<PAGE>
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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  FORM 10-QSB

                          ____________________________ 

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


FOR THE QUARTER ENDED DECEMBER 31, 1995         COMMISSION FILE NUMBER 0-14653


                         CARDIAC CONTROL SYSTEMS, INC.
             (Exact Name of Registrant as specified in its charter)

                         _____________________________

            DELAWARE                                    74-2119162
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)


                 3 COMMERCE BOULEVARD, PALM COAST, FLORIDA 32164
                (Address of Principal Executive Offices) (Zip Code)

                         _____________________________


       Registrant's telephone number, including area code: (904) 445-5450


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 January 31, 1995, 1,377,564 shares of the Registrant's common stock, $.10
par value, were issued and outstanding.


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<PAGE>
 
                         CARDIAC CONTROL SYSTEMS, INC.

                                   FORM 10-Q
                               DECEMBER 31, 1995

                                     INDEX
<TABLE>
<CAPTION>
 
--------------------------------------------------------------------------------
                                                                        Page No.
--------------------------------------------------------------------------------
<S>                                                                     <C>
 
PART I.   FINANCIAL INFORMATION

   Balance Sheets at December 31, 1995 (Unaudited)
    and March 31, 1995 ...................................................... 3

   Statements of Operations and Accumulated Deficit for the Three 
    Months and Nine Months Ended December 31, 1995 and 1994 (Unaudited)...... 4

   Statements of Cash Flows for the Nine Months Ended
    December 31, 1995 and 1994 (Unaudited) .................................. 5

   Notes to Financial Statements  ........................................... 6
   
   Management's Discussion and Analysis of Financial Position
    and Results of Operations .............................................. 10

PART II.   OTHER INFORMATION ............................................... 18
</TABLE>

                                       2
<PAGE>
 
                         PART I.  FINANCIAL INFORMATION

                         ITEM 1.  FINANCIAL STATEMENTS
                         CARDIAC CONTROL SYSTEMS, INC.
                                 BALANCE SHEETS
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------- 
                                                                             December 31,     March 31,
                                                                                 1995           1995
--------------------------------------------------------------------------------------------------------
ASSETS                                                                        (Unaudited)
<S>                                                                          <C>            <C>
    CURRENT ASSETS
        Cash and cash equivalents  ........................................  $    345,801   $    667,490
        Certificate of deposit.............................................        40,000         40,000
        Accounts and notes receivable......................................     1,465,633      1,403,276
        Inventories........................................................     2,190,693      1,755,432
        Prepaid expenses ..................................................       109,426         57,659
                                                                             ------------   ------------
                     Total current assets..................................     4,151,553      3,923,857
 
     PROPERTY, PLANT AND EQUIPMENT, less accumulated
        depreciation of $3,176,361 and $3,039,211 .........................     1,528,446      1,410,259
 
     OTHER ASSETS .........................................................       368,695        463,822
                                                                             ------------   ------------
                     Total assets  .......................................   $  6,048,694   $  5,797,938
                                                                             ============   ============
 
LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)
 
     CURRENT LIABILITIES
         Other notes  and debt obligations  payable within one year .......  $    975,973   $     46,538
         Accounts payable..................................................       310,247        474,877
         Accrued interest .................................................        46,353            555
         Accrued compensation .............................................       190,023        279,367
         Accrued compensated absences .....................................       129,296        112,477
         Deposits payable .................................................        25,000        351,147
         Other accrued expenses ...........................................       268,387        213,594
                                                                             ------------   ------------
                     Total current liabilities ............................     1,945,279      1,478,555
                                                                             ------------   ------------
 
    NOTES AND DEBT OBLIGATIONS PAYABLE AFTER ONE YEAR .....................     4,221,525      4,119,782
                                                                             ------------   ------------
    OTHER LIABILITIES .....................................................       190,840        169,311
                                                                             ------------   ------------ 
    DEFERRED ROYALTIES ....................................................       426,750        690,050
                                                                             ------------   ------------
    COMMITMENTS AND CONTINGENT LIABILITIES ...............................             -              -
                                                                             ------------   ------------
 
    STOCKHOLDERS' EQUITY (DEFICIT)
        Common stock, $.10 par value, 30,000,000 shares authorized,
              1,370,253 and 1,342,819  shares issued and outstanding......        137,383        134,282
        Treasury stock ...................................................        (10,938)             -
        Capital in excess of par value ...................................     18,745,509     18,725,430
        Accumulated deficit ..............................................    (19,607,654)   (19,519,472)
                                                                             ------------   ------------
                     Total stockholders' equity (deficit) ................       (735,700)      (659,760)
                                                                             ------------   ------------
 
                     Total liabilities and stockholders' equity (deficit).  $  6,048,694   $  5,797,938
                                                                             ============   ============
</TABLE>
                   See accompanying notes to financial statements

                                       3
<PAGE>
 
                         CARDIAC CONTROL SYSTEMS, INC.
                          STATEMENTS OF OPERATIONS AND
                              ACCUMULATED DEFICIT
                                  (UNAUDITED)

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------  
                                                                  Three Months Ended                Nine Months Ended
                                                                     December 31,                      December 31,
                                                                 1995                 1994          1995           1994
--------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                 <C>            <C>            <C>
REVENUE
    Net sales............................................   $  1,426,507        $  1,146,492   $  4,013,409   $  3,590,017
    Royalty income.......................................        722,800             205,725      1,711,450        654,875
                                                            ------------        ------------   ------------   ------------ 
       Total revenue.....................................      2,149,307           1,352,217      5,724,859      4,244,892
                                                            ------------        ------------   ------------   ------------ 
 
COSTS AND EXPENSES
    Cost of products sold................................        643,447             533,823      1,868,163      1,863,883
    Selling, general and administrative expenses.........      1,022,806             646,449      2,874,504      1,750,950
    Engineering, research and development expenses.......        215,925              90,061        679,412        320,028
                                                            ------------        ------------   ------------   ------------ 
        Total cost and expenses..........................      1,882,178           1,270,333      5,422,079      3,934,861
                                                            ------------        ------------   ------------   ------------ 
 
OPERATING  INCOME........................................        267,129              81,884        302,780        310,031
                                                            ------------        ------------   ------------   ------------ 
 
OTHER INCOME (EXPENSES)
    Interest income......................................          3,128               7,850         11,147          8,910
    Interest expense.....................................       (183,018)            (84,901)      (465,028)      (206,954)
    Other income (expense)...............................        (12,135)                 38         62,919            870
                                                            ------------        ------------   ------------   ------------ 
        Total other income (expenses)....................       (192,025)            (77,013)      (390,962)      (197,174)
                                                            ------------        ------------   ------------   ------------ 
NET  INCOME (LOSS).......................................         75,104               4,871        (88,182)       112,857
 
ACCUMULATED DEFICIT - BEGINNING OF PERIOD................    (19,682,758)        (20,786,457)   (19,519,472)   (20,894,443)
                                                            ------------        ------------   ------------   ------------ 
 
ACCUMULATED DEFICIT - END OF PERIOD......................   $(19,607,654)       $(20,781,586)  $(19,607,654)  $(20,781,586)
                                                            ============        ============   ============   ============
NET INCOME ( LOSS) PER COMMON SHARE......................           $.06                $.00          $(.07)          $.09
                                                            ============        ============   ============   ============
 
