<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 September 29, 1996, 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)

                  (803) 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              1,963,563
                                  ------------------------------
                                  (Outstanding at Sept 29, 1996)
<PAGE>   2
                        PHOENIX MEDICAL TECHNOLOGY, INC.
                            CONDENSED BALANCE SHEET
                    SEPTEMBER 29, 1996 AND DECEMBER 31, 1995

<TABLE>
<CAPTION>
                                                         Sept 29    December 31
                                                          1996         1995
                                                       -----------  -----------
                                                       (unaudited)       *
<S>                                                    <C>          <C>
                                    ASSETS
Current Assets                                   
    Cash                                               $     5,013  $    89,411
    Receivables                                          1,869,024    1,782,804
    Inventories (Note 2)                                 1,143,294    1,112,459
    Prepaid expenses                                        32,817       56,417
                                                       -----------  -----------

       Total current assets                              3,050,148    3,041,091

Operating property, plant and equipment - at cost       11,555,645   11,689,725
Less accumulated depreciation                           (7,764,152)  (7,748,033)
                                                       -----------  -----------

       Net operating property, plant and equipment       3,791,493    3,941,692
                                                       -----------  -----------

Nonoperating equipment, net                                751,008      751,008
Other assets, net                                          468,000      335,307
                                                       -----------  -----------

       Total assets                                    $ 8,060,649  $ 8,069,098
                                                       ===========  ===========


                   LIABILITIES AND SHAREHOLDERS' INVESTMENT
                                                                    
Current liabilities                                                 
    Accounts payable and accrued expenses              $ 1,171,744  $ 1,334,980
    current portion of long-term debt                      100,056      346,497
                                                       -----------  -----------

       Total current liabilities                         1,271,800    1,681,477
                                                                    
Long term debt                                           3,849,350    3,843,353
Other liabilities                                          932,775    1,177,614
                                                       -----------  -----------

       Total liabilities                                 6,053,925    6,702,444

Shareholders' investment                                            
    Shares issued and outstanding:                                  
    1,963,563 shares 9/29/96 and 12/31/95                  196,356      196,356
    Paid-in capital                                      7,224,503    7,224,503
    Warrant                                              1,235,184    1,235,184
    Deficit                                             (6,649,319)  (7,289,389)
                                                       -----------  -----------

    Total shareholders' investment                       2,006,724    1,366,654
                                                       -----------  -----------

       Total liabilities and shareholders' investment  $ 8,060,649  $ 8,069,098
                                                       ===========  ===========
</TABLE>

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





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<PAGE>   3
                        PHOENIX MEDICAL TECHNOLOGY, INC.

                       CONDENSED STATEMENTS OF OPERATIONS
                                  (unaudited)

<TABLE>
<CAPTION>
                                                   FOR THE THREE MONTHS ENDED             FOR THE NINE MONTHS ENDED
                                                 Sept 29, 1996       Oct 1, 1995       Sept 29, 1996       Oct 1, 1995
----------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                <C>                <C>                <C>
Net sales                                         $ 3,240,016        $ 3,415,429        $10,601,153        $10,107,682
Operating expenses:
   Cost of goods sold                              (2,894,163)        (3,070,552)        (9,327,124)        (9,172,291)
   Selling and administrative expense                (400,002)          (394,867)        (1,253,123)        (1,216,786)
----------------------------------------------------------------------------------------------------------------------
   (Loss) Income from operations                      (54,149)           (49,990)            20,906           (281,395)

Other expense and income:
   Interest expense, net                             (104,978)          (138,169)          (346,729)          (470,522)
   Miscellaneous income, net                              831                545             30,640              1,433
   Gain on sale of asset                                  -O-                -O-            760,731                -O-
----------------------------------------------------------------------------------------------------------------------
(Loss) Income before extraordinary item              (158,296)          (187,614)           465,548           (750,484)

Extraordinary item:
   Gain on debt discharge                             174,522                -O-            174,522          4,618,842
----------------------------------------------------------------------------------------------------------------------
   Net income (loss)                              $    16,226        $  (187,614)       $   640,070        $ 3,868,358
======================================================================================================================
(Loss) Income per share:
   (Loss) Income before extraordinary item        $     (0.08)       $     (0.10)       $      0.24        $     (0.38)
   Extraordinary item                                    0.09                 -O-              0.09               2.35
----------------------------------------------------------------------------------------------------------------------
   Net income (loss) per share                          $0.01        $     (0.10)       $      0.33        $      1.97
======================================================================================================================
Weighted average shares outstanding used to
compute earnings per share                          1,963,563          1,963,563          1,963,563          1,963,563
</TABLE>

