<PAGE>
 
================================================================================

                       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 QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997        COMMISSION FILE NUMBER
0-14653


                          CARDIAC CONTROL SYSTEMS, INC.
        (Exact Name of Small Business Issuer 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)

                                 (904) 445-5450
                           (Issuer's Telephone Number)


Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 October 31, 1997, 2,648,739 shares of the Issuer's common stock, $.10 par
value, were issued and outstanding.


================================================================================
<PAGE>
 
                          CARDIAC CONTROL SYSTEMS, INC.

                                   FORM 10-QSB
                               SEPTEMBER 30, 1997

                                      INDEX

<TABLE> 
<CAPTION> 
---------------------------------------------------------------------------------------------------------
                                                                                                 Page No.
---------------------------------------------------------------------------------------------------------

Part I.   Financial Information

    <S>                                                                                          <C> 
    Balance Sheet at September 30, 1997 (Unaudited) ....................................................3

    Statements of Operations and Accumulated Deficit for the Three Months and Six Months
        Ended September 30, 1997 and 1996 (Unaudited)...................................................4

    Statements of Cash Flows for the Six Months Ended
        September 30, 1997 and 1996 (Unaudited).........................................................5

    Notes to Financial Statements.......................................................................6

    Management's Discussion and Analysis of Financial Position
        and Results of Operations.......................................................................9

Part II.   Other Information...........................................................................13

</TABLE> 
                                        2
<PAGE>
 
                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                          CARDIAC CONTROL SYSTEMS, INC.
                                  BALANCE SHEET
                                   (Unaudited)
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------
                                                                                       September 30,
                                                                                           1997
--------------------------------------------------------------------------------------------------------
ASSETS
<S>                                                                                  <C>           
    Current assets
        Cash and cash equivalents....................................................$      179,605
        Securities...................................................................           799
        Accounts and notes receivable................................................     1,236,622
        Inventories .................................................................     1,667,038
        Prepaid expenses.............................................................       399,197
                                                                                     --------------
                     Total current assets   .........................................     3,483,261
                                                                                     --------------

     Property, plant and equipment (net).............................................     1,935,843
                                                                                     --------------

     Other assets....................................................................
         Deferred financing costs, less accumulated amortization of $165,517.........       504,668
         Deferred license fees, less accumulated amortization of $23,333.............       176,667
         Other.......................................................................        81,508
                                                                                     --------------
                     Total other assets..............................................       762,843
                                                                                     --------------
                     Total assets....................................................$    6,181,947
                                                                                     ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

     Current liabilities
         Accounts payable............................................................$      679,838
         Accrued compensation........................................................       253,790
         Accrued royalties...........................................................       232,960
         Other accrued expenses......................................................        79,462
         Deposits payable............................................................       492,191
         Notes and debt obligations payable within one year..........................       112,923
                                                                                     --------------
                     Total current liabilities.......................................     1,851,164

         Notes and debt obligations payable after one year...........................     2,727,334
         Other liabilities...........................................................        76,228
                                                                                     --------------
                      Total liabilities..............................................     4,654,726
                                                                                     --------------


    Stockholders' equity
        Common stock, $.10 par value, 30,000,000 shares authorized,
              2,648,739 shares issued ...............................................       264,874
        Additional paid in capital...................................................    22,331,206
        Accumulated deficit..........................................................   (21,061,804)
        Cumulative translation adjustment............................................        (7,055)
                                                                                     --------------
                     Total stockholders' equity......................................     1,527,221
                                                                                     --------------

     Total liabilities and stockholders' equity .....................................$    6,181,947
                                                                                     ==============
</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                   Six Months Ended
                                                             September 30,                       September 30,
                                                        1997             1996                1997              1996
-----------------------------------------------------------------------------------------------------------------------
<S>                                                <C>              <C>                  <C>               <C>         
Revenue
    Net sales .................................... $  1,041,490     $    968,682         $  1,893,779      $  2,171,175
    Royalty income ...............................      598,500          519,350            1,295,625         1,213,875
                                                   -------------------------------------------------------------------- 
        Total revenue ............................    1,639,990        1,488,032            3,189,404         3,385,050
                                                   -------------------------------------------------------------------- 

Costs and expenses
    Cost of products sold ........................      648,245          484,727            1,152,060         1,164,672
    Selling, general and administrative expenses .      613,053          728,195            1,356,125         1,549,535
    Engineering, research and development expenses      420,419          474,954              878,691           932,518
                                                   -------------------------------------------------------------------- 
        Total cost and expenses ..................    1,681,718        1,687,877            3,386,877         3,646,725
                                                   -------------------------------------------------------------------- 

Operating income (loss) ..........................      (41,727)        (199,845)            (197,473)         (261,675)
                                                   -------------------------------------------------------------------- 

Other income (expenses)
    Interest income ..............................        1,969            5,726                7,952            16,274
    Interest expense .............................     (128,421)        (131,095)            (211,006)         (265,883)
    Other income .................................          941              -                    941            25,000
                                                   -------------------------------------------------------------------- 
        Total other income (expenses) ............     (125,511)        (125,369)            (202,114)         (224,610)
                                                   -------------------------------------------------------------------- 
Net loss .........................................     (167,239)        (325,214)            (399,587)         (486,285)