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING..............      1,363,142           1,324,538      1,349,769      1,246,718
                                                            ============        ============   ============   ============
</TABLE>

                 See accompanying notes to financial statements

                                       4
<PAGE>
 
                         CARDIAC CONTROL SYSTEMS, INC.
                            STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
 
------------------------------------------------------------------------------------------------- 
Nine  Months Ended  December 31,                                             1995         1994
-------------------------------------------------------------------------------------------------
<S>                                                                       <C>          <C>
 
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income (loss)..................................................     $  (88,182)  $  112,857
 Adjustment to reconcile net income (loss) to
   net cash used  by operating activities:
   Depreciation.....................................................        181,761      122,503
   Amortization.....................................................        172,932       10,296
   Gain on sale of equipment........................................         (4,701)           -
   Increase in accounts receivable..................................        (73,295)    (481,941)
   Increase in inventories..........................................       (435,261)    (243,617)
   Increase in prepaid expenses.....................................        (51,767)      (3,188)
   Increase in other assets.........................................        (13,884)           -
   Decrease in accounts payable.....................................       (164,630)    (411,566)
   Increase  in stockholder advances................................              -        4,305
   Increase in accrued interest.....................................        130,372      186,829
   Decrease  in accrued compensation................................        (87,344)     (75,330)
   Increase in accrued compensated absences.........................         16,819       16,706
   Decrease  in  deposits payable...................................       (326,147)     (25,586)
   Increase (decrease)  in other accrued expenses...................         54,793      (26,502)
   Increase in other liabilities....................................         21,529        8,320
   Decrease in deferred royalties...................................       (263,300)    (188,250)
                                                                        -----------   -----------
   Net cash used by operating activities............................       (930,305)    (994,164)
                                                                        -----------   -----------
 
CASH FLOWS FROM INVESTING ACTIVITIES
 Purchase of property, plant and equipment..........................       (316,138)    (136,737)
 Proceeds from the sale of equipment................................         20,891        1,120
                                                                        -----------   -----------
   Net cash used by investing activities............................       (295,247)    (135,617)
                                                                        -----------   -----------
 
CASH FLOWS FROM FINANCING ACTIVITIES
 Proceeds from sale of common stock.................................              -        7,003
 Proceeds from notes and debt obligations payable...................      1,068,490    2,693,995
 Debt issuance costs................................................        (22,690)    (224,459)
 Repayment of notes and debt obligations payable....................       (136,757)    (199,778)
 Principal payments under capital lease obligations.................         (2,523)      (2,209)
 Principal payments under installment purchase obligations..........         (2,657)      (2,188)
                                                                        -----------   -----------
   Net cash provided by financing activities........................        903,863    2,272,364
                                                                        -----------   -----------
 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS................       (321,689)   1,142,583
 
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD.....................        667,490      106,231
                                                                        -----------   ----------- 
CASH AND CASH EQUIVALENTS - END OF PERIOD...........................     $  345,801   $1,248,814
                                                                        ===========   ===========

SUPPLEMENTAL CASH FLOW INFORMATION:
 Interest paid during the period....................................     $  177,036   $    9,829
 
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
 Reduction in accounts payable in exchange for common stock.........     $        -   $    2,344
 Reduction in accrued compensation in exchange for common stock.....          2,000            -
 Reduction in accrued interest in exchange for common stock.........         84,574            -
 Reduction in accounts receivable in exchange for treasury stock....         10,938            -
 
</TABLE>

                 See accompanying notes to financial statements

                                       5
<PAGE>
 
                         CARDIAC CONTROL SYSTEMS, INC.
                         NOTES TO FINANCIAL STATEMENTS

NOTE 1 - GENERAL

The accompanying balance sheet of Cardiac Control Systems, Inc. (the "Company")
as of December 31, 1995, the related statements of operations and accumulated
deficit for the three months and nine months ended December 31, 1995 and 1994,
and the statements of cash flows for the nine months ended December 31, 1995 and
1994 are unaudited. In the opinion of management, such financial statements
reflect all adjustments, consisting only of normal recurring items, necessary to
present fairly the financial position of the Company at December 31, 1995 and
the results of operations and cash flows for the three months and nine months
ended December 31, 1995 and 1994.

Certain reclassifications have been made to the unaudited financial statements
previously reported for the three months and nine months ended December 31, 1994
to conform with classifications used in the unaudited financial statements for
the three months and nine months ended December 31, 1995.

The accompanying unaudited financial statements as of December 31, 1995 and for
the three months and nine months ended December 31, 1995 and 1994 should be read
in conjunction with the Company's audited financial statements for the year
ended March 31, 1995.

The accompanying unaudited financial statements have been prepared assuming that
the Company will continue operations on a going-concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. However, the Company has a history of net losses
and incurred a net loss for the nine months ended December 31, 1995 of $88,182.
The Company's ability to continue as a going concern is dependent upon the
attainment of a profitable level of operations. The Company believes that sales
growth is critical to attaining a profitable level of operations. Therefore, the
Company is continuing its efforts to expand its sales volume, both domestically
and internationally. Management believes that the Company has the potential to
increase sales and ultimately achieve a profitable level of operations. However,
there is no assurance that the Company will be able to attain profitable
operations and continue operations as a going concern.

NOTE 2 - INVENTORIES

Inventories at December 31, 1995 and March 31, 1995 are summarized as follows:
<TABLE>
<CAPTION>
 
-------------------------------------------------------
                              December 31,    March 31,
                                  1995          1995
                              ------------   ----------
<S>                           <C>            <C>
                              (unaudited)
Raw materials and supplies....  $  560,455   $  867,492
Work-in-process...............   1,068,456      436,647
Finished goods................     634,837      571,293
                                ----------   ----------
                                 2,263,748    1,875,432
Reserve for obsolescence......     (73,055)    (120,000)
                                ----------   ----------
                                $2,190,693   $1,755,432
-------------------------------------------------------
</TABLE>

Finished goods inventories include approximately $409,000 and $306,000 of
products consigned to customers and independent sales representatives at
December 31, 1995 and March 31, 1995, respectively.

