SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(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 30, 1999 or

[ ]  Transition  report  pursuant  to  Section  13 or  15(d)  of the  Securities
     Exchange Act of 1934

For the transition period from ______________________ to ______________________

                              0-16594
Commission file number  _______________________________________________________

                        MEDICAL TECHNOLOGY SYSTEMS, INC.
-------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


          DELAWARE                                             59-2740462

--------------------------------                       ------------------------
(State or other jurisdiction of                            (I.R.S.) Employer
Incorporation or Organization)                            Identification No.)


              12920 Automobile Boulevard, Clearwater, Florida 33762
-------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)


                                  727-576-6311
-------------------------------------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)


-------------------------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                          If changed since last report)


     Indicate by check mark  whether the  registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X   No ______


                     APPLICABLE ONLY TO ISSUERS INVOLVED IN
                        BANKRUPTCY PROCEEDINGS DURING THE
                              PRECEDING FIVE YEARS


     Indicate by check mark whether the  Registrant  has filed all documents and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes X   No ______


<PAGE>
                                       i


               MEDICAL TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIES

                                      Index

                                                                            Page
Part I - Financial Information


Item 1.   Financial Statements

          Condensed Consolidated Balance Sheets -
           September 30, 1999 and March 31, 1999.........................      1

          Condensed Consolidated Statements of Operations -
           Three Months and Six Months Ended September 30, 1999 and 1998.      2

          Condensed Consolidated Statements of Changes in Stockholders'
           Equity (Deficit) - Six Months Ended September 30, 1999........      3

          Condensed Consolidated Statements of Cash Flow -
           Six Months Ended September 30, 1999 and 1998..................      4

          Notes to Condensed Consolidated Financial Statements...........  5 - 9


Item 2.   Management's Discussion and Analysis of Financial
           Condition and Results of Operations...........................10 - 14


Part II - Other Information


Item 4.   Submission of Matters to a Vote of Security-Holders............     15

Item 6.   Exhibits and Reports on Form 8-K...............................     15


          Signature......................................................     15


<PAGE>
                                       1


Item 1.  Financial Statements


                         PART 1 - FINANCIAL INFORMATION

                MEDICAL TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)


ASSETS

<TABLE>
<CAPTION>
                                                                                  September 30,           March 31,
                                                                                       1999                 1999
                                                                                  ---------------      ---------------
                                                                                    (Unaudited)
<S>                                                                               <C>                  <C>
Current Assets:
     Cash                                                                         $            0       $          205
     Accounts Receivable, Net                                                              2,548                2,473
     Inventories                                                                           2,034                1,990
     Prepaids and Other                                                                      279                   69
                                                                                    -------------        -------------
     Total Current Assets                                                                  4,861                4,737

Property and Equipment, Net                                                                1,816                2,013
Other Assets, Net                                                                          1,300                1,761
                                                                                    -------------        -------------

Total Assets                                                                      $        7,977       $        8,511
                                                                                  ===============      ===============

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
     Current Maturities of Long-Term Debt                                         $          802       $          874
     Accounts Payable and Accrued Liabilities                                              2,494                2,405
                                                                                  ---------------      ---------------
     Total Current Liabilities                                                             3,296                3,279

Net Liabilities of Discontinued Operations                                                   542                1,917
Long-Term Debt, Less Current Maturities                                                   14,601               14,915
                                                                                  ---------------      ---------------
Total Liabilities                                                                         18,439               20,111
                                                                                  ---------------      ---------------

Stockholders' Equity (Deficit):
     Voting Preferred Stock                                                                    1                    1
     Common Stock                                                                             64                   64
     Capital In Excess of Par Value                                                        8,583                8,583
     Retained Earnings (Deficit)                                                         (18,782)             (19,920)
     Less:  Treasury Stock                                                                  (328)                (328)
                                                                                  ---------------      ---------------
     Total Stockholders' Equity (Deficit)                                                (10,462)             (11,600)
                                                                                  ---------------      ---------------
Total Liabilities and Stockholders' Equity (Deficit)                              $        7,977       $        8,511
                                                                                  ===============      ===============
</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>
                                       2


                MEDICAL TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                 Three Months Ended                Six Months Ended
                                                                    September 30,                    September 30,
                                                             ----------------------------     ----------------------------
                                                                 1999            1998             1999            1998
                                                             ------------    ------------     ------------    ------------
<S>                                                          <C>             <C>              <C>             <C>
Revenue:
      Net Sales and Services                                 $     4,231     $     3,492      $     8,070     $     6,992

Costs and Expenses:
      Cost of Sales and Services                                   2,167           2,067            4,247           4,051
      Selling, General and Administrative                          1,151           1,011            2,310           1,922
      Depreciation and Amortization                                  255             248              509             487
      Interest, Net                                                  296             284              591             570
                                                             ------------    ------------        ---------      ----------

Total Costs and Expenses                                           3,869           3,610            7,657           7,030
                                                             ------------    ------------        ---------      ----------