Accumulated deficit - beginning of period ........  (20,894,565)     (19,942,048)         (20,662,217)      (19,780,977)
                                                   -------------------------------------------------------------------- 

Accumulated deficit - end of period .............. $(21,061,804)    $(20,267,262)        $(21,061,804)     $(20,267,262)
                                                   ==================================================================== 


Net income (loss) per common share ............... $      (0.06)    $      (0.13)        $      (0.15)     $      (0.19)
                                                   ==================================================================== 

Average number of common shares outstanding ......    2,646,866        2,580,799            2,630,405         2,571,166

                                                   ==================================================================== 
</TABLE>

                 See accompanying notes to financial statements

                                        4
<PAGE>
 
                          CARDIAC CONTROL SYSTEMS, INC.
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
Six Months Ended September 30,                                                                      1997           1996
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                          <C>               <C>          
Cash flows from operating activities
    Net income (loss)........................................................................$     (399,587)   $   (486,285)
    Adjustment to reconcile net income (loss) to net cash used for operating activities:
         Depreciation and amortization.......................................................       218,417         265,059
         Gain on fixed assets disposals......................................................             -            (491)
         Securities received in lieu of insurance rebate.....................................          (799)              -
         Stock issued for payment of directors' fees.........................................        34,000               -
         Cash provided by (used for):
              Accounts and notes receivable..................................................      (283,781)        358,279
              Inventories....................................................................      (147,400)        224,086
              Prepaid expenses...............................................................      (142,584)       (374,876)
              Accounts payable...............................................................      (148,405)         78,789
              Accrued interest...............................................................        11,096          (7,130)
              Accrued compensation...........................................................        13,228          31,238
              Accrued compensated absences ..................................................        10,111         (43,100)
              Deposits payable...............................................................        99,559         (66,250)
              Other accrued expenses.........................................................       (42,749)         47,385
              Other liabilities..............................................................        10,243         (74,093)
              Deferred royalties.............................................................             -        (186,750)
                                                                                             ------------------------------
Net cash provided by  (used for) by operating activities ....................................      (768,652)       (234,139)
                                                                                             ------------------------------

Cash flows from investing activities
    Purchase of property, plant and equipment................................................      (288,643)       (244,203)
    Proceeds from sale of equipment..........................................................             -             491
    Increase in other assets.................................................................        (6,124)        (39,288)
                                                                                             ------------------------------
Net cash provided by (used for) investing activities ........................................      (294,766)       (283,000)
                                                                                             ------------------------------

Cash flows from financing activities
    Proceeds from issuance of common stock, net of costs.....................................         8,928         246,033
    Proceeds from notes and debt obligations payable.........................................     1,470,625          32,035
    Repayment of notes and debt obligations payable..........................................      (193,983)       (525,273)
    Principal payments under capital lease obligations.......................................        (1,394)         (1,889)
    Deferred financing costs.................................................................      (226,616)              -
                                                                                             ------------------------------
Net cash provided by (used for) financing activities.........................................     1,057,560        (249,094)
                                                                                             ------------------------------

Net increase (decrease) in cash and cash equivalents.........................................        (5,858)       (766,233)

Cash and cash equivalents - beginning of year................................................       185,463       1,167,181
                                                                                             ------------------------------

Cash and cash equivalents - end of period....................................................$      179,605    $    400,948
                                                                                             ==============================

Supplemental Cash Flow Information:
    Interest paid during the period..........................................................$      148,732    $    159,039
Supplemental schedule of noncash investing and financing activities:
    Reduction in accrued compensation in exchange for common stock...........................$       34,000               -
    Reduction in accounts payable in exchange for common stock...............................$        8,928               -
</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 September 30, 1997, the related statements of operations and accumulated
deficit for the three months and six months ended September 30, 1997 and 1996,
and the statements of cash flows for the six months ended September 30, 1997 and
1996 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 September 30, 1997, and
the results of operations for the three months and six months ended September
30, 1997 and 1996 and the cash flows for the six months ended September 30, 1997
and 1996.

Certain reclassifications have been made to the unaudited financial statements
previously reported for the three months and six months ended September 30, 1996
to conform with classifications used in the unaudited financial statements for
the three months and six months ended September 30, 1997.

The accompanying unaudited financial statements as of September 30, 1997 and for
the three months and six months ended September 30, 1997 and 1996 should be read
in conjunction with the Company's audited financial statements for the year
ended March 31, 1997.

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 six months ended September 30, 1997 of $399,587.
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
continual development of new product and resultant sales growth is critical to
attaining a profitable level of operations. Therefore, the Company is continuing
its efforts to invest in development of its single lead technology and 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. Also, the Company is pursuing additional working
capital to expand its market position and pursue development of new
technologies. However, there is no assurance that the Company will be able to
attain profitable operations and continue operations as a going concern.

NOTE 2 - LOSS PER COMMON SHARE

Net loss per common share is based on the weighted average number of common
shares outstanding during the period. Common stock equivalents have not been
included for the three months and six months ended September 30, 1997 and 1996,
as their effect on the loss per share is anti-dilutive.

