<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended June 28, 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 No. 0-13401

                        PHOENIX MEDICAL TECHNOLOGY, INC.
--------------------------------------------------------------------------------
             (exact name of registrant as specified in its charter)

         Delaware                                          31-092-9195
---------------------------------------      -----------------------------------
   (State or other jurisdiction                         (I.R.S. Employer
         of incorporation                               Identification No.)
         or organization)

U.S. Hwy. 521 West, Andrews, South Carolina                             29510
--------------------------------------------------------------------------------
  (Address of principal executive offices)                            (Zip Code)

                                  (843)221-5100
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
--------------------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
report)

Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years.

Check whether the Registrant has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act of 1934 after the
distribution of securities under a plan confirmed by a court.

          Yes    X                                     No
               -----                                       -----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Common Stock, without par value           2,459,621
                               -----------------------------------
                                  (Outstanding at July 15, 1998)


<PAGE>   2


                        PHOENIX MEDICAL TECHNOLOGY, INC.
                            CONDENSED BALANCE SHEET
                      JUNE 28, 1998 AND DECEMBER 31, 1997

<TABLE>
<CAPTION>
                                                                   June 28          December 31
                                                                     1998               1997
                                                                 ------------      ------------
                                                                 (unaudited)             *  
<S>                                                              <C>               <C>
                                     ASSETS

Current Assets
    Cash                                                         $        821      $     38,236
    Receivables                                                     2,038,524         1,822,522
    Inventories (Note 2)                                            2,290,570         1,779,505
    Prepaid expenses                                                   22,317            37,723
    Deferred Expenses (Note 4)                                         97,678               -0-
                                                                 ------------      ------------
       Total current assets                                         4,449,910         3,677,986

Operating property, plant and equipment - at cost                  11,797,452        11,744,242
Less accumulated depreciation                                      (8,382,476)       (8,261,185)
                                                                 ------------      ------------
       Net operating property, plant and equipment                  3,414,976         3,483,057
                                                                 ------------      ------------
Nonoperating equipment, net                                           499,765           499,765
Other assets, net                                                     368,915           389,228
                                                                 ------------      ------------
       Total assets                                              $  8,733,566      $  8,050,036
                                                                 ============      ============

                    LIABILITIES AND SHAREHOLDERS' INVESTMENT

Current liabilities
    Accounts payable and accrued expenses                        $  2,014,991      $  1,521,891
    Revolving line of credit                                        2,783,510         2,771,769
    Current portion of long-term debt                                 675,234           354,716
    Deferred Option payment (Note 4)                                  508,054               -0-
                                                                 ------------      ------------
       Total current liabilities                                    5,981,789         4,648,376

Long-term debt                                                      1,468,223         1,933,886
Other liabilities                                                     706,403           683,786
                                                                 ------------      ------------
       Total liabilities                                            8,156,415         7,266,048

Shareholders' investment
     Shares issued and outstanding:
     2,459,621 shares 6/28/98,
     1,963,563 shares 12/31/97                                        245,962           196,356
     Paid-in capital                                                8,425,582         7,224,503
     Warrant                                                              -0-         1,235,184
     Deficit                                                       (8,094,393)       (7,872,055)
                                                                 ------------      ------------
     Total shareholders' investment                                   577,151           783,988
                                                                 ------------      ------------
     Total liabilities and shareholders' investment              $  8,733,566      $  8,050,036
                                                                 ============      ============
</TABLE>

*Condensed from audited financial statements.
See accompanying notes to Unaudited Condensed Financial Statements.


                                       2
<PAGE>   3




                        PHOENIX MEDICAL TECHNOLOGY, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                  (unaudited)

<TABLE>
<CAPTION>
                                               FOR THE THREE MONTHS ENDED          FOR THE SIX MONTHS ENDED
                                             June 28, 1998    June 29, 1997    June 28, 1998    June 29, 1997
-------------------------------------------------------------------------------------------------------------
<S>                                          <C>              <C>              <C>              <C>
Net sales                                     $ 3,937,529      $ 3,701,221      $ 7,463,857      $ 6,664,909

Operating expenses:
   Cost of goods sold                          (3,400,589)      (3,159,457)      (6,508,083)      (6,004,278)
   Selling and administrative expense            (455,433)        (430,364)        (843,169)        (866,476)
-------------------------------------------------------------------------------------------------------------
   Income (Loss) from operations                   81,507          111,400          112,605         (205,845)