                                       6
<PAGE>
 
NOTE 3 - NOTES AND DEBT OBLIGATIONS PAYABLE

Notes and debt obligations payable at December 31, 1995 and March 31, 1995
consist primarily of a $1.5 million promissory note dated March 31, 1995 (the
"Sirrom mortgage note") payable to Sirrom Capital Corporation; $2,885,000 in 5%
Convertible Debentures; and a $1 million promissory note to Intermedics Inc.
(the "Intermedics promissory note") dated October 20, 1995.  Notes and debt
obligations payable at December 31, 1995 and March 31, 1995 are summarized as
follows:
<TABLE>
<CAPTION>

------------------------------------------------------------------ 
                                         December 31,    March 31,
                                             1995          1995
                                         ------------    ----------
<S>                                      <C>            <C>
                                         (unaudited)
Sirrom mortgage note, net of discount....  $1,325,625   $1,221,000
5% Convertible Debentures................   2,885,000    2,885,000
Intermedics promissory note..............     925,000            -
Other....................................      61,873       60,320
                                           ----------   ----------
                                            5,197,498    4,166,320
Amount payable within one  year..........    (975,973)     (46,538)
                                           ----------   ----------
Amount payable after one year............  $4,221,525   $4,119,782
------------------------------------------------------------------ 
</TABLE>

Pursuant to a private placement, the Company sought to raise up to $3.5 million
pursuant to a Convertible Debenture offering.  Between October 11, 1994, and
December 31, 1994, the Company issued $2,885,000 in 5% Convertible Debentures
(the "Debentures") due October 31, 1999.  Interest is payable in cash or, at the
Company's option, common stock of the Company on each March 31 and October 31
commencing March 31, 1995.  At December 31, 1995, accrued interest outstanding
pursuant to the Debentures approximated $24,000, and there was no accrued
interest outstanding pursuant to the Debentures at March 31, 1995.  The cash
value of any interest payments made in common stock will be at the conversion
price of $2.80.  The conversion price of the debenture is $2.80, which is
subject to adjustment in accordance with certain anti-dilution terms of the
Debenture.  The Debentures may be converted to common stock at anytime at the
option of the Debenture holder. Under the terms of the Debenture, the Company
was obligated to file a registration statement with the SEC registering the
common stock into which the Debentures are convertible and to keep such
registration statement effective for a maximum of three years from its effective
date.  The Company filed such Registration Statement and it became effective
April 27, 1995.  The Debentures will be automatically converted to common stock
in the event the Company has in effect with the SEC a registration statement
registering the Common Stock underlying the Debentures and one of the following
events occurs: (i) the Company effects a registration statement with the SEC for
the sale of common stock or securities convertible to common stock, which equals
or exceeds $5 million, and the price per share (or the conversion, exchange or
exercise price per share, if Convertible Securities) is not less than 120% of
the conversion price for the Debentures, or (ii) the Company's common stock
closes at a price per share not less than 2.5 times the conversion price for
thirty consecutive days within twelve months of the date of issuance of the last
Debenture, or (iii) 66% of the Debenture principal amount has been converted
to common stock.  As long as more than 25% of the principal amount of the
Debentures are outstanding, the Company must obtain consent of the holders of
51% of such principal amount to effect a merger, consolidation, or sale of
substantially all of the assets of the Company.  Further, the Company shall use
its best efforts to seek shareholder approval of a director designated by those
holders.

On March 31, 1995, the Company entered into a Loan and Security Agreement (the
"Loan Agreement") with Sirrom Capital Corporation, a Tennessee corporation
("Sirrom") and executed a $1,500,000 secured promissory note.  Interest on the
note is payable monthly at 13.5% and principal is due on March 31, 2000.  The
note is secured by a first mortgage lien on all the Company's real and personal
property, excluding inventory and

                                       7
<PAGE>
 
accounts receivable, but including general intangibles such as its patents and
royalties from Intermedics Inc. The Loan Agreement restricts the Company from
incurring additional indebtedness in excess of $200,000 annually without the
lender's consent.  In addition, the Company must give the lender advance notice
of certain events, such as dividend payments, certain new stock issues,
reorganization, and merger or sale of substantially all assets.

In connection with the Loan Agreement, the Company granted the lender a warrant
to purchase, initially, 100,000 shares of the Company's common stock at $.01 per
share.  Upon issuance of the warrant in March 1995, the Company recorded
$279,000 as a discount, representing the difference between the estimated fair
market value of the underlying stock and $.01 per share.  This resulted in an
effective interest rate of 28% on the Sirrom debt. The warrant expires on March
31, 2000.  The Loan Agreement also provides that in the event the loan is not
paid off by March 31, 1997, or any anniversary thereafter, the lender has the
right to purchase an additional 50,000 shares of common stock at $.01 per share
upon such date and upon each anniversary that any amount is owed under the Loan
Agreement through March 31, 1999.  The warrant also provides for certain piggy-
back registration rights regarding the underlying shares in the event the
Company files a registration statement of a form suitable for a secondary
offering.

Under the terms of the Company's outstanding 5% Convertible Debentures (the
"Debentures"), the Company had given a negative pledge not to encumber its
patents or royalties while the Debentures were outstanding.  To consummate the
mortgage financing, the Company obtained a consent and waiver from the
Debentureholders and in exchange therefor, under a certain Second Mortgage and
Security Agreement dated March 31, 1995 ("Second Mortgage") and pursuant to
related documentation, the Company gave the Debentureholders a second lien on
the same collateral in which Sirrom took a first security interest.  The
Debentureholders' security interest in the Company's real and personal property
will terminate upon the first to occur of: (a) the payment in full of the Sirrom
loan, or (b) at such time as there remains no amount owing to Debentureholders
under the Debentures.

Pursuant to a Subordination Agreement between the Debentureholders, the Company
and Sirrom dated March 31, 1995 (the "Subordination Agreement"), the
Debentureholders agreed with Sirrom to subordinate their Debentures to Sirrom's
Loan Agreement with the Company.  Under the Subordination Agreement, the Company
may not make payments on the Debentures (interest or principal) if the Company
is in default of its obligations to Sirrom which default would subject the
Sirrom Note to acceleration.  Further, in the event of the acceleration of the
amounts owed on the Debentures (as a result of the Company's default
thereunder), or in the event of any payment or distribution of assets of the
Company to creditors upon any dissolution, winding up, or total or partial
liquidation or reorganization of the Company, the principal and interest owed to
Sirrom shall be paid in full prior to any assets being retained by, or payments
made to Debentureholders.

On October 20, 1995, the Company executed a $1 million promissory note with
Intermedics Inc. to assist the Company in meeting the demand of Intermedics
future electrode lead orders pursuant to the Supply Contract between Intermedics
and the Company.  The loan will be amortized at a given ratio against future
lead sales to Intermedics.  The note bears interest at 24.5% annually and is
secured by future proceeds from sales to Intermedics and royalties to be
received from Intermedics pursuant to the License Agreement with Intermedics.
Any unpaid principal and accrued interest will be due and payable September 1,
1998.  Accrued interest outstanding pursuant to the Intermedics promissory note
at December 31, 1995 approximated $22,000.

NOTE 4 - COMMITMENTS AND CONTINGENT LIABILITIES

PURCHASE CONTRACTS

During the year ended March 31, 1989, the Company entered into an agreement for
the procurement of hybrid microelectronic circuits. The development of circuits
for the Company's atrial-controlled ventricular and

                                       8
<PAGE>
 
single-chamber pacing products was completed in fiscal 1992. Development of the
circuits for the Company's dual-chamber devices was completed in fiscal 1993. As
of December 31, 1995, the Company's future maximum purchase obligation
approximated $1,399,000.

During the year ended March 31, 1990, the Company entered into an agreement for
the procurement of integrated circuits. The development of these circuits was
completed in fiscal 1992. As of December 31, 1995, the Company's future maximum
purchase obligation approximated $27,000.

DESIGN AND DEVELOPMENT CONTRACT

In August 1995, the Company entered into a fixed-cost contract for the
development of technological enhancements to its second generation of hybrid
microelectronic circuits.  Total development costs under the terms of the
contract approximate $73,000.  As of December 31, 1995, the Company's remaining
outstanding commitment under the development contract approximates $13,000.

