UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                             ----------------------

                                    FORM 10-Q

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

                      For the quarterly period ended November 30, 1998

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

                      Commission File No. 0-7578

                          ELECTRO-CATHETER CORPORATION
             (Exact name of the Registrant as specified in Charter)

                     New Jersey                         22-1733406
             (State of Incorporation)           (I.R.S. Employer ID Number)
                           
              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  January  11,  1999,  the  number  of  shares   outstanding  of  the
Registrant's common stock was 6,390,389 shares, $.10 par value.




<PAGE>



                          ELECTRO-CATHETER CORPORATION

                                TABLE OF CONTENTS




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


Item 1.  Financial Statements (Unaudited):


                Condensed Comparative Balance Sheets
                    November 30, 1998 and August 31, 1998             1


                Condensed Comparative Statements of Operations -
                    Three Months Ended November 30, 1998
                      and November 30, 1997                           2


                Condensed Comparative Statements of Cash Flows -
                    Three Months Ended November 30, 1998 and
                           November 30, 1997                          3


                Notes to Condensed Financial Statements             4 - 7


Item 2.         Management's Discussion and Analysis of
                    Financial Condition and Results of Operations   8 - 13



PART II. OTHER INFORMATION

Item 6.         Exhibits and Reports on Form 8-K                     14

         SIGNATURES                                                  14

         INDEX TO EXHIBITS                                           15




<PAGE>


<TABLE>

PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
                                                    ELECTRO-CATHETER CORPORATION
                                                CONDENSED COMPARATIVE BALANCE SHEETS
                                                November 30, 1998 and August 31, 1998
                                                             (Unaudited)
<CAPTION>
                                                                           November 30                       August 31
                                                                                  1998                            1998
                                                                                  ----                            ----
<S>                                                                    <C>                                   <C>      
                              ASSETS
Current assets:
    Cash and cash equivalents                                          $         64,454                        168,762
    Accounts receivable, net                                                    426,561                        723,753
    Inventories                                                               1,148,914                      1,253,456
    Prepaid expenses and other current assets                                    54,341                         68,538
                                                                            -----------                     ----------

   Total current assets                                                       1,694,270                      2,214,509

Property, plant and equipment, net                                              623,236                        653,452
Deferred merger costs                                                           321,180                        234,253
Other assets, net                                                               101,933                         80,733
                                                                              ----------                     ---------
Total assets                                                                  2,740,619                      3,182,947
                                                                              =========                      =========

          LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
   Current installments of subordinated debentures
          due to The T Partnership, a related party                              75,000                              -
   Current installments of capitalized lease
          obligations                                                            77,000                         73,279
   Accounts payable - trade                                                     575,942                        774,200
   Accrued expenses                                                             304,786                        341,646
   Accrued merger costs                                                         257,446                        181,319
   Accrued interest due to The T Partnership, a related party                   361,178                        293,764
   Accrued litigation expenses                                                  235,134                        265,134
                                                                              ---------                      ---------
Total current liabilities                                                     1,886,486                      1,929,342

Subordinated debentures and promissory note due to
   The T Partnership, a related party                                         2,172,125                      2,247,125
Capitalized lease obligations, excluding
          current installments                                                  176,863                        196,614
                                                                              ---------                      ---------
Total liabilities                                                             4,235,474                      4,373,081
                                                                              ---------                      ---------

Stockholders' deficiency:
   Common stock                                                                 639,039                        639,039
   Additional paid-in capital                                                10,704,803                     10,704,803
   Accumulated deficit                                                      (12,838,697)                   (12,533,976)
                                                                            -----------                     ----------
   Total stockholders' deficiency                                            (1,494,855)                    (1,190,134)
                                                                           ------------                   ------------

   Total liabilities and stockholders'  deficiency                     $      2,740,619                      3,182,947
                                                                             ==========                      =========

See accompanying notes to condensed financial statements.

