<PAGE>   1
   
                                     10-Q/A

                               AMENDMENT NO. 1 TO

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: June 30, 1998; 

      or

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



                         Commission File Number 1-11352

                                  DynaGen, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                         04-3029787          
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

                               840 Memorial Drive
                               Cambridge, MA 02139
           ----------------------------------------------------------
          (Address of principal executive offices, including zip code)

                                 (617) 491-2527
               --------------------------------------------------
              (Registrant's telephone number, including area code)

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       



As of August 8, 1998, there were outstanding 22,527,583 shares of common stock,
$.01 par value per share.

   
     Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, the
Registrant hereby amends its Annual Report on Form 10-Q for the quarter ended
June 30, 1998 by amending and restating Items 1 and 6 in their entirety as
follows:
    
<PAGE>   2
                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                                  DYNAGEN, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

                                     ASSETS

<TABLE>
<CAPTION>
                                                June 30,    December 31,
                                                  1998          1997
                                              -----------   -----------
<S>                                           <C>           <C>        
Current assets:
         Cash and cash equivalents            $   230,488   $   697,045

         Accounts receivable, net of
          allowance for doubtful accounts
          of $100,536 and $43,118               3,602,971     3,152,779
         Rebates                                  694,333       713,976
         Inventory (Note 3)                     7,411,686     9,111,324
         Notes receivable                         110,000       110,000
         Prepaid expenses and other
          current assets                          107,760       147,972
                                              -----------   -----------

          Total current assets                 12,157,238    13,933,096
                                              -----------   -----------

Property and equipment, net                     1,972,631     1,772,878
                                              -----------   -----------
Other assets:
         Customer lists, net of accumulated
          amortization of $2,771,013 and
          $1,361,200 (Note 2)                  11,570,192    12,250,800
         Goodwill, net of accumulated
          amortization of $35,658 and
          $22,751 (Note 2)                        350,560       363,468
         Patents and trademarks, net of
          accumulated amortization of
          $102,930 and $89,164                    293,778       345,381
         Deferred debt financing costs,
          net of accumulated amortization         361,429       359,621
         Deposits and other assets                379,440       322,870
                                              -----------   -----------
          Total other assets                   12,955,399    13,642,140
                                              -----------   -----------

                                              $27,085,268   $29,348,114
                                              ===========   ===========
</TABLE>


     See accompanying notes to unaudited consolidated financial statements.


                                       6
<PAGE>   3
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                          June 30,      December 31,
                                                            1998            1997
                                                        ------------    ------------
<S>                                                     <C>             <C>
Current liabilities:
         Bank overdraft                                  $       -0-    $    142,616
         Notes payable (Note 4)                            8,958,807       8,348,333
         Loan payable - bank                               4,883,423       6,584,710
         Accounts payable                                  3,612,365       6,390,421
         Accrued payroll and
          payroll taxes                                      247,800          95,312
         Acquisition obligation (Note 2)                   4,083,000       4,083,000
                                                        ------------    ------------
                  Total current liabilities               21,785,395      25,644,392

         Warrant put liability                               802,705         750,594
         Long term debt                                      328,500         328,500
                                                        ------------    ------------

                  Total liabilities                       22,916,600      26,723,486
                                                        ------------    ------------

Stockholders' equity (Notes 1 and 2):
         Preferred stock, $.01 par value,
          10,000,000 shares authorized,
          56,012 and 63,522 shares of
          Series A through H outstanding
          (liquidation value $5,601,271 and
          $6,348,417 respectively)                               560             635
         Common stock, $.01 par value,
          75,000,000 shares authorized,
          22,527,583 and 4,315,137 shares
          issued and outstanding
          respectively                                       225,276          43,151
         Additional paid-in capital                       44,373,894      39,137,311
         Accumulated deficit                             (40,431,062)    (36,556,469)
                                                        ------------    ------------

                  Total stockholders' equity               4,168,668       2,624,628
                                                        ------------    ------------
                                                        $ 27,085,268    $ 29,348,114
                                                        ============    ============

</TABLE>


     See accompanying notes to unaudited consolidated financial statements.