Other expense and income:
   Interest expense, net                         (160,422)        (129,449)        (310,366)        (248,016)
   Miscellaneous income, net                        1,334           35,633            3,004           37,609
   Option Agreement expense (Note 4)                  -0-              -0-          (27,581)             -0-
-------------------------------------------------------------------------------------------------------------
(Loss) Income before income tax provision         (77,581)          17,584         (222,338)        (416,252)
Income tax provision                                  -0-              -0-              -0-          (12,000)
-------------------------------------------------------------------------------------------------------------
   Net (loss) income                          $   (77,581)     $    17,584      $  (222,338)     $  (428,252)
============================================================================================================
Basic (loss) income per share                 $     (0.03)     $      0.01      $     (0.10)     $     (0.22)
Diluted (loss) income per share               $     (0.03)     $      0.01      $     (0.10)     $     (0.22)
============================================================================================================
</TABLE>

See accompanying Notes to unaudited Condensed Financial Statements


                                       3



<PAGE>   4

                        PHOENIX MEDICAL TECHNOLOGY, INC.
                       CONDENSED STATEMENT OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                           SIX MONTHS ENDED
                                                           ----------------
                                                      June 28, 1998  June 29, 1997
                                                      -------------  -------------
<S>                                                   <C>            <C>
Cash flows from operating activities:
    Net Loss                                            $(222,338)     $(428,252)
    Adjustments to reconcile net income to
       net cash provided by (used in)
       operating activities:
    Depreciation                                          121,291        163,782

    Changes in assets and liabilities:
       Increase in accounts receivable, net              (216,002)       (19,057)
       Increase in inventories                           (511,065)      (223,868)
       Decrease in prepayments                             15,406         17,709
       Decrease in other assets                            20,313         16,250
       Increase in deferred expenses (Note 4)             (97,678)           -0-
       Increase in accounts payable
         and accrued liabilities                          515,717         86,236
       Increase in deferred Option Payment (Note 4)       508,054             -0
                                                        ---------      ---------

Net cash provided by (used in) operating activities       133,698       (387,200)
                                                        ---------      ---------
Cash flows from investing activities:
    Additions to property plant and equipment             (53,210)       (93,875)
                                                        ---------      ---------
Cash flows from financing activities:
    Exercise of warrant                                    15,501            -0-
    Increase in line of credit                             11,741        561,917
    Reduction of long term debt                          (145,145)      (130,842)
                                                        ---------      ---------
Net cash (used) provided by financing activities         (117,903)       431,075
                                                        ---------      ---------
Net decrease in cash                                      (37,415)       (50,000)
Cash at beginning of period                                38,236         54,161
                                                        ---------      ---------
Cash at end of period                                   $     821      $   4,161
                                                        =========      =========
Cash paid during the period for interest                $ 285,229      $ 250,230
                                                        =========      =========
Cash paid during the period for Option
         Agreement expense                              $ 166,743            -0-
                                                        =========      =========
</TABLE>

See accompanying Notes to Unaudited Condensed Financial Statements.



                                        4
<PAGE>   5


NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1.       General

         The condensed financial statements included herein have been prepared
by the Registrant, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. These unaudited condensed financial statements should be
read in conjunction with the annual financial statements and related notes
contained in the Registrant's Form 10-KSB for the year ended December 31, 1997.

         In the opinion of management, the accompanying unaudited condensed
financial statements include all adjustments (consisting solely of normal
recurring adjustments) necessary for a fair presentation of the information
therein. Results of operations for interim periods should not be regarded as
necessarily indicative of the results to be expected for the full year.

2.       Inventories

         Inventories at June 28, 1998 and December 31, 1997 have been stated at
the lower of cost or market. Cost is determined for substantially all
inventories using the first-in, first-out (FIFO) method. The Registrant changed
to the FIFO from the LIFO (Last-in, last-out) method of inventory accounting in
the fourth quarter of 1996. This change has been applied by retroactively
restating the accompanying financial statements for that year. The accounting
change is further discussed in the Form 10-KSB for the year ending December 31,
1997.

<TABLE>
<CAPTION>
                                    June 28, 1998      Dec 31, 1997
                                    -------------      ------------
         <S>                        <C>                <C>
         Raw materials                $  450,047         $  503,881
         Work-in-process                     -0-                -0-
         Finished goods                1,840,523          1,275,624
                                      ----------         ----------
                                      $2,290,570         $1,779,505
                                      ==========         ==========
</TABLE>

3.       Earnings

         As of December 31, 1997, the Registrant adopted SFAS No. 128, "Earnings
per Share," effective December 15, 1997. As a result, the Registrant's reported
earnings per share for 1996 and 1995 were restated. For June 28, 1998 diluted
earnings per share is equal to basic earnings per share since the Registrant has
recorded a loss from continuing operations.


