FORM 10-Q/A-2
    
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   (Mark one)

          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                    For quarterly period ended June 30, 1998

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

               For the transition period from ________ to ________

                         Commission file number: 0-22340


                        PALOMAR MEDICAL TECHNOLOGIES, INC.
               (Exact name of issuer as specified in its charter)
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<S>                          <C>                                                     <C>           <C>


                             Delaware                                                              04-3128178
--------------------------------------------------------------------                 ---------------------------------------
(State or other jurisdiction of incorporation or organization)                        (I.R.S. Employer Identification No.)
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               45 Hartwell Avenue, Lexington, Massachusetts 02421
                    (Address of principal executive offices)

                                 (781) 676-7300
                 -----------------------------------------------
                (Issuer's telephone number, including area code)


         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes X No

         As of July 31, 1998,  65,558,954 shares of Common Stock, $.01 par value
per share, were outstanding.

         Transitional Small Business Disclosure Format (check one): Yes    No X
                                                                       ---   ---


                                                                    Page 1 of 19
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                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         On March 7, 1997, Selvac Acquisition Corp. ("Selvac"),  a subsidiary of
Mehl Biophile  International,  Inc.  ("Mehl"),  filed a complaint for injunctive
relief and damages for patent  infringement  and for unfair  competition  in the
United States District Court for the District of New Jersey against the Company,
two of its  subsidiaries  and a New  Jersey  dermatologist.  Selvac's  complaint
alleged that the Company's  EpiLaser(R)  laser hair removal  system  infringed a
patent  licensed to Selvac (the "Selvac  Patent") and that the Company  unfairly
competed by promoting the EpiLaser(R) laser hair removal system for hair removal
before it had received FDA approval for that  specific  application.  On May 18,
1998 the court granted the Company's  motion for partial summary judgment on the
ground that the Selvac patent is invalid  because prior art  anticipated it. The
court has since  denied  Selvac's  motion  for  reconsideration  of the  summary
judgment ruling. On August 6, 1998, Mehl's principal  unsecured creditor filed a
petition for involuntary bankruptcy against Mehl.

         On October 16, 1997, the Company brought a declaratory  judgment action
in United States  District Court for the District of  Massachusetts  against the
holders and the indenture trustee of the Company's 4.5% Subordinated Convertible
Debentures due 2003, denominated in Swiss francs (the "Swiss Franc Debentures").
The  defendants  in this  action are  Banque SCS  Alliance  SA,  Arbuthnot  Fund
Managers,  Ltd.,  Banca  Commerciale  Lugano,  Privatinvest  Bank AG (these four
defendants  being  referred to  collectively  as the "Asserting  Holders"),  CUF
Finance S.A., Fibi Bank (Schweiz) AG, Teawood Nominees, Ltd., JS Gadd & CIE, SA,
Swedbank  (Luxembourg)  SA,  Christiana Bank Luxembourg SA, (now known as Credit
Agricole Indosuez),  Landatina Financiera SA and American Stock Transfer & Trust
Co., as trustee ("Trustee").  Just prior to this suit, the Asserting Holders had
alleged that the Company is in breach of certain protective  covenants under the
indenture.  The Company  believes that it is not in default under any protective
covenants,  and the Company's  action seeks a declaration from the Court to that
effect.  All payments on the Swiss Franc  Debentures were current to the time of
suit. On October 22, 1997, the Asserting Holders sued the Company and all of its
principal  subsidiaries  in the same court;  the October  16th and October  22nd
cases  have  been  assigned  to the same  judge,  and the  dispute  between  the
Asserting Holders and the Company is proceeding under the October 22nd case. The
Asserting  Holders  claim  that the  Company  has  breached  certain  protective
indenture  covenants  and that the  Asserting  Holders are entitled to immediate
payment of their indebtedness under the Swiss Franc Debentures (which amounts to
about  US$5,000,000 at recent exchange rates).  As of November 13, 1997,  acting
under applicable  provisions of the indenture,  the Company notified the holders
of the Swiss Franc  Debentures  that it is causing the  conversion of all of the
Swiss Franc  Debentures  into an  aggregate of 914,028  shares of the  Company's
common stock.  Palomar filed a motion for summary  judgment,  asserting that its
conversion of the  debentures  into Palomar common stock deprives the plaintiffs
of standing to bring a claim. That motion has been denied without prejudice, and
the court also denied the plaintiffs'  motion for summary judgment.  The case is
scheduled for trial in October 1998.  The Company  believes that its position in
these  matters is correct  and  intends to contest  the claims of the  Asserting
Holders vigorously.