                                       7
<PAGE>   4
                                  DYNAGEN, INC.

                    CONDENSED CONSOLIDATED STATEMENTS OF LOSS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                          Three Months Ended
                                      ---------------------------
                                        June 30,       June 30,
                                          1998           1997
                                      ------------    -----------
<S>                                   <C>             <C>
Revenues:
         Product sales                $  6,429,839    $ 1,229,846  
         Fees and Royalties                    323         50,426
                                      ------------    -----------

          Total revenues                 6,430,162      1,280,272
                                      ------------    -----------

Costs and expenses:
         Cost of sales                   5,509,938      1,754,509
         Research and development           93,670      1,159,267
         Selling, general and
          administrative                 2,763,864      1,066,743
                                      ------------    -----------

          Total costs and expenses       8,367,472      3,980,519
                                      ------------    -----------

          Operating loss                (1,937,310)    (2,700,247)
                                      ------------    -----------

Other income (expense):
         Investment income, net            101,604         16,704
         Interest expense                 (330,795)      (102,947)
         Warrant put expense               (26,492)          --
         Amortization of debt
          financing costs                   (2,266)        (9,186)
                                      ------------    -----------

          Other income, net               (257,949)       (95,429)
                                      ------------    -----------

          Net loss                      (2,195,259)    (2,795,676)
                                      
Less, returns to preferred 
 stockholders:
          Beneficial conversion 
           feature                         275,042        203,000
          Dividends paid and
           accrued                          35,425         21,000
                                      ------------    -----------
          Net loss applicable to
           common stock               $ (2,505,726)   $(3,019,676)
                                      ============    ===========

Net loss per share - basic            $      (0.13)   $     (0.99)
                                      ============    ===========
                                       
Weighted average shares outstanding
                                        18,935,650      3,041,151
                                      ============    ===========
</TABLE>


     See accompanying notes to unaudited consolidated financial statements.


                                       8
<PAGE>   5
                                  DYNAGEN, INC.

                    CONDENSED CONSOLIDATED STATEMENTS OF LOSS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                               Six Months Ended
                                          ---------------------------
                                            June 30,       June 30,
                                              1998           1997
                                          ------------    -----------
<S>                                       <C>             <C>
Revenues:
         Product sales                    $ 13,391,422    $1,783,857
         Fees and Royalties                        365        50,658
                                          ------------    -----------

          Total revenues                    13,391,787      1,834,515
                                          ------------    -----------

Costs and expenses:
         Cost of sales                      11,068,500      2,707,667
         Research and development              320,287      1,646,679
         Selling, general and
          administrative                     5,231,053      2,248,649
                                          ------------    -----------

          Total costs and expenses          16,619,840      6,602,995
                                          ------------    -----------

          Operating loss                    (3,228,053)    (4,768,480)
                                          ------------    -----------

Other income (expense):
         Investment income, net                154,611        109,035
         Interest expense                     (679,749)      (116,487)
         Warrant put expense                   (52,111)            --
         Amortization of debt
          financing costs                      (69,291)       (18,372)
                                          ------------    -----------

          Other income, net                   (646,540)       (25,824)
                                          ------------    -----------

          Net loss                          (3,874,593)    (4,794,304)
                                          
Less, returns to preferred stockholders:
         Beneficial conversion feature         325,042      1,432,000
         Dividends paid and accrued             97,649         94,000
                                          ------------    -----------
Net loss applicable to Common stock       $ (4,297,284)   $(6,320,304)
                                          ============    ===========

Net loss per share - basic                $      (0.33)   $     (2.09)
                                          ============    ===========

Weighted average shares outstanding
                                            13,219,985      3,019,571
                                          ============    ===========
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.


