UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                         ------------------------------
                                   FORM 10-Q/A

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

                  For the quarterly period ended May 31, 1998

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

                  For the transition period from ___________ to ____________

                           Commission File No. 0-7578

                                 ELECTRO-CATHETER CORPORATION
                                 ----------------------------
                  (Exact name of the registrant as specified in its charter)

          New Jersey                                            22-1733406
          ----------                                            ----------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                             Identification No.)

2100 Felver Court, Rahway, New Jersey                          07065
-------------------------------------                         -----
(Address of principal executive offices)                      (Zip Code)

Registrant's Telephone No. including Area Code: 732-382-5600
                                                 -----------

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

Indicate the number of shares  outstanding of the issuer's  common stock,  as of
the latest practical date:

As of April 6, 1998, the number of shares outstanding of the Registrant's common
stock was 6,390,389 shares, $.10 par value.





<PAGE>



                                 AMENDMENT NO. 1

The  undersigned  hereby  amends  the  following  items,  financial  statements,
exhibits  or  other  positions  of its  Quarterly  Report  on Form  10-Q for the
quarterly period ended May 31, 1998, as set forth in the pages attached hereto:

         PART I

             Item 1.           Financial Statements (unaudited)

             Item 2.           Management's Discussion and Analysis of Results 
                                   of Questions.

         PART II

             Item 6.           Exhibits and Reports on Form 8-K







<PAGE>



                          ELECTRO-CATHETER CORPORATION
                          ----------------------------

                                TABLE OF CONTENTS
                                -----------------


PART I.           FINANCIAL INFORMATION                           PAGE
-------           ---------------------                           ----


Item 1.           Financial Statements (Unaudited)                  


                  Condensed Comparative Balance Sheets
                  May 31, 1998 and August 31, 1997                    1


                  Condensed Comparative Statements of Operations -
                  Three and Nine Months Ended May 31, 1998
                  and May 31, 1997                                    2


                  Condensed Comparative Statements of Cash Flows -
                  Nine Months Ended May 31, 1998 and May 31, 1997     3   


                  Notes to Condensed Financial Statements            4-7


Item 2.           Management's Discussion and Analysis of
                  Financial Condition and Results of Operations      8-12


PART II.          OTHER INFORMATION


Item 6.           Exhibits and Reports on Form 8-K                    13









<PAGE>


<TABLE>

                                                   PART I - FINANCIAL INFORMATION
                                                    Item I. FINANCIAL STATEMENTS

                                                    ELECTRO-CATHETER CORPORATION
                                                CONDENSED COMPARATIVE BALANCE SHEETS
                                                             (Unaudited)

<CAPTION>
                  ASSETS                                               May 31,                             August 31,
                                                                       1998                                1997
                                                                       ----                                ----

<S>                                                  <C>               <C>                       <C>                <C>    
Current assets:
  Cash and cash equivalents                                            $         -                                 $   98,127
  Accounts receivable, net                                                 759,133                                    988,859
         Inventories
           Finished goods                            447,388                                     481,660
           Work-in-process                           575,201                                     490,621
           Materials and supplies                    310,497                                     270,086
                                                     -------                                     -------
         Total inventories                                               1,333,086                                   1,242,367
         Prepaid expenses and
           other current assets                                             64,885                                     168,781
                                                                         ---------                                   ---------
Total current assets                                                     2,157,104                                   2,498,134

Property, plant and equipment, net                                         684,002                                     777,663
Other assets, net                                                          276,238                                      97,275
                                                                         ---------                                   ---------
Total assets                                                             3,117,344                                   3,373,072
                                                                         =========                                   =========


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current installments of subordinated
    debentures due to T Partnership,
    a related party                                                        225,000                                         -0-
  Current installments of capitalized
    lease obligations                                                       65,629                                      50,734
  Accounts payable and accrued expenses                                  1,382,143                                   1,045,406
  Accrued litigation expenses                                              288,400                                     443,820
                                                                         ---------                                   ---------
Total current liabilities                                                1,961,172                                   1,539,960

Subordinated debentures due to
  T Partnership, a related party,
  excluding current installments                                         1,922,125                                   1,747,125
Capitalized lease obligation,
  excluding current installments                                           219,285                                     222,277
Total liabilities                                                        4,102,582                                   3,509,362

Stockholders' deficiency:
  Common stock                                                             639,039                                     638,361
  Additional paid-in capital                                            10,683,491                                  10,682,008
  Accumulated deficit                                                  (12,307,768)                                (11,456,659)
                                                                        ----------                                  ----------
  Total stockholders' deficiency                                       (   985,238)                                (   136,290)
                                                                        ----------                                  ----------
  Total liabilities and
    stockholders' deficiency                                           $ 3,117,344                                 $ 3,373,072
                                                                         =========                                   =========





</TABLE>

See accompanying notes to condensed financial statements.





