SECURITIES AND EXCHANGE COMMISSION 	Washington, D. C. 20549 	FORM 10-Q 	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) 	OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended September 30, 1997 Commission File No. 2-82655 		 INTERWEST MEDICAL CORPORATION 	(Exact name of registrant as specified in its charter) 	 Oklahoma 75-1864474 (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organi- zation) 	Arlington Heights Professional Office Building 	3221 Hulen Street, Suite C, Fort Worth, TX 76107-6193 	(Address of principal executive offices, zip code) Registrant's telephone number, including area code: (817)731-2743 			 Not Applicable 	(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. Yes X No 	APPLICABLE ONLY TO ISSUERS INVOLVED IN 	BANKRUPTCY PROCEEDINGS DURING THE 	PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. 	(Not Applicable) Yes X No 	(APPLICABLE TO CORPORATE ISSUERS) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. 16,819,961 shares of Common Stock, $0.001 Par Value. 	INTERWEST MEDICAL CORPORATION 	CONDENSED CONSOLIDATED BALANCE SHEETS 	September 30, December 31, 	 1997 1996 	(Unaudited) 		 ASSETS CURRENT ASSETS Cash $2,590,071 $2,094,563 Accounts receivable - trade 2,064,167 1,631,439 Other receivables 39,609 28,906 Prepaid expenses 57,284 44,429 Total current assets 4,751,131 3,799,337 REAL ESTATE DEVELOPMENT AND CONSTRUCTION COSTS 33,582 121,582 PROPERTY AND EQUIPMENT, at cost Land 191,442 176,442 Buildings and improvements 3,867,043 3,786,294 Equipment and furniture 680,485 645,876 Oil and gas properties (successful effort method of accounting) 1,026,266 997,083 				5,765,236 5,605,695 Less accumulated depreciation 1,869,673 1,501,730 				 3,895,563 4,103,965 OTHER ASSETS 	Marketable Securities available for sale 361,854 - Cash escrow accounts 44,578 34,975 Deferred financing costs, net 273,755 273,755 	 680,187 308,730 TOTAL ASSETS $9,360,463 $8,333,614 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ 13,818 $ 13,818 Accounts payable 1,193,493 508,621 Accrued liabilities 601,908 685,729 Total current liabilities 1,809,219 1,208,168 LONG-TERM DEBT 4,535,432 4,545,653 STOCKHOLDERS' EQUITY Common stock, par value $0.001, authorized 50,000,000 shares; Issued 20,000,000 shares 20,000 20,000 Additional paid-in capital 4,798,745 4,798,745 Retained deficit ( 1,433,838) ( 1,906,428) 	3,384,907 2,912,317 Less shares held in the treasury, 1997 3,180,039; 1996 2,882,964 369,095 332,524 	 3,015,812 2,579,793 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $9,360,463 $8,333,614 	INTERWEST MEDICAL CORPORATION 	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 	(Unaudited) 					Three Months Ended Nine Months Ended 					 September 30, September 30, 					 1997 1996 1997 1996 Net patient service revenue $2,615,553 $2,271,679 $7,219,463 				$6,814,018 Other revenue 32,429 152,593 444,342 269,697 Total revenue 2,647,982 2,424,272 7,663,805 7,083,715 Costs and expenses Professional care 	of patients 1,424,471 1,216,091 4,066,005 3,621,304 General services 481,935 500,298 1,337,179 1,411,705 Administrative services 315,257 255,486 947,130 910,156 Other costs 22,641 133,512 173,195 254,587 Depreciation, depletion and amortization 115,954 146,226 371,738 			 431,742 Income from 	operations 287,724 172,659 768,558 454,221 Other income (expenses) Interest income 27,878 18,691 79,819 51,275 Interest expense ( 125,168) ( 125,531) ( 375,787) 			( 376,847) Income before 	taxes on income 190,434 65,819 472,590 128,649 Provision for income taxes - - - Net income $ 190,434 $ 65,819 $ 472,590 $ 128,649 Per share of common stock: Weighted average 	number of shares 	outstanding 16,819,961 17,260,536 16,952,373 17,437,654 Income per share $ 0.01 $ 0.00 $ 0.03 			$ 0.01 	INTERWEST MEDICAL CORPORATION 	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 	(Unaudited) 	Nine Months Ended 	 September 30, 	 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES $ 856,576 $ 341,924 CASH FLOWS FROM INVESTING ACTIVITIES 	Purchase of marketable securities ( 361,854) - Distributions received 	from joint venture - 81,761 Payments for 	acquisition of property ( 210,491) ( 182,523) Net changes in escrow accounts ( 9,603) ( 9,603) Advances to employees ( 22,000) ( 22,000) Sale of property 289,672 - Net cash used in 	investing activities ( 314,276) ( 132,365) CASH FLOWS FROM FINANCING ACTIVITIES Purchase of Treasury stock ( 36,571) ( 140,667) Payments on borrowings ( 10,221) ( 9,161) Net cash used in financing activities ( 46,792) ( 149,828) Net increase in cash 495,508 59,731 Cash, beginning of period 2,094,563 2,096,886 Cash, end of period $2,590,071 $2,156,617 	INTERWEST MEDICAL CORPORATION 	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the Company's financial position as of September 30, 1997, and its results of operations for the three and nine months ended September 30, 1997 and 1996 and cash flows for the nine months ended September 30, 1997 and 1996. The results of operations for the period presented are not necessarily indicative of the results to be expected for a full year. 2. Income per share was computed by dividing the net income by the weighted average number of shares outstanding. 	