                                       9




























<PAGE>   6
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     Six Months Ended June 30, 1998 and 1997
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                                       ACCUMULATED
                                                                                           ADDITIONAL                     OTHER 
                          COMPREHENSIVE         COMMON STOCK        PREFERRED STOCK         PAID-IN      ACCUMULATED   COMPREHENSIVE
                             INCOME          SHARES       AMOUNT    SHARES     AMOUNT       CAPITAL        DEFICIT        INCOME    
                          -------------   -----------    --------  --------   ---------   ------------   ------------   ------------
Balance at
<S>                         <C>           <C>            <C>       <C>        <C>         <C>            <C>            <C>         
 December 31, 1996                          2,910,623    $ 29,106        --   $      --   $ 29,338,794   $(24,315,191)  $   1,307   
Shares issued in private
 placements                                    37,500         375    48,500         485      4,322,357             --          --   
Stock issued for
 Superior acquisition                         166,667       1,667        --          --      4,998,333             --          --   
Exercise of stock options                         150           2        --          --          1,123             --          --   
Issuance of common stock
 purchase warrants                                 --          --        --          --            450             --          --   
Stock options issued for
 services                                          --          --        --          --        156,918             --          --   
Stock issued for interest
 obligation                                     2,515          25        --          --         38,413             --          --   
Conversion of note payable                     98,959         990        --          --        984,775             --          --
Net loss                    $(4,794,304)           --          --        --          --             --     (4,794,304)         --
Decrease in unrealized
 gain on investment
 securities                      (1,307)           --          --        --          --             --             --      (1,307)
                             ----------   -----------    --------  --------   ---------   ------------   ------------   ---------   
                            ($4,795,611)
                             ==========
                                         
Balance at June 30, 1997                    3,216,414    $ 32,165    48,500         485   $ 39,841,163   $(29,109,495)  $      --
                                          ===========    ========  ========   =========   ============   ============   =========

Balance at
 December 31, 1997                          4,315,137    $ 43,151    63,522   $     635   $ 39,137,311   $(36,556,469)         --
                                                                                                                              
Stock issued for GDI
 acquisition                                       --          --    12,000         120      1,199,880             --          --
Shares issued in private
 placements                                        --          --    29,250         293      2,776,739             --          --
Stock issued for services                   1,165,175      11,651        --          --        511,063             --          --
Delayed registration
 penalty                                           --          --        --          --       (175,000)            --          --
Conversion of note payable                  1,798,526      17,986        --          --        412,014             --          --
Conversion of family loans                  1,560,000      15,600        --          --        179,400             --          --
Conversion of preferred
 stock                                     13,688,745     136,888   (48,760)       (488)      (136,400)            --          --
Adjustment due to change in
 ownership of former subsidiary                                                                468,888                
Net loss                      3,874,593            --          --        --          --             --     (3,874,593)         --
                             ----------   -----------    --------  --------   ---------   ------------   ------------   ---------

                              3,874,593
                             ==========

Balance at June 30, 1998                   22,527,583    $225,276    56,012   $     560   $ 44,373,894   ($40,431,062)  $      --
                                          ===========    ========  ========   =========   ============   ============   =========
</TABLE>

<TABLE>
<CAPTION>
                                        TOTAL
                                     ------------
Balance at
<S>                                  <C>
 December 31, 1996                   $  5,054,016
Shares issued in private
 placements                             4,323,217
Stock issued for
 Superior acquisition                   5,000,000
Exercise of stock options                   1,125
Issuance of common stock
 purchase warrants                            450
Stock options issued for
 services                                 156,918
Stock issued for interest
 obligation                                38,438
Conversion of note payable                985,765  
Net loss                             $ (4,794,304)
Decrease in unrealized
 gain on investment
 securities                                (1,307)
                                     ------------
Balance at June 30, 1997             $ 10,764,318
                                     ============

Balance at
 December 31, 1997
                                     $  2,624,628
Stock issued for GDI
 acquisition                            1,200,000
Shares issued in private
 placements                             2,777,032
Stock issued for services                 522,714
Delayed registration
 penalty                                 (175,000)
Conversion of note payable                430,000
Conversion of family loans                195,000
Conversion of preferred
 stock                                         --
Adjustment due to change in
 ownership of former 
 subsidiary                               468,888
Net loss                               (3,874,593)
                                     ------------

Balance at June 30, 1998             $  4,168,668
                                     ============
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.