                                                                  1

<PAGE>


<TABLE>

                                                    ELECTRO-CATHETER CORPORATION
                                           CONDENSED COMPARATIVE STATEMENTS OF OPERATIONS
                                                             (Unaudited)


                                                Three Months Ended                                  Six Months Ended
                                                     May 31,                                          May 31,

<CAPTION>
                                   1998                               1997               1998                        1997
                                   ----                               ----               ----                        ----

<S>                            <C>                                <C>               <C>                         <C>        
Net revenues                   $ 1,502,537                        $ 1,718,954       $ 4,152,546                 $ 5,138,259

Cost of goods sold               1,119,482                          1,082,277         2,836,541                   2,858,408
                                 ---------                          ---------         ---------                   ---------

Gross profit                       383,055                            636,677         1,316,005                   2,279,851

Operating
expenses:
  Selling, general
  and administrative               409,404                            561,074         1,525,871                   1,759,889
  Research and development         118,734                            225,198           416,224                     672,979
                                   -------                            -------           -------                     -------

Operating loss                    (145,083)                          (149,595)         (626,090)                   (153,017)

Other expenses:
  Interest expense                 (77,607)                           (70,073)         (225,019)                   (185,562)
                                   -------                            -------          --------                    -------- 
           

  Net loss                     $  (222,690)                       $  (219,668)      $  (851,109)                $  (338,579)
                                 =========                          =========         =========                   =========

Basic and diluted
 loss per share               $     (0.03)                       $     (0.03)      $     (0.13)                 $     (0.05)
                                   ======                             ======            ======                       ======

Dividends per share                 None                              None              None                           None

Weighted
average shares
outstanding                       6,390,389                         6,383,611         6,387,000                     6,378,661





</TABLE>

See accompanying notes to condensed financial statements.




                                                                  2

<PAGE>

<TABLE>


                                                    ELECTRO-CATHETER CORPORATION
                                           CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS
                                                             (Unaudited)


                                                                                          Nine Months Ended
                                                                                               May 31,
<CAPTION>
                                                                              1998                      1997
                                                                              ----                      ----

<S>                                                                    <C>                       <C>       
Increase (decrease) in cash: Cash flows from operating activities:
  Net loss                                                             $    (851,109)            $     (338,579)
  Adjustments:
         Depreciation                                                         95,746                    107,658
         Amortization of deferred charge                                       6,250                      6,250
  Changes in assets and liabilities:
         Decrease (increase) in accounts
           receivable, net                                                   229,726                   (131,067)
         (Increase) decrease in inventories                                  (90,719)                   393,392
         Decrease (increase) in prepaid expenses and
           other current assets                                              103,896                   (174,642)
         (Increase) decrease in other assets                                (185,213)                    14,105
         Decrease in deferred revenues                                           -0-                   (144,293)
         Increase in accounts payable and accrued
           expenses                                                          230,467                    163,563
                                                                             -------                    -------

  Net cash used in operating activities                                     (460,956)                  (103,613)
                                                                             -------                    -------

Cash flows from investing activities:
  Cash purchases of property,
    plant and equipment                                                      ( 2,085)                   (66,756)
                                                                              ------                     ------

  Net cash used in investing activities                                      ( 2,085)                   (66,756)

Cash flows from financing activities:

  Proceeds from Stock Purchase Plan                                            2,161                      3,682
  Proceeds from loan from T Partnership,
    a related party                                                          400,000                    100,000
  Reductions of debt and capitalized
    lease obligations                                                        (37,247)                  (119,384)
                                                                              ------                    -------

  Net cash (used in) provided by
    financing activities                                                     364,914                    (15,702)
                                                                             -------                     ------

  Net decrease in cash                                                       (98,127)                  (186,071)

Cash at beginning of period                                                   98,127                    275,283
                                                                              ------                    -------

Cash at end of period                                                            -0-                    185,561

Interest paid                                                           $    221,420             $      185,561
                                                                             =======                    =======

Property, plant and equipment acquired under
  capitalized lease obligations                                         $     49,150             $      196,125
                                                                              ======                    =======





See accompanying notes to condensed financial statements.

</TABLE>



                                                                  3

<PAGE>



                          ELECTRO-CATHETER CORPORATION

                     NOTES TO CONDENSED FINANCIAL STATEMENTS


Note 1  Basis of Presentation
------  ---------------------

In the opinion of management,  the accompanying  unaudited  condensed  financial
statements  contain  all  adjustments   (consisting  only  of  normal  recurring
accruals) necessary to present fairly the financial position of Electro-Catheter
Corporation as of May 31, 1998, the results of operations for the three and nine
months ended May 31, 1998 and May 31, 1997 and  statements of cash flows for the
nine  months  ended  May 31,  1998  and May 31,  1997,  but are not  necessarily
indicative of the results to be expected for the full year.

The financial  statements have been prepared in accordance with the requirements
of Form 10-Q and  consequently  do not include  disclosures  normally made in an
Annual  Report on Form 10-K.  Accordingly,  the  financial  statements  included
herein should be reviewed in conjunction with the financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1997.