See accompanying Notes to unaudited Condensed Financial Statements





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<PAGE>   4

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

<TABLE>
<CAPTION>
                                                               NINE MONTHS ENDED
                                                               -----------------
                                                         Sept 29, 1996    Oct 1, 1995
                                                         -------------    -----------
<S>                                                       <C>             <C>
Cash flows from operating activities:
    Net income                                            $   640,070     $ 3,868,358

    Adjustments to reconcile net income to net
       cash used in operating activities:
    Depreciation                                              337,496         331,057
    Extraordinary item - gain on debt discharge              (174,522)     (4,618,842)
    Gain on sale of assets                                   (760,731)            -0-

Changes in assets and liabilities:
    Increase in accounts receivable, net                      (86,220)        (19,661)
    Increase in inventories                                  (364,445)       (328,963)
    Decrease in prepayments                                    23,600          35,219
    Increase in other assets                                 (132,693)       (253,685)
    (Decrease) Increase in accounts payable
       and accrued liabilities                               (253,553)        706,739
                                                          -----------     -----------

Net cash used in operating activities                        (770,998)       (279,778)
                                                          -----------     -----------

Cash flows from investing activities:
    Additions to property plant and equipment                (187,297)        (33,737)
                                                          -----------     -----------

Cash flows from financing activities:
    Net proceeds from sale of assets (apply to debt)        1,114,341             -0-
    (Reduction) Increase in line of credit                   (588,014)        413,309
    Addition of notes payable                                 750,000          50,000
    Reduction of long term debt                              (402,430)        (98,531)
                                                          -----------     -----------

Net cash provided by financing activities                     873,897         364,778
                                                          -----------     -----------

Net (decrease) increase in cash                               (84,398)         51,263
Cash at beginning of period                                    89,411          46,419
                                                          -----------     -----------

Cash at end of period                                     $     5,013     $    97,682
                                                          ===========     ===========

Cash paid during the period for interest                  $   350,178     $   305,457
                                                          ===========     ===========

Supplemental schedule of noncash investing 
    and financing activities:
    Conversion of accrued expenses to long term debt      $       -0-     $   531,769
    Conversion of long term debt to warrant               $       -0-     $ 1,235,184
                                                          ===========     ===========
</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 Company, 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 Company's Form 10-KSB for the year ended
December 31, 1995.

         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.

         In the third quarter of 1996, the Company recognized a $174,522 gain
on debt discharge resulting from the release of certain bankruptcy claims
against the Company.  In the first quarter of 1995, the Company completed a
refinancing of its outstanding debt and recognized a $4,618,842 gain on debt
discharge.  This debt refinancing is further discussed in the Form 10-KSB for
the year ending December 31, 1995.

         On March 22, 1996, the Company sold to Microtek Medical, Inc.
("Microtek") all of the Company's machinery, equipment and related tangible
property (including inventory and work-in-process) and all of its proprietary
information, and all other property and rights related to the Company's
manufacture and sale of adhesive skin drapes and scrub-and-prep products.  The
purchase price consisted of $1,175,000 in cash and Microtek's undertaking to
make contingent payments for ten years of 11.5% of its sales of patented incise
drapes and 3% of its sales of other products in the Company's product line
incorporating the patented process, with a maximum of $1,825,000 on all
contingent payments and a maximum total purchase price of $3,000,000, The
Company's sales of items produced by the assets sold to Microtek accounted for
4% of its total sales in 1995.

2.       Inventories

         Inventories at September 29, 1996 and December 31, 1995 have been
stated at the lower of cost or market.  Cost is determined for substantially
all inventories using the last-in, first-out (LIFO) method.





                                      -5-
<PAGE>   6

<TABLE>
<CAPTION>
                                 Sept 29, 1996     December 31, 1995
                                 -------------     -----------------
         <S>                       <C>                 <C>
         Raw materials             $  402,765          $  544,581
         Work-in-process                  -0-               8,869
         Finished goods               644,691             644,691
                                   ----------          ----------
                                   $1,047,456          $1,112,459
                                   ==========          ==========
</TABLE>

3.       Earnings

         Earnings per share for the quarters ended September 29, 1996 and
December 31, 1995 were based on the weighted average number of common shares
outstanding, 1,963,563 for each period.





                                      -6-
<PAGE>   7
              MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND LIQUIDITY AND CAPITAL RESOURCES

OPERATIONS

         During the third quarter of 1996, the Company experienced two separate
business interruptions resulting from the July and September east coast
hurricanes.  The Company's facility did not experience physical damage from
either storm but was forced to make preparations and cease operations for a
total of more than four days.  The operating time lost due to the forced
shutdowns was exacerbated in that each followed a holiday shutdown, July Fourth
and Labor Day.  Saturday premium pay overtime was scheduled throughout the
quarter to offset the lost operating days and maintain customer delivery
schedules.