The FASB has issued SFAS No. 128, "Earnings per Share," which provides guidance
for computing and presenting earnings per share (EPS). This statement simplifies
the standards for computing EPS previously found in APB Opinion No. 15,
"Earnings per Share." This statement, when adopted, is not expected to have a
material impact on the Company.

                                        6
<PAGE>
 
NOTE 3 - INVENTORIES

Inventories at September 30, 1997 are summarized as follows:

<TABLE>
<CAPTION>

                  ---------------------------------------------------------------- 
                                                              September 30, 1997   
                                                            ---------------------- 
                  <S>                                       <C>                    
                  Raw materials and supplies................$              888,738 
                  Work-in-process...........................               473,700 
                  Finished goods............................               323,385 
                                                            ---------------------- 
                                                                         1,685,823 
                  Reserve for obsolescence..................               (18,785)
                                                            ---------------------- 
                                                            $            1,667,038 
                  ---------------------------------------------------------------- 
</TABLE>
                  
Finished goods inventories include approximately $160,822 of products consigned
to customers and independent sales representatives at September 30, 1997.


NOTE 4 - NOTES AND DEBT OBLIGATIONS PAYABLE

Notes and debt obligations consist of the following at September 30, 1997:

<TABLE>
<CAPTION>

            ---------------------------------------------------------------------------------- 
                                                                          September 30, 1997   
                                                                        ---------------------- 
            <S>                                                         <C>                    
            Sirrom mortgage note, net of discount (A)...................$            1,440,521 
            Coast Business Credit (B)...................................             1,346,282 
            Other.......................................................                53,454 
                                                                        ---------------------- 
                                                                                     2,840,257 
            Amount payable within one year..............................               112,923 
                                                                        ---------------------- 
            Amount payable after one year...............................$            2,727,334 
            ---------------------------------------------------------------------------------- 
</TABLE> 

(A)  On March 31, 1995, the Company entered into a Loan and Security Agreement
     (the "Loan Agreement") with Sirrom Capital Corporation ("Sirrom") and
     executed a $1,500,000 secured promissory note. Interest on the note is
     payable monthly at 13.5%per annum 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 accounts receivable, but
     including general intangibles such as its patents and royalties. 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, reorganizations, and merger or
     sale of substantially all assets.

     In connection with the Loan Agreement, the Company granted Sirrom warrants
     to purchase, initially, 100,000 shares of the Company's common stock at
     $.01 per share. An additional 50,000 warrants to purchase shares of common
     stock at $.01 per share will be granted to the lender upon each anniversary
     date, beginning March 31, 1997 through March 31, 1999, that any amount owed
     to Sirrom shall be outstanding. On March 31, 1997, the Company granted
     Sirrom 50,000 additional warrants pursuant to the Loan Agreement. The
     Company recorded $279,000 (100,000 shares) in fiscal 1995 and $71,376
     (50,000 shares) in fiscal 1997 as a debt discount with the offset to
     additional paid-in capital, representing the difference between the
     estimated fair market value of the underlying stock at the date of grant
     and $.01 per share. This has resulted in an effective interest rate of
     approximately 30%per

                                       7
<PAGE>
 
     annum on the Sirrom debt. The Sirrom note includes an unamortized debt
     discount of $59,479 at September 30, 1997.

(B)  On June 13, 1997, the Company entered into a Loan Agreement ("Agreement")
     with Coast Business Credit ("CBC") for a maximum borrowing of $3.5 million
     which includes a line of credit up to $2.7 million, a $500,000 sub line for
     capital expenditures ("CAPEX"), and a $300,000 term loan ("Term Loan"). The
     maximum borrowing base available under the line of credit is based upon
     eligible receivables and inventory as defined in the Agreement. The
     maturity date for the Agreement is June 30, 2000. The CAPEX and the Term
     Loan are based upon a 48 month amortization period. The interest rate on
     the line of credit is equal to the prime rate plus 2%, and the interest
     rate for the Term Loan and the CAPEX Subline is equal to prime rate plus
     2.25%. Borrowings under the Agreement are collateralized by a first
     security interest in substantially all of the assets of the Company. The
     Agreement also contains a minimum tangible net worth requirement. In
     addition, CBC was granted warrants to purchase 37,500 shares of stock at $4
     per share, expiring June 30, 2002.

     In conjunction with the Agreement, the Company obtained an Intercreditor
     and Subordination Agreement between CBC and Sirrom. This agreement provides
     that Sirrom subordinate its first security interest in the assets of the
     Company to CBC, however, the priority interest of CBC in the Company's real
     estate is limited to $500,000. As consideration for its waiver of its first
     security interest in the assets of the Company, Sirrom was granted warrants
     to purchase 50,000 shares of stock at $5 per share, exercisable at any time
     from June 6, 1997 and expiring on June 6, 2002.

     Aggregate notes and debt obligations outstanding at September 30, 1997
     mature as follows: 1998 - $112,923; 1999 - $81,406; 2000 - $1,519,749; 2001
     - $54,477; 2002 - $1,071,702.