                                       10
<PAGE>   7
                                  DYNAGEN, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               Six Months Ended
                                                         --------------------------
                                                           June 30,       June 30,
                                                             1998           1997
                                                         -----------    -----------
<S>                                                      <C>            <C>
Cash flows from operating activities:
         Net loss                                        $(3,874,593)   $(4,794,304)
         Adjustments to reconcile
          net loss to net cash used for
         operating activities:
                  Stock options issued
                   for services                              522,714        156,918
                  Depreciation and amortization            1,684,434        134,477
                  Amortization and accretion
                   of (discounts) premiums on
                   investment securities                          --        (10,154)
                  Stock issued for
                   interest obligation                            --         38,438
         (Increase) decrease in operating
          assets:
                  Accounts receivable                        287,062       (142,722)
                  Rebates                                     19,643             --
                  Inventory                                2,751,422     (1,033,686)
                  Prepaid expenses and
                   other current assets                       50,604         37,147
                  Deposits and other assets                  (71,092)            --
         Increase (decrease) in operating liabilities:
                  Accounts payable and
                   accrued expenses                       (2,949,566)     3,008,065
                                                         -----------    -----------
                  Net cash used for
                   operating activities                   (1,579,372)    (2,605,821)
                                                         -----------    -----------

Cash flows from investing activities:
         Acquisition of Superior                                  --     (6,250,000)
         Acquisition of GDI                                 (756,406)            -- 
         Purchase of investment securities                               (1,186,455)
         Proceeds from sales and maturities
          of investment securities                                --      4,200,000
         Decrease in deposits                                     --       (200,000)
         Purchase of property and equipment                 (297,242)      (586,906)
         Increase in deferred financing
          and acquisition costs                              (50,000)            --
                                                         -----------    -----------
                                                          
                  Net cash provided (used) by                        
                   investing activities                   (1,103,648)    (2,849,549)
                                                         -----------    -----------
</TABLE>

                                   (Continued)


     See accompanying notes to unaudited consolidated financial statements.


                                       11
<PAGE>   8
                                  DYNAGEN, INC.

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Concluded)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                        Six Months Ended   
                                                                   --------------------------
                                                                    June 30,       June 30,
                                                                      1998           1997
                                                                   -----------    -----------
<S>                                                                <C>            <C>        
Cash flows from financing activities:
         Net proceeds from issuance of
          common stock and warrants                                $        --   $    854,250
         Net proceeds from preferred stock                                  --      4,847,750
         Net proceeds from private
          stock placements                                           2,777,032
         Net proceeds from debt placements                             500,000
         Proceeds from bank loan                                     1,200,000      2,696,898
         Net repayments of loan payable-bank                        (1,701,287)    (1,594,108)
         Repayment of Superior note payable                           (416,666)            --
         Increase in deferred financing
          costs                                                             --       (328,123)
         Decrease in bank overdraft                                   (142,616)            --
                                                                   -----------    -----------

                  Net cash provided by
                   financing activities                              2,216,463      6,476,667
                                                                   -----------    -----------

Net change in cash and cash equivalents                               (466,557)    (7,378,703)

Cash and cash equivalents,
 beginning of period                                                   697,045      2,112,300
                                                                   -----------    -----------

Cash and cash equivalents,
 end of period                                                     $   230,488    $   576,881
                                                                   ===========    ===========

Supplemental cash flow information:
         Common stock issued for
          convertible note payable                                 $   450,000    $ 1,065,000
         Debt issued for delayed registration
          penalty                                                      262,500             --
         Interest paid                                                 498,737             --
Schedule of non-cash investing and financing 
         activities:
On June 18, 1997, the Company purchased all of the
 common stock of Superior Pharmaceutical Company, Inc.
 for $16,250,000. In connection with the acquisition,
 non cash financing activities, liabilities assumed and 
 goodwill were as follows:
         Fair value of assets acquired                                      --    $10,913,834
         Cash paid for common stock                                         --    (6,250,000)
         Fair value of common stock issued                                  --    (5,000,000)
         Note payable issued                                                --    (5,000,000)
         Liabilities assumed                                                --     (8,263,477)
                                                                                  -----------
         Goodwill (exclusive of other acquisition
                   costs of ($694,890)                                            $13,599,643
                                                                                  ===========