Income  (Loss) Before Extraordinary Gain                             362            (118)             413             (38)
Loss from Operations of Discontinued Operations                     (572)           (582)          (1,097)         (1,098)
Extraordinary Gain on Forgiveness of Debt                              0               0                0             662
Gain on Disposal of Discontinued Operations                            0               0            1,822               0
                                                             ------------    ------------     ------------    ------------

Net Income (Loss)                                            $      (210)    $      (700)     $     1,138     $      (474)
                                                             ============    ============     ============    ============

Earnings (Loss) Per Basic and Diluted Common Share:
      Income (Loss) from Continuing Operations                      0.06           (0.02)            0.07           (0.01)
      Income (Loss) from Discontinued Operations                   (0.09)          (0.10)            0.11           (0.07)
                                                             ------------    ------------     ------------    ------------

Earnings (Loss) per Basic and Diluted Common Share           $     (0.03)    $     (0.12)     $      0.18     $     (0.08)
                                                             ============    ============     ============    ============
</TABLE>

The accompanying notes are an integral part of these financial statements.


<PAGE>
                                       3

                MEDICAL TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                       SIX MONTHS ENDED SEPTEMBER 30, 1999
                        (In Thousands Except Share Data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                         COMMON STOCK
                                      ---------------------------------------------------------------------------------------------
                                        Number            Par         Capital in    Retained         Treasury
                                          of             Value        Excess of     Earnings           Stock           Total
                                        Shares                        Par Value     (Deficit)
                                      -----------     -----------    -----------   ------------    ------------     -----------
<S>                                    <C>             <C>            <C>           <C>             <C>              <C>
Balance, March 31, 1999                6,406,191       $     64       $   8,583     $ (19,920)      $    (328)       $ (11,601)

Net Income for Six Months
   Ended September 30, 1999                -               -               -            1,138            -               1,138
                                      ---------------------------------------------------------------------------------------------
Balance, September 30, 1999            6,406,191       $     64       $   8,583     $ (18,782)      $    (328)       $ (10,463)
                                      ===========     ===========    ===========   ============    =============    ===========


                                                                        VOTING PREFERRED STOCK
                                      ---------------------------------------------------------------------------------------------
                                        Number            Par
                                          of             Value
                                        Shares
                                      -----------     -----------
Balance, March 31, 1999                6,500,000       $      1                                                      $          1
                                      -----------     -----------                                                   -------------
Balance September 30, 1999             6,500,000       $      1                                                      $          1
                                      -----------     -----------                                                   -------------

Total Stockholders' Equity
                                                                                                                    -------------
   (Deficit), September 30, 1999                                                                                     $ (10,462)
                                                                                                                    =============

The accompanying notes are an integral part of these financial statements.


</TABLE>

<PAGE>
                                       4

            MEDICAL TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In Thousands)
                               (Unaudited)

<TABLE>
<CAPTION>
                                                                                               Six Months Ended
                                                                                                 September 30,
                                                                                    --------------------------------------
                                                                                        1999                      1998
                                                                                    -------------           --------------
<S>                                                                                 <C>                     <C>
Operating Activities
    Net Income (Loss) from Continuing Operations                                    $        413            $         (38)
                                                                                    -------------           --------------
    Adjustments to Reconcile Net Income (Loss) to Net Cash
         Provided (Used) by Operating Activities:
      Depreciation and Amortization                                                          509                      487
      Legal Settlement                                                                         0                      215

      (Increase) Decrease in:
         Accounts Receivable                                                                 (75)                     147
         Inventories                                                                         (44)                    (109)
         Prepaids and Other                                                                 (166)                    (117)
         Loss on Early Retirement of Fixed Assets                                              0                       21
      Increase (Decrease) in:
         Accounts Payable and Other Accrued Liabilities                                       86                     (199)
                                                                                    -------------           --------------
    Total Adjustments                                                                        310                      445
                                                                                    -------------           --------------
    Net Cash Provided by Operating Activities                                                723                      407
                                                                                    -------------           --------------

Investing Activities
    Expended for Property and Equipment                                                     (201)                     (58)
    Expended for Product Development                                                         (39)                     (78)
    Expended for Other Assets                                                                (68)                    (140)
                                                                                    -------------           --------------
    Net Cash Used by Investing Activities                                                   (308)                    (276)
                                                                                    -------------           --------------

Financing Activities
    Payments on Notes Payable and Long-Term Debt                                            (407)                     (26)
    Proceeds from Borrowing on Notes Payable and Long-Term Debt                                0                      150
    Advances to Affiliates - Discontinued Operations                                        (213)                    (549)
                                                                                    -------------           --------------
    Net Cash Used by Financing Activities                                                   (620)                    (425)
                                                                                    -------------           --------------

Net Decrease in Cash                                                                        (205)                    (294)
Cash at Beginning of Period                                                                  205                      465
                                                                                    -------------           --------------
Cash at End of Period                                                               $          0            $         171
                                                                                    =============           ==============

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>
                                       5


NOTE A - BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation  S-X.  Accordingly,  they do not include all of the information
and notes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included.  Operating  results for the six-month  period ended September 30,
1999 are not necessarily  indicative of the results that may be expected for the
year ended  March 31,  2000.  The  unaudited  condensed  consolidated  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements  and notes thereto  included in the  Company's  annual report on Form
10-K for the year ended March 31, 1999.

