<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 March 29, 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 jurisdic-                                   (I.R.S. Employer
     tion 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 May 8, 1998)


<PAGE>   2



                        PHOENIX MEDICAL TECHNOLOGY, INC.
                             CONDENSED BALANCE SHEET
                         MARCH 29, 1998 AND DECEMBER 31, 1997


<TABLE>
<CAPTION>
                                                            March 29           December 31
                                                              1998                1997
                                                           ----------          -----------
                                                           (unaudited)              *
<S>                                                        <C>                 <C>        
                                     ASSETS
Current Assets
  Cash                                                     $      750          $    38,236
  Receivables                                               1,836,739            1,822,522
  Inventories (Note 2)                                      2,056,032            1,779,505
  Prepaid expenses                                             19,252               37,723
                                                           ----------          -----------
     Total current assets                                   3,912,773            3,677,986
 
Operating property, plant and equipment - at cost          11,750,410           11,744,242
Less accumulated depreciation                              (8,319,405)          (8,261,185)
                                                           ----------          -----------
     Net operating property, plant and equipment            3,431,005            3,483,057
                                                           ----------          -----------
Nonoperating equipment, net                                   499,765              499,765
Other assets, net                                             370,478              389,228
                                                           ----------          -----------
     Total assets                                          $8,214,021          $ 8,050,036
                                                           ==========          ===========

                    LIABILITIES AND SHAREHOLDERS' INVESTMENT

Current liabilities
  Accounts payable and accrued expenses                    $2,238,774          $ 1,521,891
  Revolving line of credit                                  2,428,022            2,771,769
  Current portion of long-term debt                           343,265              354,716
                                                           ----------          -----------
     Total current liabilities                              5,010,061            4,648,376

Long-term debt                                              1,884,723            1,933,886
Other liabilities                                             680,006              683,786
                                                           ----------          -----------
     Total liabilities                                      7,574,790            7,266,048

Shareholders' investment 
  Shares issued and outstanding:
  1,963,563 shares 3/29/98 and 12/31/97                       196,356              196,356
  Paid-in capital                                           7,224,503            7,224,503
  Warrant                                                   1,235,184            1,235,184
  Deficit                                                  (8,016,812)          (7,872,055)
                                                           ----------          -----------
  Total shareholders' investment                              639,231              783,988
                                                           ----------          -----------
  Total liabilities and shareholders' investment           $8,214,021          $ 8,050,036
                                                           ==========          ===========
</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
                                        March 29, 1998        March 30, 1997
--------------------------------------------------------------------------------
<S>                                     <C>                   <C>           
Net sales                               $    3,526,328        $    2,963,688

Operating Expenses:
  Cost of goods sold                        (3,107,494)           (2,844,821)
  Selling and administrative expenses         (415,317)             (436,112)
                                        --------------        -------------- 

  Income (loss) from operations                  3,517              (317,245)

Other expense and income:
  Interest expense, net                       (149,944)             (118,567)
  Miscellaneous income, net                      1,670                 1,976
                                        --------------        -------------- 
Loss before income tax
  provision                                   (144,757)             (433,836)

Income tax provision                               -0-               (12,000)
                                        --------------        -------------- 

  Net loss                              $     (144,757)       $     (445,836)
                                        ==============        ============== 

Basic loss per share                    $        (0.07)       $        (0.23)

Diluted loss per share                  $        (0.07)       $        (0.23)
                                        ==============        ============== 
</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>
                                                                          THREE MONTHS ENDED
                                                                          ------------------
                                                                 Mar 29, 1998            Mar 30, 1997
                                                                 ------------            ------------
<S>                                                              <C>                     <C>
Cash flows from operating activities:
  Net Loss                                                       $   (144,757)           $   (445,836)

  Adjustments to reconcile net income to net cash
     provided by (used in) operating activities:
  Depreciation                                                         58,220                  74,056

  Changes in assets and liabilities:
    (Increase) decrease in accounts receivable, net                   (14,217)                303,697
    (Increase) decrease in inventories                               (276,527)                211,110
    Decrease in prepayments                                            18,471                  46,615
    Decrease (increase) in other assets                                18,750                  (2,500)
    Increase (decrease) in accounts payable
         and accrued liabilities                                      713,103                (191,679)
                                                                 ------------            ------------