March 2, 1998, the Company purchased the net assets of GDLP
     for $2,350,000. In connection with the acquisition, 
     non cash financing activities, liabilities assumed and 
     customer lists were as follows: fair value of assets 
     acquired                                                     $  2,375,274             --
Cash paid                                                           (1,200,000)            --
Preferred stock issued                                              (1,150,000)            --
Liabilities assumed                                                   (658,274)            --
                                                                    ----------
Customer lists (exclusive of other acquisition costs of
     $96,628)                                                     $    633,000             --
                                                                    ==========
Note payable 
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.


                                       12
<PAGE>   9
                                  DYNAGEN, INC.

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                  June 30, 1998

          -------------------------------------------------------------

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         BUSINESS AND BASIS OF PRESENTATION

         The consolidated financial statements include the accounts of DynaGen,
Inc. (the Company) and its wholly-owned subsidiaries, Able Laboratories, Inc.
(Able), which is engaged in the manufacture of generic pharmaceuticals, Superior
Pharmaceutical Company (Superior) and Generic Distributors Incorporated (GDI),
which are engaged in the distribution of generic pharmaceuticals, and Apex
Pharmaceuticals, Inc., which is developing therapeutic products. The
consolidated financial statements no longer include the accounts of BioTrack for
the reason described below. The accompanying unaudited consolidated financial
statements of the Company have been prepared in accordance with generally
accepted accounting principles for interim financial information and in
accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all information and footnotes required by
generally accepted accounting principles for complete financial statement
presentation. All significant intercompany balances and transactions have been
eliminated in consolidation. In March 1998, the Company acquired Generic
Distributors Limited Partnership which is engaged in the distribution of generic
pharmaceuticals. (See Note 2.)

         During the first and second quarter of 1998, the Company sold 300,000
shares of its BioTrack subsidiary's common stock, recognizing a gain of
$150,000, which is included in investment income. In addition, during this same
period, BioTrack sold shares of its common stock directly to outside investors.
Also, BioTrack redeemed 3,930,000 shares of its common stock held by the Company
for a $1,000,000 promissory note. This note has not been recognized in the
accompanying financial statements because of the uncertainty and risks inherent
in technology start-up companies. As a result of the ownership changes in
BioTrack described above, the Company adjusted its investment in BioTrack by
approximately $469,000 which was added to additional paid-in capital. The
Company's ownership interest in BioTrack at June 30, 1998 was approximately 29%.
Accordingly, BioTrack's financial statements are not included in the
accompanying consolidated financial statements. The Company's remaining
investment is carried on the equity basis of accounting.

         The results of operations for the periods reported are not necessarily
indicative of those that may be expected for a full year. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
which are necessary for a fair statement of operating results for the interim
periods presented have been made.

         The financial information included in this report has been prepared in
conformity with the accounting policies reflected in the financial statements
included in the Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission.

         REVERSE STOCK SPLIT

         On March 4, 1998 the Company's Stockholders approved a 1 for 10 reverse
stock split of the common shares. All common stock information presented herein
has been retroactively adjusted to reflect the reverse stock split.

         USE OF ESTIMATES

         In preparing consolidated financial statements in conformity with
generally accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the balance sheet date and reported amounts of revenues and
expenses during the reporting period. Material estimates that are particularly


                                       13
<PAGE>   10
susceptible to significant change in the near term relate to the carrying values
of rebates receivable and intangible assets, the valuation of equity instruments
issued by the Company and the amount of obligations due as a result of defaults
on certain debt obligations. Actual results could differ from those estimates.

         REBATES

         Rebates represent incentives provided by pharmaceutical suppliers to
the distributors based on purchases. Management has estimated its rebates based
upon agreements and purchases during the year. Actual rebates could be different
due to market volatility and whether the Company continues to use these
suppliers.

         INVENTORY

         Inventory is valued at the lower of average cost or market on a
first-in first-out (FIFO) method.