                                       8
<PAGE>
 
Item 2.   Management's Discussion and Analysis of Financial Position and 
          Results of Operations

This Quarterly Report on Form 10-QSB contains forward looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934, as amended.
Additional written or oral forward looking statements may be made by the Company
from time to time in filings with the Securities and Exchange Commission or
otherwise. Such statements may include, but not be limited to, projections of
revenues, income, or loss, capital expenditures, plans for future operations,
financing needs or plans, and plans relating to product or services of the
Company, as well as assumptions relating to the foregoing. The words "believe,"
"expect," "anticipate," "estimate, " project," and similar expressions identify
forward looking statements, which speak only as of the date such statement is
made. Forward looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified and certain of
which are beyond the Company's control and actual results may differ materially
depending on a variety of important factors including the sources for sufficient
capital to meet the Company's growth and operation, the ability of the Company
to continually develop new, advanced products, the length of the regulatory
review process for new or advanced products, the availability of raw materials,
expansion of sales volume, changes in economic conditions, demand for the
Company's products, and changes in the regulatory and competitive environment.
Statements in this Quarterly Report, including the Notes to the Financial
Statements and "Management's Discussion and Analysis of Financial Position and
Results of Operations, describe factors, among others, that could contribute to
or cause such differences.

Financial Position and Liquidity

The Company's liquidity benefited from the loan agreement dated June 13, 1997
with Coast Business Credit (CBC) for a maximum borrowing of $3.5 million, of
which approximately $1.35 million was drawn at September 30, 1997.

Cash used by operations during the first six months of fiscal 1998 approximated
$769,000. Capital expenditures and repayment of debt and capital lease
obligations additionally utilized approximately $289,000 and $195,000
respectively. Proceeds of notes and debt obligations payable approximated
$1,471,000. Overall, negative cash flow for the first six months of fiscal 1998
approximated $6,000.

The Company has commitments of approximately $114,700 for the acquisition of
capital assets. It also has material commitments pursuant to certain inventory
procurement contracts that aggregate approximately $876,490 at September 30,
1997.

Results of Operations

Three Months Ended September 30, 1997 vs. Three Months Ended September 30, 1996

Overview. The Company's total revenues for the second quarter of fiscal 1998
increased by 10.2% to $1.64 million as compared to $1.49 million for the second
quarter of fiscal 1997. Sales increased from $0.97 million in the second quarter
of fiscal 1997 by 7.5% to $1.04 million in the second quarter of fiscal 1998. In
the second quarter of fiscal 1998 in the domestic market, sales of pacers
improved by 19% as compared to the second quarter of fiscal 1997, but sales of
electrode leads declined by 30%, due to increases competition from other
companies that have entered the market with single lead products, giving a net
reduction of 7.6%. During the second quarter of fiscal 1998, international sales
of all products increased overall by 76% over those achieved during the second
quarter of fiscal 1997. Royalty income increased from $0.52 million in the
second quarter of fiscal 1997 to $0.59 million in the second quarter of fiscal
1998. Royalty income represents royalties from Sulzer Intermedics, Inc. pursuant
to a license agreement between the Company and Intermedics; this agreement
terminates in January, 1998. Total operating costs in the second quarter of
fiscal 1998 were some $6,000 lower than those incurred during the second quarter
of fiscal 1997, resulting in an operating loss of $41,727 in the second quarter
of fiscal 1998 as compared to an operating loss

                                        9
<PAGE>
 
of $199,845 in the second quarter of fiscal 1997.

Sales. Total sales during the second quarter of fiscal 1998 increased by
$72,808, or 7.5%, to $1,041,490 from the level of $968,682 achieved during the
second quarter of fiscal 1997. Sales of pacers increased in both the domestic
and the international markets and sales of electrode leads declined in the
domestic market, but this decline was partially offset by improved selling
prices in the international market and the commencement of shipments of
defibrillator leads.

Sales by geographic area for the first quarter of fiscal 1998 and 1997 are as
follows:

<TABLE> 
<CAPTION> 

           ------------------------------------------------------------  
           Geographic Area                    1998             1997      
           ------------------------------------------------------------  
           <S>                          <C>              <C> 
           United States................$      732,400   $      792,957  
           International................       309,090          175,725  
                                        -------------------------------  
                                        $    1,041,490   $      968,682  
           ------------------------------------------------------------  
</TABLE> 
                                                                         
Royalty Income. Royalty income represents royalty fees from Sulzer Intermedics
Inc. pursuant to a License Agreement between the Company and Sulzer Intermedics,
whereby the Company licensed the technology relating to its single-pass
atrial-controlled ventricular pacing system. The future potential royalties to
be recorded over the remaining life of the Agreement, which will terminate in
January, 1998, are estimated at $825,000.

Costs of Products Sold. The cost of products sold in the second quarter of
fiscal 1998 was $648,245, compared to $484,727 in the second quarter of fiscal
1997, representing a increase of 34% as compared with an increase of 7.5% in
sales, which reduced the rate gross margin from 50% to 38%. This reduction was
due to a change in product and customer mix, with a higher proportion of sales
of sub-assemblies going to the European market, where selling prices and margins
are lower than for finished product sold in the domestic market.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $613,053 in the second quarter of fiscal 1998,
representing a decrease of 16% from $728,195 in the second quarter of fiscal
1997 as a result of reduced selling expenses in respect of salaries, commissions
and royalties.