</TABLE>

                                                                  1

<PAGE>


<TABLE>


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


<CAPTION>
                                                                                           Three Months Ended
                                                                                               November 30,

                                                                                    1998                        1997
                                                                                    ----                        ----
<S>                                                                      <C>                               <C>        

Net revenues, including product sales,
    royalty revenue and license fees                                     $       967,286                   1,335,313
Cost of goods sold                                                               701,981                     864,846
                                                                                 -------                   ---------

        Gross profit                                                             265,305                     470,467


Operating expenses:
    Selling, general and administrative                                          362,069                     526,050
    Research and development                                                     119,667                     163,018
                                                                                 -------                     -------


        Operating loss                                                          (216,431)                   (218,601)


Other expense:
        Interest expense                                                         (88,290)                    (72,856)
                                                                                 -------                     -------

        Net loss                                                       $        (304,721)                   (291,457)
                                                                                =========                   =========

Basic and diluted net loss per common share                            $          (0.05)                      (0.05)
                                                                                  =====                       =====


Dividends per share                                                               None                         None

Weighted average shares outstanding                                            6,390,389                   6,383,611
                                                                               =========                   =========



See accompanying notes to condensed financial statements.

</TABLE>





                                                                  2

<PAGE>

<TABLE>



                                                    ELECTRO-CATHETER CORPORATION
                                           CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS
                                                             (Unaudited)
<CAPTION>
                                                                                                 Three Months Ended
                                                                                                     November 30,

                                                                                           1998                       1997
                                                                                           ----                       ----
<S>                                                                                <C>                             <C>    
Cash flows from operating activities:

    Net loss                                                                       $   (304,721)                   (291,457)

Reconciliation of net loss to net cash used in operating activities:

    Depreciation                                                                         30,216                      32,508
    Amortization                                                                          2,083                       2,083

    Changes in assets and liabilities:
       Decrease in accounts receivable, net                                             297,192                      15,050
       Decrease (increase) in inventories                                               104,542                    (103,541)
       Decrease in prepaid expenses and
          other current assets                                                           14,197                      85,411
       (Increase) decrease in other assets                                              (23,283)                      3,354
       Increase in deferred merger costs                                                (86,927)                          -
       (Decrease) increase in accounts payable
          and accrued expenses                                                         (121,577)                     90,317
                                                                                       ---------                  ---------

Net cash used in operating activities                                              $    (88,278)                   (166,275)
                                                                                        -------                     -------

Cash flows used in investing activities -
    Purchases of property, plant and
       equipment                                                                              -                      (1,649)
                                                                                      ---------                      -------

Cash flows (used in) provided by financing activities:
    Proceeds from loan and warrants
       from The T Partnership, a related party                                                -                     100,000
    Repayment of capitalized lease obligations                                          (16,030)                    (14,320)
                                                                                         ------                      ------

Net cash (used in) provided by
        financing activities                                                            (16,030)                     85,680
                                                                                         -------                   --------

Net decrease in cash                                                                   (104,308)                    (82,244)
Cash at beginning of period                                                             168,762                      98,127
                                                                                        -------                      ------
Cash at end of period                                                            $       64,454                      15,883
                                                                                         ======                      ======



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  ("Electro")  as of November 30, 1998, the results of operations and
cash flows for the three months  ended  November 30, 1998 and November 30, 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  Electro's  Annual  Report on Form 10-K for the fiscal year
ended August 31, 1998.

Note 2   Liquidity
------   ---------

The  accompanying  financial  statements  have been  prepared on a going concern
basis which  contemplates the continuation of operations,  realization of assets
and  liquidation  of  liabilities  in the ordinary  course of business.  Electro
incurred net losses of  $1,077,317,  $1,354,942 and $892,940 for the years ended
August 31,  1998,  1997 and 1996,  respectively,  and a loss of $304,721 for the
three months  ended  November  30,  1998.  At November 30, 1998,  Electro had an
accumulated  deficit of  $12,838,697.  The net losses  incurred by Electro  have
consumed working capital and weakened its financial position.  Electro's ability
to continue in business is dependent  upon its success in generating  sufficient
cash flow from operations or obtaining additional  financing.  Electro continues
to  re-evaluate  its  plans and  adopt  certain  cost  reduction  measures.  The
contemplated merger between Electro and Cardiac Control Systems, Inc. ("Cardiac"
or "CCS"), a Delaware corporation located in Palm Coast,  Florida, is contingent
upon raising  sufficient  capital to support each Company's product  development
efforts.  However,  there can be no assurance that the merger will occur or that
Electro will be able to generate the funding required.