         Sales for the third quarter of 1996 were $3,240,000, 5.1% less than
for the similar quarter of 1995. On a continuing business basis, gloves only,
sales were off less than 1% from prior year results.  Vinyl glove sales were
19% greater in the current year quarter than a year ago, $2,332,000 versus
$1,959,000.  Latex glove sales were 31% less in the current year quarter than a
year ago, $899,000 versus $1,303,000.  The expiration of the 1995 Department of
Defense ("DPSC") latex exam glove contract was the major contributor, $296,000
or 77%, in the latex glove sales decline.

         Net sales for the nine months ended September 29, 1996 were
$10,601,000, 4.9% greater than sales in the similar period of 1995.  On a
continuing business basis, Sales were $743,000 or 7.7% greater in the 1996
period than in the 1995 nine months period.  Vinyl glove sales were $7,359,000,
27% greater than nine month sales one year ago.  Latex sales were $2,995,000,
$817,000 or 21% less than in the nine months of 1995.  The effect of the
expired DPSC contract over the nine month period was $914,000, exceeding the
total 1996 sales decline in latex gloves.  Over the nine month period, latex
glove average selling prices have increased 17% and vinyl glove average selling
prices are up 3% from 1995 nine month results.  The expired 1995 DPSC latex
glove contract's low price accounts for the 1996 latex glove average selling
price increase while the increase in vinyl glove average selling price is the
result of the 45% increase in cleanroom glove sales in 1996.

         Cost of goods sold, as a percent of net sales was 89% in the quarter
ended September 29, 1996 as compared with 90% in the prior year similar
quarter.  The decrease is the result of higher average selling prices and
improved product mix, offset somewhat by the greater labor costs associated
with the weekend operations discussed above.  For the nine month period of
1996, the cost of goods sold was 88% versus 91% for the nine months of 1995.
The decrease resulted from higher average selling prices, improved product mix
and some moderation in material costs.





                                      -7-
<PAGE>   8

         Selling and administrative ("S&A") expenses increased 1.3% in the
third quarter of 1996 as compared with the similar quarter of 1995, $400,000
versus $395,000.  Through nine months of 1996, S&A spending was $1,253,000 as
compared with $1,217,000, a 3% increase in spending over the 1995 period.  As a
percent of net sales, S&A spending is 11.8% for nine months of the current year
versus 12.0% in the prior year nine months.

         During the quarter ended September 29, 1996, the Company had a net
income of $16,000 including a gain of $175,000 from debt discharge.  This
compares with a year prior net loss of $188,000 for the third quarter.  For the
nine months, the Company had a net income of $640,000 including a $761,000 gain
on the sale of an asset and a gain of $175,000 from debt discharge.  Prior year
nine month net income was $3,868,000 which included a gain of $4,619,000 from
debt discharge.

         The Company is investing in facility upgrades to support its continued
growth in the manufacture and sale of cleanroom vinyl gloves.  This effort has
been facilitated by the March 1996 sale of the Company's skin drape and scrub-
and-prep business (See the Company's Form 10-QSB for the period ended June 30,
1996) and the August 1996 Amendment to the Company's line of credit.  The
Amendment increases the available funds by $750,000 and reduces the interest
rate from prime plus 5-3/4% to prime plus 3-1/4%.  Management believes that the
capital investment in facility improvements combined with its quality and
service initiatives will enable Phoenix to sustain its growth within the
contamination control glove market.

LIQUIDITY AND CAPITAL RESOURCES

         During the nine month period of 1996, operations used $771,000 of cash
as compared with $280,000 of cash used in the prior year similar period.  The
major factor contributing to the increase in cash used was a $253,000 decrease
in accounts payable and accrued liabilities during the current year period
versus an increase of $707,000 in the prior year period.  That use of cash was
offset to an extent by operating losses in 1996 which were $455,000 less than
in the nine month period of 1995.

         The Company's bank debt at September 29, 1996 was $3,949,000, $241,000
less than at year end 1995.  At September 29, 1996, the Company's line of
credit borrowing was $2,083,000, $144,000 less than at year end 1995.
Management believes that the line of credit limit, $3,000,000 and the unused
available amount is adequate to support the Company's operations.





                                      -8-
<PAGE>   9
                          PART II - OTHER INFORMATION

                        PHOENIX MEDICAL TECHNOLOGY, INC.

ITEMS 1, 2, 3, 4 AND 5 ARE INAPPLICABLE AND ARE OMITTED.

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 September 29, 1996.





                                      -9-
<PAGE>   10

                                   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: November 4, 1996
      ----------------




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