 11
<PAGE>
                                   SIGNATURES
                                   ----------


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



ORTHOLOGIC CORP.
----------------
(Registrant)

<TABLE>
<CAPTION>
Signature                                    Title                                             Date
---------                                    -----                                             ----
                                                                                         
                                                                                         
<S>                          <C>                                                           <C> 
/s/ Thomas R. Trotter        President and Chief Executive Officer                         May 15, 1997
---------------------        (Principal Executive Officer)                                                            
Thomas R. Trotter                                           
                                                                                         
                                                                                         
/s/ Terry D. Meier           Sr. Vice-President and Chief Financial Officer                May 15, 1997
----------------------       (Principal Financial and Accounting Officer)
Terry D. Meier                              
</TABLE>
                                                                         Page 12
<PAGE>
                                ORTHOLOGIC CORP.
                 EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
    Exhibit                                                        Incorporated by              Filed
      No.                       Description                          Reference to:             Herewith
  ----------       -----------------------------------------      ------------------         ------------
<S>                <C>                                                                            <C>
      4.1          Amendment to Stock Purchase
                   Warrant dated May 12, 1998 issued to
                   Silicon Valley Bank                                                            X
                                                                           
     10.1          Licensing agreement with Chrysalis                                  
                   BioTechnology, Inc.                                                            X

     10.2          1998 Management Bonus Program                                                  X

     10.3          Loan Modification agreement dated
                   May 12, 1998 by and between the 
                   Company and Silicon Valley Bank                                                X
                                                                    
      27           Financial Data Schedule                                                        X
</TABLE>
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