FINANCIAL CONSULTING AGREEMENT

In October 1992, the Company entered into an agreement (the "Agreement") with a
financial brokering and consulting firm to assist the Company in its financing
efforts.  Pursuant to this Agreement, the Company was required to pay the
broker/consultant $8,000 per month for a period of 24 months.  The Company
deferred payment of 50% of the monthly fee and accrued interest thereon at a
rate of 10%, pursuant to the Agreement. If at the end of 12 months the
broker/consultant had not performed a financial service as defined in the
Agreement, the Company could terminate this Agreement, including the remaining
monthly accrued fees and interest thereon.  In October 1993, the Company
terminated this Agreement, based on non-performance as defined in the Agreement.

On  January 4, 1994, the financial brokering and consulting firm filed suit
against the Company in the Circuit Court of the 11th Judicial Circuit in and for
Dade County, Florida (the "Court"), alleging that the Company had breached
certain contractual duties and obligations.  The suit requests a judgment
requiring the Company to deliver warrants to purchase 15% of the Company's
common stock, and damages in excess of $15,000.  The Company has denied
liability and filed a counterclaim alleging that the brokering firm fraudulently
induced the Company into the Agreement then breached the Agreement and certain
fiduciary duties.  Management plans to vigorously defend the lawsuit and pursue
its counterclaims.  In the opinion of management, this action has no merit and
the ultimate outcome is not expected to materially affect the financial position
of the Company.

                                       9
<PAGE>
 
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS
          OF OPERATIONS

FINANCIAL POSITION AND LIQUIDITY

The Company's continuing efforts towards building a sales and marketing
organization, expanding its research and design efforts, and its capital
expenditure and debt service requirements continue to have an unfavorable impact
on the Company's financial position and liquidity. Historically, the Company's
operating losses, capital expenditure and debt service requirements have been
financed through external sources, consisting primarily of equity and debt
placements. The Company's external sources of funds during the nine months ended
December 31, 1995 consisted of short-term borrowings aggregating $1,068,000.
The Company's operating and capital expenditure cash requirements exceeded its
external sources of liquidity during the nine months ended December 31, 1995.
Accordingly, the Company experienced negative cash flow.

Cash used by operations during the nine months ended December 31, 1995
approximated $930,000. Capital expenditures and repayment of debt obligations
during the nine months ended December 31, 1995 approximated $316,000 and
$142,000, respectively.  Short-term borrowings during the nine months ended
December 31, 1995 aggregated $1,068,000.  Overall, negative cash flow for the
nine months  ended December 31, 1995 approximated $322,000.

Cash used by operations during the nine months ended December 31, 1994
approximated $994,000.  Capital expenditures and repayment of debt obligations
during the nine months ended December 31, 1994 approximated $137,000 and
$204,000, respectively.  Short-term borrowings during the nine months ended
December 31, 1994 aggregated $44,000.  Long-term borrowings during the nine
months ended December 31, 1994 aggregated $2,426,000 net of debt issuance costs.
Overall, positive cash flow for the nine months ended December 31, 1994
approximated $1,143,000.

The Company has no significant commitments for the acquisition of capital
assets. It has, however, entered into material commitments pursuant to certain
development and inventory procurement contracts with a remaining obligation
aggregating approximately $1,439,000 at December 31, 1995. As of December 31,
1995, the Company's incurred and unpaid obligations pursuant to these contracts
approximates $41,000 (see "Note 4 -Commitments and Contingent Liabilities" of
the "Notes to Financial Statements").

On December 20, 1995, the Company executed a Distribution Agreement (the
"Agreement") with Grupo Taper, S.A., a Spanish distributor of medical and
electronic products.  The Agreement grants Grupo Taper exclusive rights to
distribute the Company's products in Europe, the Middle East and Africa for a
ten-year period, with the exception of three companies with which the Company
has previously signed distribution agreements.  In January 1996, the Company
received a $500,000 deposit to be applied at a ratio of 50% against future sales
which are anticipated to exceed 6,500 pacemakers over the next three years.  In
addition, Grupo Taper will purchase 100,000 shares of the Company's common stock
at $5 per share, which will represent approximately 7% of the total outstanding
shares of the Company.  In return, the Company appointed a Grupo Taper executive
to its Board of Directors.

The ability of the Company to generate adequate amounts of cash either through
external financing sources or operations to meet its working capital, capital
expenditure and debt service requirements on a long-term basis is dependent upon
the attainment of a profitable level of operations. The Company believes that
sales growth is critical to the attainment of a profitable level of operations.
Accordingly, the Company is continuing its efforts to expand the volume of its
business, both domestically and internationally. The Company believes that it
has the potential to increase its sales and ultimately achieve a profitable
level of operations. However, there is no assurance that the Company's
operations will improve and/or generate the cash flow required to meet the

                                       10
<PAGE>
 
Company's liquidity needs, or that the Company will be able to continue its
operations as a going concern.

RESULTS OF OPERATIONS

THREE MONTHS ENDED DECEMBER 31, 1995 VERSUS THREE MONTHS ENDED DECEMBER 31, 1994
--------------------------------------------------------------------------------

OVERVIEW.  Overall, the Company's total revenues for the third quarter of
fiscal 1996 increased 59% to $2.1 million as compared to $1.4 million for the
third quarter of fiscal 1995.  Sales increased 24% from $1.1 million to $1.4
million  and royalties increased from $206,000 to $723,000 for the third quarter
of  fiscal 1996 as compared to the third quarter of fiscal 1995.  Royalty income
represents royalties from Intermedics Inc. pursuant to a License Agreement
between the Company and Intermedics.   This increase in revenue was slightly
offset by a 48% increase in operating expenses as a result of  increased
investments in sales and marketing and research and design, and increased
interest expense, resulting in net income of $75,000 for the third quarter of
fiscal 1996, as compared to net income of $5,000 for the third quarter of fiscal
1995.

SALES.   Although overall sales have increased 24%, pacer unit sales  declined
24%.  However, this decline in pacer unit sales was offset by a 73% increase in
lead unit sales and increased sales of hybrid circuits to an Italian
manufacturer. The decline in overall pacer unit sales for the third quarter of
fiscal 1996 as compared to the third quarter of fiscal 1995 is the result of a
decline in international sales.  The decline in international sales is the
result of the Company not having obtained the CE Mark required to sell product
in Europe.  The increased lead sales are a result of increased lead sales to
Intermedics Inc. pursuant to a Supply Agreement between the Company and
Intermedics.