     The  unaudited  condensed  consolidated  financial  statements  include the
accounts of the Company and its subsidiaries,  MTS Packaging Systems, Inc. ("MTS
Packaging"),   Medical  Technology  Laboratories,   Inc.  ("MTL")  and  LifeServ
Technologies,   Inc.  ("LifeServ").  MTL  and  LifeServ  represent  discontinued
operations,  and accordingly,  these discontinued  segments' net liabilities are
shown  as one  amount  under  the  captions  "Net  Liabilities  of  Discontinued
Operations"  for fiscal 2000 and fiscal 1999. The results of operations of these
discontinued  segments for fiscal 2000 and fiscal 1999 have been  excluded  from
the components of "Income (Loss) from Continuing Operations" and shown under the
caption "Loss from Operations of  Discontinued  Operations" in the Statements of
Operations.

     The  unaudited  condensed  consolidated  financial  statements  include the
classification  of the amounts  due  pursuant  to the  Company's  bank term loan
according  to the  repayment  terms of the loan  agreement.  Certain  events  of
default under the loan agreement may have occurred and the Company has requested
a waiver of these  events of default.  Although  the Company is  discussing  the
waivers  with  the  bank,  there  are no  assurances  that the  waivers  will be
obtained.  In the event that waivers are not obtained and the bank exercises its
rights  regarding the repayment of the loan, the  classification  of the amounts
due to the bank on the balance  sheet may change from  long-term to current.  If
the bank elects to exercise its rights under the loan  agreement  regarding  the
repayment of the indebtedness,  the Company's  results of operations,  liquidity
and financial condition would be adversely affected (See Note E).


NOTE B - INVENTORIES

         The components of inventory consist of the following:

<TABLE>
<CAPTION>
                                                                   September 30,           March 31,
                                                                        1999                  1999
                                                                  -----------------     -----------------
                                                                              (In Thousands)
               <S>                                                <C>                   <C>

               Raw Materials                                      $          931        $          767
               Finished Goods and Work in Progress                         1,243                 1,363
               Less:  Inventory Valuation Allowance                         (140)                 (140)
                                                                  ================      ================
                                                                  $        2,034        $        1,990
                                                                  ================      ================
</TABLE>

         Inventories  are stated at the lower of cost  (first-in,  first-out) or
market.


<PAGE>
                                       6


NOTE C - EARNINGS PER SHARE

     Net income per common share is computed by dividing net income by the basic
and diluted weighted average number of shares of common stock  outstanding.  For
diluted weighted average shares outstanding, the Company used the Treasury stock
method to  calculate  the common  stock  equivalents  that stock  options  would
represent.  The effect of all  options  and  warrants  were not  included in the
calculation of net income per diluted common share as the effect would have been
anti-dilutive.


NOTE D - DISCONTINUED OPERATIONS

     During the  fourth  quarter  of fiscal  1999,  the  Company  implemented  a
strategy of focusing its  resources on its core  business,  MTS  Packaging,  and
divesting the other two business segments it historically operated.

     In May 1999, the Company sold LifeServ, its Health Care Information Systems
business segment. The Asset Acquisition Agreement provided,  among other things,
for  the  buyer  to  receive   substantially  all  the  assets  of  LifeServ  in
consideration for the assumption of certain stated  liabilities of approximately
$5 million. The sale resulted in a gain of approximately $1.8 million, which has
been recognized in the accompanying  financial  statements as a gain on disposal
of discontinued  operations.  During the first quarter,  LifeServ had revenue of
$454,000  and  costs  and  expenses  of  $978,000   resulting  in  a  loss  from
discontinued operations of $524,000.  LifeServ had no operations after the first
quarter.

     The Company is  discussing  the possible  sale of its  Clinical  Laboratory
Services  subsidiary,  MTL, with several  potential  buyers. In the event that a
sale  is not  consummated,  management  has  committed  itself  to  abandon  the
business.  In September 1999, MTL entered into a Management  Services  Agreement
with one potential buyer. The Agreement  provides,  among other things,  for the
potential  buyer to make loans and  advances to MTL for working  capital.  As of
September 30, 1999, MTL had borrowed  $120,000 from the potential  buyer.  MTL's
net  revenue  for the  first  six  months of  fiscal  2000 and  fiscal  1999 was
$4,145,000  and  $5,208,000  respectively.  The net loss  from the  discontinued
operations of MTL was  $1,072,000 and $184,000 in the first six months of fiscal
2000 and fiscal 1999, respectively.