Note 2   Other Assets
------   ------------

In  connection  with the  proposed  merger  (see  Note 4 to  Notes to  Condensed
Financial Statements), the Company has incurred $174,290 of expenses through May
31,  1998.  These  expenses  are  included in Other  Assets in the  accompanying
balance sheet at May 31, 1998.  Consummation  of the merger is subject to, among
other things, raising capital. Upon consummation of the merger, these costs will
either be charged to additional paid-in capital with equity financing, amortized
over the term of any debt or charged to operations if the merger does not occur.

Note 3    Subordinated Debentures
------    -----------------------

In September  1997, in December 1997, and in January 1998, the Company  borrowed
additional amounts from the T Partnership,  a related party, in each case in the
amount of $100,000,  under  substantially  the same terms and  conditions as its
previous borrowings,  without issuing any additional warrants. Under the current
arrangement,  the Company is obligated to comply with a financial covenant to be
tested on a monthly  basis.  Non-compliance  by the Company  with such  covenant
would  allow the T  Partnership  to declare an event of default  and  accelerate
repayment  of  indebtedness.  The Company is currently  in  compliance  with the
covenant.  The total  indebtedness  due to the T Partnership at May 31, 1998 was
$2,147,125.

Note 3   Commitments and Contingencies
------   -----------------------------

FDA Warning Letter
------------------

The  products   developed  and  manufactured  by  the  Company  come  under  the
jurisdiction  of the Food and Drug  Administration  ("FDA") of the United States
Department of Health and Human Services.  Since the devices  manufactured by the
Company are  intended  for "human  use",  as defined by the FDA, the Company and
said devices are subject to FDA regulations,  which,  among other things,  allow
for  the  conduct  of  routine  detailed  inspections  of  device  manufacturing
establishments  and  confirmation  of adherence to "current  good  manufacturing
practices" ("cGMP") in the manufacture of medical devices which include testing,
quality control, design and documentation requirements.

In February  1997,  the FDA conducted an  inspection  and audit of the Company's
facilities  and  practices as a result of which the FDA issued a Warning  Letter
regarding  non-compliance by the Company with certain cGMP in the manufacture of
its products.  Electro  communicated  with the FDA its  intentions to remedy the
non-compliance,  established a plan and timetable to effectuate  remediation and
has diligently worked to take the necessary corrective actions. A subsequent FDA
-




                                        4

<PAGE>



inspection in September 1997 indicated that while substantial  progress has been
made, not all corrective actions have been completed.  The Company is continuing
in its efforts to complete such actions and it is Electro's  intention to inform
the FDA by late  September  1998 that it is has  completed  such  actions and is
ready for  reinspection.  There can be no assurance,  however,  that the Company
will be ready for any  reinspection  in September 1998 nor that it will pass any
such  reinspection  when it  occurs.  While the  Company is  currently  under no
restrictions by the FDA regarding the  manufacture or sale of its products,  the
Company is unable to  precisely  determine  the  short-term  economic  impact of
instituting the required  corrective  actions and there can be no assurance that
the FDA will not take further action, including seizure of products,  injunction
and/or civil penalties, if the necessary corrective actions are not completed on
a timely basis.  At this time, the Company is unable to precisely  determine the
short-term  adverse  economic  impact  which will  result from  instituting  the
corrective  actions,  but the  voluntary  discontinuation  of  manufacturing  of
certain  products  and the  delay in the sale of other  products  has  adversely
affected sales by an estimated 10%.

Litigation
----------

In September  1997, a Superior Court jury in Middlesex  County found the Company
liable for age  discrimination in connection with its termination of an employee
in April 1994. The jury awarded the terminated employee $283,000 plus attorney's
fees  and  expenses  and   prejudgment   interest  in  the  combined  amount  of
approximately $47,990. The Company also incurred legal costs from September 1996
through  September  1997 in the  amount of  approximately  $115,665.  All of the
aforementioned  costs were  recorded in the  financial  statements  for the year
ended August 31, 1997.

Pending the Company's  appeal,  the plaintiff,  in an effort to execute upon the
judgment  rendered in his favor,  levied the Company's  bank  accounts,  thereby
freezing  the  available  funds.  Notwithstanding  management's  belief that the
Company had arguments supporting its appeal, management weighed the considerable
cash  requirements of an appeal bond, the costs of continued efforts relative to
the appeal, and the need to vacate the levies to satisfy the Company's immediate
cash  requirements  against the  likelihood  of prevailing on its appeal and the
terms of a possible settlement, and on April 8, 1998, the Company entered into a
Settlement  Agreement with the plaintiff.  Under the key terms of the Settlement
Agreement,  the matter is deemed  settled for the sum of  $305,000  payable by a
lump  sum  payment  of  $65,000  within  five  business  days of the date of the
Settlement  Agreement with the balance,  bearing  interest at the rate of 6% per
annum,  payable in monthly  installments of $10,000,  plus interest,  commencing
July 1, 1998. A default in any monthly payment which remains unpaid for a period
of ten days allows the plaintiff to declare a default and accelerate the payment
of the entire outstanding balance with interest.