Sales by geographic area for the third quarter of  fiscal 1996 and 1995 are as
follows:
<TABLE>
<CAPTION>
 
                   -----------------------------------------
                   Geographic Area        1996        1995
                   -----------------------------------------
                   <S>                <C>         <C>
                   United States....  $1,314,882  $  862,522

                   Europe...........     111,625     283,970
                                      ----------  ----------
                                      $1,426,507  $1,146,492
                   -----------------------------------------
</TABLE>

The Company's domestic sales for the third quarter of fiscal 1996 increased 52%
as compared to the third quarter of  fiscal 1995.  The increase in domestic
sales is a result of an 80% increase in lead unit sales resulting from increased
lead sales to Intermedics Inc.  Domestic pacer unit sales also increased 38%.
European sales declined 61% for the third quarter of  fiscal 1996 as compared to
the third quarter of fiscal  1995.  The Company ceased sales of pacers to
European distributors effective January 1, 1995 as the Company has not yet
obtained the CE Mark required to sell product in Europe. Although there is no
assurance the Company will succeed in obtaining the CE Mark, the Company is
preparing to obtain the CE Mark in the first quarter of fiscal 1997.  However,
the Company executed a new contract with its Italian distributor and the Company
now sells hybrid circuits to this supplier instead of the pacemaker sub-
assemblies it historically sold to this distributor.  The Company is not
required to have the CE Mark in order to sell components to European suppliers.

                                       11
<PAGE>
 
Sales by product line for the third quarter of fiscal 1996 and 1995 are as
follows:
<TABLE>
<CAPTION>

      ------------------------------------------------------------------
        Product Line                                   1996        1995
      ------------------------------------------------------------------
      <S>                                         <C>         <C>
      Single-chamber pacemakers.................. $  251,084  $  162,142
      Dual-chamber pacemakers....................     87,031       4,796
      Atrial-controlled ventricular pacemakers...    391,869     578,637
      Hybrid circuits............................     55,125      36,625
      Electrode leads............................    641,398     360,716
      Other......................................          -       3,576
                                                  ----------  ----------
                                                  $1,426,507  $1,146,492
      ------------------------------------------------------------------
</TABLE>

The Company received approval  from the Food and Drug Administration ("FDA") for
its downsized dual-chamber device at the end of September 1995.  Sales of the
new downsized dual-chamber device are expected to continue to have a favorable
impact on domestic sales in the fourth quarter of fiscal 1996.  The Company is
continuing its efforts to increase its sales domestically through the
recruitment of new sales representatives. Further, the Company is also
continuing its efforts to obtain the CE Mark in order to re-establish its
presence in the  European market; and  it continues to pursue other
international  markets.

ROYALTY INCOME.  Royalty income increased 251% in the third quarter of fiscal
1996 as compared to the third quarter of fiscal 1995. Royalty income represents
royalty fees from Intermedics Inc. pursuant to a License Agreement between the
Company and Intermedics, whereby the Company licensed the technology relating to
its single-pass atrial-controlled ventricular pacing system. Intermedics began
marketing this pacing system domestically  in March 1995.  The future  potential
royalties to be recorded over the life of the License Agreement are estimated at
$3.4 million.

COSTS OF  PRODUCTS SOLD.  As compared to the 24% increase in sales, cost of
products sold increased 21%  to $643,000 for the third quarter of fiscal 1996 as
compared to $534,000 for the third quarter of fiscal 1995, resulting in an
increase in the gross margin to 55% for the third quarter of  fiscal 1996 as
compared to 53% for the same period last year.  Increased production levels are
having a favorable impact on the Company's manufacturing costs, reducing
overhead and scrap rates.  However, these factors are being slightly offset by
the less favorable margin being incurred for lead sales to Intermedics which
account for 38% of sales for the third quarter of fiscal 1996 as compared to 19%
for the third quarter of  fiscal 1995. However, the Company also receives a $325
royalty per lead unit sold by Intermedics which incorporates the Company's
single-pass technology, pursuant to the License Agreement with Intermedics.

SELLING, GENERAL  AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses increased 58% for the third quarter of  fiscal 1996 as
compared to the third quarter of  fiscal 1995 as a result of increased
commission expense as a result of the support of new sales representatives;
increased salary and benefits  expense primarily for new sales and marketing
personnel; increased travel expense for the new senior management and new sales
and marketing personnel; and increased consulting and professional services
expense for management consultants and assistance in obtaining CE Mark/ISO
certifications.

ENGINEERING, RESEARCH AND DEVELOPMENT EXPENSES.  The 140% increase in
engineering, research and development expenses for the third quarter of  fiscal
1996 as compared to the third quarter of   fiscal 1995 is primarily a result of
the Company hiring new engineering personnel to resume its developments in
single-pass lead, dual-chamber operation and rate-responsive pacing, and related
outside professional services for those development projects.

                                       12
<PAGE>
 
OTHER INCOME AND EXPENSES.  Interest expense for the third quarter of  fiscal
1996 increased 116% as compared to the third quarter of  fiscal 1995 as a result
of higher debt balances, primarily due to the $2,885,000, 5% debenture
financing, the $1 million promissory note from Intermedics, and the amortization
of debt costs associated with the debenture and  mortgage financings.

NINE MONTHS ENDED DECEMBER 31, 1995 VERSUS NINE MONTHS ENDED DECEMBER 31, 1994
------------------------------------------------------------------------------

OVERVIEW.  Overall, the Company's total revenues for the nine months ended
December 31, 1995 increased 35% to $5.7 mllion as compared to $4.2 million for
the nine months ended December 31, 1994.  Sales increased 12% to $4.0 million as
compared to $3.6 million for the same period last year.  Royalty income
increased 161% to $1.7 million for the year to date fiscal 1996 as compared to
$655,000 for the year to date fiscal 1995.  However, as a result of increases in
operating expenses due to increased investments in sales and marketing and
research and design, and increased interest expense, the Company incurred a net
loss of $88,000 for the nine months ended December 31, 1995, as compared to  net
income of $113,000 for the same period last year.

SALES.  Although overall sales increased 12%, pacer unit sales declined 40%.
However, this decline in pacer unit sales was offset by a 48% increase in lead
unit sales and increased sales of hybrid circuits to an Italian manufacturer.
The decline in overall pacer unit sales for the year to date of fiscal 1996 as
compared to the year to date fiscal 1995 is the result of a decline in
international sales. The decline in international sales is the result of the
Company not having obtained the CE Mark required to sell product in Europe.  The
increased lead sales are a result of increased lead sales to Intermedics Inc.
pursuant to a Supply Agreement between the Company and Intermedics.  Sales by
geographic area for the year to date fiscal 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
 
                   -----------------------------------------
                   Geographic Area        1996        1995
                   -----------------------------------------
                   <S>                <C>         <C>
                   United States..... $3,608,946  $2,778,344
                   Europe............    404,463     811,673
                                      ----------  ----------
                                      $4,013,409  $3,590,017
                   -----------------------------------------
</TABLE>

The Company's domestic sales for the year to date fiscal 1996 increased 30% as
compared to the year to date fiscal 1995.  The increase in domestic sales is a
result of a 53% increase in lead unit sales resulting from increased lead sales
to Intermedics Inc.  Domestic pacer unit sales also increased 8%.  European
sales declined 50% for the year to date fiscal 1996 as compared to the same
period last year.  The Company ceased sales of pacers to European distributors
effective January 1, 1995 as the Company has not yet obtained the CE Mark
required to sell product in Europe. Although there is no assurance the Company
will succeed in obtaining the CE Mark, the Company is preparing to obtain the CE
Mark in the first quarter of fiscal 1997.  However, the Company executed a new
contract with its Italian distributor and the Company  now sells hybrid circuits
to this supplier instead of the pacemaker sub-assemblies it historically sold to
this distributor.  The Company is not required to have the CE Mark in order to
sell components to European suppliers.