         PROPERTY AND EQUIPMENT

         Property and equipment are stated at cost. Depreciation expense is
provided over the estimated useful lives of the assets using the straight-line
method. Leasehold improvements are amortized on the straight-line method over
the shorter of the estimated useful life of the asset or the life of the related
lease term.

         CUSTOMER LISTS AND GOODWILL

         Customer lists and goodwill are being amortized over estimated lives of
five and fifteen years, respectively. (See Note 2.)

         REVENUE RECOGNITION

         Revenues from product sales are recognized when products are
shipped. Revenues from license fees and royalties are recognized as the terms of
the agreements are met.

         EARNINGS PER SHARE

         In February 1997, FASB issued SFAS No. 128, Earnings per Share which
requires that earnings per share be calculated on a basic and a dilutive
basis. Basic earnings per share represents income available to common stock
divided by the weighted-average number of common shares outstanding during the
period. Diluted earnings per share reflects additional common shares that would
have been outstanding if dilutive potential common shares had been issued, as
well as any adjustment to income that would result from the assumed
conversion. The Statement is effective for interim and annual periods ending
after December 15, 1997, and requires the restatement of all prior-period
earnings per share data presented. Accordingly, the Company has restated all
earnings per share data presented herein.


                                       14
<PAGE>   11
         For the three and six months ended June 30, 1998 and 1997 options,
warrants and put warrants, were anti-dilutive and excluded from the diluted
earnings per share computations.

         The loss applicable to common stockholders has been increased by the
stated dividends on the convertible preferred stock and the amortization of
discounts on the convertible preferred stock due to the beneficial conversion
feature. Shares of common stock contingently issuable to the former stockholders
of Superior have not been included in diluted EPS because to do so would have
been anti-dilutive.

         COMPREHENSIVE INCOME

         In June 1997, FASB issued SFAS No. 130, Reporting Comprehensive Income,
effective for fiscal years beginning after December 15, 1997. Accounting
principles generally require that recognized revenue, expenses, gains and losses
be included in net income. Certain FASB statements, however, require entities to
report specific changes in assets and liabilities, such as unrealized gains and
losses on available-for-sale securities, as a separate component of the equity
section of the balance sheet. Such items, along with net income, are components
of comprehensive income. SFAS No. 130 requires that all items of comprehensive
income be reported in a financial statement that is displayed with the same
prominence as other financial statements. Additionally, SFAS No. 130 requires
that the accumulated balance of other comprehensive income be displayed
separately from retained earnings and additional paid-in capital in the equity
section of the balance sheet. The Company adopted these disclosure requirements
in the first quarter of 1998 and has presented comparative disclosure for the
quarter ended March 31, 1997. There is no other comprehensive income in the 
quarter ended June 30, 1998.

2.       BUSINESS ACQUISITIONS

         SUPERIOR PHARMACEUTICAL COMPANY

         On June 18, 1997, the Company acquired all of the outstanding stock of
Superior Pharmaceutical Company (Superior), a distributor of generic
pharmaceutical products. The Company paid the shareholders of Superior
$6,250,000 in cash, $5,000,000 in three-year secured promissory notes and
166,667 shares of the Company's Common Stock with a guaranteed value of
$5,000,000. The secured promissory notes were subsequently reduced by $400,000
due to a deficiency in the required net worth of Superior as of the acquisition
date. DynaGen is obligated to issue to the shareholders up to an additional
1,666,667 shares of its common stock after twelve months if its common stock is
not trading at an average of at least $30.00 per share for 10 consecutive
trading days. The merger agreement provides further that DynaGen shall pay to
the former Superior stockholders the difference between $5,000,000 and the
current aggregate market value of the shares issued to the former Superior
stockholders. DynaGen is obligated to register the shares within eleven months
after the closing of the acquisition. The Company recorded a $4,083,000
acquisition obligation at December 31, 1997 based on the difference between the
current estimated fair value of the 1,833,334 shares of common stock issued and
issuable and the guaranteed value of $5,000,000. The former shareholders of
Superior, who remain as senior management at Superior, may also receive certain
incentive payments based on Superior's performance during the three years
following the closing of the acquisition.  Any such payments will be charged to
expense when incurred. DynaGen contributed $1,750,000 in additional capital to
Superior immediately following the closing. 