Merger
------

The Company  entered into an Agreement and Plan of  Reorganization,  dated as of
January 20, 1998 (the "Merger  Agreement"),  with Cardiac Control Systems,  Inc.
("CCS"),  a Delaware  corporation  located in Palm Coast,  Florida,  to effect a
merger of the two companies  targeted  toward the  development  and marketing of
advanced specialty  electrophysiology  products.  A subsequent  amendment of the
Merger  Agreement was entered into on May 5, 1998.  Currently,  the structure of
the  transaction  contemplates  the  merger  of  a  newly-created,  wholly-owned
subsidiary  of CCS into and with the  Company  as a result of which the  Company
shall  become  a  wholly-owned  subsidiary  of CCS and the  stockholders  of the
Company will become  stockholders of Catheter  Technology Group, Inc. ("CTG"), a
Delaware  corporation  and parent holding company of CCS, to be formed as a part
of a restructuring in connection with the merger. By virtue of the merger,  each
outstanding  share of common  stock,  $.10 par  value,  of the  Company  will be
converted  into the right to receive  one-fifth  of a share of common stock $.10
par value of CTG. Pursuant to the restructuring,  CTG will succeed to all rights
and  obligations  of CCS and will become the  successor  issuer of CCS such that
stockholders  of  CCS  will  become  stockholders  of  CTG.  Subsequent  to  the
restructuring,  it is  intended  that CTG will  undergo a 1 for 5 reverse  stock

 

                                      5
<PAGE>

split reducing the number of shares of common stock, $.10 par value, of CTG (the
"CTG Common Stock")  outstanding to approximately  529,748 shares.  By virtue of
the merger,  subsequent  to the reverse  stock split to receive  one-fifth  of a
share of CTG Common Stock, effectively equal to an even exchange of shares prior
to such reverse stock split.

Upon  closing of the  transaction,  $1 million of the  Company's  senior debt is
intended  to be  redeemed  by:  (a) the  issuance  by the  surviving  subsidiary
corporation in the merger (the  "Surviving  Subsidiary") to the T Partnership of
an aggregate of 1,000 shares of Series A 9% preferred  stock,  no par value (the
"Series A Preferred Stock") of the Surviving Subsidiary, which shares shall have
a liquidation value equal to, and shall be issued in redemption of, $1.0 million
of the  indebtedness and shall be convertible into shares of CTG Common Stock at
a conversion  price equal to 120% of the price per share of the CTG Common Stock
used as the basis for the  consideration  given  (whether  in the form of issued
stock, if any, or warrants,  provided the exercise price of the warrant reflects
the current market value of the CTG Common Stock,  or otherwise) in exchange for
any capital raised in satisfaction of the financing  contingency to the merger ;
(b) the delivery to the T Partnership  of a CTG 9% conditional  promissory  note
pursuant to which CTG is obligated to pay only those  amounts  which are due but
not paid to the  holders of the  Series A  Preferred  Stock,  or in the event of
certain other non-monetary defaults such as bankruptcy,  liquidation,  a sale of
substantially all assets, a change of ownership of the surviving subsidiary,  or
a default in the herein below mentioned secured  promissory note (any payment or
conversion  of the  Series A  Preferred  Stock  shall be deemed a payment on the
conditional note, and any principal or interest payments on the conditional note
shall be deemed  redemptions  and payments  under the Series A Preferred  Stock,
with the result being that CCS shall not be obligated to make aggregate payments
with  respect to both the Series A  Preferred  Stock and  conditional  note,  in
excess of $1.0 million plus interest); and (c) the delivery to the T Partnership
of a secured promissory note made by CTG in an amount not to exceed $1.3 million
(which  amount  shall  be  the  remaining   amount  of  The  Company's   secured
indebtedness  to the T Partnership  exclusive of the amount  redeemed  under (a)
above),  bearing  interest at the rate of 12% per annum payable  quarterly,  the
principal  amount of which shall be due and payable three years from the date of
execution  of such note (the terms of the  security  for the note have yet to be
agreed upon).

Consummation  of the merger is  subject,  among  other  things,  to: (i) raising
sufficient capital to support the product development efforts of both companies;
(ii) declaration of the  effectiveness of the registration  statement filed with
the Securities and Exchange Commission in connection with the merger;  (iii) the
approval  of  the  merger  and  the  transactions  contemplated  thereby  by the
stockholders  of  Electro-Catheter  Corporation and CCS; (iv) the receipt of all
required regulatory approvals by the two companies.

CCS  develops,  manufactures  and  sells a broad  line  of  implantable  cardiac
pacemakers,  pacemaker  leads and  related  products  which  Company  management
believes are  complementary  to its own product lines.  The Company believes the
merger may allow certain efficiencies to improve operating  performance and that
the  broader  product  line  may  provide  for a more  effective  marketing  and
distribution process.  There can be no assurance,  however, that consummation of
the merger will yield positive operating results in the future.