                                       13
<PAGE>

 
Sales by product line (including product assemblies) for the year to date fiscal
1996 and 1995 are as follows:
<TABLE>
<CAPTION>
 
               ---------------------------------------------------
               Product Line                    1996        1995
               ---------------------------------------------------
               <S>                          <C>         <C>
               Single-chamber pacemakers... $  549,543  $  734,368
               Dual-chamber pacemakers.....     87,031      83,386
               Atrial-controlled 
                ventricular pacemakers.....  1,284,396   1,528,516
               Hybrid circuits.............    254,750      58,125
               Electrode leads.............  1,810,309   1,092,974
               Other.......................     27,380      92,648
                                            ----------  ----------
                                            $4,013,409  $3,590,017
               ---------------------------------------------------
</TABLE>

The Company received approval  from the Food and Drug Administration ("FDA") for
its downsized dual-chamber device at the end of September 1995.  Sales of the
new downsized dual-chamber device are expected to continue to have a favorable
impact on domestic sales in the fourth quarter of fiscal 1996.  The Company is
continuing its efforts to increase its sales domestically through the
recruitment of new sales representatives. Further, the Company is also
continuing its efforts to obtain the CE Mark in order to re-establish its
presence in the  European market; and  it continues to pursue other
international  markets.

ROYALTY INCOME.  Royalty income increased 161% for the year to date fiscal 1996
as compared to the year to date fiscal 1995.  Royalty income represents royalty
fees from Intermedics Inc. pursuant to a License Agreement between the Company
and Intermedics, whereby the Company licensed the technology relating to its
single-pass atrial-controlled ventricular pacing system. Intermedics began
marketing this pacing system in March 1995.  The future  potential royalties to
be recorded over the life of the License Agreement are estimated at $3.4
million.

COSTS OF PRODUCTS SOLD.  As compared to the 12% increase in sales, cost of
products sold remained constant at $1.9 million for the year to date fiscal 1996
as compared  the year to date fiscal 1995, resulting in an increase in the gross
margin to 53% for the year to date fiscal 1996 as compared to 48% for the same
period last year.  Increased production levels are having a favorable impact on
the Company's manufacturing costs, reducing overhead and scrap rates; further,
the Company is incurring reduced per-unit manufacturing costs for the downsized
generation pacers.  However, these factors are being slightly offset by the less
favorable margin being incurred for lead sales to Intermedics which account for
38% of sales for the year to date fiscal 1996 as compared to 24% for the year to
date fiscal 1995. However, the Company also receives a $325 royalty per lead
unit sold by Intermedics which incorporates the Company's single-pass
technology, pursuant to the License Agreement with Intermedics.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses increased 64% for the year to date fiscal 1996 as
compared to the year to date fiscal 1995 primarily as a result of increased
commission expense as a result of the support of new sales representatives;
increased salary and benefits expense for new senior management and sales and
marketing personnel; and increased travel expense for the new senior management
and sales and marketing personnel as they recruit, train and manage the new
sales force and market the Company's product at trade conventions.

ENGINEERING, RESEARCH AND DEVELOPMENT EXPENSES.  The 112%  increase in
engineering, research and development expenses for the year to date fiscal 1996
as compared to the year to date fiscal 1995 is a result of the Company hiring
new engineering personnel to resume its developments in single-pass lead, dual-
chamber operation and rate-responsive pacing, and related outside professional
services for those development projects.

                                       14
<PAGE>
 
OTHER INCOME AND EXPENSES.    Interest expense for the year to date fiscal 1996
increased 125% as compared to the year to date fiscal 1995 as a result of higher
debt balances, primarily due to the $2,885,000, 5% debenture financing, the $1
million promissory note to Intermedics, and the amortization of debt costs
associated with the debenture and mortgage financings.

OPERATING TRENDS AND UNCERTAINTIES

SALES. The ability of the Company to attain a profitable level of operations is
dependent upon expansion of sales volume, both domestically and internationally.
The Company believes that with the commercial release of its atrial-controlled
ventricular pacing system, which is a system capable of attracting a significant
market share, and the introduction of its new line of smaller, more competitive
pacing products, it now has the potential to improve its sales and the
recruitment of sales representatives. The Company received clearance by the FDA
to commercially distribute this new line of products in fiscal 1994 for its
single-chamber and atrial-controlled ventricular devices.  The PMA Supplement
for the new dual-chamber device was submitted to the FDA in February 1995 and
clearance was received in September 1995.  Working capital  constraints had
delayed the procurement of sufficient quantities of the dual-chamber hybrid
circuits to complete testing and production requirements for the submission to
the FDA prior to that time.  The availability of the new dual-chamber device is
expected to have a favorable impact on domestic sales.

The Company's sales during fiscal 1995 had been restricted as a result of
production limitations resulting from working capital constraints. However, the
Company has secured financing that management believes will enable it to meet
and expand its demand in the domestic market,  and expand into additional
international markets.

The European Community ("EC") nations have adopted universal standards in order
to provide simplified trade among the member nations and to assure free access
to trade while maintaining quality standards for products sold.  All companies
doing business in these nations must be certified to these standards set forth
by the EC which is evidenced by being granted the CE Mark.  Standards for
active implantable medical products were implemented January 1, 1993, with a
transition period ending December 31, 1994.  In order for the Company to resume
the sale of its product in the EC, it must obtain certification, the CE Mark.
These standards have been developed by the International Organization for
Standardization ("ISO").  The Company is preparing for certification during the
first quarter of fiscal 1997.  From January 1, 1995, until it receives such
certification, the Company will lose sales to its European distributors, to
which the Company sells completed devices.  However, the Company anticipates
that increased sales in the domestic market will reduce the overall adverse
effect of this loss of European sales.  Further, the Company continues to sell
hybrid circuit components to its customer in Italy and continues to export its
products to Greece.

Until March 1995, the Company was the only manufacturer commercially marketing
single-lead atrial-controlled ventricular pacemakers.  However, Intermedics
Inc., a competitor of the Company, received FDA clearance to commercially market
a single-lead atrial-controlled ventricular pacemaker that it developed
utilizing the Company's technology pursuant to license and supply agreements
with the Company.  Intermedics commenced marketing its new pacemakers in March
1995.

Although the introduction of the new Intermedics pacemakers poses competition
for the Company, management believes that the Company will benefit from such
competition since the new Intermedics pacemaker will increase the visibility of
single-lead atrial-controlled ventricular pacemakers in the marketplace and
thereby increase market acceptance of the product.  Further, management
believes that there is a sufficient market to accommodate both the Company's and
Intermedics pacemakers.  The Company estimates that its market share of
pacemakers generally is less than 1% of an estimated total worldwide market of
$2 billion per year.

                                       15
<PAGE>
 
Various factors impact on a firm's ability to increase market share including,
but not limited to, the financial strength of the firm, the ability of the firm
and its competitors, and the time involved in obtaining FDA clearance for new or
improved products.  Therefore, although management believes that the Company is
well poised for viable growth, management cannot predict the degree of market
share the Company can obtain.  Factors beyond the Company's control may impede
its progress  and in such event, its business and operations would be adversely
impacted.