     The Company  estimated  the loss on disposal of MTL to be $2.5  million and
recorded a charge of that amount in the fourth  quarter of fiscal 1999. The loss
on disposal  of MTL  included a reserve of $500,000  for the  estimated  cost of
disposal and  operating  losses  through the  disposal  date.  Accordingly,  the
Company  charged  $500,000 of the net loss from  discontinued  operations to the
reserve  and  recorded a loss from  operations  of  discontinued  operations  of
$572,000 in the second  quarter of fiscal 2000.  The Company  believes that if a
sale of the business can be negotiated with the potential  buyer,  the sale will
be concluded  before  December 31, 1999.  The terms of the  Management  Services
Agreement provide that the potential buyer will advance the amounts necessary to
fund any operating  losses  incurred by MTL. In addition,  the operations of MTL
have  historically  been seasonal and generally have been profitable  during the
months of October,  November and December.  As a result, the Company has elected
not to provide any additional amounts as a reserve for operating losses that may
be incurred until the anticipated  closing date. In the event that a sale is not
concluded,  the Company is  committed to  liquidating  the business and believes
that the net  proceeds  received  in  liquidation  will  exceed  the  amount  of
liabilities that will ultimately be satisfied.

<PAGE>
                                       7


     The  carrying  value  of  the  net  assets  (liabilities)  of  discontinued
operations  at  September  30,  1999 and  March  31,  1999 is  comprised  of the
following.

<TABLE>
<CAPTION>
                                                                                                      Total
                                       LifeServ                          MTL                       Discontinued
                                                                                                    Operations
                              ---------------------------    ---------------------------   ----------------------------
                               September      March 31,       September      March 31,      September       March 31,
                                  30,                            30,                           30,
                                  1999           1999            1999           1999           1999            1999
                              ------------   ------------    ------------   ------------   ------------    ------------
<S>                           <C>            <C>             <C>            <C>            <C>             <C>
Current Assets                $       0      $   1,047       $   3,094      $   3,945      $   3,094       $   4,992
Other Assets                          0          2,088               0             71              0           2,159
                              -----------    -----------     -----------    -----------    -----------     -----------
Total Assets                  $       0      $   3,135       $   3,094      $   4,016      $   3,094       $   7,151
                              -----------    -----------     -----------    -----------    -----------     -----------

Current Liabilities           $       0      $   4,532       $   2,327      $   2,876      $   2,327       $   7,408
Long-Term Liabilities                 0            346           1,309          1,314          1,309           1,660
                              -----------    -----------     -----------    -----------    -----------     -----------
Total Liabilities             $       0      $   4,878       $   3,636      $   4,190      $   3,636       $   9,068
                              -----------    -----------     -----------    -----------    -----------     -----------

Net Assets (Liabilities)
of Discontinued               $        0     $  (1,743)      $   (542)      $    (174)     $   (542)       $  (1,917)
Operations
                              ===========    ===========     ===========    ===========    ===========     ===========

</TABLE>



NOTE E - LONG-TERM DEBT

     Long-term debt related to continuing operations consists of the following:

<TABLE>
<CAPTION>
                                                                                    September 30,       March 31,
                                                                                         1999             1999
                                                                                    -------------    --------------
                                                                                             (In Thousands)
  <S>                                                                                <C>             <C>

  Bank Term Loan;  payable in  installments  of interest  at 7.5% and  principal
    monthly for ten years ending  September 1, 2006,  with a lump sum payment of
    approximately $11.4 million on that date secured by all tangible and
    intangible assets of the Company.                                                $  14,509       $    14,806

  Unsecured Notes Payable plus interest at 12% through  February 1999, and 18%
    until repaid.                                                                          150               150

  Unsecured  Notes  Payable plus  interest at 13% in monthly  installments  of
    $8,905 through September 2001.                                                         185               200

  Unsecured Note Payable plus interest at 3%, payable in monthly  installments
    of $2,394 through September 2006.                                                      181               193

  Unsecured  Note  Payable  under  settlement  agreement  with  State of Florida
    Department of Revenue, payable in monthly installments of $2,500-$3,500
    over a period of four to eight years.                                                  273               284

   Other Notes and  Agreements;  interest and  principal  payable  monthly and
    annually at various amounts through March 2000.                                        105               156
                                                                                    ------------     -------------
  Total Long -Term Debt                                                                 15,403            15,789
  Less Current Portion                                                                    (802)             (874)
                                                                                    ============     =============
  LONG-TERM DEBT DUE AFTER 1 YEAR                                                    $  14,601       $    14,915
                                                                                    ============     =============
</TABLE>


<PAGE>
                                       8


 The  bank  notes  payable  are  collateralized  by the  Company's  accounts
receivables, inventory, equipment and intangibles.