Engineering, Research and Development Expenses. Engineering, research and
development costs were $420,419 in the second quarter of fiscal 1998, which was
a decrease of 11% from $474,954 in the second quarter of fiscal 1997.

Other Income and Expenses. Interest income was $1,969 during the second quarter
of fiscal 1998 compared to $5,726 during the second quarter of fiscal 1997.
Total interest expense decreased from $131,095 in the second quarter of fiscal
1997 to $128,421 in the second quarter of fiscal 1998. Interest paid to Sirrom
Capital Corporation in respect of a secured loan of $1,500,000 obtained on March
31, 1995 was $51,041 in both the second quarter of fiscal 1998 and the second
quarter of fiscal 1997. Interest in the sum of $33,593 was paid to Coast
Business Credit (CBC) during the second quarter of fiscal 1998 in respect of a
secured loan agreement dated June 13, 1997. The balance of principal outstanding
on September 30, 1997 pursuant to the CBC secured loan was $1,346,282. Debt
amortization costs decreased from $54,284 in the second quarter of fiscal 1997
by $17,525 to $36,759 in the second quarter of fiscal 1998.

Six Months Ended September 30, 1997 vs. Six Months Ended September 30, 1996.

Overview - The Company's total revenues for the first half of fiscal 1998
decreased by 6% to $3.2 million as compared to $3.4 for the first half of fiscal
1997. Sales decreased from $2.2 million in the first half of fiscal 1997

                                       10
<PAGE>
 
to $1.9 million in the first half of 1998. Royalty income increased from $1.2
million in the first half of fiscal 1997 to $1.3 million in the first half of
fiscal 1998. Royalty income represents royalty fees from Sulzer Intermedics,
Inc. Pursuant to a License Agreement between the Company and Intermedics; this
agreement terminates in January, 1998. Total operating costs in the first half
of fiscal 1998 were approximately $260,000 lower than those incurred during the
first half of fiscal 1997, resulting in an operating loss of $197,000 in the
first half of fiscal 1998 compared to an operating loss of $262,000 in the first
half of fiscal 1997.

Sales - Total sales during the first half of fiscal 1998 decreased from
$2,171,175 in the first half of fiscal 1997 by $277,396 or 13% to $1,893,779.
Sales of pacers were stable in both the domestic and international markets,
sales of electrode leads declined in the domestic market, but these were
partially offset by increased sales of hybrid circuits in the international
market and the commencement of sales of defibrillator leads.

Sales by geographic area during the first halves of fiscal 1998 and 1997 were:

<TABLE> 
<CAPTION> 

          ---------------------------------------------------------------- 
          Geographic Area                      1998               1997     
          ---------------------------------------------------------------- 
          <S>                          <C>                <C> 
          United States................$      1,513,410   $      1,862,475 
          International................         380,369            308,700 
                                       ----------------------------------- 
                                       $      1,893,779   $      2,171,175 
          ---------------------------------------------------------------- 
</TABLE> 
          
Royalty Income - Royalty income represents royalty fees from Sulzer 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. The future potential royalties to
be recorded over the remaining life of the Agreement, which will terminate in
January, 1998, are estimated at $825,000.

Costs of Products Sold - The cost of products sold during the first half of
fiscal 1998 was $1,152,060 compared to $1,164,672 in the first half of fiscal
1997, representing a decrease of 1% as compared to a decrease of 13% in sales,
which reduced the rate of gross margin from 46% in the first half of fiscal 1997
to 39% in the first half of fiscal 1998. This reduction was due to a change in
product and customer mix, with a higher proportion of sales of sub-assemblies
going to the European market, where selling prices and margins are lower than
for finished product sold in the domestic market.

Selling, General and Administrative Expenses - Selling, general and
administrative expenses were $1,356,125 in the first half of fiscal 1998,
representing a decrease of $193,410 or 12% from $1,549,535 incurred in the first
half of fiscal 1997. Selling expenses decreased from $851,373 in the first half
of fiscal 1997 by $250,070 or 29% to $601,303 in the first half of fiscal 1998
as a result of reduced costs in respect of salaries, commissions and royalties;
general and administrative expenses increased from $698,162 in the first half of
fiscal 1997 by $56,660 or 8% to $754,822 in the first half of fiscal 1998 as a
result of increased costs in respect of salaries, insurance and professional
fees.

Engineering, Research and Development Expenses - Engineering, research and
development costs were $878,691 during the first half of fiscal 1998 compared to
$932,518 during the first half of fiscal 1997 due to the continuing development
activities in advanced pacing technologies.

Other Income and Expenses - Interest income was $7,952 during the first half of
fiscal 1998 compared to $16,274 during the first half of fiscal 1997. Total
interest expense decreased from $265,883 in the first half of fiscal 1997 to
$211,006 in the first half of fiscal 1998. Interest paid to Sirrom Capital
Corporation in respect of a secured loan of $1,500,000 obtained on March 31,
1995 was $101,527 in the first half of fiscal 1998 and in the first half of
fiscal 1997. Interest in the sum of $33,593 was paid in the first half of fiscal
1998 to Coast Business Credit (CBC) in respect of a secured loan agreement dated
June 13, 1997. The balance of principal outstanding on September 30,

                                       11
<PAGE>
 
1997 pursuant to the CBC secured loan was $1,346,282. Debt amortization costs
decreased from $106,845 in the first half of fiscal 1997 by $44,571 to $62,274
in the first half of fiscal 1998.