From  December  1997  through  March  1998,  the  Company  also had  discussions
regarding  acquisition by another firm based outside the United States. In early
April 1998,  the  Company's  Board of Directors  terminated  these  discussions,
believing  that  the  terms  proposed  were  not in  the  best  interest  of the
stockholders.

International sales should be adversely affected in Europe (approximately 17% of
total  revenues)  for about the next six months as the  Company  was not able to
obtain the "CE" Mark on its products on a timely basis,  in order to continue to
sell into this market.  The effort to obtain the "CE" Mark is continuing and the
Company is hopeful of obtaining this designation  before the end of the calendar
year on  itsmajor  products  in order to  continue  selling  into  this  market.
However, there can be no assurance that the Company will obtain the "CE" Mark or
maintain  the same  level of  revenue  upon  receiving  the "CE"  Mark as it did
previously.


                                       6


<PAGE>



Note 5   Reclassifications
------   -----------------

Certain  reclassifications  have been made to conform  to the  fiscal  year 1998
presentation.

Note 6   Earnings Per Share
------   ------------------

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting Standard No. 128 "Earnings Per Share" (SFAS 128). SFAS 128
supersedes  Accounting  Principles  Board Opinion No. 15, Earnings Per Share and
specifies the computation, presentation and disclosure requirements for earnings
per share for entities with  publicly  held common stock.  SFAS 128 is effective
for  financial  statements  relating to both interim and annual  periods  ending
after December 15, 1997.

Basic loss per share is based on net loss for the  relevant  period,  divided by
the weighted  average  number of common  shares  outstanding  during the period.
Diluted loss per share is based on net loss for the relevant period,  divided by
the weighted  average  number of common  shares  outstanding  during the period.
Common share equivalents, such as outstanding stock options, are not included in
the calculation since the effect would be antidilutive.




                                      7 

<PAGE>


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

General
-------

The following is  management's  discussion  and analysis of certain  significant
factors  which have affected the  Company's  financial  condition and results of
operations during the periods included in the accompanying financial statements.

Statements  contained  in and  preceding  management's  discussion  and analysis
include  various  forward-looking  information  that is based on data  currently
available to management and management's  beliefs and assumptions.  When used in
this  report,  the words  "anticipates,"  "estimates,  "believes,"  "plans," and
similar expressions are intended to identify forward-looking statements, but are
not the exclusive  means of identifying  such  statements.  Such  statements are
subject to risks and  uncertainties,  and the Company's  actual results may vary
materially  from those  anticipated,  estimated or projected  due to a number of
factors,  including,  without  limitation,  the competitive  environment for the
Company's  products  and  services,  and other  factors set forth in reports and
other documents filed by the Company with the Securities and Exchange Commission
from time to time.

Results of Operations
---------------------

General.  The Company entered into an Agreement and Plan of Reorganization dated
------- as of January 20, 1998 (the "Merger  Agreement")  with  Cardiac  Control
Systems, Inc. ("CCS"), a Delaware corporation located in Palm Coast, Florida, to
effect a  merger  of the two  companies  targeted  toward  the  development  and
marketing  of  advanced  specialty   electrophysiology  products.  A  subsequent
amendment of the Merger  Agreement  was entered into on May 5, 1998.  Currently,
the structure of the  transaction  contemplates  the merger of a  newly-created,
wholly-owned  subsidiary  of CCS into and with the  Company as a result of which
the Company shall become a wholly-owned  subsidiary of CCS and the  stockholders
of the Company  will become  stockholders  of Catheter  Technology  Group,  Inc.
("CTG"), a Delaware  corporation and parent holding company of CCS, to be formed
as part of a  restructuring  in  connection  with the  merger.  By virtue of the
merger,  each outstanding  share of common stock, $.10 par value, of the Company
will be converted into the right to receive one-fifth of a share of common stock
$.10 par value of CTG.  Pursuant to the  restructuring,  CTG will succeed to all
rights and  obligations of CCS and will become the successor  issuer of CCS such
that  stockholders  of CCS will become  stockholders  of CTG.  Subsequent to the
restructuring,  it is  intended  that CTG will  undergo a 1 for 5 reverse  stock
split reducing the number of shares of common stock, $.10 par value, of CTG (the
"CTG Common Stock")  outstanding to approximately  529,748 shares.  By virtue of
the merger,  subsequent to the reverse stock split,  each  outstanding  share of
common stock, $.10 par value, of the Company will be converted into the right to
receive  one-fifth of a share of CTG Common Stock,  effectively equal to an even
exchange of shares prior to such reverse stock split.

