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 March 31, 1998 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 organization) 	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 	March 31, 	December 31, 	 1998 	 1997 	(Unaudited) ASSETS CURRENT ASSETS Cash	$1,188,333	$1,458,281 Investments available for sale	2,497,096	1,955,961 Accounts receivable - trade	2,311,683	2,225,183 Prepaid expenses	 52,696	 60,165 Total current assets	 6,049,808	 5,699,590 REAL ESTATE DEVELOPMENT AND CONSTRUCTION COSTS	 13,433	 33,582 PROPERTY AND EQUIPMENT, at cost Land	191,442	191,442 Buildings and improvements	3,795,460	3,789,419 Equipment and furniture	832,553	827,302 Oil and gas properties (successful effort method of accounting)	 502,206	 477,276 				5,321,661	5,285,439 Less accumulated depreciation	 1,849,029	 1,779,239 				 3,472,632	 3,506,200 OTHER ASSETS Cash escrow accounts	20,494	17,293 Deferred financing costs, net	 411,944	 265,583 	 432,438	 282,876 TOTAL ASSETS	$9,968,311	$9,522,248 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term debt	$ 15,418	$ 15,418 Accounts payable	1,135,576	1,196,289 Accrued liabilities	 658,865	 775,163 Total current liabilities	 1,809,859	 1,986,870 LONG-TERM DEBT	 4,498,735	 4,530,234 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	( 648,248)	( 1,297,316) Accumulated other comprehensive income	( 141,685)	( 147,190) 	4,028,812	3,374,239 Less shares held in the treasury, 1998 and 1997 - 3,180,039	 369,095	 369,095 	 3,659,717	 3,005,144 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$9,968,311	$9,522,248 	INTERWEST MEDICAL CORPORATION 	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME 	(Unaudited) 						 Three Months Ended 						 March 31, 							 1998 	 1997 	 Net patient service revenue	$2,898,459	$2,333,603 Other revenue	 30,664	 138,551 Total revenue	2,929,123	2,472,154 Costs and expenses Professional care 	of patients	1,419,361	1,325,940 General services	483,060	432,405 Administrative services	460,924	312,493 Other costs	10,202	113,124 Depreciation, depletion and amortization	 69,790	 130,619 Income from operations	485,786	157,573 Other income (expenses) Interest income	 6,549	20,465 Interest expense	( 95,668)	( 125,355) Gain on sale of investments	 252,401	 - 	 Income before taxes on income	649,068	52,683 Provision for income taxes	 - 	 - 	 Net income	649,068	52,683 	Other comprehensive income 		Unrealized losses on securities	 5,505	 - 	 			Comprehensive income	$ 643,563	$ 52,683 Per share of common stock: Weighted average number of shares outstanding	16,819,961	17,098,748 Net income per share	$ 0.04	$ 0.00 	INTERWEST MEDICAL CORPORATION 	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 	(Unaudited) 	Three Months Ended 	 March 31, 				 1997 	 1996 					 1998 	 1997 	 CASH FLOWS FROM OPERATING ACTIVITIES	$ 207,215	$ 64,761 CASH FLOWS FROM INVESTING ACTIVITIES 	Payments for acquisition of property	( 36,222)	( 29,422) 	Advances to employees	- 	( 22,000) Purchase of investments	( 1,271,289)	- Proceeds from sale of investments	 1,008,208	 - 	 Net cash used in investing activities	( 299,303)	( 51,422) CASH FLOWS FROM FINANCING ACTIVITIES Purchase of treasury stock	- 	( 4,680) Payments on borrowings	( 31,499)	( 3,314) Financing costs paid	( 146,361)	 - 	 Net cash used in financing activities	( 177,860)	( 7,994) Net increase (decrease) in cash	( 269,948)	5,345 CASH, beginning of period	 1,458,281	 2,094,563 CASH, end of period	$1,188,333	$2,099,908 	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 March 31, 1998, and its results of operations for the three months ended March 31, 1998 and 1997, and cash flows for the three months ended March 31, 1998 and 1997. 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 March 31, 1998 and the condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 1998 and 1997, and cash flows for the three months ended March 31, 1998 and 1997, 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 March 31, 1998, and the related condensed consolidated statements of operations and comprehensive income for the three month periods ended March 31, 1998 and 1997, and cash flows for the three months ended March 31, 1998 and 1997. 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, 1997, 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 10, 1998, 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, 1997, 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 May 13, 1998 549	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 $6,049,808 and total assets were $9,968,311 at March 31, 1998 as compared to $5,699,590 current assets and $9,522,248 total assets at December 31, 1997. Current liabilities were $1,809,859 at March 31 1998 as compared to $1,986,870 at December 31, 1997. Results of Operations For the Three Months Ended March 31, 1998, operating revenue was $2,929,123; costs and expenses were $2,443,337, net income was $649,068 and interest income was $6,549, as compared to the Three Months Ended March 31, 1997, operating revenue of $2,472,154, costs and expenses of $2,314,581, net income of $52,683 and interest income of $20,465. Cash Flows For the Three Months Ended March 31, 1998, cash flows from operating activities were $207,215, cash flows from investing activities were ($299,303), cash flows from financing activities were ($177,860), net decrease in cash was ($269,948), cash at the beginning of the period was $1,458,281, and cash at the end of the period was $1,188,333 as compared to the Three Months Ended March 31, 1997, to cash flows from operating activities of $64,761, cash flows from investing activities of ($51,422), cash flows from financing activities of ($7,994), net increase in cash of $5,345, cash at the beginning of the period of $2,094,563 and cash at the end of the period of $2,099,908. 	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:	May 15, 1998 See Accompanying Notes to Condensed Consolidated Financial Statements.