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
and continued development of new, advanced products. The Company believes that
with the continued release of new products and its world-wide market expansion,
it will have the potential to increase sales.

The European Union ("EU") nations have adopted universal standards as developed
by the International Organization for Standardization ("ISO") 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
EU 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. The Company Quality System received
certification to the ISO 9002 on November 19, 1996. The CE Mark certification
was issued by the Notified Body, TUV Product Service, of Munich, Germany, during
the second quarter of fiscal 1996 for the Company's products intended for sale
in Europe. The Company is developing design control processes in preparation for
a compliance audit to ISO 9001.

Until March 1995, the Company was the only manufacturer commercially marketing
single-lead atrial-controlled ventricular pacemakers. However, Sulzer
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. Sulzer Intermedics commenced marketing its new
pacemakers in March 1995. In addition, other competitors have also commenced
marketing competitive single lead products.

Although the introduction of the new single lead pacemakers poses competition
for the Company, management believes that the Company will benefit from such
competition since the new competition 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 other
competitive 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.

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 successfully to compete with Sulzer Intermedics and other
pacemaker manufacturers will depend on the Company's ability to supply product
and recruit and increase a quality sales force and continue to develop and
release new advanced products. 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 Company
believes that the credit facility from Coast Business Credit and the cash flow
generated from Sulzer Intermedics' orders and royalties have positioned the
Company to increase its research and development capabilities and its sales
force, and to provide an uninterrupted supply of products. However, actual
results may differ materially from the Company expectations, depending on a
variety of important factors, some of which may be out of the Company's control,
including, among others, the availability of raw materials from suppliers, the
timing of FDA clearance of new products, the ability of the Company to keep pace
with market demand for new products, the ability of the Company's sales force,
and the ability of the Company to successfully compete with competitors who have
greater financial resources.

                                       12
<PAGE>
 
As discussed above, the manufacture and sale of leads to Sulzer Intermedics
produce income for the Company. The Company sells electrode leads to Sulzer
Intermedics for its new systems under an Amended and Restated Supply Contract
that terminates on August 1, 1998. The Company also receives royalties from
Sulzer Intermedics sales of its products incorporating the licensed technology
under an Amended and Restated License Agreement. The Company anticipates
supplying components to Sulzer Intermedics under the supply agreement for the
next several years. An increase in demand for components by Sulzer 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 will be in a
position to accommodate an increase in orders.

It is anticipated that Sulzer 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 Sulzer 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 Sulzer Intermedics with
products, the Company anticipates providing Sulzer Intermedics with components
for the next few years. However, in the event Sulzer Intermedics receives FDA
approval in a shorter time-frame than anticipated, or other events occur which
causes a decrease in Sulzer Intermedics' orders, the Company's business and
operating results would be adversely affected.

Sources of Supply. Two of the Company's principal suppliers of materials used
primarily in electrode lead production, Dow Corning Corp. and E.I. DuPont de
Nemours & Company, indicated that they will no longer supply their materials to
the medical device industry for use in implantable devices. In July 1993, the
FDA published in the Federal Register a one-time-only requirement for medical
device manufacturers to file a special notification of material supplier changes
resulting from the decision of Dow Corning to discontinue supplying its
materials to medical device manufacturers. The Company filed the "Special
Silicone Notification" for its products effected by the Dow Corning decision in
September 1993. In this notification alternate suppliers and materials were
identified and supporting technical biological test data were provided for the
alternate materials. The FDA acknowledged receiving the Company's notification
and indicated that, unless otherwise notified by the FDA, the alternate
materials identified in the notification may be used in the Company's products
in place of the comparable Dow Corning materials. No further FDA approvals of
the alternate materials of such suppliers were required.

With respect to other materials changes resulting from decisions by the
material suppliers to discontinue supplying the medical device industry, e.g.
E.I. DuPont de Nemours, the FDA has indicated that such changes shall be handled
on a case-by-case basis through the established product approval processes
within the FDA. The availability of materials suitable for use in implantable
medical devices is an industry-wide problem and is not unique to the Company or
to the 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.

Suppliers of custom Application Specific Integrated Circuits (ASIC's) have
advised that the technology used to produce ASIC's will no longer be supported.
As such, the Company placed one last bulk order to ensure the availability of
sufficient ASIC's to satisfy projected demands for product. State of the art
ASIC's will be developed for the new pacing system, obviating the need for
perpetual supply of the currently used ASIC's.

Inflation and Changing Prices

In the opinion of Company management, the rate of inflation during the past two
fiscal years has not had any material impact on the Company's operations.
Because of the implementation of cost containment and new

                                       13
<PAGE>
 
Medicare regulations, any increase in sales revenues is expected to result from
an increase in the volume of business rather than from an increase in selling
prices. The Company's pricing structure may not reflect inflation rates, due to
constraints of Medicare regulations, market conditions and competition.

