# UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-Q

||X| | Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1930
|--- | ---------------------------------------------------------------------------------------

| | For quarterly period ended June 30, 2003
| | ----------------------------------------

|[ ] | Transition Report Pursuant to Section 13 or
        15(d) of the Securities Exchange Act of 1934
|--- | ------------------------------------------------------------------------------------------------

| | For transition period from _______________ to ______________
| | ------------------------------------------------------------

Commission File Number:   
0-16594

| |                                                        | 
| | ------------------------------------------------------ | 
| | 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
| |                                                        
| | (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.   |X|   Yes
             [  ]    No

Indicate by check mark whether the  registrant  is an  accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
             [  ]   Yes      [X]    No

As
of August 13, 2003, the registrant had 4,404,523 shares of common stock, $.01 par value per
share, issued and outstanding.

10Q-1

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# MEDICAL TECHNOLOGY
SYSTEMS, INC. AND SUBSIDIARIES

# Index

| |         | Page                                                                                                            | 
| | ------- | --------------------------------------------------------------------------------------------------------------- | 
|
|
|
| | Item 1. | Financial Statements                                                                                            | 
| |         |                                                                                                                 | 
| |         | Condensed Consolidated Balance
        Sheets - June 30, 2003 and March 31, 2003                                | 
|
| |         | Condensed Consolidated
        Statements of Earnings - Three Months Ended June 30, 2003 and 2002               | 
|
| |         | Condensed Consolidated Statements
        of Changes in Stockholders' Equity - Three Months Ended June 30, 2003 | 
|
| |         | Condensed Consolidated Statements
        of Cash Flows - Three Months Ended June 30, 2003 and 2002             | 
| |         |                                                                                                                 | 
| |         | Notes to Condensed Consolidated
        Financial Statements                                                    | 
|
| | Item 2. | Management's Discussion and Analysis of
        Financial Condition and Results of Operations                   | 
| |         |                                                                                                                 | 
| | Item 3. | Quantitative and Qualitative Disclosures About
        Market Risk                                              | 
| |         |                                                                                                                 | 
| | Item 4. | Controls and Procedures                                                                                         | 
| |         |                                                                                                                 | 
|
|
| | Item 6. | Exhibits and Reports on Form 8-K                                                                                | 
|
| |         | Signatures                                                                                                      | 

i.

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Table of Contents

# Item 1.     Financial
Statements

# PART 1  FINANCIAL INFORMATION

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

ASSETS

|                            | June 30,    |  | March 31, |       
|--------------------------- | ----------- |  | --------- | ------
|
|
|                            | (Unaudited) |  |           |       
|Current Assets:             |             |  |           |       
|Cash                        |             |  | $         | 208   
|Accounts Receivable, Net    |             |  |           | 4,228 
|Inventories                 |             |  |           | 3,229 
|Prepaids and Other          |             |  |           | 498   
|Deferred Tax Benefits       |             |  |           | 1,290 
|                            |             |  |           |       
|Total Current Assets        |             |  |           | 9,453 
|Property and Equipment, Net |             |  |           | 3,074 
|Other Assets, Net           |             |  |           | 2,749 
|Deferred Tax Benefits       |             |  |           | 1,866 
|                            |             |  |           |       
|Total Assets                |             |  | $         | 17,142
|                            |             |  |           |       

LIABILITIES AND STOCKHOLDERS' EQUITY

|Current Liabilities:                       |  |  |   |        |   |   |        |  
|------------------------------------------ |  |  | - | ------ | - | - | ------ | -
|Current Maturities of Long-Term Debt       |  |  | $ | 1,210  |   | $ | 1,461  |  
|Accounts Payable and Accrued Liabilities   |  |  |   | 3,070  |   |   | 3,506  |  
|                                           |  |  |   |       
|Total Current Liabilities                  |  |  |   | 4,280  |   |   | 4,967  |  
|Long-Term Debt, Less Current Maturities    |  |  |   | 7,167  |   |   | 7,023  |  
|                                           |  |  |   |       
|Total Liabilities                          |  |  |   | 11,447 |   |   | 11,990 |  
|                                           |  |  |   |       
|Stockholders' Equity:                      |  | 
|Common Stock                               |  |  |   | 44     |   |   | 44     |  
|Preferred Stock                            |  |  |   | 1      |   |   | 1      |  
|Capital In Excess of Par Value             |  |  |   | 11,838 |   |   | 11,881 |  
|Accumulated Deficit                        |  |  |   | (5,860 | ) |   | (6,205 | )
|Treasury Stock                             |  |  |   | (328   | ) |   | (328   | )
|                                           |  |  |   |       
|Total Stockholders' Equity                 |  |  |   | 5,695  |   |   | 5,393  |  
|                                           |  |  |   |       
|Total Liabilities and Stockholders' Equity |  |  | $ | 17,142 |   | $ | 17,383 |  
|                                           |  |  |   |       