     On July 15, 1999,  the Company  received a waiver of certain  defaults that
occurred under its bank term loan agreement  through June 30, 1999. In addition,
the bank and the  Company  agreed to modify the loan  agreement  for  results of
operations subsequent to July 1, 1999. To date the bank and the Company have not
agreed on the terms of the modification. The Company has requested that the bank
extend its waiver of certain  defaults  past June 30, 1999 and has requested the
bank to waive certain other events of default that may have occurred.  There are
no  assurances  that the bank will  extend  the  waiver or waive any  additional
events  of  default  that may have  occurred.  If the bank  does not  ultimately
provide a waiver of events of default  and/or a loan agreement  modification  is
not executed,  long-term debt of approximately $14.5 million may be reclassified
as  current  and  thereby,  will  adversely  affect  the  Company's  results  of
operations, liquidity and financial condition.


NOTE F - CONTINGENCIES

     On November 19, 1998,  MTL received a refund  request in the amount of $1.8
million from Medicare Program  Safeguards ("MPS") and $104,000 from the State of
Florida Agency for Health Care Administration  ("AHCA").  The request follows an
onsite review in May 1997, by federal and state agencies,  of MTL's Medicare and
Medicaid billing  practices in 1996. MTL has conducted an internal review of the
billing procedures, records and services in question and disputes MPS's findings
and determination.  On December 17, 1998, MTL responded to the MPS determination
and  subsequently  received a response  from MPS in which MPS  informed MTL that
recoupment  of the  refund  amount  would be  stayed  while MPS  reviewed  MTL's
response.  Although MTL believes  that MPS's  determination  and the request for
refund are without  merit,  there can be no  assurance  that this matter will be
resolved over the near term or that the ultimate  outcome of the matter will not
have a material adverse affect on the Company's  financial condition and results
of operation.

     In July 1999,  MTL was served  with a summons and  complaint  relating to a
replevin  action  commenced  by  a  secured   creditor  of  Community   Clinical
Laboratories,  Inc.  ("CCL").  MTL purchased  certain assets of CCL in September
1998.  The  replevin  action  seeks to allow  the  secured  creditor  to  obtain
possession of certain equipment used by MTL in the operation of its business. If
the secured creditor is successful in obtaining possession of the equipment, the
operations of MTL would be adversely  affected.  The Company has retained  legal
counsel and is in the process of responding to the action.

     In October 1999, MTL determined  that certain  lenders of CCL held security
interests  in the assets MTL  purchased  from CCL. MTL was not made aware of the
security interests,  which relate to indebtedness of approximately  $235,000, at
the time the assets were purchased and received  representations  and warranties
from  CCL  that the  assets  purchased  were  free  and  clear  of any  liens or
encumbrances  other than  those  specifically  disclosed.  In the event that MTL
becomes  responsible for the indebtedness,  MTL will pursue its remedies against
CCL including right of offset against other amounts owed to CCL.

     The Company is involved in certain  claims and other legal actions  arising
in the  ordinary  course of  business.  There can be no  assurances  that  these
matters will be resolved on terms  acceptable to the Company.  In the opinion of
management,  based  upon  advice  of  counsel  and  consideration  of all  facts
available at this time, the ultimate  disposition of these matters will not have
a material  adverse affect on the financial  position,  results of operations or
liquidity of the Company.

<PAGE>
                                       9

NOTE G - INCOME TAXES

     The  Company's  utilization  of net  operating  loss  carry  forwards  from
continuing and discontinued  operations that have not been previously recognized
substantially eliminated the current periods income tax provision.


NOTE H - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                                                              September 30,
                                                                                     -------------------------------
                                                                                          1999             1998
                                                                                     -------------    --------------
                                                                                              (In Thousands)
  <S>                                                                                 <C>             <C>
  Cash Paid for Interest                                                              $     538       $       670

  Cash Flow Information for Discontinued Operations:

      Operating Activities
          Net Cash Used by Discontinued Operations                                         (289)             (718)

      Investing Activities
          Net Cash Used by Investing Activities of Discontinued Operations                  (31)             (113)

      Financing Activities
          Net Cash Provided by Investing Activities of Discontinued Operations               87               407
                                                                                     ------------     -------------
      Net (Decrease) in Cash - Discontinued Operations                                     (233)             (424)
      Cash at Beginning of Period - Discontinued Operations                                  61              (141)
      Cash Provided by Continuing Operations                                                213               549
                                                                                     ------------     -------------
      Cash at End of Period - Discontinued Operations                                 $      41       $       (16)
                                                                                     ============     =============
</TABLE>


<PAGE>
                                       10


ITEM 2.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
         RESULTS OF OPERATIONS

     This Form 10-Q contains  forward-looking  statements  within the meaning of
that term in Section  27A of the  Securities  Act of 1933 and Section 21E of the
Securities  Exchange  Act of 1934.  Additional  written or oral  forward-looking
statements  may be made by the Company  from time to time,  in filings  with the
Securities and Exchange  Commission or otherwise.  Statements  contained  herein
that are not historical  facts are  forward-looking  statements made pursuant to
the safe harbor  provisions  described  above.  Forward-looking  statements  may
include,  but are not limited to,  projections  of  revenues,  income or losses,
capital  expenditures,  plans for future  operations,  the elimination of losses
under certain  programs,  financing  needs or plans,  compliance  with financial
covenants  in loan  agreements,  plans for sale of assets or  businesses,  plans
relating to products or services of the  Company,  assessments  of  materiality,
predictions of future events and the effects of pending and possible litigation,
as well as assumptions relating to the foregoing. In addition, when used in this
discussion, the words "anticipates",  "estimates", "expects", "intends", "plans"
and  variations  thereof  and  similar  expressions  are  intended  to  identify
forward-looking statements.