                                        5



<PAGE>   6



4.       Other Relevant Events

         On September 15, 1997, the Registrant announced that it had entered
into a letter of intent with London International Group, Ltd. ("LIG") with
respect to LIG's intent to purchase an option to acquire substantially all of
the assets of the Registrant and other related transactions. In the Letter of
Intent, LIG agreed to pay $500,000 as consideration for an option to purchase
substantially all of the Registrant's assets and assume certain stated
liabilities, for a $6,821,708 cash purchase price, for a period of one year from
the date of the definitive Option Agreement. On December 22, 1997, the
Registrant entered into the Definitive Option Agreement with LIG, which, in
addition to the transactions stated above, included a Loan and Security
Agreement, a Research and Development Agreement and a Supply Agreement. This
Agreement was subject to approval of Phoenix Stockholders. On April 28, 1998,
the Registrant's stockholders approved the Option Agreement with LIG. In
conjunction with the approval, on April 29, 1998, the Registrant received the
$500,000 Option Payment which will be deferred until the Option is exercised or
expires on April 28, 1999. Second quarter 1998 expense related to the Option
Agreement has been capitalized on the Balance Sheet as a current asset until the
Option Agreement is exercised by LIG or expires (April 28, 1999).

         In addition, on March 30, 1998, NationsBank exercised its warrant to
purchase 496,058 shares of the Registrant's Common Stock exercisable at a price
of $0.03125 per share which was recorded as a reduction of the Registrant's note
payable with NationsBank.








                                        6


<PAGE>   7



                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

OPERATIONS

         Second quarter 1998 net sales were 12% greater than in the first
quarter of 1998 and 6% greater than in the second quarter of 1997. Net sales
were $3,938,000 in the second quarter of 1998, up $236,000 as compared with the
1997 second quarter. Through the first six months of 1998, net sales were
$7,464,000, 12% or $799,000 greater than net sales in the similar six month
period of 1997.

         The Registrant experienced net sales growth in each of its three glove
product lines, vinyl, latex and nitrile gloves, during the first half of 1998
when compared with first half of 1997 net sales. Nitrile cleanroom glove demand
continued strong and contributed 75% of the total net sales increase during the
first six months of 1998. Vinyl glove net sales contributed slightly more than
23% of the net sales growth through six months of 1998 with latex gloves net
sales growth slightly more than 1%. During the second quarter and the first six
months of 1998, the Registrant derived 70% of its net sales revenue from the
sale of powder-free gloves, 21% from commodity powdered gloves and 9% from
specialty powdered gloves.

         During the second quarter of 1998, the Registrant operated the
equipment which manufactures both its nitrile and latex gloves seven days a
week. Most of the second quarter weekend operation was scheduled to facilitate a
strategic inventory build required to support continuing third quarter business
while the Registrant uses three weeks of machine time during August for a trial.
The three week trial is part of the due diligence of London International Group,
Inc. ("LIG") related to LIG's Option Agreement with the Registrant. The costs
associated with the trial will be paid by LIG, in accordance with the Option
Agreement.

         Due to what has been termed "a broad based global slump" for
semiconductor chip manufacturers and a "continuing slump" for the disc drive
manufacturers, both major end users of the Registrant's gloves, the Registrant
has seen a decline in orders since mid-June 1998. Decreased demand for cleanroom
gloves, combined with seasonal summer softness in other end user markets, could
result in a third quarter 1998 net sales decline of 10% from first half 1998
sales levels. Stringent cash conservation measures have been taken and will be
continued until order receipt improves.

         Selling and Administrative ("S&A") expenses were $455,000 or 11.6% of
net sales in the second quarter of 1998 and $843,000 or 11.3% of net sales in
the first half of 1998. These expenses were $430,000, 11.6% of net sales and
$866,000, 13.0% of net sales for



                                       7

<PAGE>   8





the second quarter and first half, respectively, of 1997. Selling expense was
4.3% of net sales in the second quarter of 1998 versus 4.4% of net sales in the
1997 second quarter. In the first half of 1998 selling expense was 4.0% of net
sales versus 5.2% of net sales in the first half of 1997. The decrease is the
continuing benefit of direct selling as compared with using only manufacturers'
representatives.

