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             Commission File Number
                  APRIL 30, 1998                             0-9922



                             AMERICAN ELECTROMEDICS CORP.
          (Exact Name of Small Business Issuer as Specified in its Charter)

                     DELAWARE                              04-2608713
           (State or Other Jurisdiction               (IRS Employer ID No.)
                 of Incorporation
                 or Organization)


               13 COLUMBIA DRIVE, SUITE 5, AMHERST, NEW HAMPSHIRE 03031
                (Address and Zip Code of Principal Executive Offices)


             Issuer's telephone number, including area code: 603-880-6300
                                                             ------------

                  Securities registered pursuant to Section 12(b) of
                                the Exchange Act: NONE
                                                  ----

                  Securities registered pursuant to Section 12(g) of
                                  the Exchange Act:
                        COMMON STOCK, PAR VALUE $.10 PER SHARE
                        --------------------------------------
                                   (Title of Class)



          Indicate by check mark 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, and (2) has been subject
          to such filing requirements for the past 90 days.
          YES X  NO
             ---    ---

          As of June 15, 1998, there were outstanding 7,038,136 shares of
          the Issuer's Common Stock, $.10 par value.


          <PAGE>

                             AMERICAN ELECTROMEDICS CORP.

                                        Index

                                                                       Page
                                                                       ----
          PART I - FINANCIAL INFORMATION

          Item 1.  Financial Statements

                   Balance Sheets, April 30, 1998 and
                    July 31, 1997 . . . . . . . . . . . . . . .           3

                   Statements of Operations for the Three
                      and Nine Months Ended April 30, 1998
                      and April 26, 1997  . . . . . . . . . . .           4

                   Statements of Cash Flows for the 
                      Nine Months Ended April 30, 1998 and
                      April 26, 1997  . . . . . . . . . . . . .           5

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

          Item 2.  Management's Discussion and Analysis or
                      Plan of Operation . . . . . . . . . . . .           10

          PART II - OTHER INFORMATION

          Item 2.  Changes in Securities and Use of Proceeds  .           12

          Item 6.  Exhibits and Reports on Form 8-K . . . . . .           12

          SIGNATURES    . . . . . . . . . . . . . . . . . . . .           13



                                      2

          <PAGE>


          PART I  -  FINANCIAL INFORMATION

          Item 1.  FINANCIAL STATEMENTS

                             AMERICAN ELECTROMEDICS CORP.
                                    BALANCE SHEET

                                             APRIL 30, 1998   JULY 31, 1997
                                             --------------   -------------
                                               (Unaudited)
                                                       (Thousands)
          ASSETS
          Current Assets:
          Cash and cash equivalents   . . .     $   110         $  471
          Accounts receivable
            Trade . . . . . . . . . . . . .       1,242            283
            Affiliate . . . . . . . . . . .          --            379
                                                -------        -------
                                                  1,242            662

          Inventories . . . . . . . . . . .       2,704            475
          Prepaid and other current
            assets  . . . . . . . . . . . .         704            244
                                                -------        -------
            Total current assets  . . . . .       4,760          1,852

          Property and equipment  . . . . .         840            449
          Accumulated depreciation  . . . .        (418)          (396)
                                                -------        -------
                                                    422             53
          Deferred financing costs  . . . .          21            128
          Investment in affiliate . . . . .         311            819
          Goodwill  . . . . . . . . . . . .         849            208
                                                -------        -------
                                                $ 6,363        $ 3,060
                                                =======        =======

          LIABILITIES AND STOCKHOLDERS' EQUITY
          Current Liabilities:
          Accounts payable  . . . . . . . .     $   923       $    187
          Bank line of credit . . . . . . .         285            300
          Accrued liabilities . . . . . . .         469            153
          Current portion of long-
            term debt . . . . . . . . . . .         167            152
                                                -------        -------
            Total current liabilities . . .       1,844            792

          Long-term debt  . . . . . . . . .       1,118            380
          Convertible subordinated 
            debentures  . . . . . . . . . .          --            720