Upon  closing of the  transaction,  $1 million of the  Company's  senior debt is
intended  to be  redeemed  by:  (a) the  issuance  by the  surviving  subsidiary
corporation in the merger (the  "Surviving  Subsidiary") to the T Partnership of
an aggregate of 1,000 shares of Series A 9% preferred  stock,  no par value (the
"Series A Preferred Stock") of the Surviving Subsidiary, which shares shall have
a liquidation value equal to, and shall be issued in redemption of, $1.0 million
of the  indebtedness and shall be convertible into shares of CTG Common Stock at
a conversion  price equal to 120% of the price per share of the CTG Common Stock
used as the basis for the  consideration  given  (whether  in the form of issued
stock, if any, or warrants,  provided the exercise price of the warrant reflects
the current market value of the CTG Common Stock,  or otherwise) in exchange for
any capital raised in satisfaction  of the financing  contingency to the merger;
(b) the delivery to the T Partnership  of a CTG 9% conditional  promissory  note
pursuant to which CTG is obligated to pay only those  amounts  which are due but
not paid to the  holders  of the  Series A  Preferred  Stock or in the  event of
certain other non-monetary defaults such as bankruptcy,  liquidation,  a sale of
substantially all assets, a change of ownership of the surviving subsidiary,  or

                                       8

<PAGE>

a default in the herein below mentioned secured  promissory note (any payment or
conversion  of the  Series A  Preferred  Stock  shall be deemed a payment on the
conditional note, and any principal or interest payments on the conditional note
shall be deemed  redemptions  and payments  under the Series A Preferred  Stock,
with the result being that CCS shall not be obligated to make aggregate payments
with  respect to both the Series A  Preferred  Stock and  conditional  note,  in
excess of $1.0 million plus interest); and (c) the delivery to the T Partnership
of a secured promissory note made by CTG in an amount not to exceed $1.3 million
(which  amount  shall  be  the  remaining   amount  of  The  Company's   secured
indebtedness  to the T Partnership  exclusive of the amount  redeemed  under (a)
above),  bearing  interest at the rate of 12% per annum payable  quarterly,  the
principal  amount of which shall be due and payable three years from the date of
execution  of such note (the terms of the  security  for the note have yet to be
agreed upon).

Consummation  of the merger is  subject,  among  other  things,  to: (i) raising
sufficient capital to support the product development efforts of both companies;
(ii) declaration of the  effectiveness of the registration  statement filed with
the Securities and Exchange Commission in connection with the merger;  (iii) the
approval  of  the  merger  and  the  transactions  contemplated  thereby  by the
stockholders  of  Electro-Catheter  Corporation and CCS; (iv) the receipt of all
required regulatory approvals by the two companies.

CCS  develops,  manufactures  and  sells a broad  line  of  implantable  cardiac
pacemakers,  pacemaker  leads and  related  products  which  Company  management
believes are  complementary  to its own product lines.  The Company believes the
merger may allow certain efficiencies to improve operating  performance and that
the  broader  product  line  may  provide  for a more  effective  marketing  and
distribution process.  There can be no assurance,  however, that consummation of
the merger will yield positive operating results in the future.

From  December  1997  through  March  1998,  the  Company  also had  discussions
regarding  acquisition by another firm based outside the United States. In early
April 1998,  the  Company's  Board of Directors  terminated  these  discussions,
believing  that  the  terms  proposed  were  not in  the  best  interest  of the
stockholders.

Overview.   Net  revenues   declined  $216,417  (12.6%)  and  $985,713  (19.2%),
-------- respectively,   for the three  and nine  months  ended May 31,  1998 as
compared  to the three and nine  months  ended May 31,  1997.  Product  revenues
increased  $31,210 (2.1%) for the three months ended May 31, 1998 as compared to
the same three month period in the prior fiscal year. However,  product revenues
decreased $471,238 (10.7%) for the nine months ended May 31, 1998 as compared to
the same period in the prior fiscal  year.  Contract  research  and  development
declined  $240,529 (100%) and $544,293 (100%),  respectively,  for the three and
nine months  ended May 31,  1998 as compared to the three and nine months  ended
May 31, 1997.  Licensing fees and royalty income increased $11,902 for the three
months ended May 31, 1998 and declined  $33,309 for the nine month  period.  For
the nine months ended May 31, 1998 sales to an original equipment  manufacturing
("OEM")  customer  increased  $63,727,  however,  revenues  from  this  customer
declined $19,000 for the three month period ended May 31, 1998.

Sales.  Domestic sales  decreased  $74,266  (7.4%) and $353,934  (11.6%) for the
------ three and nine months ended May 31,  1998,  respectively,  as compared to
the same periods in the prior year.  These  decreases  are  primarily due to the
Company not having an approved  electrophysiology ablation catheter, lack of new
products,  a continued  decline in demand for the  Company's  older  products in
pacing and monitoring,  backorders, as well as the impact of not replacing sales
representatives  who have left the  Company.  International  revenues  decreased
$117,304 (8.6%) for the first nine months of fiscal year 1998 as compared to the
first nine months of fiscal year 1997. The decline in international revenues for
the nine month period is attributed  to the lack of new  products,  lower demand
for the Company's  electrophysiology  products, product redesign problems, lower
prices due to  competition  and  backorders.  For the three months ended May 31,
1998, international revenues increased $105,476 (23.5%) as compared to the three
months  ended May 31,  1997.  This  increase is  attributed  to new  business in
countries where the Company has had representation and the timing 

                                       9

<PAGE>

of orders from  distributors.  This increasing trend is not expected to continue
in the near term.  International  sales should be  adversely  affected in Europe
(approximately  17% of total  revenues)  for  about  the next six  months as the
Company was not able to obtain the "CE" Mark on its products on a timely  basis,
in order to continue to sell into this market.