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

1

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Table of Contents

# MEDICAL TECHNOLOGY
SYSTEMS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF EARNINGS(In Thousands;
Except Earnings Per Share Amounts)(Unaudited)

|                                                                        | Three Months Ended | 
|----------------------------------------------------------------------- | ------------------ | 
|
|
|
|
|Revenue:                                                                |                    | 
|Net Sales                                                               |                    | 
|Costs and Expenses:                                                     |                    | 
|Cost of Sales                                                           |                    | 
|Selling, General and Administrative                                     |                    | 
|Depreciation and Amortization                                           |                    | 
|                                                                        |                    | 
|Total Costs and Expenses                                                |                    | 
|                                                                        |                    | 
|Operating Profit                                                        |                    | 
|                                                                        |                    | 
|                                                                        |                    | 
|Other Expenses:                                                         |                    | 
|Interest Expense                                                        |                    | 
|Amortization of:                                                        |                    | 
|Financing Costs                                                         |                    | 
|Original Issue Discount                                                 |                    | 
|                                                                        |                    | 
|Total Other Expenses                                                    |                    | 
|Income Before Income Taxes                                              |                    | 
|                                                                        |                    | 
|Income Tax Expense                                                      |                    | 
|                                                                        |                    | 
|                                                                        |                    | 
|Net Income                                                              |                    | 
|Non-Cash Constructive Dividend Related to
        Beneficial Conversion |                    | 
|Feature of Convertible Preferred Stock                                  |                    | 
|Convertible Preferred Stock Dividends                                   |                    | 
|                                                                        |                    | 
|Net Income Available to Common Stockholders                             |                    | 
|                                                                        |                    | 
|Net Income Per Common Share - Basic                                     |                    | 
|                                                                        |                    | 
|Net Income Per Common Share - Diluted                                   |                    | 
|                                                                        |                    | 

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

2

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Table of Contents

MEDICAL
TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY THREE MONTHS ENDED
JUNE 30, 2003(In Thousands)(Unaudited)



|                                                | Common Stock |           | Preferred Stock |   | Capital |  |       |  |   |   | 
|----------------------------------------------- | ------------ | --------- | --------------- | - | ------- |  | ----- |  | - | - | 
|
|
|
|
|
|Balance, March 31, 2003                         |              | 4,393,623 |                 | $ | 44      |  | 2,000 |  | $ | 1 | 
|
|Stock Options and Warrants Exercised            |              | 10,900    |                 |   |         |  |       |  |   |   | 
|
|Convertible Preferred Stock Dividend            |              |           |                 |   |         |  |       |  |   |   | 
|
|Currency Exchange Gain (Loss)                   |              |           |                 |   |         |  |       |  |   |   | 
|
|Net Income for Three Months Ended June 30, 2003 |              |           |                 |   |         |  |       |  |   |   | 
|
|Balance, June 30, 2003                          |              | 4,404,523 |                 | $ | 44      |  | 2,000 |  | $ | 1 | 
|

3

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Table of Contents

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

|                                                        | Three Months Ended
|------------------------------------------------------- | ------------------
|
|
|
|
|Operating Activities                                    |                   
|Net Income                                              |                   
|
|Adjustments to
        Reconcile Net Income to Net Cash |                   
|Provided
        by Operating Activities:               |                   
|Amortization of Deferred Financing Costs                |                   
|Amortization of Original Issue Discount                 |                   
|Depreciation and Amortization                           |                   
|Income Tax Expense                                      |                   
|(Increase) Decrease in:                                 |                   
|Accounts Receivable                                     |                   
|Inventories                                             |                   
|Prepaids and Other                                      |                   
|Increase (Decrease) in:                                 |                   
|Accounts Payable and Other Accrued Liabilities          |                   
|
|Total Adjustments                                       |                   
|
|Net Cash Provided by
        Operations                 |                   
|
|Investing Activities                                    |                   
|Expended for Property
        and Equipment             |                   
|Expended for Product
        Development                |                   
|Expended for Patents
        and Other Assets           |                   
|
|Net Cash (Used) by
        Investing Activities         |                   
|
|Financing Activities                                    |                   
|Payments on Notes
        Payable and Long-Term Debt    |                   
|Advances (Paydowns)
        on Revolving Line of Credit |                   
|Borrowing on Term
        Loans and Subordinated Notes  |                   
|Issuance of
        Convertible Preferred Stock         |                   
|Exercise of Stock
        Options                       |                   
|Expended for Financing
        Costs                    |                   
|Dividends on
        Convertible Preferred Stock        |                   
|
|Net Cash (Used) by
        Financing Activities         |                   
|
|Net (Decrease) in Cash                                  |                   
|
|Cash at Beginning of Period                             |                   
|
|Cash at End of Period                                   |                   
|

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

Supplemental Disclosure
of Cash Flow Information

June 30, 2003       
         Non-Cash Financing Activities  The Company purchased $175,000 in equipment and financed the
purchase with a capital lease obligation.