          Stockholders' equity:
          Preferred stock, $.01 par value;
          Authorized - 1,000,000 shares;
          Outstanding - none  . . . . . . .          --             --
          Common stock, $.10 par value; 
          Authorized - 20,000,000 shares; 
          Outstanding - 5,663,136 shares
          at April 30, 1998 and 2,553,136 
          at July 31, 1997  . . . . . . . .         566            255
          Additional paid-in capital  . . .       5,682          2,919
          Retained deficit  . . . . . . . .      (2,752)        (2,006)
          Foreign currency translation 
            adjustment  . . . . . . . . . .         (95)            --
                                                -------        -------
          Total stockholders' equity  . . .       3,401          1,168
                                                -------        -------
                                                $ 6,363        $ 3,060
                                                =======        =======


                               See accompanying notes.



                                      3
          <PAGE>


                             AMERICAN ELECTROMEDICS CORP.
                               STATEMENTS OF OPERATIONS
                                     (Unaudited)



                                                   THREE MONTHS ENDED  
                                                   ------------------
                                             APRIL 30, 1998  APRIL 26, 1997
                                             --------------  --------------
                                                (Thousands, except per 
                                                      share amounts)

          Net sales . . . . . . . . . . . .    $      1,495      $     423 
          Cost of goods sold  . . . . . . .           1,134            247 
                                               ------------  ------------- 
          Gross profit  . . . . . . . . . .             361            176 

          Selling, general and
            administrative  . . . . . . . .           1,048            411 
          Research and development  . . . .              --             10 
                                               ------------  ------------- 
            Total operating expenses  . . .           1,048            421 
                                               ------------  ------------- 

          Operating loss  . . . . . . . . .            (687)          (245)

          Other income (expenses):
            Undistributed earnings 
              of affiliate  . . . . . . . .             (21)           (12)
            Interest, net . . . . . . . . .             (19)           (38)
            Minority interest in 
              affiliate . . . . . . . . . .              --             --
            Other . . . . . . . . . . . . .             (64)          (237)
                                               ------------   ------------ 
                                                       (104)          (287)

          Loss before provision for
            income taxes  . . . . . . . . .            (791)          (532)
          Provision for income taxes  . . .              --             -- 
                                               ------------   ------------ 
          Net loss  . . . . . . . . . . . .    $       (791)  $       (532)
                                               ============   =============

          Weighted average number of common
            and common equivalent shares
            outstanding . . . . . . . . . .       5,404,146      2,526,965 
                                               ============    =========== 

          Loss per common and 
            common equivalent share:
            Basic . . . . . . . . . . . . .    $       (.15)   $      (.21)
                                               ============    =========== 
            Diluted . . . . . . . . . . . .    $       (.15)   $      (.21)
                                               ============    =========== 



                                                    NINE MONTHS ENDED
                                                    -----------------
                                             APRIL 30, 1998  APRIL 26, 1997
                                             --------------  --------------
                                                (Thousands, except per 
                                                      share amounts)

          Net sales . . . . . . . . . . . .    $     5,095   $       1,486

          Cost of goods sold  . . . . . . .          2,979             841
                                               -----------   -------------
          Gross profit  . . . . . . . . . .          2,116             645

          Selling, general and
            administrative  . . . . . . . .          2,637           1,100
          Research and development  . . . .             --              85
                                               -----------   -------------
            Total operating expenses  . . .          2,637           1,185
                                               -----------   -------------

          Operating loss  . . . . . . . . .           (521)           (540)

          Other income (expenses):
            Undistributed earnings of
              affiliate . . . . . . . . . .             56             (55)
            Interest, net . . . . . . . . .           (137)            (81)
            Minority interest in 
              affiliate . . . . . . . . . .            (85)             -- 
            Other . . . . . . . . . . . . .            (58)           (250)
                                               -----------   -------------
                                                      (224)           (386)

          Loss before provision for
            income taxes  . . . . . . . . .           (745)           (926)
          Provision for income taxes  . . .             (2)             --
                                               -----------   -------------
          Net loss  . . . . . . . . . . . .    $      (747)  $        (926)
                                               ===========   =============

          Weighted average number of 
            common and common equivalent 
            shares outstanding  . . . . . .      4,002,804       2,495,232
                                               ===========   =============

          Loss per common and 
            common equivalent share:
            Basic . . . . . . . . . . . . .    $      (.19)  $        (.37)
                                               ===========   =============
            Diluted . . . . . . . . . . . .    $      (.19)  $        (.37)
                                               ===========   =============

                               See accompanying notes.