         On July 31, 1998, the Company signed a contingent settlement agreement
with the selling shareholders of Superior which provides for an overall


                                       15
<PAGE>   12

   

reduction in purchase price of $4,900,000 through waiver of any additional stock
or cash payment. If the settlement agreement is finalized, the company will
reduce its liabilities to the selling shareholders and reduce the acquired
intangible assets by the amount of the settlement. The agreement also provides
for, and is contingent upon, a payment of $4,200,000, which represents the
remaining amount due on the original selling shareholder notes by September 30,
1998.

    
         The Superior acquisition has been accounted for as a purchase. The
results of operations of Superior have been included in the Company's
consolidated financial statements since the date of acquisition. The purchase
price allocation was based on the estimated fair values at the date of
acquisition. The Company allocated $13,612,000 of the purchase price to customer
lists based on an independent appraisal, which is being amortized on a
straight-line basis over five years. Amortization of customer lists amounted to
$1,361,200 for the six months ended June 30, 1998. In addition, the Company
recorded goodwill of $386,219, which is being amortized on a straight-line basis
over 15 years. Amortization expense for the six months ended June 30, 1998 was
$12,908.

         GENERIC DISTRIBUTORS, INC.

         On March 2, 1998 the Company, through its subsidiary, Generic
Distributors, Incorporated (GDI), completed the acquisition of substantially all
of the assets and liabilities of Generic Distributors Limited Partnership
(GDLP), of Monroe, LA. In connection with the acquisition, the Company paid the
limited partnership $1,200,000 in cash, and $1,050,000 in Series E Convertible
Preferred Shares and 1,500 shares of Series F Convertible Preferred Stock valued
at $100,000, for a total purchase price of $2,350,000. The Series E Preferred
Shares are convertible beginning 12 months from the closing into the Company's
common shares at the then prevailing market prices. The Series F Preferred Stock
is convertible into $100,000 in value of the Company's Common Stock commencing
120 days after the closing. In connection with the transaction, GDI received
$1,200,000 in a five-year term loan from Fleet Bank. The loan carries interest
of LIBOR plus 3%, is payable in quarterly installments of principal and interest
and matures on April 26, 2003. Fleet Bank also established a revolving line of
credit for general working capital in the amount of $300,000. The line bears
interest at LIBOR plus 2-1/2%. The loans are secured by all of the assets of GDI
and the Company's subsidiary, Able Laboratories, Inc., and a pledge of all of
the common stock of GDI, and are guaranteed by the Company. In addition, the
Company entered into employment and consulting agreements with the sellers which
provide, among other things, for annual compensation and a signing bonus of
1,500 shares of Series F Preferred Stock, convertible into $100,000 of the
Company's Common Stock commencing 120 days after the closing.

         The GDI acquisition has been accounted for as a purchase. The results
of operations of GDI have been included in the Company's consolidated financial
statements since the date of acquisition. The purchase price allocation was
based on the estimated fair values at the date of acquisition. The Company
allocated $729,618 of the purchase price to customer lists, based on an
independent appraisal, which is being amortized on a straight line basis over
five years. Amortization of customer lists amounted to $48,613 for the six
months ended June 30, 1998. 
       
         Unaudited pro forma consolidated operating results for the Company,
assuming the acquisitions of Superior and GDI had been made as of the beginning
of the most recent fiscal year for each of the periods presented, are as
follows:


                                       16
<PAGE>   13
<TABLE>
<CAPTION>
                                   Six months ended
                                   ----------------
                           June 30, 1998         June 30, 1997
                           -------------         -------------
<S>                        <C>                   <C>         
Revenues                   $ 14,572,510          $ 17,105,176
Net loss                     (4,288,211)           (5,753,710)
Net loss per share                (0.32)                (1.91)
</TABLE>

<TABLE>
<CAPTION>
                                   Three months ended
                                   ------------------
                           June 30, 1998         June 30, 1997
                           -------------         -------------
<S>                        <C>                   <C>         
Revenues                   $  6,430,162          $  7,707,558
Net loss                     (2,506,597)           (3,948,290)
Net loss per share                (0.13)                (1.30)
</TABLE>
                                          
         The unaudited pro forma information is not necessarily indicative
either of the actual results of operations that would have occurred had the
purchases been made as of the beginning of each of the fiscal periods presented
or of future results of operations of the combined companies.