Recent Accounting Pronouncements

The FASB has issued SFAS No. 128, "Earnings per Share," which provides guidance
for computing and presenting earnings per share (EPS). This statement simplifies
the standards for computing EPS previously found in APB Opinion No. 15,
"Earnings per Share." This statement, when adopted, is not expected to have a
material impact on the Company.

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (FAS
130) and No. 131, "Disclosure about Segments of an Enterprise and Related
Information" (FAS 131). FAS 130 establishes standards for reporting and
displaying comprehensive income, its components and accumulated balances. FAS
131 establishes standards for the way that public companies report information
about operating segments in annual financial statements and requires reporting
of selected information about operating segments in interim financial statements
issued to the public. Both FAS 130 and FAS 131 are effective for periods
beginning after December 15, 1997. Because of the recent issuance of the
standards, management has been unable to fully evaluate the impact, if any, they
may have on future financial statement disclosures.

                                       14
<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 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.

Item 2.   Changes in Securities

         (a)      Not applicable.

         (b)      Not applicable.

         (c)      On August 29, 1997, the Company issued shares in payment of a
                  portion of outstanding Directors' fees to those outside
                  Directors named below, which fees were payable in part on
                  March 31, 1996 and in part on March 31, 1997.

<TABLE>
<CAPTION>
                                               Outstanding              Shares of Common Stock
                                             Directors' Fees          issued @ $1.4375 in payment
                                           payable in Shares of        of outstanding Directors'
                                              Common Stock.                      Fees.1

                  <S>                      <C>                        <C>  
                  William H. Burns Jr.           $7,000                           4,870

                  Larry Haimovitch               $7,000                           4,870

                  Augusto Ocana                  $6,000                           4,174

                  Robert Rylee                   $7,000                           4,870

                  Tracey E. Young                $7,000                           4,870
</TABLE>

                  1. The issuance price of $1.4375 was the closing price on
                     March 31, 1997.

                  On September 12, 1997, the Company issued 5,714 shares of
                  common stock to outside Director William H. Burns Jr. pursuant
                  to an agreement for consulting services dated November 1995
                  between the Company and Biosight Inc., of which Mr. Burns is
                  President and principal shareholder. The consulting agreement
                  provided for payment of $20,000 in shares of common stock at
                  $3.50 per share.

                  All of the foregoing individuals are accredited investors
                  (Directors of the Company). All of the foregoing stock
                  issuances were entered into by the Company in reliance on
                  Section 4(2) of the Securities Act of 1933. The foregoing
                  individuals indicated their investment intent and the stock
                  certificates bear a legend accordingly.

                                       15
<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
-------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                    <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 11,
                    5% Convertible Debenture due           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 Registration
                    Qualified Stock Option Plan            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 Dow         1995, File No. 0-14653
                    Corning Enterprises, Inc.

4.6                 Stock Purchase Warrant, dated          Exhibit 4.6 to Form 10-KSB for the year ended March 31,
                    October 15, 1995 in favor of           1996, File No. 0-14653
                    Sirrom Capital Corporation

4.7                 Stock Purchase Warrant, dated          Exhibit 4.7 to Form 10-KSB for the year ended March 31,
                    March 29, 1996 in favor of             1996, File No. 0-14653
                    Grupo Taper, S.A.Exhibit
</TABLE>

                                       16
<PAGE>
 
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------------
Exhibit                                                    Sequential Page Number or
Number              Description                            Incorporation by Reference to
-------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                    <C>           
4.8                 Stock Purchase Warrant, dated          Exhibit 4.1 to Form 8-K Current Report dated June 13,
                    June, 1997 in favor of Coast           1997, File No. 0-14653.
                    Business Credit, a Division of
                    Southern Pacific Thrift and Loan
                    Association

4.9                 Stock Purchase Warrant dated           Exhibit 4.2 to Form 8-K Current Report dated June 13,
                    June 6, 1997 in favor of Sirrom        1997, File No. 0-14653
                    Capital Corporation

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

10.2                Amended and Restated License           Exhibit 10.19 to Form 8-K Current Report, dated April 2,
                    Agreement between Sulzer               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 Sulzer                1992, File No. 0-14653
                    Intermedics Inc. and the
                    Company, dated April 2, 1993

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

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

10.6                Employment Agreement between           Exhibit 10.12 to Form 10-Q for the Quarter Ended
                    Robert S. Miller and the               December 31, 1994, File No. 0-14653
                    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 and          March 2, 1995, Registration No. 33-89938
                    Bart C. Gutekunst, dated July 1,
                    1994
</TABLE>

                                       17
<PAGE>
 
<TABLE> 
<CAPTION>

-------------------------------------------------------------------------------------------------------------------------
Exhibit                                                    Sequential Page Number or
Number              Description                            Incorporation by Reference to
-------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                    <C>                              
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 between           Exhibit 10.14 to Form S-1 Registration Statement filed on
                    Robert R. Brownlee and the             March 2, 1995, Registration No. 33-89938
                    Company dated as of October 1,
                    1994