The Company's  insufficient  financing has hampered its ability to introduce new
products  to market and to correct  the  redesign  issues,  in order to maintain
sales at its prior levels.

Gross Profits.  Gross profit  dollars  decreased  $253,622  (39.8%) and $963,846
------------- (42.3%), respectively, for the three and nine months ended May 31,
1998 as compared to the three and nine months ended May 31, 1997.  This decrease
is primarily  attributed  to decreased  production  levels  related to the lower
sales volume.  The decreased  production levels caused the cost of goods sold of
the catheters to increase due to less efficient labor  utilization and a greater
amount of fixed overhead allocated to each catheter produced. The increased cost
of goods sold is also  attributable to write-offs of certain  inventories  which
were scrapped for sterilization samples, evaluation and testing failures and the
increased cost associated with regulatory compliance. The lower volume continues
to negatively impact gross profit.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
-----------------------------------------------------   administrative  expenses
decreased $151,670 (27.0%) and $234,018 (13.3%), respectively, for the three and
nine months ended May 31, 1998 as compared to the same  periods  last year.  The
three months ended May 31, 1998 includes an adjustment of $144,068 to reclassify
expenses  associated with the merger to other assets (see Note 2 to Notes to the
Condensed Financial Statements). Excluding this adjustment, selling, general and
administrative expenses decreased only $35,602 (6.3%) for the three months ended
May 31, 1998 as compared to the three months ended May 31, 1997.  The  decreases
primarily   reflects  lower   domestic  and   international   selling   expenses
substantially  attributable  to the loss of field sales  personnel that have not
yet been replaced and cutbacks in international activities.

Engineering,   Research  and  Development  Expenses.  Research  and  development
---------------------------------------------------- expenses decreased $106,464
(47.3%) and $256,755 (38.2%),  respectively, for the three and nine months ended
May 31, 1998 as  compared to the same  periods in the prior  fiscal  year.  This
decrease  reflects  the lower level of R&D  efforts.  The  decrease is primarily
attributed to decreased  personnel and lower  material,  supply,  consulting and
recruiting  expenses.  In the prior fiscal year,  costs associated with billable
research and development activities were charged to cost of revenues. There were
no contract research and development activities during the nine months ended May
31, 1998.

Other  Income  and  Expenses.  Interest  expense  increased  as a result  of the
----------------------------  increased  borrowings  from the T Partnership  and
interest on capitalized lease obligations.

Liquidity and Capital Resources
-------------------------------

At May 31, 1998,  working capital decreased $762,242 to $195,932 from August 31,
1997.  The current ratio was 1.1 to 1 at May 31, 1998 as compared to 1.6 to 1 at
August 31, 1997. Net cash used in operating activities was $460,956 for the nine
months ended May 31, 1998 as compared to $103,613  used in operating  activities
for the nine months  ended May 31,  1997.  This  increase in cash  required  for
operations is primarily  attributed to the increase in the Company's  losses for
the nine month  period,  increase in other assets which is primarily  associated
with the expenses in connection with the proposed merger, higher inventories and
increase in accounts  payable  offset by a decrease in accounts  receivable  and
other current assets. The Company was able to satisfy its cash requirements with
borrowings from the T Partnership, cost saving measures, especially in the sales
and marketing area,  where sales personnel have not been replaced,  cash on hand
and extending its accounts payable.


                                       10

<PAGE>

In September 1997, a Superior Court jury in Middlesex County, New Jersey,  found
the Company liable for age  discrimination in connection with its termination of
an employee in April 1994.  The jury awarded the  terminated  employee  $283,000
plus  attorney's  fees and  expenses  and  prejudgment  interest in the combined
amount of  approximately  $47,990.  The Company also  incurred  legal costs from
September 1996 through  September 1997 in the amount of approximately  $115,665.
All of the  aforementioned  costs were recorded in the financial  statements for
the year ended August 31, 1997. The Company filed an appeal of the judgement.

