SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C. 20549

                                    FORM 10-QSB/A
                                  (AMENDMENT NO. 1)

                   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 . . . . . . . . . . . . . . . .   6

                    Notes to Financial Statements . . . . . . . . . . .   7

          Item 2.   Management's Discussion and Analysis or
                         Plan of Operation  . . . . . . . . . . . . .    11

          PART II - OTHER INFORMATION

          Item 2.   Changes in Securities and Use of Proceeds . . . .    13

          Item 6.   Exhibits and Reports on Form 8-K  . . . . . . . .    13

          SIGNATURES  . . . . . . . . . . . . . . . . . . . . . . . .    14


     <PAGE>


          PART I  -  FINANCIAL INFORMATION

          Item 1.  FINANCIAL STATEMENTS

                             AMERICAN ELECTROMEDICS CORP.
                                    BALANCE SHEET

                                                      APRIL 30,   JULY 31,
                                                        1998        1997
                                                     ----------  ----------
                                                     (Unaudited)

                                                          (Thousands)
          ASSETS
          Current Assets:                                        
          Cash and cash equivalents . . . . . . . .    $   110     $  471 
          Accounts receivable                                    
            Trade . . . . . . . . . . . . . . . . .      1,242        283 
                                                            --        379 
            Affiliate . . . . . . . . . . . . . . .    -------    ------- 
                                                         1,242        662 
          Inventories . . . . . . . . . . . . . . .      2,704        475 
                                                           704        244 
          Prepaid and other current assets  . . . .    -------    ------- 
            Total current assets  . . . . . . . . .      4,760      1,852 

          Property and equipment  . . . . . . . . .        840        449 
                                                          (418)      (396)
          Accumulated depreciation  . . . . . . . .    -------    ------- 
                                                           422         53 
          Deferred financing costs  . . . . . . . .         21        128 
          Investment in affiliate . . . . . . . . .        311        819 
                                                           849        208 
          Goodwill  . . . . . . . . . . . . . . . .    -------    ------- 
                                                        $6,363     $3,060 
                                                       =======    ======= 
          LIABILITIES AND STOCKHOLDERS' EQUITY                   
          Current Liabilities:                                   
          Accounts payable  . . . . . . . . . . . .    $   923    $   187 
          Bank line of credit . . . . . . . . . . .        285        300 
          Accrued liabilities . . . . . . . . . . .        469        153 
                                                           167        152 
          Current portion of long-term debt . . . .    -------    ------- 
            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)
                                                           (95)        -- 
          Foreign currency translation adjustment .    -------    ------- 
                                                         3,401      1,168 
            Total stockholders' equity  . . . . . .    -------    ------- 
                                                        $6,363     $3,060 
                                                       =======    =======

                               See accompanying notes.


                                      -3-
     <PAGE>

                             AMERICAN ELECTROMEDICS CORP.
                               STATEMENTS OF OPERATIONS
                                     (Unaudited)


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

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

          Selling, general and administrative . .       1,048         636 
                                                           --          10 
          Research and development  . . . . . . .  ----------  ---------- 
                                                        1,048         646 
             Total operating expenses . . . . . .  ----------  ---------- 

          Operating loss  . . . . . . . . . . . .        (687)       (470)

          Other income (expenses):                 
             Undistributed earnings of affiliate          (21)        (12)
             Interest, net  . . . . . . . . . . .         (19)        (38)
             Minority interest in affiliate . . .          --          -- 
                                                          (64)        (12)
             Other  . . . . . . . . . . . . . . .  ----------  ---------- 
                                                         (104)        (62)


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


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


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


                                      -4-  
     <PAGE>


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

          Net sales . . . . . . . . . . . . . . .  $    5,095  $    1,486 
                                                        2,979         841 
          Cost of goods sold  . . . . . . . . . .  ----------   --------- 
          Gross profit  . . . . . . . . . . . . .       2,116         645 

          Selling, general and administrative . .       2,637       1,325 
                                                           --          85 
          Research and development  . . . . . . .  ----------   --------- 
                                                        2,637       1,410 
             Total operating expenses . . . . . .  ----------   --------- 

          Operating loss  . . . . . . . . . . . .        (521)       (765)

          Other income (expenses):
            Undistributed earnings of affiliate .          56        (55)
            Interest, net . . . . . . . . . . . .        (137)       (81)
            Minority interest in affiliate  . . .         (85)        -- 
                                                          (58)       (25)
            Other . . . . . . . . . . . . . . . .  ----------  --------- 
                                                         (224)      (161)

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


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

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

                               See accompanying notes.


                                      -5-
     <PAGE>


                             AMERICAN ELECTROMEDICS CORP.
                               STATEMENTS OF CASH FLOWS
                                     (Unaudited)

                                                     NINE MONTHS ENDED  
                                                    APRIL 30,    APRIL 26,
                                                       1998        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              (775)       (361)
               current assets . . . . . . . . . .
             Accounts payable and accrued                (233)         16 
               liabilities  . . . . . . . . . . .   ---------  ---------- 
             Net cash used in operating          
               activities . . . . . . . . . . . .      (1,272)     (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           236         500 
            line of credit  . . . . . . . . . . .
          Proceeds from issuance of common stock,         994         144 
            net . . . . . . . . . . . . . . . . .
          Proceeds from issuance of convertible            --         720 
            subordinated debt . . . . . . . . . .
          Deferred financing costs  . . . . . . .          --        (166)
          Proceeds from exercise of stock options         150           2 
                                                   ----------  ---------- 
          Net cash provided by financing                1,115       1,116 
            activities  . . . . . . . . . . . . .  ----------  ---------- 

          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         533         317 
            period  . . . . . . . . . . . . . . .  ----------  ---------- 
          Cash and cash equivalents, end of        $      110  $      372 
            period  . . . . . . . . . . . . . . .  ==========  ==========

          Supplemental disclosure of cash flow                  
            information:

          NON-CASH ACTIVITIES: 
          Common stock issued in connection with
            consulting agreement  . . . . . . . .  $    1,000          --
          Conversion of convertible subordinated                         
            debt into common stock  . . . . . . .         720          __
                                                   ==========  ==========
          Common Stock issued in connection with
            acquisitions  . . . . . . . . . . . .         210          __
                                                   ==========  ========== 


                               See accompanying notes.


                                      -6-
     <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:


                                      -7-
     <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.

          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.


                                      -8-
          <PAGE>


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

          On December 18, 1997, the Company invested $255,000, $150,000 in
          cash and 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.
          The shares were valued at $1.00 per share, which represented the
          fair market value of the Common Stock as of the entry into such
          Agreement.  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.


                                      -9-
     <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.


                                      -10-
     <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 is immediately convertible into
          shares of the Company's Common Stock at a conversion rate equal
          to $1,000 divided by the lower of (i) $4.00 or (ii) 75% of the
          average closing bid price for the Common Stock for the five
          trading days immediately preceding the conversion date.  The
          Company may force conversion of all (and not less than all) of
          the outstanding shares of Series A Preferred Stock at any time
          after the first anniversary of the effective date of the
          Registration Statement.  There is no minimum conversion price. 
          Should the bid price of the Common Stock fall substantially prior
          to conversion, the holders of the Series A Preferred Stock could
          obtain a significant portion of the Common Stock upon conversion,
          to the detriment of the then holders of the Common Stock.

          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


                                      -11-
     <PAGE>


          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.

          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 $636,000 and $1,325,000
          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


                                      -12-
     <PAGE>


          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.

          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


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     <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:  September 9, 1998         /s/ Thomas A. Slamecka
                                            --------------------------
                                            Thomas A. Slamecka
                                            Chairman


          Dated:   September 9, 1998        /s/ Michael T. Pieniazek
                                            --------------------------
                                            Michael T. Pieniazek
                                            President and Chief Financial
                                              Officer


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