         The Registrant had $82,000 of income from operations in the second
quarter of 1998 versus $111,000 income from operations in the year earlier
quarter. Income from operations for the six months of 1998 was $113,000 as
compared with a $206,000 loss from operations during the first six months of
1997. On April 28, 1998, the Registrant's stockholders approved an Option
Agreement with LIG. Pursuant to the Option Agreement, LIG has purchased, at an
option price of $500,000, an option to purchase substantially all of the assets
of the Registrant at a price of $6,821,708 and to assume certain liabilities of
the Registrant. The Option Payment, $508,000 including interest, has been
recorded as a deferred liability on the Balance Sheet.

         The Registrant had a net loss of $78,000 in the second quarter of 1998
as compared to $18,000 net income in the second quarter of 1997. The Registrant
incurred $98,000 of expenses during the second quarter of 1998 directly related
to the approval of the Option Agreement. These expenses have been capitalized
and recorded as current assets on the Balance Sheet, until such time as the
Option expires or is exercised. Interest expense was $160,000 in the second
quarter of 1998 versus $129,000 in the second quarter of 1997. The Registrant
incurred a net loss of $222,000 in the first half of 1998 as compared to a net
loss of $428,000 in the first half of 1997. Interest expense for the six months
of 1998 was $310,000 versus $248,000 in the first six months of 1997.

         In addition to the $98,000 of expenses directly related to the Option
Agreement which were incurred in the second quarter of 1998 and capitalized,
$28,000 of similar expenses were incurred in the first quarter of 1998 and
expensed. Similarly related expenses of $93,000 incurred in the fourth quarter
of 1997 were also expensed.

LIQUIDITY AND CAPITAL RESOURCES

         During the quarter ended June 28, 1998, the Registrant's operations
used $239,000 of cash compared with $383,000 of cash used in the quarter ended
June 29, 1997. Capital expenditures used $47,000 of cash in the second quarter
of 1998 versus $27,000 of cash used in the similar quarter of 1997. Accounts
payable and accrued expenses decreased $197,000 in the second quarter of 1998
compared to an increase of $278,000 in the second quarter a year



                                       8

<PAGE>   9





ago. The sum of inventories, accounts receivable and prepayment increased
$439,000 in the 1998 second quarter compared with an increase of $787,000 in the
1997 second quarter. The $234,000 increase in inventories resulted in most part
from the strategic inventory build required to support sales during August while
the Registrant manufactures trials for LIG as discussed above.

         Through two quarters of 1998, the Registrant's operations have provided
$134,000 of cash as compared with $387,000 used in the 1997 half year and
capital expenditures used $53,000 of cash versus $94,000 cash used for capital
expenditures in the first half of 1997.

         At June 28, 1998, the Registrant's borrowing against its $3,750,000
line of credit was $3,271,000, up $318,000 from March 29, 1998 and down $63,000
from year end 1997. Total bank debt at June 28, 1998 was $4,927,000 versus
$4,656,000 at March 29, 1998 and $5,060,000 at December 31, 1997.

         The Registrant is hopeful that the $500,000 received as payment for the
Option Agreement and cash provided from operations will support the cash needs
of the Registrant. Management believes that the lower order receipt experienced
since mid-June will improve substantially after July and that the third quarter
will be near the $3.4 million rate of the 1997 third quarter, or about 10% below
the average of the first two quarters of 1998. Inventories and receivables will
decline, providing cash. Interest expense should also decline.

         In the event the Registrant's operating results fall short of its
projections or the borrowings and option purchase price described above are
insufficient to fund its capital requirements, the Registrant could be required
to seek additional financing. For any such additional financing, the Registrant
will consider borrowings from commercial lenders and other sources of debt
financing as well as equity financing. No assurance can be given, however, that
the Registrant will be able to obtain any such additional financing when needed
upon terms satisfactory to the Registrant.

         The Registrant has assessed the impact of the Year 2000 issue on its
reporting systems and operations. Nearly all of the Registrant's systems utilize
a four-digit field and are therefore unaffected by the Year 2000 issue. In
addition, the Registrant's systems do not interface with outside entities except
for EDI, which system's software is Year 2000 compatible. Therefore, the
Registrant believes the Year 2000 issue is not material with respect to its
reporting systems and operations.