The Company's ability to successfully compete with Intermedics and other
pacemaker manufacturers will depend on the Company's ability to supply product
and recruit and increase a quality sales force.  The Company historically has
been restricted in its marketing capabilities due to financial constraints
impeding its ability to supply  products and recruit and train a sales force.
However, the availability of capital from the Debenture financing, the resulting
reduction in debt made possible from those funds and from the Sirrom loan, and
the cash flow generated from Intermedics' orders and royalties have positioned
the Company to increase its sales force and provide an uninterrupted supply of
products.

As discussed above, the manufacture and sale of leads to Intermedics produce
income for the Company.  The Company sells electrode leads to Intermedics for
its new systems under an Amended and Restated Supply Contract that terminates on
August 1, 1998, unless renewed for an additional two year period.  The Company
also receives royalties from Intermedics sales of  its products incorporating
the licensed technology under an Amended and Restated License Agreement.  The
Company anticipates supplying components to Intermedics under the supply
agreement for the next several years.  An increase in demand for components by
Intermedics will put further demands on the Company to supply the products;
however, with the anticipated cash flow from such orders that would be generated
under the license and supply agreements, plus anticipated positive cash flow
from sales of other products by the Company, management believes that the
Company could be in a position to accommodate an increase in orders.  Further,
in October 1995, Intermedics loaned the Company $1,000,000 to assist the Company
in meeting the demand of its future orders, such loan to be amortized at a given
ratio against future orders.

It is anticipated that Intermedics will eventually develop its own manufacturing
capability for electrode leads necessary for its new pacemakers.  However, any
such development will take time.  Although the Company does not know how long it
will take Intermedics to develop its own manufacturing capability, added to any
such development period would be the time necessary to obtain FDA clearance of
its manufacturing process.  Thus, although the Company cannot guarantee that it
will continue to supply Intermedics with products, the Company anticipates
providing Intermedics with components for the next few years.  However, in the
event Intermedics receives FDA approval in a shorter time-frame than
anticipated, or other events occur which causes a decrease in Intermedics'
orders, the Company's business and operating results would be adversely
affected.

In an effort to gain competitive access to the European market, on December 20,
1995, the Company executed a Distribution Agreement (the "Agreement") with Grupo
Taper, S.A., a Spanish distributor of medical and electronic products.  The
Agreement grants Grupo Taper exclusive rights to distribute the Company's
products in Europe, the Middle East and Africa for a ten-year period, with the
exception of three companies with which the Company has previously signed
distribution agreements.  In January 1996, the Company received a $500,000
deposit to be applied at a ratio of 50% against future sales which are
anticipated to exceed 6,500 pacemakers over the next three years.

SOURCES OF SUPPLY.   One of the Company's principal suppliers of material used
primarily in electrode lead production, E.I. DuPont de Nemours & Company, has
indicated that they will no longer supply their material to the medical device
industry for use in implantable devices.  The availability of this material
suitable for use in implantable medical devices is an industry-wide problem and
is not unique to the Company or to the

                                       16
<PAGE>
 
cardiovascular device segment of the industry.  A tentative replacement for the
DuPont supplied material has been identified which meets manufacturing
requirements.  Biocompatibility studies have been initiated on the replacement
candidate.  Since the candidate replacement material is comprised of the same
chemical composition as the DuPont material, it is expected that it will be
comparable with respect to the performance characteristics and biocompatibility
of the current material in use.  Similarly, FDA approval of this replacement
material is anticipated to be forthcoming based upon a satisfactory outcome of
the testing in progress.  The Company believes, however, that it has a
sufficient quantity of the DuPont material on supply to meet the Company's
anticipated demand for the next several years.

                                       17
<PAGE>
 
                          PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

On  January 4, 1994, a financial brokering and consulting firm filed suit
against the Company in the Circuit Court of the 11th Judicial Circuit in and for
Dade County, Florida (the "Court"), alleging that the Company had breached
certain contractual duties and obligations.  The suit requests a judgment
requiring the Company to deliver warrants to purchase 15% of the Company's
common stock, and damages in excess of $15,000.  The Company has denied
liability and filed a counterclaim alleging that the brokering firm fraudulently
induced the Company into the Agreement then breached the Agreement and certain
fiduciary duties.  Management plans to vigorously defend the lawsuit and pursue
its counterclaims. In the opinion of management, this action has no merit and
the ultimate outcome is not expected to materially effect the financial position
of the Company.

ITEM 2.  CHANGES IN THE RIGHTS OF THE COMPANY'S SECURITY HOLDERS

         None

ITEM 3.  DEFAULTS BY THE COMPANY ON ITS SENIOR SECURITIES

         None

ITEM 4.  RESULTS OF VOTES OF SECURITY HOLDERS

The Company held its annual meeting of shareholders on December 14, 1995, for
the purposes of: (1) electing the Company's Board of Directors; (2) ratifying
the appointment of BDO Seidman, LLP as the Company's independent auditors for
the year ended March 31, 1996; and (3) approving an amendment to the Company's
Certificate of Incorporation authorizing the issuance of up to 3,000,000 shares
of preferred stock.  Proxies were solicited by the Company under Regulation 14A
of the Securities and Exchange Commissions' proxy rules, and there was no
solicitation in opposition to management's nominees for directores listed in the
Proxy Statement.  A summary of the votes cast for and against each of the
matters set forth in the Proxy Statement is set forth below:
<TABLE>
<CAPTION>
--------------------------------------------------------------------- 
                                                     Votes     Votes
                                                      For     Against
                                                ----------------------
<S>                                                <C>        <C>
Election of Directors:
    Robert R. Brownlee...........................    947,896   87,394
    William H. Burns.............................    948,111   87,179
    Bart C. Gutekunst............................    947,917   87,372
    Larry Haimovitch.............................    948,328   86,961
    Alan J. Rabin................................    950,678   84,612
    Robert T. Rylee..............................    988,542   46,747
    Tracey E. Young..............................    950,206   85,084
Ratification of Independent Accountants..........  1,016,374   16,457
Authorization of an Issuance of Preferred Stock..    389,063  358,900
---------------------------------------------------------------------
</TABLE>

The number of votes cast for the amendment to the Comapny's Certificate of
Incorporation were not sufficient to approve such amendment.