     Forward-looking   statements   are   inherently   subject   to  risks   and
uncertainties,  some of which can be predicted or  quantified,  based on current
expectations.  Consequently,  future  events and  actual  results  could  differ
materially  from  those  set  forth  in,  contemplated  by,  or  underlying  the
forward-looking  statements  contained  herein.  Statements  in  this  Quarterly
Report,  particularly  in "Item  2.  Management's  Discussion  and  Analysis  of
Financial   Condition  and  Results  of  Operations"   and  Notes  to  Condensed
Consolidated  Financial Statements,  describe factors,  among others, that could
contribute to or cause such differences.  Other factors that could contribute to
or  cause  such  differences  include,  but are not  limited  to,  unanticipated
increases in operating costs, labor disputes, capital requirements, increases in
borrowing  costs,  product  demand,  pricing,  market  acceptance,  intellectual
property rights and litigation,  risks in product and technology development and
other risk factors detailed in the Company's  Securities and Exchange Commission
filings.

     Readers are  cautioned not to place undue  reliance on any  forward-looking
statements contained herein, which speak only as of the date hereof. The Company
undertakes  no  obligation  to publicly  release the result of any  revisions of
these  forward-looking  statements  that  may  be  made  to  reflect  events  or
circumstances  after the date hereof or to reflect the  occurrence of unexpected
events.


RESULTS OF OPERATIONS

Three Months Ended September 30, 1999 and 1998
----------------------------------------------

     Net sales for the three months ended  September  30, 1999  increased 21% to
$4.2 million from $3.5 million during the same period the prior year.

     Net sales  increased  primarily  as a result  of a greater  number of punch
cards and other disposable supplies sold to pharmacies. MTS Packaging's customer
base continues to consolidate as a result of acquisitions that has increased the
number of pharmacies  serviced by MTS Packaging.  This  consolidation  has had a
favorable  impact on the volume of product MTS  Packaging  sells to its existing
customers.

     Cost of sales and services for the three  months ended  September  30, 1999
increased 5% to $2.2 million from $2.1 million  during the same period the prior
year.  Cost of sales and  services as a percentage  of sales  decreased to 51.2%
from 59.2% during the same period the prior year.  The decrease is primarily due
to certain  fixed  components  of cost of sales and services not  increasing  as
revenue increased.

<PAGE>
                                       11


     Selling,  general and  administration  expenses  for the three months ended
September 30, 1999  increased  14% to $1.2 million from $1.0 million  during the
same period the prior year. The increase resulted  primarily from an increase in
personnel  costs that  resulted  from the addition of  personnel to  accommodate
increased sales and services.

     Depreciation and amortization expenses for the three months ended September
30, 1999 increased 3% to $255,000 from $248,000 during the same period the prior
year. This increase is a result of new assets being placed into service.

     Interest expense for the three months ended September 30, 1999 increased 4%
to $296,000  from $284,000  during the same period the prior year.  The increase
results  from  additional  debt,  which the Company  incurred  during the fourth
quarter of the previous fiscal year.

Six Months Ended September 30, 1999 and 1998
--------------------------------------------

     Net sales for the six months ended September 30, 1999 increased 15% to $8.1
million from $7.0 million during the same period the prior year.

     Net sales  increased  primarily  as a result  of a greater  number of punch
cards and other disposable supplies sold to pharmacies. MTS Packaging's customer
base continues to consolidate as a result of acquisitions that has increased the
number of pharmacies  serviced by MTS Packaging.  This  consolidation  has had a
favorable  impact on the volume of product MTS  Packaging  sells to its existing
customers.

     Cost of sales and  services  for the six months  ended  September  30, 1999
increased 5% to $4.2 million from $4.1 million  during the same period the prior
year.  Cost of sales and  services as a percentage  of sales  decreased to 52.6%
from 57.9% during the same period the prior year.  The decrease is primarily due
to certain  fixed  components  of cost of sales and services not  increasing  as
revenue increased.

     Selling,  general  and  administration  expenses  for the six months  ended
September 30, 1999  increased  20% to $2.3 million from $1.9 million  during the
same period the prior year. The increase resulted  primarily from an increase in
personnel  costs that  resulted  from the addition of  personnel to  accommodate
increased sales and services.