                                      4
          <PAGE>


                             AMERICAN ELECTROMEDICS CORP.
                               STATEMENTS OF CASH FLOWS
                                     (Unaudited)

                                                    NINE MONTHS ENDED
                                                    -----------------
                                             APRIL 30, 1998  APRIL 26, 1997
                                             --------------  --------------
                                                       (Thousands)

          OPERATING ACTIVITIES:
          Net loss  . . . . . . . . . . . .    $  (747)          $  (926)
          Adjustments to reconcile net
            loss to net cash used in 
            operating activities:
            Depreciation and 
              amortization  . . . . . . . .        265                56
            Undistributed earnings 
              of affiliate  . . . . . . . .        (56)               55
            Minority interest in 
              affiliate . . . . . . . . . .         85                --
            Changes in operating assets and 
              liabilities:
              Accounts receivable . . . . .        189               135
              Inventories, prepaid and other 
                current assets  . . . . . .       (985)             (361)
              Accounts payable and accrued 
                liabilities . . . . . . . .       (233)               16
                                               -------           -------
              Net cash used in operating 
                activities  . . . . . . . .     (1,482)           (1,025)

          INVESTING ACTIVITIES:
          Purchase of property and 
            equipment, net  . . . . . . . .       (267)              (36)
                                               -------           -------
          Net cash used in investing 
            activities  . . . . . . . . . .       (267)              (36)

          FINANCING ACTIVITIES:
          Principal payments on long-
            term debt . . . . . . . . . . .       (265)              (84)
          Proceeds from long-term debt and 
            bank line of credit . . . . . .        236               500
          Proceeds from issuance of common 
            stock, net  . . . . . . . . . .      1,924               144
          Proceeds from issuance of 
            convertible subordinated 
            debt  . . . . . . . . . . . . .         --               720
          Redemption of convertible 
            subordinated debt . . . . . . .       (720)               --
          Deferred financing costs  . . . .         --              (166)
          Proceeds from exercise of 
            stock options . . . . . . . . .        150                 2
                                               -------           -------
            Net cash provided by financing
              activities  . . . . . . . . .      1,325             1,116
                                               -------           -------

          Effect of exchange rate changes on 
            cash and cash equivalents . . .          1                --
          Increase (decrease) in cash and 
            cash equivalents  . . . . . . .       (423)               55
          Cash and cash equivalents, 
            beginning of period . . . . . .        533               317
                                               -------           -------
          Cash and cash equivalents, 
            end of period . . . . . . . . .    $   110           $   372
                                               =======           =======

          Supplemental disclosure of 
            cash flow information:

          NON-CASH ACTIVITIES:
          Common stock issued in 
            connection with 
            consulting agreement  . . . . .    $ 1,000                --
                                               =======           =======


                               See accompanying notes.



                                      5
          <PAGE>


                             AMERICAN ELECTROMEDICS CORP.
                            NOTES TO FINANCIAL STATEMENTS
                                    APRIL 30, 1998
                                     (Unaudited)


          1.  BASIS OF PRESENTATION
              ---------------------

          The accompanying unaudited financial statements have been
          prepared in accordance with generally accepted accounting
          principles for interim financial information.  Accordingly, they
          do not include all of the information and footnotes required by
          generally accepted accounting principles for complete financial
          statements.  In the opinion of management, all adjustments
          (consisting of normal recurring accruals) considered necessary
          for a fair presentation have been included.

          Effective July 31, 1997, the Company is reporting its month end
          on the last day of each month for accounting purposes.