ITEM 5.  OTHER INFORMATION

         None

                                       18
<PAGE>
 
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
6(A).  EXHIBITS

Exhibits filed in Part II of this Report are as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------- 
Exhibit                                      Sequential Page Number or
Number    Description                        Incorporation by Reference to
-------------------------------------------------------------------------------------------------------
<C>      <S>                                 <C>
3.0      Certificate of Incorporation of     Exhibit 3.0 to Amendment No. 1 to Form S-1 Registration
         the Company, as amended             Statement filed on February 1, 1988, Registration No. 33-
                                             16490 and Form 10-K for the year ended March 31, 1990,
                                             File No. 0-14653

 3.1     Amendment to Certificate of          Exhibit 3.1 to Form S-1 Registration Statement filed on
         Incorporation                        March 2, 1995, Registration No. 33-89938

 3.2     By-Laws of the Company              Exhibit 3.1 to Form S-18 Registration Statement filed on
                                             October 16, 1985, Registration No. 33-9208

 3.3     Amendment to Bylaws                 Exhibit 3.3 to Form S-1 Registration Statement filed on
                                             March 2, 1995, Registration No. 33-89938

 4.0     Form of Common Stock                Exhibit 4.0 to Form S-1 Registration Statement filed on
         Certificate                         March 2, 1995, Registration No. 33-89938

 4.1     Form of Sales Representative        Exhibit 4.13 to Form 10-Q for the Quarter Ended
         Stock Option Agreement              September 30, 1988, File No. 0-14653

 4.2     Cardiac Control Systems, Inc.       Exhibit 4.15 to Form 8-K Current Report dated October
         5% Convertible Debenture due        11, 1994, File No. 0-14653
         October 31, 1999

 4.3     Combined 1987-1992 Non-             Exhibit 4.8 to Amendment No. 1 to Form S-1
         Qualified Stock Option Plan         Registration Statement filed on April 17, 1995,
                                             Registration No. 33-89938

 4.4     Stock Purchase Warrant dated        Exhibit 4.1 to Form 8-K Current Report, dated March 31,
         March 31, 1995 in favor of          1995, File No. 0-14653
         Sirrom Capital Corporation

  4.5    Stock Purchase Warrant, dated       Exhibit 4.2 to Form 8-K Current Report, dated March 31,
         March 31, 1995 in favor of          1995, File No. 0-14653
         Dow Corning Enterprises, Inc.

 10.0    License Agreement between           Exhibit 10.1 to Form 10-Q for the Quarter Ended
         Hughes/Bertolet and the             September 30, 1986, File No. 0-14653
         Company
 
 10.1    Settlement Agreement and            Exhibit 10.2 to Form 10-K for the Year Ended March 31,
         Release between Applied             1990, File No. 0-14653
         Cardiac Electro-physiology
         and the Company

</TABLE> 

                                       19
<PAGE>
 
<TABLE>
<CAPTION>
 
-------------------------------------------------------------------------------------------------------
Exhibit                                                      Sequential Page Number or
Number              Description                            Incorporation by Reference to
-------------------------------------------------------------------------------------------------------
<C>      <S>                                 <C>
10.2     Amended and Restated License        Exhibit 10.19 to Form 8-K Current Report, dated April 2,
         Agreement between                   1993, File No. 0-14653
         Intermedics Inc. and the
         Company, dated April 2, 1993

10.3     Amended and Restated Supply         Exhibit 10.20 to From 8-K Current Report, dated April  2,
         Contract between Intermedics        1992, File No. 0-14653
         Inc. and the Company, dated
         April 2, 1993

10.4     Employment Agreement                Exhibit 10.24 to Form 8-K Current Report, dated October
         between Bart C. Gutekunst           11, 1994, File No. 0-14653
         and the Company, dated
         October 13, 1994

10.5     Employment Agreement                Exhibit 10.25 to Form 8-K Current Report, dated October
         between Alan J. Rabin and the       11, 1994, File No. 0-14653
         Company, dated October 13,
         1994

10.6     Employment Agreement                Exhibit 10.12 to Form 10-Q for the Quarter Ended
         between Robert S. Miller and        December 31, 1994, File No. 0-14653
         the Company, dated December
         12, 1994

10.7     Agreement between LEM               Exhibit 10.13 to Form 10-Q for the Quarter Ended
         Biomedica, s.r.l. and the           December 31, 1994, File 0-14653
         Company, dated October 1,
         1994

10.8     Agreement between the               Exhibit 10.12 to Form S-1 Registration Statement filed on
         Company and Alan J. Rabin           March 2, 1995, Registration No. 33-89938
         and Bart C. Gutekunst, dated
         July 1, 1994

10.9     Form of Indemnification             Exhibit 10.13 to Form S-1 Registration Statement filed on
         Agreement between the               March 2, 1995, Registration No. 33-89938
         Company and each Director,
         executed December 1994

10.10    Employment Agreement                Exhibit 10.14 to Form S-1 Registration Statement filed on
         between Robert R. Brownlee          March 2, 1995, Registration No. 33-89938
         and the Company dated as of
         October 1, 1994

10.11    Loan and Security Agreement         Exhibit 10.1 to Form 8-K Current Report, dated March
         between the Company and             31, 1995, File No. 0-14653
         Sirrom Capital Corporation,
         dated March 31, 1995


</TABLE> 

                                       20
<PAGE>
 
<TABLE>
<CAPTION>
 
-------------------------------------------------------------------------------------------------------
Exhibit                                         Sequential Page Number or
Number   Description                            Incorporation by Reference to
-------------------------------------------------------------------------------------------------------
<C>      <S>                                 <C>
10.12    $1,500,000 Secured Promissory          Exhibit 10.2 to Form 8-K Current Report, dated March
         Note in favor of Sirrom Capital        31, 1995, File No. 0-14653
         Corporation, dated March 31,
         1995

10.13    Mortgage, Assignment of Rents          Exhibit 10.3 to Form 8-K Current Report, dated March
         and Leases, and Security               31, 1995, File No. 0-14653
         Agreement in favor of Sirrom
         Capital Corporation, dated
         March 31, 1995

10.14    Second Mortgage and Security           Exhibit 10.4 to Form 8-K Current Report, dated March
         Agreement in favor of Bart             31, 1995, File No. 0-14653
         Gutekunst, as trustee, dated
         March 31, 1995

10.15    Subordination Agreement                Exhibit 10.5 to Form 8-K Current Report, dated March
         between the Company Sirrom             31, 1995, File No. 0-14653
         Capital Corporation, and the
         Debentureholders, dated March
         31, 1995

10.16    Promissory Note and Security           Exhibit 10.16 to Form 10-Q for the Quarter Ended
         Agreement between Intermedics          September 30, 1995, File No. 0-14653
         Inc. and the Company, dated
         October 20, 1995

10.17    Amendment 2 to Supply                  Exhibit 10.17 to Form 10-Q for the Quarter Ended
         Contract between Intermedics           September 30, 1995, File No. 0-14653
         Inc. and the Company, dated
         October 20, 1995

10.18    Amendment 2 to License                 Exhibit 10.18 to Form 10-Q for the Quarter Ended
         Agreement between Intermedics          September 30, 1995, File No. 0-14653
         Inc. and the Company, dated
         October 20, 1995

10.19    Distribution Agreement between     
         Grupo Taper, S.A. and the
         Company, dated December 20,
         1995

11.0     Statement re Computation of         
         Income (Loss) per share
</TABLE>
--------------------------------------------------------------------------

 6(B).  REPORTS ON FORM 8-K

     The Company did not file a current report on Form 8-K in the quarter ended
December 31, 1995.

                                       21
<PAGE>
 
                                    SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) 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.

                          CARDIAC CONTROL SYSTEMS, INC.
                                   (Registrant)



Date: February 13, 1996                By: /s/ Alan J. Rabin
      -----------------                    ------------------------------------
                                           Alan J. Rabin
                                           President and Chief Executive Officer



Date: February 13, 1996                By: /s/ Lauri Mitchell
      -----------------                    -----------------------------------
                                           Lauri Mitchell
                                           Controller

                                       22