Net cash provided by (used in) operating
         activities                                                   373,043                  (4,537)
                                                                 ------------            ------------
Cash flows from investing activities:
    Additions to property plant and equipment                          (6,168)                (67,288)
                                                                 ------------            ------------
Cash flows from financing activities:
   (Reduction of) increase in line of credit                         (343,747)                 20,370
   Reduction of long term debt                                        (60,614)                (66,103)
                                                                 ------------            ------------
Net cash used in financing activities                                (404,361)                (45,733)
                                                                 ------------            ------------
Net decrease in cash                                                  (37,486)               (117,558)
Cash at beginning of period                                            38,236                  54,161
                                                                 ------------            ------------
Cash at end of period                                            $        750            $    (63,397)
                                                                 ============            ============
Cash paid during the period for interest                         $    128,634            $    119,142
                                                                 ============            ============
</TABLE>

See accompanying Notes to Unaudited Condensed Financial Statements.


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<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, 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 March 29, 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 Company 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>
                                                Mar 29, 1998         Dec 31, 1997
                                                ------------         ------------
  <S>                                           <C>                  <C>
  Raw materials                                  $  560,342           $  503,881
  Work-in-process                                       -0-                  -0-
  Finished goods                                  1,495,690            1,275,624
                                                 ----------           ----------
                                                 $2,056,032           $1,779,505
                                                 ==========           ==========
</TABLE>

3.   Earnings

     As of December 31, 1997, the Company adopted SPAS No. 128, "Earnings per
Share," effective December 15, 1997. As a result, the Company's reported
earnings per share for 1996 and 1995 were restated. For March 29, 1998 and March
30, 1997, diluted earnings per share is equal to basic earnings per share since
the Company has recorded a loss from continuing operations for both periods.




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<PAGE>   6
4.   Subsequent Events

     On September 15, 1997, the Company announced that it had entered into a
letter of intent with London International Group, Inc. ("LIG") with respect to
LIG's intent to purchase an option to acquire substantially all of the assets of
the Company 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 Company's assets and assume certain stated liabilities, for a $6,800,000
cash purchase price, for a period of one year from the date of the definitive
Option Agreement. On April 28, 1998, the Company's stockholders approved the
Option Agreement with LIG. In conjunction with the approval, the Company
received the $500,000 Option Payment on April 29, 1998.

     In addition, subsequent to March 29, 1998, NationsBank exercised its
warrants to purchase 496,058 shares of the Company's Common Stock exercisable at
a price of $0.03125 per share which was recorded as a reduction of the Company's
note payable with NationsBank.




                                       6
<PAGE>   7



                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND LIQUIDITY AND CAPITAL RESOURCES

OPERATIONS

     Order receipt and net sales each month of the first quarter of 1998
significantly exceeded the results recorded in the first quarter of 1997. Net
sales were up 16% in January, 19% in February and 22% in March compared with the
same months in 1997 and up 19% for the quarter as compared with the first
quarter of 1997. Net sales were $3,526,000 in the first quarter of 1998, up
$563,000 as compared with the 1997 first quarter.

     Sales unit volume was up nearly 11% in the first quarter of 1998 compared
with 1997 and average selling prices were up nearly 8% compared with 1997. The
price increase resulted from product mix improvement. The Registrant's nitrile
cleanroom gloves, introduced in 1997, accounted for almost 9% of sales in first
quarter of 1998 versus 1% of sales in the first quarter of 1997. Nitrile
cleanroom gloves are non-allergenic and provide substantial operating benefits
to electronics industry users. Due to material costs and production rate, the
new gloves are costly to manufacture and demand a selling price per unit almost
twice that of the Registrant's average vinyl and latex gloves.