          The Company changed its method from the equity method of
          accounting for Rosch GmbH Medizintechnik ("Rosch GmbH") to a
          consolidated basis on August 11, 1997 based upon the Company's
          determination that it had reached the definition of control of
          Rosch GmbH as of August 11, 1997 under generally accepted
          accounting principles. The Company's determination of control of
          Rosch GmbH was based primarily upon the successful completion of
          negotiations to acquire effective voting control. For the
          quarterly period ended October 31, 1997, the Company consolidated
          the Company and Rosch GmbH, however, the Company continued only
          to recognize earnings of Rosch GmbH up to its 50% ownership share
          until the remaining 50% was purchased.  On December 18, 1997, the
          Company closed on the purchase of the remaining 50% of the
          outstanding capital stock of Rosch GmbH paying $50,000 plus
          105,000 shares of the Company's Common Stock, pursuant to a Stock
          Purchase Option Agreement, dated as of November 1, 1997. As a
          result of this transaction, the Company has recognized 100% of
          earnings by Rosch GmbH since the quarter ended January 31, 1998.

          The following proforma information is presented for comparative
          purposes to disclose information on the financial position and
          results of operations of the Company and Rosch GmbH had they been
          consolidated for all periods presented:




                                      6
          <PAGE>

                                             (IN 000'S)

                                         Three Months        Three Months 
                                        Ended 4/30/98       Ended 4/26/97
                                       ----------------   -----------------

          Sales                          $ 1,495               $ 1,444 

          Gross profit                       361                   637 

          Net loss                          (791)                 (447) 

          Current assets                   4,760                 3,722 

          Non-current assets               1,603                 1,294 

          Current liabilities              1,844                 2,052 

          Non-current liabilities          1,118                 1,744


                                         Nine Months         Nine Months
                                        Ended 4/30/98       Ended 4/26/97
                                      -----------------   -----------------

          Sales                           $ 5,095               $ 3,302

          Gross profit                      2,116                 1,086

          Net loss                           (747)                 (967)

          Current assets                    4,760                 3,722

          Non-current assets                1,603                 1,294

          Current liabilities               1,844                 2,052

          Non-current liabilities           1,118                 1,744


          Operating results for the three and nine month periods ended
          April 30, 1998 are not necessarily indicative of the results that
          may be expected for the year ending July 31, 1998.  For further
          information, refer to the financial statements and footnotes
          thereto included in the Company's annual report on Form 10-KSB
          for the year ended July 31, 1997.


                                      7
          <PAGE>


          Foreign Currency Translation
          ----------------------------

          The financial statements of the Company's foreign subsidiary have
          been translated into U.S. dollars in accordance with Statement of
          Financial Standards No. 52, Foreign Currency Translation.  All
          balance sheet amounts have been translated using the exchange
          rates in effect at the balance sheet date.  Statement of
          operations amounts have been translated using average exchange
          rates.  The gains and losses resulting from the changes in
          exchange rates from the date of acquisition of Rosch GmbH to
          April 30, 1998 have been reported separately as a component of
          stockholders equity.

          The aggregate transaction gains and losses are insignificant.


          2.  INVESTMENT IN AFFILIATE
              -----------------------

          On December 18, 1997, the Company invested $150,000 and issued
          105,000 shares of its Common Stock for a 45% interest in
          Meditronic Medizinelektronik GmbH ("Meditronic"), pursuant to a
          Stock Purchase Option Agreement, dated as of November 1, 1997.
          Meditronic is a development and manufacturing company based in
          Germany, specializing in the manufacture of medical camera
          systems.  Substantially all of Meditronic's sales are to Rosch
          GmbH.  At April 30, 1998, the investment in Meditronic exceeded
          the Company's share of the underlying equity in net assets by
          approximately $190,000 and is being amortized over twenty-five
          years.


          3.  DEBT
              ----

          On October 28, 1997, the Company entered into a Forbearance and
          Workout Agreement with its bank as a result of the Company not
          being in compliance with certain financial covenants under its
          loan agreement as of July 31, 1997.  The bank waived the
          non-compliance and the Company agreed to, among other things,
          raise an additional $250,000 of equity capital and to apply
          $150,000 of such amount against outstanding term loans. 
          Additionally, as part of this Agreement, the Company's revolving
          line of credit was reduced to $300,000.  Certain of the loan
          agreement financial covenants were also amended to more
          reasonably reflect the Company's current financial position.  See
          Note 6, Subsequent Events.

          As of November 26, 1997, the Company closed a private placement
          of 1,030,000 shares of Common Stock at a price of $1.00 per
          share, and used $150,000 of the placement proceeds to repay
          portions of its bank indebtedness.

          In connection with the October 1997 amendments to its bank
          arrangements and efforts to obtain additional equity capital, the
          Company reduced the conversion price of its outstanding 14%
          Convertible Subordinated Debentures (the "Debentures") from $3.75
          to $1.00 per share of Common Stock.  As of November 3, 1997, the
          holders of all outstanding $720,000 principal amount of
          Debentures elected to convert.  As a result of these conversions,
          the Company also reduced its long-term debt by $720,000 and
          issued 720,000 shares of Common Stock.



                                      8
          <PAGE>


          4.  CAPITAL STOCK
              -------------

          Effective as of March 15, 1998, the Company retained Liviakis
          Financial Communications, Inc. ("LFC") as a financial consultant
          for a term of one year for a fee of 1,000,000 shares of the
          Company's Common Stock, valued at $1.00 per share, the fair
          market value, and warrants for an additional 1,000,000 shares of
          Common Stock exercisable at $1.00 per share for four years.  LFC
          would receive a finder's fee equal to 2.5% of the gross funding
          of any debt or equity placement and 2% of the gross consideration
          on any acquisition for which LFC acts as a finder for the
          Company.


          5.  YEAR 2000
              ---------

          The Company has completed an assessment of Year 2000 issues with
          respect to its computer systems.  The Company believes that the
          Year 2000 issue will not pose significant operational problems
          for its computer systems in that all required modifications and
          conversions to comply with Year 2000 requirements should be fully
          completed by the third quarter of 1999.  In the opinion of
          management, the total cost of addressing the Year 2000 issue will
          not have a material impact on the Company's financial position or
          results of operations.


          6.  SUBSEQUENT EVENTS
              -----------------

          On May 5, 1998, the Company acquired Dynamic Dental Systems,
          Inc., a Delaware corporation ("DDS"), in exchange for 750,000
          shares of the Company's Common Stock and $225,000, pursuant to an
          Agreement and Plan of Merger, whereby DDS became a wholly-owned
          subsidiary of the Company.  DDS is based in Gainesville, Georgia
          and is a distributor of digital operator hardware, cosmetic
          imaging software, and intraoral dental cameras.

          On May 12, 1998, the Company acquired Equidyne Systems, Inc., a
          California corporation ("ESI"), in exchange for 600,000 shares of
          the Company's Common Stock, pursuant to an Agreement and Plan of
          Merger, whereby ESI became a wholly-owned subsidiary of the
          Company.  ESI is based in San Diego, California and is engaged in
          the development of the INJEX(TM) needle-free drug injection
          system.

          During May 1998, the Company closed the placement of three
          tranches of 1,000 shares each of Series A Convertible Preferred
          Stock, $.01 par value (the "Series A Preferred Stock"), to one
          purchaser (the "Purchaser") at a purchase price of $1,000 per
          share or an aggregate purchase price of $3 million, pursuant to a
          Securities Purchase Agreement (the "Purchase Agreement"), among
          the Company, West End Capital LLC ("West End") and the Purchaser. 
          As part of its entry into the Purchase Agreement, the Company
          entered into a Registration Rights Agreement (the "Registration
          Agreement") and a Warrant Agreement.  Concurrently with the
          closing for the first tranche of Series A Preferred Stock, the
          Company issued warrants under the Warrant Agreement (the
          "Warrants") to West End for the purchase of 50,000 shares of the
          Company's Common Stock at an exercise price of $4.80 per share,
          subject to customary anti-dilution provisions, expiring on May 5,
          2002.  The Company also issued warrants for the purchase of
          30,000 shares of Common Stock to the placement agent, exercisable
          at $4.40 per share for three years.


                                      9
          <PAGE>


          The Registration Agreement requires the Company to file a
          registration statement (the "Registration Statement") under the
          Securities Act of 1933, as amended, for the Warrants and shares
          of the Company's Common Stock underlying the Series A Preferred
          Stock and the Warrants.

          The Series A Preferred Stock has a liquidation preference of
          $1,000 per share, plus any accrued and unpaid dividends, and
          provides for an annual dividend equal to 5% of the liquidation
          preference, which may be paid at the election of the Company in
          cash or shares of its Common Stock.  The annual dividend rate was
          increased to 12% as of June 5, 1998 because the Company did not
          file the Registration Statement covering the Common Stock
          underlying the Series A Preferred Stock within 30 days of the
          initial closing.  Such rate may increase up to 18% by reason of
          further delays in the effective date of the Registration
          Statement, and remain in effect until the effective date thereof
          when the dividend rate would return to 5%.



          Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
          OPERATION

          This Report contains or refers to forward-looking information,
          made pursuant to the "safe harbor" provisions of the Private
          Securities Litigation Reform Act of 1995. That information covers
          future revenues, products and income and is based upon current
          expectations that involve a number of business risks and
          uncertainties.  Among the factors that could cause actual results
          to differ materially from those expressed or implied in any
          forward-looking statement include, but not limited to,
          technological innovations of competitors, delays in product
          introductions, changes in health care regulations and
          reimbursements, changes in foreign economic conditions or
          currency translation, product acceptance or changes in government
          regulation of the Company's products, as well as other factors
          discussed in other Securities and Exchange Commission filings for
          the Company.

          RESULTS OF OPERATIONS
          ---------------------

          Net sales for the three and nine month periods ended April 30,
          1998 were $1,495,000 and $5,095,000, respectively, compared to
          $423,000 and $1,486,000 for the three and nine month periods
          ended April 26, 1997.  The increase in sales in fiscal 1998 was
          attributable to accounting for sales of Rosch GmbH on a
          consolidated basis as well as sales of the new intraoral dental
          camera system.  Sales of the dental camera commenced in the
          second quarter of fiscal 1997.  During the third quarter of
          fiscal 1998, Rosch GmbH began a transition from utilizing a major
          distributor for the sale of its dental cameras in Europe to
          direct sales.  Management believes that selling the cameras on a
          direct basis should result in increased sales and profits
          commencing in early fiscal 1999.  This transitioning though
          resulted in decreased sales in the third quarter of fiscal 1998
          when compared with sales for the second quarter of fiscal 1998.

          Cost of sales for the three and nine month periods ended April
          30, 1998 were 75.8% and 58.5%, compared to 58.4% and 56.6% of net
          sales during the same periods in the prior year.  The increase in
          cost as a percentage of sales can be attributed to the product
          mix which included sales of Rosch GmbH on a consolidated basis. 
          As the Company's sales mix becomes more significantly related to
          dental camera products, and as costs of sales for dental camera
          products is greater than for other product lines, as expected,
          costs of sales as a percentage increased.
                    

                                      10
          <PAGE>


          Selling, general and administrative ("SGA") expenses for the
          three and nine month periods ended April 30, 1998 were $1,048,000
          and $2,637,000, respectively, compared to $411,000 and $1,100,000
          for the comparable prior year periods.  The increases reflect
          increased corporate activity, as well as accounting for the
          selling, general and administrative expenses of Rosch GmbH on a
          consolidated basis.  The Company expects that the higher level of
          marketing and selling expenses will continue for the balance of
          fiscal 1998, when compared to the prior year, as the Company
          seeks to promote its new dental camera product line.  The
          increased corporate activity relates to management time and
          related expenses in connection with preliminary acquisition
          discussions conducted during the fiscal quarter.  These
          discussions resulted in the two acquisitions closed early in the
          fourth quarter of fiscal 1998.  The Company expects to continue
          incurring expenses related to acquisition discussions as its
          current strategy is to grow through acquisitions.  Additionally,
          as a result of the Company's entering into a consulting agreement
          with LFC (see Note 4), the Company will incur additional SGA
          expense related to the ratable amortization of the fair value of
          the services performed at a rate of $250,000 per quarter over a
          one-year period ending March 15, 1998.

          Net loss for the three and nine month periods ended April 30,
          1998 were $791,000, or $.15 per share, and $747,000, or $.19 per
          share, compared to a net loss of $532,000, or $.21 per share, and
          $926,000, or $.37 per share for the same periods in the prior
          fiscal year.  The increase in net loss is the result of decreased
          sales, as described above, and the per share amounts were also
          affected by increases during fiscal 1998 in the number of
          outstanding shares upon which such calculation was based.


          LIQUIDITY AND CAPITAL RESOURCES
          -------------------------------

          Working capital of the Company at April 30, 1998 was $2,916,000,
          compared to $1,060,000 at fiscal year ended July 31, 1997.  The
          $1,856,000 increase in working capital primarily reflects the
          accounting for Rosch GmbH on a consolidated basis.  As mentioned
          in Note 3 of the Notes to the financial statements to this
          Report, the Company applied $150,000 to repay portions of its
          bank indebtedness and $200,000 as the cash portion of the
          purchase price of its acquisition of Rosch GmbH and investment in
          Meditronic.  Further, the November 1997 conversion of the
          Debentures should reduce the annual interest expense going
          forward by approximately $100,000 a year.  The principal
          components of the increase in working capital were inventory and
          accounts receivable as the result of accounting for Rosch GmbH on
          a consolidated basis.

          Subsequent to April 30, 1998, the Company received $2,665,000 in
          net proceeds from the placement of the Series A Preferred Stock. 
          It used $225,000 of such proceeds for the cash portion of the DDS
          acquisition and $600,000 to repay the outstanding bank
          indebtedness.

          The Company expects that available cash should be sufficient to
          meet its normal operating requirements, including research and
          development expenditures, for the next 12 months, subject to
          needs of further cash for possible future acquisitions.  The
          Company would seek additional capital through equity and/or debt
          placements or secured financings; however, no assurance can be
          given that such financing arrangements would be successfully
          completed and, if so, on terms not dilutive to existing
          stockholders.


                                      11
          <PAGE>


          The Company is considering future growth through acquisitions of
          companies or business segments in related lines of business or
          other lines of business, as well as through expansion of existing
          lines of business.  There is no assurance that management will
          find suitable acquisition candidates or effect the necessary
          financial arrangements for such acquisitions.  In May 1998, the
          Company acquired Dynamic Dental Systems, Inc. ("DDS") and
          Equidyne Systems, Inc. ("ESI").  The Company, through DDS, is
          marketing intraoral dental cameras in the United States and
          expects to commence marketing the ESI INJEX needle-free injection
          system at the end of calendar 1998.  



          PART II. - OTHER INFORMATION


          Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

               (c)  During the fiscal quarter, the Company issued an
          aggregate of 1,000,000 shares of its Common Stock as part of the
          fee for the retention of a financial consultant, and also granted
          the warrants to purchase the Company's Common Stock, see Note 4
          of the Notes to the financial statements in this Report.  The
          issuance of the foregoing shares of Common Stock and warrants was
          claimed exempt from the registration requirements of the
          Securities Act of 1933, as amended, by reason of Section 4(2)
          thereof.

          Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

          The Company filed a report on Form 8-K for an event on March 27, 
          1998 to report that the Company entered into an Agreement and
          Plan of Merger to acquire ESI, mentioned in Item 2 of Part I of
          this Report.


          Exhibits -

          27       Financial Data Schedule




                                      12
          <PAGE>

                                      SIGNATURES

          In accordance with the requirements of the Exchange Act, the
          registrant caused this report to be signed on its behalf by the
          undersigned, thereunto duly authorized.

                             AMERICAN ELECTROMEDICS CORP.



          Dated:  June 19, 1998              /s/ Thomas A. Slamecka
                                             ----------------------
                                             Thomas A. Slamecka
                                             Chairman


          Dated:   June 19, 1998             /s/ Michael T. Pieniazek
                                             ------------------------
                                             Michael T. Pieniazek
                                             President and
                                             Chief Financial Officer





                                      13

          <PAGE>


                                   EXHIBIT INDDEX


          Exhibit            Description
          -------            -----------

            27               Financial Data Schedule