                                       9
<PAGE>   10






CAUTIONARY STATEMENT AS TO FORWARD-LOOKING INFORMATION

         Statements contained in this report as to the Registrant's outlook for
sales, operations, capital expenditures and other amounts, budgeted amounts and
other projections of future financial or economic performance of the Registrant,
and statements of the Registrant's plans and objectives for the future are
"forward-looking" statements, and are being provided in reliance upon the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
Important factors that could cause actual results or events to differ materially
from those projected, estimated, assumed or anticipated in any such
forward-looking statements include without limitation: General economic
conditions in the Registrant's markets, including inflation, recession, interest
rates and other economic factors, especially in the United States and other
areas of the world where the Registrant markets its products; any loss of the
services of the Registrant's key management personnel; increased competition in
the United States and abroad, both from existing competitors and from any new
interests in the business; changes in the cost and availability of raw
materials; changes in governmental regulations applicable to the Registrant's
business; the failure to obtain any required governmental approvals; casualty to
or disruption of the Registrant's production facilities and equipment; delays or
disruptions in the shipment of the Registrant's products and raw materials;
disruption of operations due to strikes or other unrests; and other factors that
generally affect the business of manufacturing companies with international
operations.

















                                       10
<PAGE>   11





                           PART II - OTHER INFORMATION

                        PHOENIX MEDICAL TECHNOLOGY, INC.

ITEMS 1, 2, AND 3 ARE INAPPLICABLE AND ARE OMITTED.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         On April 28, 1998 a Special Meeting of Security Holders was held for
the purpose of voting upon three proposals: 1) A proposal to approve the Option
Agreement, dated as of December 22, 1997 and as amended by a First Amendment to
Option Agreement dated as of March 9, 1998 and the transactions contemplated
thereby between the Registrant and London International Group, Inc. ("LIG"); 2)
A proposal to amend the Certificate of Incorporation of the Registrant to change
the Registrant's name to PMT Inc. and 3) A proposal to approve the Registrant's
Plan of Dissolution and Liquidation.

Voting was as follows (1,963,563 Shares Eligible to Vote):

<TABLE>
<CAPTION>
         For        Against       Abstain        Total Votes       % of Votes
-------------------------------------------------------------------------------
<S>     <C>       <C>             <C>            <C>               <C>
Item 1) To Approve Option Agreement
        1,134,725    20,030         4,760         1,159,515          59.051

Item 2) To Amend Certificate of Incorporation
        1,135,475    19,180         4,860         1,159,515          59.051

Item 3) Approve Plan of Dissolution and Liquidation
        1,127,125    20,480        11,910         1,159,515          59.051
-------------------------------------------------------------------------------
Total Investors Voted:     281      Total Participants Voted             60
</TABLE>

ITEM 5. OTHER INFORMATION

         On December 22, 1997, the Registrant announced that it had entered into
an Option Agreement, subject to approval by its stockholders, with London
International Group, Inc. ("LIG") with respect to LIG's acquisition of an 
option to purchase all or substantially all of the assets of the Registrant and
other related transactions. LIG is an indirect wholly-owned subsidiary of London
International Group plc, a company registered in England, and a leading
manufacturer of personal protective products utilizing thin film barrier
technology, including Marigold(r) Industrial Gloves.

         The terms of the principal transaction with LIG were approved by the
Board of Directors of the Registrant, and the definitive Option Agreement was
approved by the Registrant's stockholders on April 28, 1998. As contemplated by
the Option Agreement, LIG paid to the Registrant $500,000 in cash as
consideration for an option to buy all or substantially all of its assets and
assume certain liabilities, at a cash purchase price of $6,821,708, exercisable
for a period of up to one year. In addition, LIG has agreed to finance the
acquisition of capital equipment and other capital improvements for the
Registrant of up to $750,000 and to participate in the joint development of
technology for the manufacture by the Registrant of



                                       11
<PAGE>   12






new nitrile glove products. Finally, LIG will enter into an agreement to
purchase industrial gloves from the Registrant.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

a.   Exhibit 27, Financial Data Schedule filed in electronic format only.

b.   Exhibits and Reports on Form 8-K. No reports on Form 8-K were filed during
the quarter ended June 28, 1998.





















                                       12
<PAGE>   13



                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                    PHOENIX MEDICAL TECHNOLOGY, INC.


                                    BY: /s/ Edward W. Gallaher, Sr.
                                        ---------------------------------
                                        Edward W. Gallaher, Sr.
                                        President and Treasurer



                                    BY: /s/  Delores P. Williams
                                        ---------------------------------
                                        Delores P. Williams
                                        Controller

DATE: August 7, 1998
      --------------






















                                       13