         On August 27, 1997,  Pamela Siegman,  as Trustee for the Pamela Siegman
Trust,  filed an action in the Court of Chancery of the State of Delaware in and
for New Castle County against the Company and each of its current  directors and
two former  directors.  Siegman,  purportedly  on behalf of  similarly  situated
shareholders,  claimed  disclosure  errors and omissions in the Company's annual
meeting proxy statement,  and sought a declaration that the Company's  preferred
stock is void because of a purported deficiency in the Company's  Certificate of
Incorporation.  On March 9, 1998, the Court of Chancery ruled against Siegman on
all of her claims  (she had  abandoned  some of her claims  prior to the Court's
ruling).  On July 13, 1998,  the Court allowed (in part)  Siegman's  request for
attorney fees, reasoning that while the Company's  Certificates of Correction of
its  Certificate  of  Incorporation  operated  retroactively  to the date of the
original  Certificate of  Incorporation to cure any defect of authority to issue
preferred  stock in series,  those  Certificates  of Correction were filed after
Siegman's  suit was begun,  and she was  entitled to fees up to the date of that
filing. Siegman took no appeal, and Palomar paid the $125,000 fee award.

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

         The following table sets forth a brief description of each matter voted
upon and the  number  of votes  cast for or  against,  as well as the  number of
abstentions  and broker  non-votes,  as to each such  matter,  at the  Company's
Annual Meeting of Stockholders held on June 1, 1998.
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-------------------------------- ------------------- --------------- ---------------- ----------------
                                      Votes              Votes                            Broker
           Matter                      For              Against        Abstentions       Non-Votes
-------------------------------- ------------------- --------------- ---------------- ----------------
Charter Amendment To                 45,365,931        4,543,854         315,142           None
increase authorized shares
of common stock from
100,000,000 to 120,000,000

-------------------------------- ------------------- --------------- ---------------- ----------------
Approval of 1998 Stock               11,224,398          571,629         417,894        33,618,116
Option Plan

-------------------------------- ------------------- --------------- ---------------- ----------------
Ratification of Selection of         49,768,925          254,877         308,155           None
Arthur Andersen LLP as the
Company's Auditors

-------------------------------- ------------------- --------------- ---------------- ----------------
Election of Directors

-------------------------------- ------------------- --------------- ---------------- ----------------
     Louis P. Valente                49,572,431          759,526           None            None

-------------------------------- ------------------- --------------- ---------------- ----------------
     James G. Martin                 49,583,531           748,396          None            None

-------------------------------- ------------------- --------------- ---------------- ----------------
     A. Neil Pappalardo              49,583,531           748,398          None            None

-------------------------------- ------------------- --------------- ---------------- ----------------
     Nicholas P. Economou            49,581,861           748,396          None            None

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

(a)      Exhibits

10.1*    Second Amended 1996 Employee Stock Purchase Plan.

10.2*    Second Loan Agreement between Palomar Medical Technologies, Inc. and Coherent, Inc., dated May 7, 1998.

10.3*    Loan  Agreement  between  Palomar  Medical  Technologies,  Inc. and  Coherent,  Inc.,  dated May 22, 1998.
         (Portions omitted pursuant to a request for confidential treatment.)
   
10.4     Fifth Amendment to the Schedule to the Loan and Security  Agreement between Palomar Medical  Technologies,
         Inc. and Coast Business Credit, dated April 29, 1998.
    
27.1*    Financial Data Statement, Restated, for the period ended June 30, 1997.

27.2*    Financial Data Statement, for the period ended June 30, 1998.
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(b)      Reports on Form 8-K.

         Form 8-K filed June 3, 1998.




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                                   SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1934,  the
Registrant  certifies  that it has caused this Report to be signed on its behalf
by the undersigned,  thereunto duly authorized,  in the Town of Lexington in the
Commonwealth of Massachusetts on February 12, 1999.

                                              PALOMAR MEDICAL TECHNOLOGIES, INC.
                                                         (Registrant)



DATE:  February 12, 1999                   By:     /s/ Louis P. Valente
                                                   --------------------
                                                   Louis P. Valente
                                                   Chief Executive Officer
                                                   (Principal Executive Officer)

DATE:  February 12, 1999                           /s/ Joseph P. Caruso
                                                   --------------------
                                                   Joseph P. Caruso
                                                   Chief Financial Officer and
                                                   Treasurer
                                                   (Principal Financial Officer
                                                   and Principal Accounting
                                                   Officer)
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