Pending the Company's  appeal,  the plaintiff,  in an effort to execute upon the
judgment  rendered  in his  favor,  levied  on  certain  of the  Company's  bank
accounts,  thereby  freezing the available funds.  Notwithstanding  management's
belief that the Company had arguments supporting its appeal,  management weighed
the  considerable  cash  requirements  of an appeal bond, the costs of continued
efforts relative to the appeal, and the need to vacate the levies to satisfy the
Company's  immediate cash  requirements  against the likelihood of prevailing on
its  appeal and the terms of a possible  settlement,  and on April 8, 1998,  the
Company  entered into a Settlement  Agreement with the plaintiff.  Under the key
terms of the  Settlement  Agreement,  the matter has been settled for the sum of
$305,000  payable as follows:  (i) by a lump sum payment of $65,000  within five
business  days of the date of the  Settlement  Agreement  and (ii) the  balance,
bearing interest at the rate of 6% per annum, payable in monthly installments of
$10,000,  plus  interest,  commencing  July 1, 1998.  The  Settlement  Agreement
provides that a default in any monthly payment which remains unpaid for a period
of ten days allows the plaintiff to declare a default and accelerate the payment
of the entire  outstanding  balance  with  interest.  The  Company  has made the
payments due to date on a timely basis.

The Company's  ability to continue with its plans is contingent upon its ability
to  either  obtain  sufficient  cash  flow from  operations,  obtain  additional
financing, or consummate a combination with another company. The Company has had
difficulty in paying its obligations  and, as a result,  has delayed payments to
some  vendors.  The Company  continues  to evaluate  its plans to obtain  funds.
Consummation  of the merger is  subject,  among  other  things,  to: (i) raising
sufficient capital to support the product development efforts of both companies;
(ii) declaration of the  effectiveness of the registration  statement filed with
the Securities and Exchange Commission in connection with the merger;  (iii) the
approval  of  the  merger  and  the  transactions  contemplated  thereby  by the
stockholders  of  Electro-Catheter  Corporation and CCS; (iv) the receipt of all
required regulatory approvals by the two companies.

Management  believes  that this merger can offer  benefits to both  companies by
taking  advantage of economies of scale and  elimination  of redundant  efforts.
However,  there can be no assurance  that the merger will be consummated or that
the Company will be able to generate the funding required.

Inflation  did not  have a  material  impact  on the  results  of the  Company's
operations for the nine months ended May 31, 1998.

Operating Trends and Uncertainties
----------------------------------

Sales.  The ability of Electro to attain a  profitable  level of  operations  is
------  dependent  upon  expansion  of  sales  volume,   both  domestically  and
internationally,  and continued  development of new and advanced products.  Many
countries  in which  Electro  markets its  products  regulate  the  manufacture,
marketing and use of medical devices. Electro intends to pursue product approval
or registration  procedures in countries where is it marketing its products. The
international  registration  and approval  process is normally  accomplished  in
coordination  with its  international  distributors.  In order  for  Electro  to
continue to sell certain of its products in the nations of the European Economic
Community  (the "EEC") after June 14, 1998,  Electro must obtain  certification,
the CE Mark, from the  International  Organization for  Standardization.  In the
event  that  Electro  is unable  to  obtain  the CE Mark by such date it will be
unable  to  sell  certain  of  its  products  in the  nations  of  the  EEC  and
international  sales (which  account for  approximately  17% of total  revenues)
should be  adversely  affected in Europe for some period of time.  The effort to
obtain the CE Mark is  continuing  and  Electro is  hopeful  of  obtaining  this

                                       11


<PAGE>

designation  before  June 14,  1998.  However,  there can be no  assurance  that
Electro  will  obtain the CE Mark or  maintain  the same  level of revenue  upon
receiving the CE Mark as it did previously.

Year 2000 Issue.  Electro is  reviewing  its  computer  programs  and systems to
---------------- ensure that the programs and systems will function properly and
be in compliance with Year 2000 capability  requirements.  Management of Electro
presently   believes  that  the  Year  2000  issue  will  not  pose  significant
operational  problems for Electro's  computer  systems.  The  estimated  cost of
Electro's  review and  assessment  efforts is not  expected  to be  material  to
Electro's financial position or any year's result of operations,  although there
can be no assurance of this result. In addition,  the Year 2000 issue may impact
other entities with which Electro transacts business, and Electro cannot predict
the effect of the Year 2000 issue on such entities.





                                      12 

<PAGE>



PART II.          OTHER INFORMATION
--------          -----------------

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K
-------        --------------------------------

       (a)     The exhibits filed or  incorporated  by reference as part of this
               Quarterly Report on Form 10-Q are listed in the attached Index of
               Exhibits.

       (b)     The Company  did not file any Current  Reports on Form 8-K during
               the period reviewed by this Quarterly Report on Form 10-Q.




                                      13 

<PAGE>



                                   SIGNATURES

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


                                     ELECTRO-CATHETER CORPORATION



                                     /s/Ervin Schoenblum
Date:  October 9, 1998               Ervin Schoenblum
                                     Acting President & Chief Operating Officer


                                     /s/Joseph P. Macaluso
Date:  October 9, 1998              Joseph P. Macaluso
                                     Chief Financial Officer




                                      14 

<PAGE>



                                INDEX TO EXHIBITS


10.1      First  Amendment  to  the  Agreement and Plan of Reorganization dated
May 5, 1998 among the Company, Cardiac Control Systems, Inc. and CCS Subsidiary,
Inc.






                                      15