     The growing demand for nitrile cleanroom gloves and continuing demand for
the Registrant's latex gloves, both produced on the same equipment, required
substantial weekend operations to meet delivery schedules. Cost of goods sold in
the first quarter of 1998 was 88.1% versus 96% in the first quarter of 1997.
Overtime premium and new employee training added 1.2%, ($37,000), to the cost of
goods sold in the current year quarter versus 0.3%, ($9,000), in the prior year
quarter.

     Selling and Administrative ("S&A") expenses were $415,000 or 11.8% of net
sales in the current year quarter as compared with $436,000, 14.7%, of net sales
in the prior year quarter. Selling expense was 29% lower in the first quarter of
1998 versus one year ago. During the first quarter of 1997, the Registrant began
to move to a dedicated employee sales force, adding two field sales persons and
terminating six manufacturers representative agencies. Administrative expense
was up 13% in the first quarter of 1998 due mainly to increased professional
fees related to the transaction with London International Group, Inc. described
below, and year end matters.

     The Registrant had $4,000 of income from operations in the first quarter of
1998 versus a $317,000 loss from operations in the first quarter of 1997. The
Registrant experienced a net loss



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<PAGE>   8



of $145,000 in the first quarter of 1998 versus a net loss of $446,000 in the
first quarter of 1997. Interest expense was $150,000 in the first quarter of
1998, up from $119,000 a year ago.

     The Registrant, on March 9, 1998, entered the second year of its contract
with its hourly production employees. Hourly production employees are
represented by the Union of Needletraders, Industrial and Textile Employees
("UNITE"). Under the three year agreement, labor rates increased $0.20/hour for
the second contract year. The Registrant considers its present relationship with
its employees to be good.

     On April 28, 1998, the Registrant's stockholders approved an Option
Agreement with London International Group, Inc. ("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.

LIQUIDITY AND CAPITAL RESOURCES

     During the quarter ended March 29, 1998, the Registrant's operations
provided $373,000 of cash compared with $5,000 of cash used by operations in the
first quarter of 1997. Capital expenditures used $6,000 of cash in the first
quarter of 1998 versus $67,000 in the first quarter a year ago. Accounts payable
and accrued expenses increased $713,000 in the first quarter of 1998 compared to
a decrease of $192,000 in the first quarter of 1997. The sum of inventories,
accounts receivable and prepayments increased $272,000 in the current year
quarter compared with a $561,000 decrease in the 1997 first quarter. Inventories
increased $277,000 or 15.5%, during the first quarter of 1998, reflecting an
increased manufacturing rate and the necessity to inventory at least three weeks
finished goods for both latex and nitrile gloves. Because both gloves are
manufactured on the same machinery, in 14 day increments, inventories peak at
about 21 to 24 days of sales and drop as low as 7 days of sales before the cycle
repeats. Inventory value can swing $200,000 to $300,000 depending on where in
the cycle a quarter ends. If a quarter ends at the end of the nitrile running
period, as on March 29, 1998, inventory levels will be highest.

     At March 29, 1998, the Registrant's borrowing against its $3,750,000 line
of credit was $2,953,000, down $381,000 from December 31, 1997. Total bank debt
at March 29, 1998 stood at $4,656,000 versus $5,060,000 at December 31, 1997,
down $404,000.




                                       8
<PAGE>   9



     The Registrant is hopeful that the strong order receipt experienced since
October 1997 will continue throughout 1998. The fourth quarter 1997 sales growth
of 11% and the first quarter 1998 sales growth of 19% compared with prior year
quarters, if continued, will help reverse the Registrant's past problems of
using cash in operations. Additionally, the Registrant has received the $500,000
Option Agreement purchase price in cash from LIG, discussed earlier herein. In
addition, pursuant to other agreements between the Registrant and LIG, LIG has
made available to the Registrant a $750,000 term loan facility to be used for
certain capital projects.

     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.

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




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<PAGE>   10



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.




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<PAGE>   11



                           PART II - OTHER INFORMATION

                        PHOENIX MEDICAL TECHNOLOGY, INC.

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

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 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 (for SEC
use only).

b. Exhibits and Reports on Form 8-K. No reports on Form 8-K were filed during
the quarter ended March 29, 1998.



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<PAGE>   12


                                   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: May 11, 1998
      ------------
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