     Depreciation and  amortization  expenses for the six months ended September
30, 1999 increased 5% to $509,000 from $487,000 during the same period the prior
year. This increase is a result of new assets being placed into service.

     Interest  expense for the six months ended  September 30, 1999 increased 4%
to $591,000  from $570,000  during the same period the prior year.  The increase
results  from  additional  debt,  which the Company  incurred  during the fourth
quarter of the previous fiscal year.

Year 2000 Compliance
--------------------

Introduction

     The Company's year 2000 ("Y2K") compliance project is intended to determine
the  readiness  of the  Company's  business  for the year 2000.  The Company has
identified three areas where the Y2K problem creates risk to the Company.  These
areas are a) internal information systems; b) system capabilities of third party
business  with  relationships  with the Company,  including  product  suppliers,
customers,  service  providers and companies that  interface  their software and
hardware  products with products sold by the Company;  and c) product  liability
claims  arising  out of the  non-performance  of computer  products  sold by the
Company.  Although the Company is currently addressing these areas, there can be
no assurance that its efforts will prevent all potential adverse consequences to
the Company resulting from any Y2K problem.


<PAGE>
                                       12


Plan to Address Y2K Compliance

     In December  1998,  the Company  formed a Y2K  compliance  project  team to
develop an overall plan to address Y2K readiness issues.  The plan was developed
in phases.

     o    Phase I

          a)   Identify all internal  hardware and software systems that must be
               compliant.

          b)   Appoint  individuals  within the  Company to be  responsible  for
               communication   with  third  party   businesses   regarding   Y2K
               readiness.

          c)   Appoint  individuals  within the  Company to be  responsible  for
               evaluation of product  liability  issues that may exist regarding
               products sold by the Company.

     o    Phase II - Identify Y2K problems that may exist in each risk area.

     o    Phase III - Repair,  modify or replace  systems that are determined to
          be non-compliant.

     o    Phase IV - Test systems to confirm that any repairs,  modification  or
          replacements have resulted in compliance.

State of Readiness

     Internal Systems
     ----------------

     Although the Company believes that the internal  information systems in its
Medication  Packaging and  Dispensing  Systems  subsidiary are in a state of Y2K
readiness,  there can be no assurance  that the Company will not  experience any
problems related to its Y2K readiness.

     The  internal  information  systems  utilized  in  the  Company's  Clinical
Laboratory  Services,  MTL,  business are not Y2K  compliant.  MTL's billing and
collection  information  system must be upgraded to Y2K  compliance  in order to
maximize the  liquidation  value of its account  receivable.  MTL has contracted
with third party software suppliers to ensure Y2K compliance before December 31,
1999, however, there can be no assurance that Y2K compliance will be achieved in
a timely manner.

     Material Third Party Readiness
     ------------------------------

     Individuals  within  the  Company  have been  assigned  responsibility  for
communicating  with material  third party  businesses  with whom the Company has
business  relationships  and have  completed a survey  process.  The Company has
received representations from third parties as to their Y2K readiness,  however,
the Company has not independently  verified these  representatives and there can
be no assurance  that material  vendors and customers  will not  experience  Y2K
related problems, which could have a material adverse affect on the Company.

Product Liability

     Although the Company believes the products sold by the Medication Packaging
and Dispensing  Systems  subsidiary do not have Y2K issues associated with them,
there can be no  assurance  that the Company  will not  experience  any problems
related to Y2K liability.

<PAGE>
                                       13


     The  Services  rendered  by  the  Company's  Clinical  Laboratory  Services
business are directly affected by the internal  information  systems utilized to
perform  analytical  laboratory  tests.  If the  Company  is not  successful  in
implementing  Y2K  compliant  internal   information  systems  in  its  Clinical
Laboratory  Services business,  it could adversely affect that business' ability
to perform  diagnostic tests and provide the results of those test to its client
physicians.

     The rights to sell the products of the  Company's  Health Care  Information
Systems business were sold in May 1999. Any liabilities  arising from Y2K issues
have been assumed by the buyer.

     Notwithstanding  the foregoing,  there can be no assurance that the Company
will be successful in implementing  its Y2K compliance  project and that it will
not be adversely affected by the failure of third party suppliers or significant
customers  to become Y2K  compliant.  Although  the  Company is taking  steps to
address Y2K problems,  if unexpected or unresolved  Y2K problems  develop,  such
problems  could have a material  impact on the Company's  results of operations,
liquidity and financial condition.


Cost of Project

     Expenditures  to date on Y2K  compliance  have  not  been  material  to the
Company's operation or financial condition.  The Company does not anticipate any
material  expenditures  for Y2K  compliance  in its  medication  and  dispensing
systems subsidiary.

LIQUIDITY AND CAPITAL RESOURCES

     During the first six months of the current fiscal year, the Company had net
income  from  continuing  operations  of  $413,000  compared  to a net loss from
continuing  operations  of $38,000 the prior year.  Cash  provided by  operating
activities of  continuing  operations  was $723,000  during the six months ended
September 30, 1999 compared to $407,000  provided in the prior year. The Company
had working capital of $1,565,000 at September 30, 1999.