Note 3   Accounts Receivable
------   -------------------
<TABLE>

Accounts receivable comprise the following:

<CAPTION>
                                                     November 30,                     August 31,
                                                            1998                           1998
                                                            ----                           ----
       <S>                                           <C>                             <C>    

       Accounts receivable - trade                   $   645,760                        937,342
       Allowance for doubtful accounts                  (219,199)                      (213,589)
                                                        --------                       --------

                                                     $   426,561                        723,753
                                                        ========                        =======
</TABLE>

Note 4    Inventories
------    -----------
<TABLE>

Inventories consist of the following:
<CAPTION>
                                                     November 30,                     August 31,
                                                            1998                           1998 
                                                            ----                           ---- 
       <S>                                       <C>                                  <C>    
       Finished goods                             $      460,990                        398,503
       Work-in-process                                   477,308                        611,300
       Materials and supplies                            210,616                        243,653
                                                         -------                        -------

                                                  $    1,148,914                      1,253,456
                                                       =========                      =========
</TABLE>


                                        4

<PAGE>



Note 5   Commitments and Contingencies
------   -----------------------------

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

Electro's  products are classified as medical  devices under the FDA Act and, as
such, are subject to extensive regulatory compliance  requirements.  In February
1997,  the FDA conducted an  inspection  and audit of Electro's  facilities  and
practices,  as a result  of which  the FDA  issued a  Warning  Letter  (the "FDA
Warning Letter")  regarding non-compliance  by Electro with certain  regulations
regarding current good  manufacturing  practices  ("cGMP") in the manufacture of
its  products.   The  areas  of  noncompliance   include  Electro's  methods  of
investigation   of  device   complaints,   methods  of   validation   of  device
sterilization,  environmental  monitoring  procedures,  methods of validation of
extrusion  processes  which are used in the  manufacture of certain of Electro's
catheters and other quality  assurance and recordkeeping  requirements.  Electro
has communicated  with the FDA its intentions to remedy the non-compliance,  has
established a plan to effectuate such  remediation and has diligently  worked to
take the  necessary  corrective  actions.  Electro's  actions have  included the
establishment of certain  validation  protocols,  revisions of Electro's Quality
System  and  Quality  System  Manual,   the  implementation  of  a  program  for
environmental   testing,   the  purchase  of  equipment  for  extrusion  process
validation and the institution of file and recordkeeping protocols. A subsequent
FDA inspection in September 1997 indicated that while  substantial  progress had
been made, not all corrective actions had been completed.  Electro is continuing
in its efforts to complete such actions and it is Electro's  intention to inform
the FDA in early  1999  that it has  completed  such  actions  and is ready  for
reinspection. There can be no assurance, however, that Electro will be ready for
such  reinspection  nor that  Electro  will pass any such  reinspection  when it
occurs.  While Electro is currently  under no  restrictions by the FDA regarding
the  manufacture  or  sale of its  products,  Electro  is  unable  to  determine
precisely 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.  Until all
corrective  actions  required under the FDA Warning Letter have been taken,  the
FDA will not consider new products for approval. However, Electro's insufficient
financing  for  research  and  development  efforts over the last few years have
limited its ability to produce new products and, consequently,  no FDA approvals
are currently sought.

The Proposed Merger
-------------------

Electro entered into an Agreement and Plan of Reorganization dated as of January
20, 1998,  with  CCS,  to effect a merger of the two companies  targeted  toward
the development and marketing of advanced specialty  electrophysiology products.
The structure of the  transaction  contemplates  the merger of a  newly-created,
wholly-owned  subsidiary  of CCS  into  and with  Electro  as a result  of which
Electro shall become a wholly-owned  subsidiary of CCS and the  stockholders  of
Electro will become  stockholders of Catheter  Technology Group, Inc. ("CTG"), a
Delaware  corporation  and parent  holding  company of CCS,  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 Electro 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  stockholders  of CCS will become  stockholders  of CTG.
Pursuant to the  restructuring,  it is intended  that CCS will undergo a 1 for 5
reverse  stock split  reducing  the number of shares of common  stock,  $.10 par
value, of CCS  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 Electro 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  consummation  of the merger,
CTG plans to issue stock in a public  offering.  It is expected  that the merger
will be  accounted  for using the  purchase  method of  accounting  as a reverse
acquisition   with  Electro  deemed  to  be  the  accounting   acquiror  as  its
stockholders  will  receive  the  largest  portion of the voting  rights in CTG.
Accordingly,  Electro has  deferred  costs  associated  with the merger.  If the
merger is not  consummated,  such  costs will be  recognized  as expense in that
period.