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

10.12               $1,500,000 Secured Promissory          Exhibit 10.2 to Form 8-K Current Report, dated March 31,
                    Note in favor of Sirrom Capital        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 31,
                    and Leases, and Security               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 31,
                    Agreement in favor of Bart             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 31,
                    between the Company Sirrom             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-QSB for the Quarter ended
                    Agreement between Sulzer               September 30, 1995, File No. 0-14653
                    Intermedics Inc., and the
                    Company dated October 20,
                    1995

10.17               Amendment 2 to Supply                  Exhibit 10.17 to Form 10-QSB for the Quarter ended
                    Contract between Sulzer                September 30, 1995, File No. 0-14653
                    Intermedics Inc., and the
                    Company, dated October 20,
                    1995
</TABLE>

                                       18
<PAGE>
 
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------------
Exhibit                                                    Sequential Page Number or
Number              Description                            Incorporation by Reference to
-------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                    <C>             
10.18               Amendment 2 to License                 Exhibit 10.18 to Form 10-QSB for the Quarter ended
                    Agreement between Sulzer               September 30, 1995, File No. 0-14653
                    Intermedics Inc., and the
                    Company, dated October 20,
                    1995

10.19               Distribution Agreement between         Exhibit 10.19 to Form 10-QSB for the Quarter ended
                    Grupo Taper S.A. and the               December 31, 1995, File No. 0-14653
                    Company, dated December 20,
                    1995

10.20               Distribution Agreement between         Exhibit 10.20 to Form 10-QSB for the Quarter ended
                    LEM Biomedica s.r.l. and the           September 30, 1996, File No. 0-14653
                    Company, dated October 1, 1996

10.21               Security Agreement and Secured         Exhibit 10.21 to Form 10-QSB for the Quarter ended
                    Promissory Note between Bart           December 31, 1996, File No. 0-14653
                    C. Gutekunst and the Company,
                    dated October 28, 1996.

10.22               Security Agreement and Secured         Exhibit 4.1 to Form 10-KSB for the year ended March 31,
                    Promissory Note between Bart           1997, File No. 0-14653
                    C. Gutekunst and the Company,
                    dated March 24, 1997.

10.23               Security Agreement and Secured         Exhibit 10.23 to Form 10-QSB for the quarter ended June
                    Promissory Note between Alan J.        30, 1997.
                    Rabin and the Company, dated
                    April 15, 1997.

10.24               Security Agreement and Secured         Exhibit 10.24 to Form 10-QSB for the quarter ended June
                    Promissory Note between Bart           30, 1997.
                    C. Gutekunst and the Company,
                    dated April 21, 1997.

10.25               Loan and Security Agreement            Exhibit 10.1 to Form 8-K Current Report dated June 13,
                    Coast Business Credit and the          1997, File No. 0-14653
                    Company, dated June 13, 1997

10.26               $300,000 Secured Promissory            Exhibit 10.2 to Form 8-K Current Report dated June 13,
                    Note of the Company to Coast           1997, File No. 0-14653
                    Business Credit, dated June 13,
                    1997

10.27               $500,000 CAPEX Promissory              Exhibit 10.3 to Form 8-K Current Report dated June 13,
                    Note of the Company to Coast           1997, File No. 0-14653
                    Business Credit, dated June 13,
                    1997
</TABLE>

                                       19
<PAGE>
 
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------------
Exhibit                                                    Sequential Page Number or
Number              Description                            Incorporation by Reference to
-------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                    <C>       
10.28               Intercreditor and Subordination        Exhibit 10.4 to Form 8-K Current Report dated June 13,
                    Agreement between Coast                1997, File No. 0-14653
                    Business Credit and Sirrom
                    Capital Corporation

10.29               Mortgage and Security                  Exhibit 10.5 to Form 8-K Current Report dated June 13,
                    Agreement between the                  1997, File No. 0-14653
                    Company and Coast Business
                    Credit

10.30               Security Agreement (Intellectual       Exhibit 10.6 to Form 8-K Current Report dated June 13,
                    Property) between the Company          1997, File No. 0-14653
                    and Coast Business Credit

10.31               Grant of Security Interest -           Exhibit 10.7 to Form 8-K Current Report dated June 13,
                    Patents in favor of Coast              1997, File No. 0-14653
                    Business Credit

27                  Financial Data Schedule                Included herewith
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

  Copies of the above described exhibits will be furnished to the stockholders
upon written request, addressed to President and Chief Executive Officer,
Cardiac Control Systems, Inc., 3 Commerce Boulevard, Palm Coast, Florida 32164.

6(b).  Reports on Form 8-K - None

                                       20
<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: 11 Nov. 1997                    By: /s/ Alan J. Rabin
     -------------------                 --------------------------------------
                                         Alan J. Rabin
                                         President and Chief Executive Officer



Date: November 10, 1997               By: /s/ W. Alan Walton
     -------------------                 --------------------------------------
                                         W. Alan Walton
                                         Executive Vice President and Chief 
                                         Operating Officer

                                       21
<PAGE>
 
                               INDEX OF EXHIBITS


  Exhibit                    Description
  Number

  27                Financial Data Schedule

                                       22