     Cash was provided by operating  activities of continuing  operations during
the six months ended September 30, 1999 primarily due to profitable operations.

     Investing  activities  used $308,000  during six months ended September 30,
1999 as a result of expenditures for capital equipment and product development.

     Financing  activities  used $620,000  during the six months ended September
30, 1999  primarily  as a result of  payments  made to the  Company's  principal
lenders.  In addition,  the  operations of MTL required cash to support  working
capital needs while  potential  buyers are  identified  or a liquidation  of the
business occurs.

     The Company's  short-term and long-term liquidity is primarily dependent on
its  ability to generate  cash flow from  operations.  Inventory  levels are not
expected  to change  significantly  based upon the  Company's  current  level of
operation.  Increases  in  revenue  have  generally  resulted  in  corresponding
increases in accounts  receivable.  Cash flow from  operations is anticipated to
support an increase in accounts receivable.

     The Company has several new product development  projects underway that are
expected to be funded by cash flow from operations. These projects are monitored
on a regular basis to attempt to ensure that the  anticipated  costs  associated
with them do not exceed the  Company's  ability to fund them from cash flow from
operations.

     The Company believes that cash generated from operations will be sufficient
to meet the capital expenditures,  product development and working capital needs
of MTS Packaging.

<PAGE>
                                       14


     Certain  events of  default  may have  occurred  under the  Company's  loan
agreement  with its bank.  Although the Company has  requested a waiver of these
events of default, there are no assurances that the waivers will be obtained. If
the bank elects to exercise its rights under the loan  agreement  regarding  the
repayment of the indebtedness,  the Company's  results of operations,  liquidity
and financial condition would be adversely affected.

     MTL has entered into a Management Services Agreement with a potential buyer
of the  business.  The  agreement  provides for the  potential  buyer to loan or
advance  funds to MTL for  working  capital.  At  September  30,  1999,  MTL had
borrowed  $120,000 from the potential buyer. The Company has determined that the
operations of MTL must be supported by the cash flow generated from the business
and advances from the potential  buyer. In the event that operating costs exceed
cash flow from  operations  and advances,  the Company is committed to a plan to
liquidate the business.

     After the disposal of MTL, the Company will focus on its core business, MTS
Packaging,  which has historically generated positive cash flow from operations.
As a result,  management  believes that certain  administrative  costs that were
previously required to support three separate businesses can be reduced.


<PAGE>
                                       15


PART II  -  OTHER INFORMATION


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

     The Annual Meeting of the Shareholders of the Company was held on September
28, 1999.  Messrs.  Todd E. Siegel,  David Kazarian,  Michael  Conroy,  and John
Stanton were elected  directors  of the Company for one-year  terms.  There were
4,903,384 common shares and 6,500,000 shares of voting preferred shares voted in
favor  of Todd E.  Siegel's  appointment;  104,934  common  shares  and 0 voting
preferred  shares voted against the  appointment and 267,520 common shares and 0
voting  preferred  shares  abstained.  There were  4,991,284  common  shares and
6,500,000  shares  of  voting  preferred  shares  voted in favor of  Michael  P.
Conroy's  appointment;  17,034 common shares and 0 voting preferred shares voted
against the appointment and 267,520 common shares and 0 voting  preferred shares
abstained.  There were  4,910,809  common shares and 6,500,000  shares of voting
preferred shares voted in favor of David Kazarian's  appointment;  97,509 common
shares and 0 voting  preferred  shares voted against the appointment and 267,520
common shares and 0 voting  preferred  shares  abstained.  There were  4,993,284
common shares and 6,500,000  shares of voting preferred shares voted in favor of
John Stanton's  appointment;  15,034 common shares and 0 voting preferred shares
voted against the appointment  and 267,520 common shares and 0 voting  preferred
shares abstained.

     Grant  Thornton LLP was  ratified as the  Company's  independent  certified
public  accountants  for fiscal year 2000 with 5,023,572  shares of Common Stock
and 6,500,000 shares of Voting Preferred Stock voting in favor, 30,531 shares of
Common  Stock and zero shares of Voting  Preferred  Stock  voting  against,  and
220,735  shares of  Common  Stock and zero  shares  of  Voting  Preferred  Stock
abstaining.


Item 6.  Exhibits and Reports on Form 8-K

          A.   Exhibits

               10   - Management Service Agreement dated September 8, 1999

               27   - Financial  data  schedule as of  September  30, 1999 filed
                      herewith (for SEC use only).

          B.   Reports on Form 8-K

               None


Signature
---------

     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.


                        MEDICAL TECHNOLOGY SYSTEMS, INC.



Date:  November 12, 1999      By:       /s/ Michael P. Conroy
       -----------------      --------------------------------------------------
                              Michael P. Conroy
                              Vice President & Chief Financial Officer
                              (Principal Financial and Chief Accounting Officer)