                                       17
<PAGE>   14
3.       INVENTORY

         Inventory consists of the following:

<TABLE>
<CAPTION>
                                   June 30,
                            -----------------------
                               1998         1997
                            ----------   ----------
<S>                         <C>          <C>       
         Raw materials      $  340,945   $  311,166
         Work-in-progress      180,717      136,240
         Finished goods      6,890,024    8,663,918
                            ----------   ----------
                            $7,411,686   $9,111,324
                            ==========   ==========
</TABLE>

4.       DEBT

         Notes payable consist of the following:

<TABLE>
<CAPTION>
                                      June 30,    December 31,
                                        1998         1997
                                     ----------   -----------
<S>                                  <C>          <C>       
         Convertible note payable    $  535,000   $  535,000
         Bridge loans                   500,000      630,000
         Notes payable - Superior
          acquisition                 3,766,667    4,183,333
         Secured debt - Fleet Bank    1,157,140           --
         Senior subordinated debt     3,000,000    3,000,000
                                     ----------   ----------
                                     $8,958,807   $8,348,333
                                     ==========   ==========
</TABLE>

5.       SUBSEQUENT EVENTS

         In July 1998, the Company, through its Able Laboratories, Inc.
subsidiary (Able), entered into a short-term financing agreement with Porter
Capital (Porter) whereby Able will finance its outstanding accounts receivable
through Porter. Porter will advance funds equal to 70% of invoice value upon
receipt of invoices from Able. Upon payment in full from Able's customers,
Porter will remit the balance due Able less Porter's net charge of 2% per 30
days outstanding. Porter has the right to reject any or all accounts receivable
tendered from Able. No assurance can be given that Porter will accept any or all
of Able's outstanding accounts receivable. The term of this agreement is six
months.

         On July 25, 1998, the Company issued 4,750 shares of its Series H
Convertible Preferred Stock to an unaffiliated investor. The aggregate purchase
price was $475,000. Under the terms of the purchase agreement, the Series H
Stock is convertible beginning 90 days after issuance into shares of Common
Stock at a price of 80% of the trading price of the Common Stock for the five
trading days preceding conversion.

         On July 31, 1998, the Company entered into a contingent settlement
agreement with the selling shareholders of Superior which provides for an
overall reduction in purchase price of $4,900,000 through waiver of any
additional stock or cash payment. This agreement also provides for, and is
contingent upon, a payment by DynaGen of $4,200,000, which represents the
remaining amount due on the original selling shareholder notes, by September 30,
1998. There can be no assurance that the Company will be able to obtain
financing to meet the obligations to pay the selling shareholders. The Company's
inability to meet any such obligation or other fixed or contingent obligations
of the Company as they become due could have a material adverse effect on the
Company's ability to continue its operations.



                                       18
<PAGE>   15
   
Item 6.  Exhibits and Reports on Form 8-K

 (a)List of Exhibits:

 The following exhibits, required by Item 601 of Regulation S-K, are filed as
part of this Amendment No. 1 to Quarterly Report on Form 10-Q. Exhibit numbers,
where applicable, in the left column correspond to those of Item 601 of
Regulation S-K.

Exhibit
No.      Description of Exhibit
-------  ----------------------

3a       Restated Certificate of Incorporation


                                       19
    
<PAGE>   16
    
                                  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.

                    DYNAGEN, INC.



                By: /s/ DHANANJAY G. WADEKER
                    ----------------------------------
                        Dhanenjay G. Wadeker
                        Executive Vice President




Date: September 11, 1998
    
   

                                       20
    
<PAGE>   17
   
                                  Exhibit Index

Exhibit
No.       Description of Exhibit
-------- ----------------------

3a        Restated Certificate of Incorporation

                                           

                                       21