June 30, 2002       Non-Cash
Financing Activities  See Notes G and I.

4

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Table of Contents

# MEDICAL TECHNOLOGY
SYSTEMS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS FOR THE THREE MONTHS
ENDED JUNE 30, 2003

# NOTE  A  BASIS OF
PRESENTATION

The
accompanying unaudited condensed consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of America
(US GAAP) 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 the US GAAP 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 three-month period
ended June 30, 2003 are not necessarily indicative of the results that may be expected for
the year ended March 31, 2004. 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,
2003.

The
unaudited condensed consolidated financial statements include the accounts of the Company
and its subsidiaries, MTS Packaging Systems, Inc. (MTS Packaging) and MTS
Packaging Systems International, Ltd. (MTSPI). All other subsidiaries of the
Company did not have operations during the three-month period ended June 30, 2003 and
2002.

# NOTE   B  INVENTORIES

The
components of inventory consist of the following:

|                                     | June 30,       |  | March 31,
|------------------------------------ | -------------- |  | ---------
|
|
|                                     | (In Thousands)
|
|Raw Materials                        |                |  | $        
|Finished Goods and Work in Progress  |                |  |          
|Less:  Inventory Valuation Allowance |                |  |          
|
|                                     |                |  | $        
|

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

# NOTE  C  EARNINGS
PER SHARE

Net
Income per common share is computed by dividing net income available to common
shareholders by the basic and diluted weighted average number of shares of common stock
outstanding. The number of shares of common stock, for purposes of the basic earnings per
share computation, include 566,517 shares that could result from the exercise of warrants
exercisable at $.01 per share by the holder of the warrants (see Note G). For diluted
weighted average shares outstanding, the Company used the treasury stock method to
calculate the common stock equivalents that the stock options and warrants would
represent. In addition, the convertible preferred stock has been treated as if it had been
converted into common stock on the date of issuance.

5

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The
following table sets forth the computation of income per basic and diluted common share:

|                                                                                                   | Three Months Ended
|-------------------------------------------------------------------------------------------------- | ------------------
|
|
|
|
|Numerator:                                                                                         |                   
|
|Net Income                                                                                         |                   
|
|Minus:                                                                                             |                   
|Constructive Dividend Related to Beneficial
        Conversion Feature Convertible Preferred Stock |                   
|
|Convertible Preferred Stock Dividend
        Payable                                               |                   
|
|Net Income Available to Common Shareholders                                                        |                   
|
|Denominator:                                                                                       |                   
|
|Weighted Average Shares Outstanding - Basic                                                        |                   
|
|Add:    Effect of Dilutive Warrants and
        Options                                            |                   
|
|Effect of Conversion of Convertible
        Preferred Stock Into Common Stock                      |                   
|
|Effect of Shares Available for Issuance under SAR Agreement                                        |                   
|
|Weighted Average Shares Outstanding -
        Diluted                                              |                   
|
|Income Common Share - Basic                                                                        |                   
|
|Income Common Share - Diluted                                                                      |                   
|

Certain
provisions of the warrants and the terms of the convertible preferred stock issued in June
2002 may result in the issuance of additional shares at some future date if certain events
occur. Since these events have not yet occurred, and therefore the number of additional
shares is not known, no additional shares have been included in the earnings per share
calculation (see Note I).

# NOTE   D  STOCK
BASED COMPENSATION

The
Company follows SFAS No. 123, Accounting for Stock-Based Compensation(SFAS 123),
which establishes a fair market value based method of accounting for stock-based employee
compensation plans; however, the Company has elected to account for its employee stock
compensation plans using the intrinsic value method under Accounting Principles Board
Opinion No. 25, with pro forma disclosures of net earnings and earnings per share as if
the fair value based method of accounting defined in SFAS 123 had been applied. The
Company amortizes compensation costs related to the pro forma disclosure using the
straight-line method over the vesting period of the employees common stock options.
If compensation cost for the Companys stock option plan had been determined on the
fair value at the grant dates for stock-based employee compensation arrangements
consistent with the method required by SFAS 123, the Companys net income (loss) and
net income (loss) per common share would have been the pro forma amounts
indicated below:

6

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|                                                              | Three Months Ended June 30
|------------------------------------------------------------- | --------------------------
|
|
|
|                                                              | (In Thousands)            
|                                                              |                           
|
|Net Income Available to Common Shareholders as Reported       |                           
|                                                              |                           
|Net Income (Loss) Proforma                                    |                           
|                                                              |                           
|Net Income Per Common Share, Basic as Reported                |                           
|Net Income (Los) Per Common Share, Basic Proforma             |                           
|                                                              |                           
|Net Income Per Share, Diluted as Reported                     |                           
|Net Income (Loss) Per Share, Diluted Proforma                 |                           
|                                                              |                           
|For Basic Income (Loss) Per Share - Weighted Average Shares   |                           
|                                                              |                           
|For Diluted Income (Loss) Per Share - Weighted Average Shares |                           

# NOTE   E  REVENUE
RECOGNITION

The
Company recognizes revenue when products are shipped and title transfers. However, revenue
related to the sale of OnDemand machines is recognized upon installation and acceptance of
the machine by the customer in accordance with the terms of the purchase agreement.
Revenue includes certain amounts invoiced to customers for freight and handling charges.
The Company excludes the actual cost of freight and handling incurred from net sales and
includes these costs in cost of sales.

# NOTE  F  RESEARCH
AND DEVELOPMENT AND PRODUCT DEVELOPMENT

The
Company expenses product research and development costs as incurred. The Company incurred
approximately $33,000 and $10,000 during the three months ended June 30, 2003 and 2002,
respectively, for research and development costs.

All
costs incurred subsequent to the completion of research and development activities
associated with the products hardware components and the software components
achievement of technological feasibility are capitalized until the product is available
for general release to customers. The Company initially classifies the construction costs
of the first units produced for commercial use as product development costs prior to
transferring these costs to inventory. The Company capitalized approximately $115,000 and
$130,000 of product development costs during the three months ended June 30, 2003 and
2002, respectively.

Product
development costs are generally amortized on a straight-line basis over a five (5) year
period. Amortization expense related to product development costs was $91,000 and $37,000
for the three months ended June 30, 2003 and 2002, respectively.

At
June 30, 2003 and March 31, 2003, the Companys capitalized product development costs
included its new OnDemand product, which represented $1,539,000 and $1,428,000,
respectively, of the total capitalized product development costs (see Note L).

7

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Table of Contents

# NOTE  G  LONG-TERM
DEBT

|                                                                                                                                                                             | June 30,       |   | March 31,
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------- | - | ---------
|
|
|                                                                                                                                                                             | (In Thousands)
|
|Revolving Line of Credit due
        June 26, 2005 plus interest payable at 1% above the prime rate (5.0% at June 30, 2003).                                                 |                | $ | 3,425    
|                                                                                                                                                                             |                |   |          
|Bank Term Loan payable in monthly
        installments of $83,333 plus interest at 2.25% above the prime rate (6.25% at June 30, 2003) through
        June 2004.            |                |   | 1,000    
|                                                                                                                                                                             |                |   |          
|Bank Term Loan payable in monthly
        installments of $11,667 plus interest at 1.25% above the prime rate (5.25% at June 30, 2003) through
        June 2007.            |                |   | 560      
|                                                                                                                                                                             |                |   |          
|Subordinated Note - Face amount
        of $4,000,000, less unamortized original issue discount of $989,000, due June 26, 2007 plus interest
        payable monthly at 14%. |                |   | 3,011    
|                                                                                                                                                                             |                |   |          
|Other Notes and Agreements                                                                                                                                                   |                |   | 381      
|
|Total Long - Term Debt                                                                                                                                                       |                |   | 8,377    
|Less Current Portion                                                                                                                                                         |                |   | (1,210   
|
|LONG-TERM DEBT DUE AFTER 1 YEAR                                                                                                                                              |                | $ | 7,167    
|

In
June 2002, the Company repaid the entire amount, $11,310,000, of its bank term loan with
the proceeds of a new revolving line of credit, term loans, a subordinated note and
convertible preferred stock. The revolving line of credit allows for borrowing of up to
$5,000,000 based upon advance rates that are applied to the Companys eligible
accounts receivable and inventory. There was an additional $409,000 available at June 30,
2003 on the revolving line of credit based upon eligible accounts receivable and
inventory. Interest is payable on the revolving line of credit monthly based on the
average unpaid balance at the prime rate plus 1.0%.

One
term loan in the amount of $700,000 is repayable in equal monthly installments over a five
(5) year term, plus interest at the prime rate plus 1.25%. