U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-KSB

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF
1934 (Fee Required)

     For the fiscal year ended June 30, 1998

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (No Fee Required)

For the transition period from                to
                  ---------------------------------------------

                       Commission File Number: 33-27610-A

                     MEDICAL TECHNOLOGY & INNOVATIONS, INC.
                 (Name of small business issuer in its charter)

                                     Florida
                         (State or other jurisdiction of
                         incorporation or organization)

                       615 Centerville Road, Lancaster, PA
                    (Address of principal executive offices)

                                   65-2954561
                      (I.R.S. Employer Identification No.)

                                      17601
                                   (Zip Code)

                                 (717) 892-6770
                (Issuer's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

                           Common Stock, no par value
                              (Title of each class)

Securities registered pursuant to Section 12(g) of the Act:

                                      None
                                (Title of Class)

     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  preceding 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing  requirements  for the past 90 days. YES [X]
No [ ]

     Check if there is no disclosure of delinquent  filers  pursuant to Item 405
of  Regulation  S-B is not  contained in this form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

     The issuer's revenues for its most recent fiscal year were $4,541,372.

     The  aggregate  market  value of the voting  stock  held by  non-affiliates
computed  by  reference  to the price at which the stock was sold or the average
bid and asked  prices  of such  stock as of August  31,  1998 was  approximately
$9,100,000.

     As of June 30, 1998 26,385,279 shares of Common Stock, no par value, of the
registrant were outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE:

                                      None

[GRAPHIC OMITTED]
<PAGE>
                                     PART I.

Item 1.  Description of Business

General

Medical Technology & Innovations,  Inc., f/k/a SouthStar Productions,  Inc. (the
"Company") was incorporated in the state of Florida in January 1989. The Company
operates through its wholly-owned subsidiary,  Medical Technology, Inc. ("MTI").
MTI was incorporated in the state of Iowa in April 1993.

The  Company  acquired  control  of MTI in  October of 1995 under the terms of a
Share   Exchange  Plan  ("the  Plan")  with   SouthStar   Productions,   Inc.  (
"SouthStar").

The Company  manufactures  and  distributes the MTI  PhotoScreenerO,  which is a
specialized Polaroid-type instant film camera designed to detect conditions that
lead to amblyopia ("lazy eye") and other eye disorders.

On August 1, 1996 the Company acquired the net assets of Steridyne  Corporation,
a Florida Corporation ("Steridyne"). Steridyne is a manufacturer and distributor
of  thermometer  sheaths,  probe  covers,  and  anti-  decubitus  gel  cushions.
Steridyne also distributes both glass and digital thermometers.

Product Lines

The MTI  Photoscreener  is  designed to take a  photograph  of a child's eye and
detect  factors  which can lead to amblyopia  (lazy eye),  including  strabismus
(misalignment of the eye),  cataracts  (cloudy lenses),  and asymmetric or other
abnormal  refractive  errors,  including  myopia  (nearsightedness),   hyperopia
(farsightedness), and astigmatism.

The MTI  Photoscreener  consists of a single flash placed close to the center of
the lens of the  subject's  eye to  accentuate  the "red  eye"  appearance  of a
subject  for  diagnostic  purposes.  By  placing  the  flash  close  to the lens
aperture, abnormal refractive errors of the eye are imaged as white crescents in
the red eye reflex, a process scientifically known as "photo refraction".

The MTI PhotoScreenerO consists of approximately 40 components,  plus screws and
fasteners.  Major components include molded plastic parts, optic lenses, printed
circuit boards, an instant film back, a strobe flash,  optic mirrors,  a battery
pack, a power supply, and a battery charger.

Steridyne's  primary   professional  product  line  is  the  Steritempa  sterile
thermometer sheath and Steritemp II probe cover, a universal probe cover for the
small hand-held electronic thermometer.  These clinical products are packaged in
over 30 distinct put-ups for the varied marketplace.  This includes Steritempa's
own branded electronic  thermometer and probe cover kits. A non-sterile  economy
sheath/probe cover line, Value BrandO, was recently introduced.

Steridyne's   retail  products  include  Glass  thermometer   kits,   electronic
thermometer kits, sheath/probe covers, and forehead temperature indicators.

Steridyne  has  two  extensive  wound  management  product  lines  in  the  home
healthcare  market:  Zero-GO and  SofSeatO,  a range of gel  flotation  cushions
offering full support at economical price levels.

Certain geographic segment  information is described in Note 16 to the Company's
financial statements included as Item 7 of this Form 10-KSB.

Marketing and Distribution
<PAGE>
The Company  markets the MTI  PhotoScreenerO  domestically  and  internationally
through  a  combination  of  direct  sales   representatives   and   independent
distributors.  The Company  markets  the MTI  PhotoScreenerO  to  pediatricians,
public health and education departments,  preschools,  day care centers,  family
and general physicians, eye doctors, hospitals, volunteer organizations, managed
care and health maintenance organizations, and national eye care chains.

Steridyne  products  are  distributed   through  an  authorized  dealer  network
utilizing  sales   representatives   throughout  the  nation.  There  are  three
divisions:  professional (ethical),  home healthcare and retail. The independent
sales representatives are directed by a sales executive of Steridyne.

Competition

The vision screening business has attracted several companies, both domestic and
foreign.  Although other vision screening devices currently exist and are on the
market, the Company believes the MTI  PhotoScreenerO has competitive  advantages
over all other such devices.  These advantages  include instant film capability,
relatively low cost, portability, and ease of interpretation and use.

The Company's  temperature  taking and wound  management  products  operate in a
highly competitive retail market in which the Company has a minor share. Most of
its business is in the clinical area where it is estimated that it has about 25%
of the U.S. market.

Although the Company  believes  its  products  have  advantages  over  competing
products,  no assurances  can be made that current  competitors  or new entrants
into the market will not  develop  more  competitive  products.  Such  potential
competitors would most likely have  considerably  more financial  resources than
the Company.

Patents and Trademarks

In 1993,  the  Company  obtained  rights  to U.S.  Patent  No.  4,989,968  for a
photoscreening  camera system, which is now known as the MTI PhotoScreener.  The
above patent was  initially  granted to Dr.  Howard  Freedman  and  subsequently
assigned to the Company.  The Company has filed patent  applications  in Canada,
Europe, and Japan.

As a result of the  acquisition  of Steridyne  in August  1996,  the Company has
obtained rights to patents No.4672700,  No.4753705,  No.4967758, No.4614442, and
No. 4593699,  covering thermometer sheaths and probe covers,  decubitus cushions
and disposable liners for blood pressure cuffs.  Steridyne's  trademarks include
Steritemp, Zero-G, Dr. T.Rex and Sofseat.

Government Regulation

Certain aspects of the Company's business,  principally the manufacture and sale
of the MTI  PhotoScreenerO  and the Steridyne products are subject to regulation
by the U.S. Food and Drug Administration  (FDA) as a medical device. The Company
has received a 510(k) clearance to market the MTI  PhotoScreenerO and all of the
Steridyne products with the exception of the gel floatation cushions and sheaths
which only  require  listing  with the FDA and that has been  accomplished.  The
Company believes that it has completed all necessary  governmental  processes to
market the MTI PhotoScreenerO.  However, if the FDA should determine the Company
has not complied  with its  regulations,  the FDA has the authority to order the
Company to cease production of its products and recall products already sold.

Employees

As of June 30, 1998, the Company employed 38 full-time employees.  This compares
with the employment of
<PAGE>
46 full-time  employees at June 30, 1997.  None of the  Company's  employees are
represented by a labor union, and the Company  considers its employee  relations
to be good.

Item 2. Description of Properties

The  Company's  principal  executive and  administrative  offices are located in
Lancaster,  Pennsylvania.  In July of 1998,  the Company  sold the  building and
moved its headquarters to a smaller leased facility in Lancaster,  Pennsylvania.
In August of 1996,  the Company moved its MTI  PhotoScreenerO  manufacturing  to
leased  facilities  in Waterloo,  Iowa.  The Company  also owns a  manufacturing
facility  in  Riviera  Beach,  Florida  where  manufacturing,  distribution  and
administrative functions of Steridyne Corporation are conducted. The facility is
subject to a mortgage of approximately  $230,000.  The Company believes that its
properties  are well  maintained,  and its  manufacturing  equipment  is in good
operating condition and sufficient for current production.

Item 3. Legal Proceedings

In March  1997,  the  Company was sued by  Lehman-Millet  Incorporated  "LMI" in
Suffolk  County  Superior Court in Boston,  Massachusetts  concerning an alleged
agreement to provide public relations and promotional assistance with respect to
the MTI PhotoScreener(TM). This lawsuit was settled in March of 1998.

In  November,  1997 the Company  initiated  a law suit  against  Faisal  Finance
(Switzerland)  S.A. to recover damages related to  restructuring  the conversion
rights of its Series A Preferred  Convertible  shares and  associated  financial
transactions.  That action was filed in  Pennsylvania  and  subsequently  Faisal
Finance challenged the jurisdiction of the court and filed an action against the
Company in Florida. The Company then joined the two actions in Florida.

The Company  alleges  that Faisal  Finance  breached  its  agreement  to provide
funding for, as well as to  participate  as an investor  in, the  restructuring,
purposefully delayed the transactions knowing the precarious financial condition
of the Company at the time and allowed  conflicting  interests to interfere with
their  obligations  as a financial  advisor to the  Company.  Faisal is claiming
damages  of  $750,000  for the  alleged  failure  of the  Company  to fulfil its
obligations under the original conversion rights and investment banking fees for
alleged services in connection with the restructuring.

Management  believes that the Company's  claim against Faisal Finance is well in
excess of Faisal's  claim against the Company and that the facts,  circumstances
and merits  surrounding  the Company's claim will prevail against any defense or
counter claim that Faisal Finance may attempt.

Special counsel advises that it is probable that the Company will prevail in its
claim  against  Faisal  Finance  and  that  the  likelihood  of  Faisal  Finance
recovering  anything  beyond the $76,000 that the Company  attempted to pay them
for their shares in connection with the restructuring is remote.

MTI,  the  Company  and  Steridyne  are  also  parties  to other  pending  legal
proceedings  in the  ordinary  course of their  business.  The Company  does not
expect  these  legal  proceedings  to  have a  material  adverse  effect  on the
Company's financial condition.

Item 4.  Submission of Matters to a Vote of Security Holders

The following  items were considered and acted upon at the Company's 1998 annual
meeting of stockholders which was held February 23, 1998:

1. The following director was elected, along with his respective votes received:
<PAGE>
 Director             Term      Votes For      Votes Against    Votes Abstain  
 Robert  Brennan      3 yr.     17,813,523          293              3,999


2. Simon  Lever & Company  was  ratified  as the  independent  certified  public
accountants  by a vote of 17,397,433  in favor,  1,953 votes against and 418,429
abstain votes.

                                    PART II.

Item 5.  Market for Common Equity and Related Stockholder Matters

The Company's common stock is listed on the Over the Counter Electronic Bulletin
Board under the symbol "MTEN." Prior to October 1995, the Company's common stock
was neither listed nor traded on any market.  The following table sets forth the
range of the high and low bid  prices for the common  stock  during the  periods
indicated,  and  represents  interdealer  prices,  which do not  include  retail
mark-ups and  mark-downs,  or any commission to the  broker-dealer,  and may not
necessarily represent actual transactions.

Quarter Ending        High    Low        Quarter Ending        High     Low

September 30, 1997    $.25    $.11       September 30, 1996    $1.44    $1.19
December 31, 1997      .69     .21       December 31, 1996       .81      .75
March 31, 1998         .35     .22       March 31, 1997          .50      .25
June 30, 1998          .40     .18       June 30, 1997           .38      .19

As of June 30, 1998, there were approximately 686 recordholders of common stock.
Such amounts do not include common stock held in "nominee" or "street" name.
<PAGE>
In fiscal  1998,  the  Company  sold  144,509  shares of common  stock for total
consideration  of $25,000  pursuant to Rule 506 of  Regulation D as  promulgated
under the Securities Act of 1933.

The Company has not paid cash dividends on its common stock since its inception.
At the present time, the Company's  anticipated working capital requirements are
such that it intends to follow a policy of  retaining  any  earnings in order to
finance the development of its business.

Item 6.  Management's Discussion and Analysis or Plan of Operation

This analysis  should be read in  conjunction  with the  consolidated  financial
statements and notes thereto.

This form 10-KSB  includes " forward looking  statements"  concerning the future
operations of the Company.  It is  management's  intent to take advantage of the
"safe harbor" provision of the Private Securities Litigation Reform Act of 1995.
This  statement  is for the  express  purpose  of  availing  the  Company of the
protections of such safe harbor with respect to all "forward looking statements"
contained in this Form 10-KSB.  We have used  "forward  looking  statements"  to
discuss  future plans and  strategies  of the Company.  Management's  ability to
predict results or the effect of future plans is inherently  uncertain.  Factors
that could effect results  include,  without  limitation,  competitive  factors,
general economic conditions, customer relations, relationships with vendors, the
interest rate environment, governmental regulation and supervision, seasonality,
distribution networks, product introductions,  acceptance, technological change,
changes in industry  practices  and one-time  events.  These  factors  should be
considered when evaluating the "forward  looking  statements" and undue reliance
should not be placed on such  statements.  Should any one or more of these risks
or  uncertainties  materialize,  or  should  any  underlying  assumptions  prove
incorrect, actual results may vary materially from those described herein.

Results of Operations

Fiscal Year Ended June 30, 1998 as Compared to 1997

Revenues for the fiscal year 1998 increased by $909,091 or a 25% increase.  This
increase results because of increased demand for the MTI PhotoScreener(TM)  from
retail optical chains,  service clubs and schools  combined with a 12% growth in
the core Steridyne business.  Gross profit for the fiscal year 1998 increased by
84% versus the  comparable  period in fiscal 1997 mostly due to sales  increases
and mix as overall margins are comparable between the two periods.  MTI products
generally have higher profit margins than Steridyne products.

Operating expenses decreased by 36% from $4,125,498 in fiscal 1997 to $2,659,027
in fiscal 1998. This reduction is evident in almost all expense  categories with
the greatest savings in the employment and public  relations  areas.  Management
expects  ongoing  general  and  administrative  costs  to  stabilize  at  levels
experienced in the fourth quarter of fiscal 1998. Interest expense has increased
60% to $231,230 for fiscal 1998 versus 1997 because of the debt incurred to fund
the  restructuring  of the Series A Preferred  shares and higher  interest costs
associated with factoring the Company's receivables to increase cash flow.

Management expects a lower net loss for the first fiscal quarter 1999 because of
increased sales and continued cost controls.

Liquidity and Capital Resources

At June 30,  1998,  the  Company  had cash of  $38,247  and  working  capital of
($1,163,005)  as  compared  to $58,090  and  ($341,860)  at June 30,  1997.  The
increase  in the  working  capital  deficit  is mostly due to the  inclusion  of
$798,000 of secured notes incurred to fund the Series A Restructuring  which are
payable or convertible  into Company common stock in March of 1999.  Included in
long-term  debt at June 30, 1998 is a mortgage on the  headquarters  facility of
$234,000  which  was  satisfied  in July of 1998 and  $376,750  of  subordinated
convertible
<PAGE>
notes were converted into 725,000 shares of common stock in July of 1998.

In  September of 1997 the Company  reached an agreement  with the holders of the
Series A  Preferred  shares  issued in July of 1996 to amend  certain  terms and
conditions  of  the  issue  subject  to  the  Company  completing  the  required
financing. All Series A Preferred shareholders were given the choice of electing
("Option 1") a cash payment of $3,800 per share or ("Option 2") 10,000 shares of
the Company's common stock and a new Series B Preferred share with a $6,000 face
in  exchange  for 1 share of the  original  Series  A  Preferred.  All  Series A
Preferred shareholders will also have the exercise price reduced on all warrants
applicable to tendered  Series A Preferred  Shares from $2.72 to $1.00.  The new
Series B Preferred  Stock is  convertible  into common stock of the Company from
October 1, 1998 at a fixed price of $1.00.  Conversion  is limited to 10% of the
holding for the first four months following October 1, 1998 then it is increased
to 20% per month thereafter. The Series B Preferred stock can be redeemed by the
Company at any time in cash at 110% of the face value or in common stock at 120%
of the face value,  with  mandatory  redemption  required by September 30, 2000.
Over 60% of the  parties  who  purchased  the  Series  A  Preferred  shares  and
converted  them into shares of the  Company's  common  stock agreed to a lock-up
which  limited  sales to 8% of the amount  purchased  per month with no limit on
salability  after  October 1, 1998.  Common  stock  issued to Series A Preferred
Stockholders  electing Option 2 is subject to a lock-up which ends on October 1,
1998.

In  connection  with  securing  financing for Option 1 of the Series A Preferred
restructuring,  the Company  raised an additional  $719,000 for general  working
capital  purposes.  The Company  recruited new senior  management who instituted
significant reductions in employees,  inventory management programs and cutbacks
in operating  expenses in all parts of the business.  Management  also broadened
its sales and marketing  emphasis to target large  retailers and national public
service   organizations   rather  than  individual   healthcare   professionals.
Management  believes these actions will improve  operating  performance and cash
flow in the near term.

In August of 1998,  the  Company  received  its  largest  order  ever to deliver
approximately   700   PhotoScreeners   during  fiscal  1999.   The  order  which
approximates  $1.5  million  places  certain  restrictions  on the Company  from
selling the PhotoScreener in certain markets.  In connection with this order and
provided the customer spends several millions of dollars in national advertising
mentioning  the  PhotoScreener,  the  Company has  provided  the  customer  with
warrants to purchase 1.2 million  shares of the  Company's  stock at an exercise
price in excess of the current market.

The Chief Executive Officer and a director  personally signed a guarantee with a
local bank to provide a $250,000 line of credit to the Company which  terminates
in January of 1999.

For the past several  years the Company has financed  its  operations  primarily
through  private sales of securities and revenues from the sale of its products.
Since June of 1993 the Company has received net proceeds of approximately  $10.0
million  from the private  sale of  securities  and debt.  The Company may raise
additional  capital  through  private  and/or  public sales of securities in the
future.

Year 2000 Compliance

The  Company  is aware of the issues  associated  with the  programming  code in
existing computer systems as the millennium (Year 2000) approaches. All software
used for the Company systems is supplied by software  vendors or outside service
providers.  The  Company  has  confirmed  with such  providers  that its present
software is Year 2000 compliant.
<PAGE>
Item 7.  Financial Statements

Index to Consolidated Financial Statements:
                                                                            Page

Report of independent auditors for the years ended June 30, 1998 and 1997      8

Consolidated balance sheets as of June 30, 1998 and 1997                       9

Consolidated income statements for the years ended June 30, 1998 and 1997     10

Consolidated statements of stockholders' equity for the years ended
     June 30, 1998, 1997 and 1996                                             11

Consolidated statements of cash flows for the years ended
     June 30, 1998 and 1997                                                   12

Notes to consolidated financial statements                                    13
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Medical Technology & Innovations, Inc.
Lancaster, Pennsylvania

     We have audited the  accompanying  consolidated  balance  sheets of Medical
Technology & Innovations,  Inc. and  subsidiaries  as of June 30, 1998 and 1997,
and the related  consolidated  statements of income,  stockholders'  equity, and
cash flows for the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

     We conducted  our audits in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly, in all material respects, the consolidated financial position of
Medical Technology & Innovations,  Inc. and subsidiaries as of June 30, 1998 and
1997, and consolidated  results of their operations and their  consolidated cash
flows for the years then ended in conformity with generally accepted  accounting
principles.


           /s/SIMON LEVER & COMPANY




Lancaster, Pennsylvania
October 9, 1998
<PAGE>
                     Medical Technology & Innovations, Inc.
                          Consolidated Balance Sheets
                                    June 30
<TABLE>
<S>                                                                     <C>                   <C>
       Assets
                                                                             1998                 1997
                                                                        ------------          -----------
Current Assets:
         Cash                                                             $ 38,247              $ 58,090
         Accounts Receivable, less allowances of
           $36,367                                                         287,114               407,633
         Inventory                                                         393,148               692,273
         Prepaid Expenses                                                   30,740                36,477
                                                                         ---------            ----------
         Total Current Assets                                              749,249             1,194,473
                                                                          --------             ---------

Fixed Assets:
         Land                                                              382,000              382,000
         Property & Equipment                                            1,194,104             1,180,269
         Less accumulated depreciation                                   (364,567)             (223,881)
                                                                         ---------             ---------
         Fixed Assets, net                                               1,211,537             1,338,388
                                                                         ---------             ---------
Other Assets:
         Intangible and Other Assets                                     2,345,530             2,716,280
                                                                         ---------             ---------

Total Assets                                                            $4,306,316            $5,249,141
                                                                         =========             =========

              Liabilities and Stockholders' Equity
Current Liabilities:
         Accounts Payable                                                 $505,824              $418,341
         Accrued Liabilities                                               370,558               384,995
         Current Maturities of Long-Term Debt                            1,035,872               732,997
                                                                         ---------            ----------
         Total Current Liabilities                                       1,912,254             1,536,333

Long-Term Debt, Net of Current Maturities                                1,117,545             1,020,040
                                                                         ---------             ---------

Total Liabilities                                                        3,029,799             2,556,373
                                                                         ---------             ---------
Stockholders' Equity
         Common Stock, no par value, authorized
             700,000,000 shares, outstanding 26,385,279
             and 16,730,729 shares, respectively                         9,632,183             6,755,260
         Series A Convertible Preferred Stock, $100
             par value, authorized 70,000 shares,
             outstanding nil and 496 shares,
             respectively                                                    - 0 -             4,407,810
         Series B Convertible Preferred Stock,
            $100 par value, authorized 1000 shares,
            267 outstanding                                              1,602,000                 - 0 -
          Preferred Stock, authorized 100,000,000 shares
            $1,000 par value, 12%, noncumulative,
            outstanding 22.5 shares                                         22,500                22,500
         Treasury Stock, at cost                                         (309,742)              (309,742)
         Accumulated Deficit                                           (9,670,424)            (8,183,060)
                                                                       -----------            -----------
         Total Stockholders' Equity                                      1,276,517              2,692,768
                                                                         ---------              ---------
Total Liabilities and Stockholders' Equity                              $4,306,316             $5,249,141
                                                                       ===========             ==========
</TABLE>
    The accompanying notes are an integral part of the financial statements.
<PAGE>
                     Medical Technology & Innovations, Inc.
                         Consolidated Income Statements
                           For the Years Ended June 30
<TABLE>
<S>                                                                  <C>                                   <C>
                                                                        1998                                   1997
                                                                       -----                                  -----
Revenues                                                             $4,541,372                             $3,632,281
Cost of Goods Sold                                                    3,138,479                              2,870,196
                                                                     ----------                            -----------

          Gross Profit                                                1,402,893                                762,085
                                                                     ----------
Operating Expenses
          Advertising                                                   128,640                                454,828
          Selling, General,
          and Administrative                                          2,530,387                              3,670,670
                                                                     ----------
          Total Operating Expenses                                    2,659,027                              4,125,498
                                                                     ----------
(Loss) from Operations                                              (1,256,134)                            (3,363,413)
          Interest expense, net                                         231,230                                144,146
                                                                    -----------
Net (Loss) from Operations                                         ($1,487,364)                           ($3,507,559)

Add: Gain on Restructuring of Series A
         Preferred Stock                                               948,163                                   - 0 -
                                                               ----------------
Net (Loss) Attributable to Common Stock                              ($539,201)                           ($3,507,559)
                                                                   ============

Net (Loss) per common share (basic and diluted)                         ($.065)                                ($.247)
                                                                   ============

Net (Loss) per common share after
          Gain on Restructuring of Series A
          Preferred Stock (basic and diluted)                           ($.024)                                ($.247)
                                                                   ============
</TABLE>
    The accompanying notes are an integral part of the financial statements.
<PAGE>
                     Medical Technology & Innovations, Inc.
                 Consolidated Statements of Stockholders' Equity
                               For the Years Ended
<TABLE>
<S>                               <C>         <C>       <C>            <C>           <C>        <C>       <C>          <C>
                                                          Series A      Series B 
                                                         Convertible   Convertible                                        Total
                                    Common      Common    Preferred     Preferred    Preferred  Treasury  Accumulated  Stockholders'
                                    Shares       Stock      Stock         Stock        Stock      Stock     Deficit       Equity

Balance at June 30, 1995          11,205,036  $1,435,407                              $56,000             ($2,781,730)  ($1,290,323)

Issuance of Common Stock           1,306,409   1,147,076                                                                  1,147,076
Exercise of Stock Options            735,084   1,102,427                                                                  1,102,427
Stock Issued for Services            217,520     462,230                                                                    462,230
Purchase of Treasury Shares       (1,316,750)                                                   ($250,000)                 (250,000)
Net Loss                             _______   _________                _________     ________             (1,893,771)   (1,893,771)
                                                                                                           -----------   -----------
Balance at June 30, 1996          12,147,299  $4,147,140                               $56,000  ($250,000) ($4,675,501)   ($722,361)

Sale of 70,000 Series A
    Convertible Preferred Stock,
    Net of issuance costs                                $6,220,700                                                       6,220,700
Conversions of Preferred Stock
    Into Common Stock              3,697,576   1,846,390 (1,812,890)                   (33,500)
Exercise of Stock Options            194,737     292,105                                                                    292,105
Issuance of Common Stock             532,898     270,250                                                                    270,250
Stock Issued for Services            215,000     199,375                                                                    199,375
Purchase of Treasury Shares          (56,781)                                                     (59,742)                  (59,742)
Net Loss                            ________   _________ __________                    ________    _______  (3,507,559)  (3,507,559)
                                                                                                                   -          ----- 
Balance at June 30, 1997          16,730,729  $6,755,260 $4,407,810                    $22,500  ($309,742) ($8,183,060)  $2,692,768
                                   ---------                                                              -------------
Net Loss                                                                                                    (1,487,364)  (1,487,364)
Issuance of Common Stock             144,509      25,000                                                                     25,000
Stock Issued for Services          1,156,864     296,113                                                                    296,113
Conversion of Series A Preferred
    Stock into common stock        7,853,177   1,531,647 (1,531,647)
Conversion of subscribed Series A    500,000      76,000    (76,000)
    Preferred Stock into common stock
Gain on Restructuring of Series A
    Preferred Stock                              948,163 (1,198,163)                                                       (250,000)
Issuance of Series B Preferred
    in exchange for Series A Pf'd  _________    ________ (1,602,000)    1,602,000  

Balance at June 30, 1998          26,385,279  $9,632,183     - 0 -     $1,602,000      $22,500  ($309,742)  ($9,670,424) $1,276,517
</TABLE>
    The accompanying notes are an integral part of the financial statements.
<PAGE>
                     Medical Technology & Innovations, Inc.
                      Consolidated Statements of Cash Flows
                           For the Years Ended June 30
<TABLE>
<S>                                                                          <C>                <C>
                                                                                 1998               1997
Cash flows from operating activities:
Net Loss                                                                     ($1,487,364)       ($3,507,559)
Adjustments to reconcile net loss to net cash used in
operating activities:
               Depreciation and Amortization                                      365,474            312,845
               Decrease (Increase) in Accounts Receivable                         120,519            299,800
               Decrease (Increase) in Inventory                                   299,125              2,244
               Decrease (Increase) in Prepaid Expenses                              5,737            132,010
               Increase (Decrease) in Accounts Payable                             87,483            198,932
               (Decrease) Increase in Accrued Liabilities                        (14,437)            259,929
               Stock issued for services                                          296,113            199,375
                                                                                  -------            -------
Net cash used in operating activities                                           (327,350)        (2,102,424)

Cash flows from investing activities:
               Purchase of Net Assets of Steridyne                                 - 0 -         (4,406,635)
               Purchase of Fixed Assets                                          (13,835)          (244,986)

Net cash used in investing activities                                            (13,835)        (4,651,621)

Cash flows from financing activities:
               Costs incurred for restructuring of
               Series A Preferred Stock, net                                    (250,000)              - 0 -
               Proceeds from issuance of Series A
                 Preferred Stock, net                                               - 0 -          6,220,700
               Proceeds from issuance of Stock, net                                25,000            270,250
               Proceeds from exercise of Stock options, net                         - 0 -            292,105
               Acquisition of Treasury Stock                                        - 0 -           (59,742)
               Proceeds from issuance of Notes Payable                            728,750            266,000
               Repayment of Notes Payable                                       (182,408)          (451,120)
                                                                                ---------         ----------
Net cash from financing activities                                                321,342          6,538,193
                                                                                ---------          ---------
Net (decrease) in cash                                                           (19,843)          (215,852)
Cash at beginning of year                                                          58,090            273,942
                                                                                   ------            -------
Cash at end of year                                                               $38,247            $58,090
                                                                                  =======            =======

Supplemental Disclosure:
   Cash paid during the year for interest                                        $118,337            $76,000

                                                                                 ========            =======
</TABLE>
   The accompanying notes are an integral part of the financial statements.
<PAGE>
                     Medical Technology & Innovations, Inc.
                   Notes to Consolidated Financial Statements

1.  Organization.  Medical Technology & Innovations,  Inc. (the Company),  f/k/a
SouthStar  Productions,  Inc., is a Florida  corporation  engaged in the design,
manufacture,   and  distribution  of  medical   screening  devices  for  medical
professionals  primarily  involved in vision screening  through its wholly-owned
subsidiary,  Medical  Technology,  Inc. (MTI).  The Company's other  subsidiary,
Steridyne   Corporation,   distributes  digital  and  glass  thermometers,   and
manufactures and distributes probe covers,  sheaths, and anti-decubitus  devices
for hospitals,  medical offices,  nursing homes and retail outlets.  The Company
derives the majority of its revenues from sales of Steridyne's products.

2. Summary of Significant Accounting Policies.
Principles of Consolidation.  The consolidated  financial statements include the
Company and its wholly owned  subsidiaries.  All significant  intercompany items
have been eliminated.

Reclassifications.  Certain amounts in the prior years'  consolidated  financial
statements have been reclassified to conform to the current year presentation.

Revenue  Recognition.  Revenue from  product  sales are  recognized  at the time
product is shipped.

Inventories.  Inventories  are stated at the lower of cost or market,  with cost
determined under the first-in, first-out (FIFO) method.

Property and  Equipment.  Property and equipment are stated on the basis of cost
less accumulated  depreciation.  The Company provides for depreciation  over the
estimated useful lives of property and equipment using the straight-line method.
        
Intangible and Other Assets.  Intangible  and other assets consist  primarily of
goodwill  associated  with the  acquisition  of Steridyne and are amortized on a
straight-line   basis  over  their  estimated   remaining   lives.   Accumulated
amortization on intangibles and other assets total $643,589 and $272,841 at June
30, 1998 and 1997, respectively.

Income Taxes.  Deferred income taxes are provided on a liability  method whereby
deferred tax assets are  recognized  for deductible  temporary  differences  and
operating loss and tax credit  carryforwards  and deferred tax  liabilities  are
recognized for taxable  temporary  differences.  Temporary  differences  are the
differences between the reported amounts of assets and liabilities and their tax
bases.  Deferred tax assets are reduced by a valuation  allowance  when,  in the
opinion of  management,  it is more likely than not that some  portion or all of
the  deferred  tax  assets  will  not  be  realized.  Deferred  tax  assets  and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.
         
Advertising. Advertising costs are expensed as incurred.

Estimates.  The preparation of financial statements in conformity with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.
<PAGE>
Long-Lived  Assets -  Long-lived  assets  to be held and used are  reviewed  for
impairment whenever events or changes in circumstances indicate that the related
carrying  amount may not be  recoverable.  When required,  impairment  losses on
assets to be held and used are  recognized  based on the fair value of the asset
and  long-lived  assets to be disposed of are  reported at the lower of carrying
amount or fair value less cost to sell.  Impairment  losses are recognized  when
the aggregated  future cash inflows (less outflows) to be generated by an asset,
are less than an asset's carrying value. Future cash inflows include an estimate
of the proceeds from eventual  disposition  of the assets.  For purposes of this
comparison,  future  cash  flows  are  determined  without  reference  to  there
discounted present value.

New Financial Accounting  Standards- In June 1997, the FASB issued Statement No.
130, "Reporting  Comprehensive Income" and Statement No. 131, "Disclosures About
Segments  of  an  Enterprise  and  Related  Information".  Both  statements  are
effective  for periods  beginning  after  December 15, 1997.  Statement  No. 130
establishes  standards for the reporting and display of comprehensive income and
its components in a full set of financial statements and requires that all items
that are required to be  recognized as  components  of  comprehensive  income be
reported in a financial  statement that is displayed with the same prominence as
other financial  statements.  Statement No.131 establishes standards for the way
public  enterprises  report  information  about  operating  segments  in  annual
financial  statements  and requires them to report  selected  information  about
operating segments in interim financial reports issued to shareholders.  It also
establishes  standards  for related  disclosures  about  products and  services,
geographic areas and major customers. The impact of both statements will require
additional disclosures to the Company's 1999 financial statements.

3.  Inventories.  Inventories  consisted  of the  following at June 30, 1998 and
1997:
                        1998                  1997 
                      ---------             --------
     Raw materials     $271,878             $462,987
     Work in process     50,305               71,509
     Finished goods      70,965              157,777
                      ---------            ---------
                       $393,148             $692,273

4. Fixed  Assets.  Fixed assets  consisted of the following at June 30, 1998 and
1997:
                                      1998                 1997
                                     -------              -------
 Plant & equipment                  $930,147             $916,647
 Land                                382,000              382,000
 Computer equipment and software     163,618              163,618
 Furniture and fixtures              100,339              100,004
                                     -------              -------
                                   1,576,104            1,562,269
 Less: Accumulated Depreciation    (364,567)            (223,881)
                                  $1,211,537           $1,338,388

In July of 1998,  the  Company  sold its  headquarters  facility  and repaid the
$234,000 mortgage on the realty.

5.  Long-Term  Debt.  Long-Term Debt consisted of the following at June 30, 1998
and 1997:
                                                          1998         1997
                                                         ------       ------ 
12% subordinated convertible notes, due May 1998       $376,750     $343,750

8.5% note, due February 1, 1999, interest payable
monthly, secured by a mortgage                          234,000      234,000

11.25% note, due February 1999, principal and 
interest payable monthly, secured by substantially
all of the assets of a subsidiary of the Company, 
except for the Company's patent, and guaranteed by
the Company's President and major stockholder            73,095      115,672

8% convertible notes, due March 1999, 
interest payable quarterly, secured by certain
assets of a subsidiary;  guaranteed by the Company      798,643        - 0 -

11.25% note, due March 2001, principal and 
interest payable monthly, secured by  substantially 
all of the assets of a  subsidiary  of the Company, 
except for the Company's patent and guaranteed by the
Company's President and major stockholder                87,139      106,584

10.0% convertible note, due March 2001, interest
payable quarterly                                        78,829       75,643

10.0% convertible note, due March 2002, interest
payable quarterly                                        79,486       76,329

Secured notes payable, due various dates, interest
payable various at 0% to 16%                                -0-        7,036

9.5% note, due December 2011, principal and
interest payable monthly, secured by mortgage            238,551     238,660

Variable  rate note  payable,  interest  payable monthly 
at prime rate plus 7%,secured by Company's inventory      60,000      50,000
<PAGE>
Unsecured notes payable, due various dates, interest
payable various at 0% to 10%                             126,924     505,363
                                                         -------     -------
Total notes payable                                    2,153,417   1,753,037
Less: amounts due in one year                        (1,035,872)   (732,997)   
                                                      $1,117,545  $1,020,040

The 12% subordinated  convertible notes due May 1998 were converted into 725,000
shares of the Company's common stock in July of 1998.

The 10.0%  convertible  note due March 2001 and the 10.0%  convertible  note due
March 2002 are  convertible,  at the election of the note  holder,  into 158,010
shares and 131,675 shares respectively  adjusted for certain antidilutive events
upon the earlier of: (1) March 1, 1998,  (2) an initial  public  offering of the
Company's  Common  Stock,  or (3) the  sale of all or  substantially  all of the
assets of the Company.
         
The 8%  convertible  notes due in March 1999 are  convertible  at the  Company's
election  into  common  stock  in an  amount  equal  to 115% of the  outstanding
principal then due and payable plus accrued and unpaid interest,  divided by the
average bid and asked  quotes for the  Company's  common  stock for the previous
thirty trading days.

The amount of long-term  debt  maturing in each of the next five fiscal years is
$1,035,872  in 1999,  $35,557 in 2000,  $118,298 in 2001,  $83,185 in 2002,  and
$8,185 in 2003.

6. Lease Expense.  The Company  leases various  equipment and office space under
operating lease agreements.  Future minimum annual rentals for subsequent fiscal
years are as follows at June 30, 1998:

                                           Fiscal            Lease
                                           Year              Payments
                                           ------            --------
                                           1999              $53,021
                                           2000               34,934
                                           2001               16,501

7.  Earnings(Loss)  Per Share.  Earnings  (loss) per common share is computed by
dividing net  income(loss)  by the weighted  average number of common shares and
dilutive potential common shares outstanding.  The average number of shares used
to compute basic earnings per share was 23,041,184 and 14,189,150 for the fiscal
years ended June 30, 1998 and 1997  respectively.  The Dilutive potential common
shares  were  anti-dilutive  for the years  ending  June 30,  1998 and 1997 and,
accordingly,  basic and dilutive earnings (loss) per share was approximately the
same.
<PAGE>
8. Income Taxes. The Company did not incur any income tax expense for its fiscal
years  ending  June  30,  1998 and 1997  respectively.  As of June 30,  1998 the
Company has sustained in excess of $9 million in net operating losses (NOLs) for
tax purposes.  These NOLs will expire in various amounts if not utilized between
2004 and 2013 and are subject to limitations should the ownership of the Company
significantly  change.  The  deferred  tax  asset  resulting  from the above NOL
carryforwards  has not been recorded in the  accompanying  financial  statements
since  management  believes a valuation  allowance  is  necessary  to reduce the
deferred  tax  asset.  Realization  of  deferred  tax assets is  dependent  upon
sufficient  future  taxable income during the period that  deductible  temporary
differences  and  carryforwards  are expected to be available to reduce  taxable
income.

9. Royalty  Agreement.  The Company is the owner of a patent on a photoscreening
device from which MTI derives  substantially  all of its revenues.  The terms of
the royalty  agreement  require the Company to pay a royalty to the  inventor of
six percent (6.0%) of net  PhotoScreener  sales. The amount of royalties accrued
by the Company  were  $68,644 and $56,952 for its fiscal  years  ending June 30,
1998 and 1997 respectively under this agreement.

10.  Preferred  Stock.  The Company has three  classes of preferred  stock.  The
$1,000 par value  convertible  preferred stock is convertible into 14,985 shares
of the Company's common stock.

The Series A convertible  preferred stock was convertible into  approximately 30
million  shares of the  Company's  common  stock as of September  30, 1997.  The
Series A preferred stock conversion rate was the lower of the approximate market
rate or $2.72.

During  September  of 1997,  the  Company  renegotiated  terms with the Series A
Preferred Shareholders and as a result, Series A Preferred Shares were exchanged
for a combination of cash,  common stock, a new Series B Preferred  stock and an
amended warrant  certificate  with an exercise price of $1.00 per share in cash.
Series A Preferred shareholders owning 217 outstanding shares elected to receive
$3,800 in cash in exchange for their Series A Preferred shares with a face value
of  $10,000.  The Series A  Preferred  shares  were  eventually  converted  into
5,425,000 of the Company's Common Stock.  Over 60% of the parties who ultimately
purchased the Series A Preferred shares and converted them into common shares of
the Company  agreed not to sell any common shares before April 1, 1998 and limit
sales  to 8% of the  amount  purchased  per  month  thereafter  with no limit on
salability  once 360 days have  lapsed  since the  closing.  Series A  Preferred
shareholders  owning 267  outstanding  shares agreed to exchange  their Series A
Preferred  shares for a new Series B  Preferred  share with a $100 par value,  a
face value of $6000 with accretion at 8% from October 1, 1997 plus 10,000 shares
of the Company's  common stock.  The new Series B Preferred stock is convertible
into common stock beginning October 1, 1998 at a fixed conversion price of $1.00
per share.  Conversion  is  limited  to 10% per month of the  shares  held until
February 28, 1999 and 20% per month thereafter.  The conversion  feature doubles
provided the Company's  common stock closing bid price for ten consecutive  days
is greater than $2.00 per share.

The Company  has the option of  redeeming  the Series B Preferred  shares at any
time in cash,  at 110% of the  original  face  value of the  Series B  Preferred
shares  including  accretion,  or in the  Company's  common  stock valued at the
average closing bid price for the 30 days prior to the redemption at 120% of the
original face value of the Series B Preferred  shares including  accretion.  The
Company is  required  to redeem the Series B Preferred  stock on  September  30,
2000. The common stock issued to Series B Preferred  shareholders  is subject to
the following lockup schedule:
<PAGE>
                                                 Maximum
                    Date                         Tradeable

          December 1, 1997                       250 shares
           January 1, 1998                       750 shares
          February 1, 1998                     1,500 shares
             April 1, 1998                     2,500 shares
              July 1, 1998                     5,500 shares
           October 1, 1998                    10,000 shares

As a result of the  restructuring  of the Series A Preferred  Stock,  the common
stock holders have received a gain of approximately $948,000.

11. Stock Option Plans.  In October of 1995 officers of the Company were granted
options to acquire up to 2.0 million shares of common stock at an exercise price
of $1.50 per share. The options are exercisable ratably over a three year period
commencing with the quarter ending June 30, 1996.

In April of 1996 the Company's shareholders approved the 1996 Stock Option Plan,
which allows the board of directors to grant up to 3.0 million  options.  During
fiscal 1997 and fiscal 1998,  1,250,000 and 500,000 options  respectively,  have
been  granted.  The options  are  exercisable  ratably  over a three year period
commencing with the grant date.

In September of 1997 and  February of 1998,  the Board of Directors  reduced the
exercise price on all options granted to Company Executives to $.25 per share.

            The following is a summary of stock option transactions:

                                              1998

Outstanding, beginning of year             3,239,936
Options granted                              500,000
Options exercised                                  0
Options cancelled                          (500,000)
Outstanding, end of year                   3,239,936
Exercisable, end of year                   1,898,270


The  proforma  disclosures  required  by SFAS 123  "Accounting  for  Stock-based
Compensation", is not applicable due to immateriality.

12.  Warrants.  The Company has issued  warrants to purchase  approximately  3.0
million  shares of common  stock as of June 30,  1998.  The  warrants  relate to
grants made in connection with an equity issuance and various services rendered.
The warrants  can be  exercised at prices  ranging from $.25 to $2.72 per share.
2.4 million  warrants  expire in July 2001.  Pursuant to terms  renegotiated  in
September of 1997  between the Company and holders of Series A Preferred  Shares
issued in July of 1996, the exercise price of approximately 1.8 million warrants
was reduced from $2.72 to $1.00.

13. Related Party  Transactions.  The Company and its wholly-owned  subsidiaries
have had  transactions  with various  entities,  certain of whose principals are
also officers or directors of the Company or MTI.

During the fiscal year ended June 30, 1997 the Company  borrowed $90,000 from an
affiliate of the Chief Executive Officer and a Director of the Company.  On June
30, 1997,  both amounts were  outstanding and were included in the balance sheet
as of the same date. Both loans were repaid during fiscal 1998.

In May of 1997,  the  Company  borrowed  $50,000  from a director of the Company
which was repaid by the Company in October of 1997.

In connection with financing  required to fund the restructuring of the terms of
the Series A Preferred  shares in September 1997, the Chief  Executive  Officer,
Chief  Operating  Officer and a family  member,  Executive  Vice President and a
director loaned a subsidiary of the Company approximately $411,000.  These loans
are secured by certain  assets of the  subsidiary,  bear  interest at 8% payable
quarterly  and are due to be repaid or  converted  into shares of the  Company's
common stock in March of 1999.

During the fiscal year ended June 30, 1998 the Company issued common shares with
a value approximating  $100,000, to a company director for performing investment
banking, consulting and financial advisory services.

The Chief Executive Officer and a director  personally signed a guarantee with a
local bank to provide a $250,000 line of credit to the Company which  terminates
in January 1999.

14.  Fair Value of  Financial  Instruments.  The  estimated  fair  values of the
Company's financial instruments as of June 30, 1998 and 1997 are as follows:

                               1998                       1997
                       Carrying        Fair          Carrying      Fair
                         Amount       Value            Amount     Value
Accounts Receivable    $287,114    $287,114          $407,633  $407,633
Accounts Payable        505,824     505,824           418,341   418,341
Accrued Expenses        370,588     370,588           384,995   384,995
Long-term Debt        2,153,417   2,153,417         1,753,037 1,753,037

The estimated  fair value of long-term  debt  approximates  the carrying  amount
based upon the borrowing rates currently available to the Company for loans with
similar terms and maturities.  The fair value of accounts  receivable,  accounts
payable, and accrued expenses approximates their carrying amount.

15. Major Customers.  For the years ended June 30, 1998 and 1997 the Company had
no major customers that accounted for more than 10% of sales.
<PAGE>
16.   Geographic  Area   Information.   The  Company  sells  its  products  both
domestically and internationally.  All international  transactions are conducted
in U.S. currency. Information concerning operations by principal geographic area
was as follows:
                         United          Asia/
                         States        Pacific        Europe    Consolidated
June 30, 1998
Revenues             $4,341,321        $22,070      $177,981      $4,541,372
Net Earnings (Loss)  (1,342,619)       (30,327)     (114,418)     (1,487,364)
Identifiable Assets   4,292,376          - 0 -        13,940       4,306,316

June 30, 1997
Revenues             $3,349,691        $240,304      $42,286      $3,632,281
Net Earnings (Loss)  (3,169,081)       (232,161)    (106,317)     (3,507,559)
Identifiable Assets   5,195,114          23,541       30,486       5,249,141

17.  Commitment.  In August of 1998, the Company received its largest order ever
to deliver  approximately  700 MTI  PhotoScreeners(TM)  during fiscal 1999.  The
Company and the customer  agreed,  that in consideration of the customer funding
and executing a national  vision  screening  marketing  program  mentioning  the
PhotoScreeners,  the cost of which will be several million dollars,  the Company
shall grant the customer  warrants to purchase  1,200,000 shares of common stock
of the Company at an exercise price of $0.88 per share.

Item  8.  Changes  In and  Disagreements  With  Accountants  on  Accounting  and
Financial Disclosure
<PAGE>
There  were  no  disagreements   between  the  Company  and  their   independent
accountants.
  
                                   PART III.

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act

NAME               POSITION WITH    DATE ELECTED  TERM OF OFFICE       AGE
                     COMPANY            DIRECTOR
Jeremy Feakins    Director, Chief     April 1996     3 years            45
                 Executive Officer
Robert Brennan    Director, Chief  February 1998     3 years            56
                 Operating Officer
John Behrmann        Director       January 1997     3 years            63
Mathew Crimmins      Director       January 1997     3 years            66

BUSINESS EXPERIENCE OF DIRECTORS

Mr. Feakins was elected to the board in April of 1996. Since 1989, he has served
as President of Medical  Technology,  Inc. (MTI) and in October 1995, became the
President and Chief Executive Officer of Medical Technology & Innovations,  Inc.
From 1980 to 1986,  he was the managing  Director of Craft  Master,  Limited,  a
South African  corporation,  which was a  manufacturer  and exporter of point of
purchase  display  systems.  Mr.  Feakins  received his degree in accounting and
computer  studies  from the Royal  Naval  College,  Secretarial  and  Accounting
College, Chatham, Great Britain.

Mr. Brennan joined the Company in February 1997 as President and Chief Operating
Officer.  Prior to joining the Company,  Mr. Brennan was Vice  President-General
Manager of the Trubyte division of Dentsply International,  Inc. ("Dentsply"), a
worldwide dental and medical product manufacturer and distributor (NASDAQ:XRAY).
His prior experience included Vice  President-General  Manager of Dentsply's F&F
Koenigkramer division, a fully integrated  ophthalmologic equipment company, and
Vice  President-Operations  of the Deseret division of Warner Lambert Company, a
hospital product  manufacturer of IV catheters and operating room supplies.  Mr.
Brennan  received a B.S.  degree in  Business  Administration  and an M.B.A.  in
Management Development from Drexel University.

Mr. Behrmann has been a director since April 1996. Mr. Behrmann is a Chairman of
First American Health Concepts,  Inc., a public company in the optical insurance
business and owner and operator of  Evergreen  Industries,  Inc., a company with
interests in commercial  deer farming and real estate.  He is also a stockholder
and Chairman of Preston  Reynolds & Co.,  Inc., an investment  banking firm with
special  emphasis on the oil and gas industry and a stockholder  and Chairman of
Redstone  Resources,  Inc., a company  engaged in natural gas  exploration.  Mr.
Behrmann was formerly a Senior Vice  President,  Chief  Financial  Officer,  and
director of Dentsply International, Inc., a health care company, is a C.P.A. and
holds a B.S. degree in Commerce and Finance from Bucknell University, Lewisburg,
Pennsylvania.

Mr.  Crimmins has been a director  since April 1996.  From 1965 to 1995,  he was
with Polaroid  Corporation  where he held a number of executive  positions  with
responsibility in many functional areas including,  commercial,  technical,  and
manufacturing  operations.  He was a Senior  Director of Polaroid at retirement.
Mr.  Crimmins  received  a  B.S.  (Physics)  degree  from  Holy  Cross,  a  M.S.
(Electrical  Engineering)  degree from  Northeastern,  and a M.B.A.  from Boston
College.
<PAGE>
BUSINESS EXPERIENCE OF SIGNIFICANT OFFICERS

Mr.  Stefanick  joined the company in April 1997 as Executive  Vice President of
Sales and Marketing.  Prior to joining the Company,  Mr. Stefanick was President
of  Organizational  Resources,  Inc., a management  consulting  firm.  His prior
experience  included Vice President,  Sales and Marketing for Dentsply's Ceramco
division,  the world's leading supplier of dental ceramic products, and Director
of Sales and Marketing for Johnson & Johnson's Ceramco  division.  Mr. Stefanick
received a B.S. from West Chester University.

Mr. Surovcik joined the company in January 1998 as Senior Vice President,  Chief
Financial  Officer and Secretary.  He formerly was a staff  accountant for Price
Waterhouse  in New York and  later,  Audit  Director  and Group  Controller  for
Dentsply  International.  Mr.  Surovcik,  a CPA, most recently was President and
Owner of DBK Distributors, Inc., a small distribution company serving over 1,000
grocery  stores  in the Mid  Atlantic  States.  Mr.  Surovcik  received  a BS in
accounting from Susquehanna University.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section  16(a) of the  Securities  Exchange Act of 1934  requires the  Company's
officers and directors,  and persons who own more than ten percent of its Common
Stock, to file reports of ownership and changes of ownership with Securities and
Exchange  Commission (SEC).  Officers,  directors,  and greater than ten-percent
stockholders  are required by SEC  regulation to furnish the Company with copies
of all ownership forms they file.

Based  solely on its review of the copies of such form  received by it, or based
upon representations  that no Form 5 was required,  Messrs.  Feakins,  Ballheim,
Behrmann,  Brennan,  Stefanick, and Surovcik did not timely file Forms 3,4, or 5
for the fiscal year ending June 30, 1998 as follows:

Name                     No. of Late Reports

Jeremy Feakins                  3
Robert Ballheim                 1
John Behrmann                   3
Robert Brennan                  3
John Stefanick                  3
Dennis Surovcik                 3
<PAGE>
Item 10.  Executive Compensation

SUMMARY COMPENSATION TABLE

The following table sets forth  information  concerning the  compensation of the
Company's Executive Officers whose compensation exceeded $100,000 for the fiscal
years ending June 30, 1998 and 1997.
<TABLE>
<S>         <C>     <C>    <C>       <C>         <C>                                           <C>

Name and     Fiscal Annual Compensation          Long-Term Compensation                          All Other
Principal    Year                                                                               Compensation
Position(1)
                    Salary    Bonus  Other       Awards                             Payouts
                                     Annual
                                     Comp.
                                                 Restricted Stock  Options/SARs     LTIP
                                                 Award(s)                           Payouts

J. Feakins,  1998  $133,500     0                      0                  0             0            0
Chief
Executive    1997  $146,250     0                      0                  0             0            0
Officer

R. Brennan,  1998  $117,187     0                      0                  0             0            0
Chief
Operating
Officer

J. Stefanick 1998  $135,186     0                      0                  0             0             0
Executive
Vice
President
</TABLE>
----------
1. Each executive is furnished with an automobile for business and personal use.
The compensation  specified in the preceding table does not include the value of
non-business use as the amount is not material.

                     STOCK OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<S>                        <C>                         <C>                        <C>                        <C>
                               (Individual Grants)

Name                        No. of Shares Common        % of Total Options        Exercise of Base Price      Expiration Date
                            Stock Underlying            Granted to Employees             ($/share)
                            Options Granted                in Fiscal Year
-------------------------- -------------------------- -------------------------- ---------------------------  ----------------
D. Surovcik                    500,000 (1)                   100%                       $0.25                        (2)       
------------------------- --------------------------- -------------------------- ---------------------------  -----------------
</TABLE>
-------------
1.  Options  become  exercisable  at the rate of 8.33% of  options  granted  per
calendar  quarter for twelve quarters  beginning July 1, 1997 for Mr.  Surovcik.
Options  not yet  exercisable  in the  event  of  cessation  of  employment  are
forfeited by the individual  participant  unless there is a change of control in
the Company, in which event, all options granted are immediately exercisable. 2.
The expiration dates for the options granted are two (2) years from the date the
options become exercisable.

                         AGGREGATED OPTION EXERCISES IN
                       THE FISCAL YEAR ENDED JUNE 30, 1998
                        AND FISCAL YEAR END OPTION VALUES
<TABLE>
<S>                    <C>                     <C>                    <C>                    <C>                 <C>
Name                    No. of Shares              Value Realized     No. of Shares of          Exercisable/Un-       Value of
                        Acquired on                                   Common Stock                exercisable     Unexercised in-
                        Exercise                                      Underlying                                 the-money Options
                                                                      Unexercised                                 Exercisable/Un-
                                                                      Options @ Fiscal                              exercisable
                                                                      Year End
----------------------  ---------------------  ---------------------- ---------------------- ---------------------- ---------------
J. Feakins                        0                      0                   500,000            400,000/100,000               0
----------------------  ---------------------  ---------------------- ---------------------- ---------------------- ---------------
R. Ballheim                       0                      0                   500,000            400,000/100,000               0
----------------------  ---------------------  ---------------------- ---------------------- ---------------------- ---------------
D.Surovcik                        0                      0                   500,000            166,667/333,333               0
----------------------  ---------------------  ---------------------- ---------------------- ---------------------- ---------------
G. Hartman                        0                      0                   489,936            389,936/100,000               0
----------------------  ---------------------  ---------------------- ---------------------- ---------------------- ---------------
R. Brennan                        0                      0                   750,000            375,000/375,000               0
----------------------  ---------------------  ---------------------- ---------------------- ---------------------- ---------------
J. Stefanick                      0                      0                   500,000            166,667/333,333               0
----------------------  ---------------------  ---------------------- ---------------------- ---------------------- ---------------
</TABLE>
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth  information  concerning all persons known to the
Company  to be the  beneficial  owners of more than 5% of the  Company's  Common
Stock,  (ii) the ownership  interest of each director and nominee,  and (iii) by
all directors and executive officers as a group calculated as of June 30, 1998.

NAME             POSITION                  AMOUNT AND NATURE OF  PERCENT OF
                                           BENEFICIAL OWNERSHIP   OWNERSHIP
Jeremy Feakins   Director, Chief Executive        5,685,278         21.55%
                 Officer
John Behrmann    Director                         1,501,618          5.69%
Mathew Crimmins  Director                                 0          0.00%
Robert Brennan   Director, Chief Operating          426,962          1.62%
                 Officer
All Executive Directors
and Officers as a Group                           8,022,304           30.4%

Item 12.  Certain Relationships and Related Transactions

From  November  1995 to May 1996,  a Director  loaned the Company  approximately
$108,000.  The above  loan was an  unsecured  promissory  note and was  interest
bearing. The loan was repaid by the Company in July, 1996.

In March  and  April of 1997,  a Company  affiliated  with the  chief  executive
officer and director of the Company made an unsecured demand loan to the Company
for $90,000 supported by a promissory note bearing interest at 9% per annum. The
loan was partially repaid in October 1997 and in full in May 1998.

In May of 1997, a director of the Company made an unsecured  loan to the Company
for $50,000 supported by a promissory note bearing interest at 9% per annum. The
loan was repaid by the Company in October of 1997.

In connection with financing  required to fund the restructuring of the terms of
the Series A Preferred  shares in September 1997, the Chief  Executive  Officer,
Chief  Operating  Officer and family  member,  Executive  Vice  President  and a
Director loaned a subsidiary of the Company approximately $411,000.  These loans
are secured by certain  assets of the  subsidiary,  bear  interest at 8% payable
quarterly  and are due to be repaid or  converted  into shares of the  Company's
common stock in March of 1999.

During the fiscal year ended June 30, 1998 the Company issued common shares with
a value approximating  $100,000, to a Company director for performing investment
banking, consulting and financial advisory services.

The Chief Executive Officer and a director  personally signed a guarantee with a
local bank to provide a $250,000line  of credit to the Company which  terminates
in January 1999.
<PAGE>
Item 13.  Exhibits and Reports on Form 8-K

(a) Exhibits:

3.1 Articles of  Incorporation  of SouthStar  Productions,  Inc.,  n/k/a Medical
Technology & Innovations,  Inc. [Incorporated by reference to Exhibit 3.1 to the
Company's  Registration  Statement  on Form S- 18 (File No.  33-27610-A),  filed
March 17, 1989]

3.2 Amendment to the Articles of Incorporation for SouthStar Productions,  Inc.,
which changed its name to Medical Technology & Innovations,  Inc.  [Incorporated
by  reference  to the  Company's  Current  Report  on Form  8-K for an  event on
September 21, 1995]

3.3 Restated  Articles of  Incorporation  for Medical  Technology & Innovations,
Inc.  [Incorporated  by reference to the Company's  Annual Report on Form 10-KSB
(File No. 33-27610-A), filed September 30, 1996]

3.4  By-laws  [Incorporated  by  reference  to  Exhibit  3.2  to  the  Company's
Registration Statement on Form S-18 (File No. 33-27610-A), filed March 17, 1989]

10.1 Share  Exchange  Plan  between  SouthStar  Productions,  Inc.  and  Medical
Technology,  Inc.  [Incorporated by reference to the Company's Current Report on
Form 8-K for an event on August 21, 1995]

10.2 Asset  purchase  agreement  for the purchase and sale of certain  assets of
Steridyne Corporation [Incorporated by reference to the Company's Current Report
on Form 8-K for an event on July 31, 1996]

10.3  Medical   Technology  &   Innovations,   Inc.   1996  Stock  Option  Plan.
[Incorporated  by reference to the Company's  Annual Report on Form 10-KSB (File
No. 33-27610-A), filed September 30, 1996.]

10.4 SouthStar  Productions,  Inc. Stock Purchase Plan 1995a  (Financial  Public
Relations Consulting Agreement) [Incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-8 (File No. 33-27610-A), filed August
23, 1995]

10.5  Medical   Technology  &  Innovations,   Inc.  1996b  Stock  Purchase  Plan
(Consulting  Agreement)  [Incorporated  by  reference  to  Exhibit  4.1  to  the
Company's Registration Statement on Form S-8 (File No. 33-27610-A),  filed April
22, 1996]
<PAGE>
10.6 Form of  Employment  Agreement,  Covenant not to Compete,  and Stock Option
Agreement  between the Company and key employees.  [Incorporated by reference to
the  company's  Annual  Report  on Form  10-KSB  (File  No.  33-27610-A),  filed
September 30, 1996.]

10.7 Purchase Agreement dated January 31, 1996 between the Company and Glenn and
Ruth Schultz.  [Incorporated by reference to the Company's Annual Report on Form
10-KSB (File No. 33-27610-A), filed September 30, 1996.]

16.1 Letter on change in certifying accountant [Incorporated by reference to the
Company's Current Report on Form 8-K for an event on April 26, 1996]

21.1 Subsidiaries. Medical Technology, Inc. and Steridyne Corporation.
    
24.1 Powers of Attorney as indicated on Page 24 of this Form 10-KSB.

(b) Reports on Form 8-K.
               No reports on Form 8-K were filed  during the last quarter of the
period covered by this report.
<PAGE>
                                   Signatures

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                       AND
BY:                                   BY:
 /s/ JEREMY P. FEAKINS               /s/DENNIS A. SUROVCIK
   Jeremy  P. Feakins                 Dennis A. Surovcik, Senior Vice President
   Chief Executive Officer            and  Chief Financial Officer and Secretary

Date:  October 25, 1998

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.


/s/ JEREMY P. FEAKINS                           /s/ROBERT D. BRENNAN *
  Jeremy  P. Feakins, Chief Executive Officer,    Robert D. Brennan, President 
                                                  and Chairman, and Director
                                                    Chief Operating Officer

/s/ JOHN BEHRMANN
  John Behrmann, Director


/s/ MATHEW CRIMMINS*
  Matthew Crimmins, Director

Pursuant to Power of Attorney
Date: October 25, 1998
<PAGE>