REVIEW BY INDEPENDENT 	CERTIFIED PUBLIC ACCOUNTANTS Weaver and Tidwell, L.L.P., Independent Certified Public Accountants, have performed a review of the condensed consolidated balance sheet as of September 30, 1997 and the condensed consolidated statements of operations for the three and nine months ended September 30, 1997 and 1996, and cash flows for the nine months ended September 30, 1997 and 1996, in accordance with established professional standards and procedures for such a review. All adjustments or additional disclosures proposed by Weaver and Tidwell, L.L.P. have been reflected in the data presented. The report of Weaver and Tidwell, L.L.P. commenting upon their review is included as Part I - Exhibit I. 	INDEPENDENT ACCOUNTANT'S REVIEW REPORT To the Board of Directors InterWest Medical Corporation We have reviewed the condensed consolidated balance sheet of InterWest Medical Corporation as of September 30, 1997, and the related condensed consolidated statements of operations for the three and nine month periods ended September 30, 1997 and 1996, and cash flows for the nine months ended September 30, 1997 and 1996. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated statements referred to above, for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1996, and the related consolidated statements of operations, stockholders' equity and cash flows for the year then ended (not presented herein); and in our report dated March 7, 1997, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1996, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. WEAVER AND TIDWELL, L.L.P. Fort Worth, Texas November 5, 1997 534 PART I - EXHIBIT I Item 2. Management's Discussion and Analysis of Financial Position and Results of Operations. Changes in Balance Sheet Accounts Current assets were $4,751,131 and total assets were $9,360,463 at September 30, 1997 as compared to $3,799,337 current assets and $8,333,614 total assets at December 31, 1996. Current liabilities were $1,809,219 at September 30, 1997 as compared to $1,208,168 at December 31, 1996. Results of Operations For the Three Months Ended September 30, 1997, operating revenue was $2,647,982; costs and expenses were $2,360,258, net income was $190,434 and interest income was $27,878, as compared to the Three Months Ended September 30, 1996 operating revenue of $2,424,272, costs and expenses of $2,251,613, net income of $65,819 and interest income of $18,691. For the Nine Months Ended September 30, 1997, operating revenue was $7,663,805, costs and expenses were $6,895,247, interest income was $79,819 and net income was $472,590, as compared to the Nine Months Ended September 30, 1996, to operating revenue of $7,083,715, costs and expenses of $6,629,494, interest income of $51,275, and net income of $128,649. Cash Flows For the Nine Months Ended September 30, 1997, cash flows from operating activities were $856,576, cash flows from investing activities were ($314,276), cash flows from financing activities were ($46,792), net increase in cash was $495,508, cash at the beginning of the period was $2,094,563, and cash at the end of the period was $2,590,071 as compared to the Nine Months Ended September 30, 1996, cash flows from operating activities of $341,924, cash flows from investing activities of ($132,365), cash flows from financing activities of ($149,828), net increase in cash of $59,731, cash at the beginning of the period of $2,096,886 and cash at the end of the period of $2,156,617. 	PART II. OTHER INFORMATION Item 1. Legal Proceedings. Not applicable. Item 2. Changes in Securities. Not applicable. Item 3. Defaults upon Senior Securities. Not applicable. Item 4. Submission of Matters to a Vote of Securities Holders. Not applicable. Item 5. Other Information Not applicable. Item 6. Exhibits and Reports on Form 8-K. (a) None. (b) None. 	SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its half by the undersigned thereunto duly authorized. INTERWEST MEDICAL CORPORATION By: Arch B. Gilbert, President, Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer Date: November 10, 1997