                                        5

<PAGE>




Consummation  of the merger is subject to a number of conditions,  many of which
have already been met. The remaining conditions are to be satisfied on or before
January 31,  1999 in order for the merger to be  consummated.  Among  conditions
remaining to be satisfied  are: (i) the securing of a minimum of $4.0 million in
financing  in addition to any  existing  debt  obligations  of both  Cardiac and
Electro;  and (ii) the receipt of all required  regulatory  approvals by the two
companies.  The  stockholders of each of Electro and Cardiac approved the merger
at the respective  Special  Meetings of such  Stockholders  held on November 16,
1998.

There is no assurance that the remaining conditions will be satisfied in time or
that the merger will be completed at all.

International Sales
-------------------

Beginning in June 1998,  international  sales were adversely  affected in Europe
(approximately 21% and 17% of total revenues for the fiscal years 1996 and 1997,
respectively) as Electro was not able to obtain the CE Mark on its products on a
timely basis in order to continue to sell into this market.  Several months ago,
Electro and CCS submitted an application  requesting CE Mark  certification  for
CCS to sell Electro's steerable line of catheters, as manufacturer, with Electro
acting as vendor to CCS in such regard. The CE Mark certification was granted on
October 26, 1998, issued in the name of CCS. Upon completion of the merger,  the
CE Mark will belong to CTG.  CCS and Electro  intend to have product with the CE
Mark available for shipment in early 1999. Applications for the CE Mark for many
additional products of Electro have been submitted recently.  However, there can
be no assurance that the CE Mark for the  additional  products will be obtained,
that the merger between CCS and Electro will be consummated or that the pre-June
1998 sales levels will be recaptured.

Note 6   Reclassifications
------   -----------------

Certain  reclassifications  have been made to conform  to the  fiscal  year 1999
presentation.

Note 7   Earnings Per Share
------   ------------------

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.

Note 8   Comprehensive Income
------   --------------------

On June 7, 1997, the  FASB issued SFAS No. 130 "Reporting Comprehensive Income".
SFAS No. 130  establishes  standards for reporting and display of  comprehensive
income and its components (revenues,  expenses, gains, and losses) in a full set
of general purpose  financial  statements.  SFAS No. 130 requires that all items
that are required to be recognized under  accounting  standards as components of


                                        6

<PAGE>

comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. SFAS No. 130 is effective for
fiscal years  beginning after December 15, 1997.  Reclassification  of financial
statements for earlier periods  provided for  comparative  purposes is required.
Electro  adopted  SFAS  No.  130  for  the  quarter  ended  November  30,  1998.
Comprehensive  income for the three month  periods  ended  November 30, 1998 and
1997 were the same as net losses of $304,721 and $291,457, respectively.


                                       7

<PAGE>

                                                            





MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
     AND RESULTS OF OPERATIONS
     -------------------------

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

General.  The  following  is  management's  discussion  and  analysis of certain
significant  factors which have affected the financial  condition and results of
operations  of  Electro-Catheter  Corporation  ("Electro")  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  Electro'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
Electro's  products  and  services,  and other  factors set forth in reports and
other  documents  filed by Electro with the Securities  and Exchange  Commission
from time to time.

Proposed  Merger.  Electro entered into an Agreement and Plan of  Reorganization
dated as of January 20, 1998, with Cardiac Control Systems,  Inc.  ("Cardiac" or
"CCS"), to effect a merger of the two companies  targeted toward the development
and marketing of advanced specialty electrophysiology products. The structure of
the  transaction  contemplates  the  merger  of  a  newly-created,  wholly-owned
subsidiary  of CCS into and with  Electro  as a result  of which  Electro  shall
become a  wholly-owned  subsidiary of CCS and the  stockholders  of Electro will
become  stockholders of Catheter  Technology  Group,  Inc.  ("CTG"),  a Delaware
corporation and parent holding company of CCS, 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 Electro 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. Pursuant to the restructuring,  it is intended that
CCS will undergo a 1 for 5 reverse stock split  reducing the number of shares of
common  stock,  $.10 par value,  of CCS  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 Electro 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
consummation of the merger, CTG plans to issue stock in a public offering. It is
expected  that the merger will be  accounted  for using the  purchase  method of
accounting as a reverse  acquisition  with Electro  deemed to be the  accounting
acquiror as its  stockholders  will  receive  the largest  portion of the voting
rights in CTG.  Accordingly,  Electro has  deferred  costs  associated  with the
merger.  If the merger is not  consummated,  such costs  will be  recognized  as
expense in that period.

Consummation  of the merger is subject to a number of conditions,  many of which
have already been met. The remaining conditions are to be satisfied on or before
January 31,  1999 in order for the merger to be  consummated.  Among  conditions
remaining to be satisfied  are: (i) the securing of a minimum of $4.0 million in
financing  in addition to any  existing  debt  obligations  of both  Cardiac and


                                        8

<PAGE>



Electro;  and (ii) the receipt of all required  regulatory  approvals by the two
companies.  The  stockholders of each of Electro and Cardiac approved the merger
at the respective  Special  Meetings of such  Stockholders  held on November 16,
1998.

There is no assurance that the remaining conditions will be satisfied in time or
that the merger will be completed at all.

Overview.  Electro's insufficient financing for research and development efforts
over the last few years has limited its  ability to produce  new  products  and,
consequently, has adversely affected product sales. Additionally,  international
sales have been adversely affected in Europe recently as Electro was not able to
obtain the CE Mark on its  products  on a timely  basis in order to  continue to
sell into this  market.  While  this  situation  has been  addressed  in part by
issuance  of  certification  to  CCS  to  market  Electro's  steerable  line  of
catheters,  as manufacturer,  there can be no assurance that pre-June 1998 sales
levels  will  be  recaptured.   Domestic  sales  were  also  affected  as  sales
representatives that left Electro were not replaced as a result of the financial
condition of Electro.  This decline in sales was partially offset by instituting
certain cost reduction measures.

Revenues.  Net  revenues  declined  $368,027  (27.6%) for the three months ended
November  30, 1998 as compared to the three  months  ended  November  30,  1997.
Product  sales  declined  $273,318  (22.2%),  sales to an OEM customer  declined
$51,185 and licensing and royalty revenues  decreased $43,524 as compared to the
same period last year.

Direct  domestic  sales  decreased  $138,418  (15.9%) for the three months ended
November 30, 1998 as compared to the same period in the prior year.  The decline
was  primarily  attributed to lower  electrophysiology  sales as Electro has not
introduced  any new  products  and  also  to  Electro  not  having  an  approved
electrophysiology  ablation catheter. Sales of Electro's Pacewedge catheter also
declined as a result of lower demand.  A decline in demand for  Electro's  older
products  in pacing  and  monitoring,  backorders,  as well as the impact of not
replacing  sales  representatives  who have left  Electro  have  also  adversely
affected sales.  International revenues decreased $134,900 (37.6%) for the three
months ended  November  30, 1998 as compared to the three months ended  November
30, 1997.  The decline in  international  revenues is  attributed to Electro not
obtaining  the CE Mark on its products on a timely basis in order to continue to
sell into Europe and the lack of new products for the  electrophysiology  market
that Electro has  targeted.  Certain of  Electro's  European  distributors  have
terminated their  relationship  with Electro in order to represent  competitors.
Several months ago, Electro and CCS submitted an application  requesting CE Mark
certification  for  CCS to  sell  Electro's  steerable  line  of  catheters,  as
manufacturer,  with Electro acting as vendor to CCS in such regard.  The CE Mark
certification  was granted on October 26, 1998,  issued in the name of CCS. Upon
completion of the merger, the CE Mark will belong to CTG. CCS and Electro intend
to  have  product  with  the CE Mark  available  for  shipment  in  early  1999.
Applications  for the CE Mark for many additional  products of Electro have been
submitted recently.  However, there can be no assurance that the CE Mark for the
additional  products will be obtained,  that the merger  between CCS and Electro
will be consummated or that the pre-June 1998 sales levels will be recaptured.

Gross Profit.  Gross profit  dollars  decreased  $205,162  (43.6%) for the three
months ended  November  30, 1998 as compared to the three months ended  November
30, 1997. This decrease is primarily  attributed to decreased production levels,
for the most part related to the lower sales volume. The gross profit percentage
for the three months ended  November 30, 1998 was 27.4% as compared to 35.2% for
the three  months  ended  November  30,  1997.  The lower  volume  continues  to
negatively impact gross profit.


                                        9

<PAGE>



Selling,  General  and  Administrative.   Selling,  general  and  administrative
expenses decreased $163,981 (31.2%) for the three months ended November 30, 1998
as compared to the same period in the prior year.  This decrease  reflects lower
domestic and international  selling expenses primarily attributed to the loss of
field  sales  personnel  that  have  not  been  replaced  and  the  slowdown  in
international  activities.  In addition,  the prior year includes legal expenses
associated  with the  aforementioned  merger  with CCS which  were  subsequently
reclassified  and  recorded  as a deferred  charge in the second  quarter of the
prior fiscal year.

Research and Development.  Research and development  expenses  decreased $43,351
(26.6%) for the three  months  ended  November  30, 1998 as compared to the same
period  in the prior  year.  This  decrease  reflects  the lower  level of R & D
efforts, primarily attributed to a decrease in personnel.

Other Expense.  Interest  expense  increased for the three months ended November
30,  1998 as  compared  to the same  period in the prior year as a result of the
increased  borrowings from The T Partnership  and interest on capitalized  lease
obligations.

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

At November  30,  1998,  Electro  had  negative  working  capital of $192,216 as
compared to positive  working  capital of $285,167 at August 31, 1998.  Net cash
used in operating activities was $88,278 for the three months ended November 30,
1998 as compared to $166,275 used in operating activities for the same period in
the prior  fiscal  year.  This  decrease  in cash  required  for  operations  is
primarily  attributed  to the decrease in accounts  receivable  and inventories,
offset  partially by a decrease in accounts  payable and accrued expenses and an
increase  in  deferred  merger  costs.  Electro  was  able to  satisfy  its cash
requirements  with cost saving  measures,  especially in the sales and marketing
area where sales personnel have not been replaced,  cash on hand,  collection of
accounts receivable and extension of its accounts payable.

Electro's  ability to continue with its plans is contingent  upon its ability to
obtain sufficient cash flow from operations or to obtain  additional  financing.
Electro  has had  difficulty  in paying  its  obligations  and,  as a result has
delayed certain  payments to vendors and others  providing  services to Electro,
such as  attorneys.  Electro  continues to evaluate its plans and adopt  certain
cost-saving measures,  where appropriate.  The contemplated merger is contingent
upon  both  companies  raising  sufficient  capital  to  support  their  product
development  efforts.  Electro's  management and Board of Directors believe that
this merger can offer  advantages  to the  combined  companies  by,  among other
benefits, providing economies of scale and elimination of redundancies. However,
there can be no  assurance  that the merger will occur or that  Electro  will be
able to generate the funding required.  Further,  there can be no assurance that
the combined company,  upon consummation of the merger,  will be able to achieve
positive operating results in the future.

The rate of  interest on the debt to The T  Partnership  is 12% per annum on any
outstanding  balance and is payable  monthly.  As of November 30, 1998,  Electro
owed The T Partnership  $361,178 for monthly  interest  payments  dating back to
July 1997. Electro has sent the required interest payments to The T Partnership.
The T Partnership  has chosen not to tender such checks for payment.  Therefore,
Electro has considered the interest payments unpaid at November 30, 1998 and has
reflected the amount as a liability in the accompanying balance sheet.  Interest
payments  under this  agreement  continue  to be  required  to be made  monthly;
however,  The T  Partnership  has agreed that the  failure to make such  monthly
payments will not  constitute an event of default,  as defined in the agreement,
and has agreed not to request  acceleration  of payment  for the prior  interest
payments  or,  further,  for any fiscal  year 1999  interest  payments.  Monthly
principal  payments of $25,000  scheduled  to begin on  September  1, 1996 have,
pursuant to several  waivers,  with the latest  received in January  1999,  been
deferred to  December 1, 1999.  The loan is   secured by   Electro's   property,

                                       10

<PAGE>



building, accounts receivable,  inventories and machinery and equipment. Electro
is to  prepay  the  outstanding  balance  in the  event  it is  merged  into  or
consolidated  with another  corporation or it sells all or substantially  all of
its assets,  unless The T Partnership  and Electro agree  otherwise.  The Merger
Agreement contemplates that the total indebtedness  outstanding and due to The T
Partnership plus interest accrued thereon (totaling  approximately  $2.6 million
at November 30, 1998) shall be redeemed at the merger effective time by: (a) the
issuance by the Surviving  Subsidiary  to The T  Partnership  of an aggregate of
1,000  shares of 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 the new combined  company's  common  stock;  (b) the delivery to The T
Partnership of the new combined company's 9% conditional  promissory note in the
amount of $1.0 million  pursuant to which the new combined  company 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; and (c) the delivery to The T Partnership of a secured promissory note
made by the new combined  company in an amount not to exceed $1.3 million (which
amount  shall  be  the  approximate   remaining  amount  of  Electro'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).  As a result of the issuance of Series A Preferred  Stock,  The T
Partnership shall be entitled to receive dividends. In addition, pursuant to the
terms  of  the  Merger  Agreement,  The  T  Partnership  shall  be  entitled  to
reimbursement  for cash advances  provided to Electro in the amount of $200,000,
or any greater  amount as may be agreed to by Electro and  Cardiac,  in writing,
which may have been  extended by The T  Partnership  between May 1, 1998 and the
completion  of the merger for the purpose of operating  capital,  plus  interest
accrued on such amount.

Under  the  provisions  of the  agreement  with The T  Partnership,  Electro  is
obligated to comply with  certain  covenants,  to be tested on a monthly  basis.
Non-compliance  by Electro shall allow The T Partnership  to declare an Event of
Default and  accelerate  repayment  of  indebtedness.  As of November  30, 1998,
Electro was not in compliance with certain covenants.  However, in January 1999,
The T Partnership  agreed not to exercise its right to accelerate  the repayment
of indebtedness  through December 1, 1999 as a result of non-compliance with the
aforementioned covenants and agreed to defer the principal and interest payments
due through November 30, 1999.

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

Sales. The ability of Electro to attain profitable  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 it is marketing its products. The international  registration
process and approval process is normally  accomplished in coordination  with its
international  distributors.  In  order  for  Electro  to  continue  to sell its
products  in the  nations  of the EEC,  it was  required  to obtain  the CE Mark
certification from the International  Organization of  Standardization  ("ISO").
Since Electro has not yet obtained the CE Mark  certification  and is now unable
to sell certain of its products in the nations of the EEC (which  accounted  for
approximately 14%, 17% and 21% of total revenues for fiscal years 1998, 1997 and
1996, respectively), international sales have been adversely affected in Europe.
Several months ago, Electro and Cardiac  submitted an application  requesting CE
Mark certification for Cardiac to sell Electro's steerable line of catheters, as
manufacturer,  with Electro acting as vendor to Cardiac in such regard.  CE Mark
certification  was  granted  on  October  26,  1998,  and  issued in the name of
Cardiac.   Cardiac  and  Electro   anticipate   having   product  with  CE  Mark


                                       11

<PAGE>



certification  available  for  shipment in early 1999.  Electro and Cardiac have
also  recently  submitted  applications  for CE Mark  certification  for many of
Electro's additional products.  However, there can be no assurances that CE Mark
certification for the additional  products will be obtained or that the pre-June
1998 sales levels will be recaptured.


FDA Warning Letter.  Electro's  products are classified as medical devices under
the FDA Act  and,  as such,  are  subject  to  extensive  regulatory  compliance
requirements.  In February  1997,  the FDA conducted an inspection  and audit of
Electro's  facilities  and practices as a result of which the FDA issued the FDA
Warning  Letter  regarding  non-compliance  by Electro with certain  regulations
regarding cGMP in the manufacture of its products.  The areas of  non-compliance
include  Electro's  methods of  investigation of device  complaints,  methods of
validation of device sterilization, environmental monitoring procedures, methods
of  validation  of  extrusion  processes  which are used in the  manufacture  of
certain of Electro's  catheters  and other quality  assurance and  recordkeeping
requirements. Electro has communicated with the FDA its intentions to remedy the
non-compliance,  has  established  a  plan  and  timetable  to  effectuate  such
remediation and has diligently worked to take the necessary  corrective actions.
Electro's  actions  have  included  the  establishment  of  certain   validation
protocols,  revisions of Electro's Quality System and Quality System Manual, the
implementation of a program for environmental testing, the purchase of equipment
for extrusion  process  validation and the institution of file and recordkeeping
protocols.  A subsequent  FDA  inspection in September 1997 indicated that while
substantial  progress  had  been  made,  not all  corrective  actions  had  been
completed.  Electro is continuing in its efforts to complete such actions and it
is  Electro's  intention  to inform the FDA in early 1999 that it has  completed
such actions and is ready for reinspection.  There can be no assurance, however,
that Electro will be ready for such  reinspection nor that it will pass any such
reinspection when it occurs. While Electro is currently under no restrictions by
the FDA  regarding  the  manufacture  or sale of its  products,  it is unable to
determine  precisely 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.  Until all corrective  actions required under the FDA Warning Letter have
been taken,  the FDA will not  consider  new  products  for  approval.  However,
Electro's  insufficient  financing for research and development efforts over the
last  few  years  have  limited  its  ability  to  produce  new  products   and,
consequently, no FDA approvals are currently sought.

Year 2000  Issue.  Many  currently  installed  computer  systems use a two-digit
suffix to identify year  references  with an assumed prefix of "19". This limits
those systems to  recognizing  dates  between 1900 and 1999.  As a result,  in a
little less than a year, computer systems and/or software used by many companies
in a very wide variety of applications  will experience  operating  difficulties
unless  they  are  modified  or  upgraded  to  adequately  process   information
involving,  related to or dependent upon the century  change.  If not corrected,
systems  and/or  applications  could fail or create  erroneous  results at or in
connection with applications  after December 31, 1999.  Significant  uncertainty
exists  concerning  the scope and  magnitude  of  problems  associated  with the
century change.

Electro has  established  a project team to address Year 2000 risks.  Electro is
currently  assessing  the  impact  of Year  2000  on its  computer  systems  and
financial applications although a plan has not been implemented. Electro is also
assessing the potential  overall  impact of the impending  century change on its
business, results of operations and financial position.

Electro has reviewed its information and operational  systems and  manufacturing
processes in order to identify those products,  services or systems that are not
Year  2000  compliant. As a  result  of  its  initial   assessment, Electro  has

                                       12

<PAGE>



determined that it will be required to modify or replace certain information and
operational systems so they will be Year 2000 compliant. These modifications and
replacements  are being,  and will  continue  to be,  made in  conjunction  with
Electro's  overall  systems  initiatives.  The  total  cost of these  Year  2000
compliance  activities is not anticipated to be material to Electro's  financial
position or its results of operations. Electro expects to complete its Year 2000
project during 1999.  Based on available  information,  Electro does not believe
any material exposure to significant business  interruption exist as a result of
Year 2000  compliance  issues.  Accordingly,  Electro has not adopted any formal
contingency plan in the event its Year 2000 project is not completed in a timely
manner.  These costs and the timing in which  Electro plans to complete its Year
2000   modification  and  testing  processes  are  based  on  management's  best
estimates.  However, there can be no assurance that Electro will timely identify
and remediate all significant Year 2000 problems, that remedial efforts will not
involve  significant  time and expense,  or that such  problems  will not have a
material  adverse  effect  on  Electro's  business,  results  of  operations  or
financial position.

Electro also faces risk to the extent that  suppliers of products,  services and
systems  purchased  by it and others with whom Electro  transacts  business on a
worldwide basis do not comply with Year 2000 requirements. Electro will initiate
written communications with significant suppliers and customers to determine the
extent to which it is  vulnerable to these third  parties'  failure to remediate
their own Year 2000 issues.  In the event any such third parties  cannot provide
Electro with products,  services or systems that meet the Year 2000 requirements
on a timely basis,  or in the event Year 2000 issues  prevent such third parties
from timely delivery of products or services  required by Electro,  its  results
of operations could be materially  adversely  affected.  To the extent Year 2000
issues cause  significant  delays in, or cancellation  of, decisions to purchase
Electro's  products  or  services,  its  business,  results  of  operations  and
financial position could be materially  adversely  affected.  Due to the general
uncertainty,  both internally and externally,  inherent in the Year 2000 problem
resulting,  in part,  from the  uncertainty  of its Year 2000 readiness of third
parties,  suppliers and  customers,  Electro is unable to accurately  predict at
this time whether the  consequences  of Year 2000  failures will have a material
impact on Electro's results of operations, liquidity or financial condition.

The discussion of Electro's efforts, and management's expectations,  relating to
Year 2000  compliance  are  forward-looking  statements.  Electro's  ability  to
achieve  Year 2000  compliance  and the level of  incremental  costs  associated
therewith,  could be adversely impacted by, among other things, the availability
and cost of  programming  and  testing  resources,  vendors'  ability  to modify
proprietary  software,  and  unanticipated  problems  identified  in the ongoing
compliance review.


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<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)       Electro  did not file any  Current  Reports on Form 8-K
                         during the period reviewed by this Quarterly  Report on
                         Form 10-Q.


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.

                                                  ELECTRO-CATHETER CORPORATION

                                                   /s/Ervin Schoenblum
                                                   -------------------
Date  January 14, 1999                             Ervin Schoenblum
      ----------------                             Acting President and
                                                    Chief Operating Officer

                                                   /s/Joseph P. Macaluso
                                                   ---------------------
Date  January 14, 1999                             Joseph P. Macaluso
      ----------------                             Chief Financial Officer





                                       14

<PAGE>


                                INDEX TO EXHIBITS


27    -    Financial  data  schedule  which is submitted  electronically  to the
           Securities and Exchange  Commission for  information  only and is not
           filed.


                                       15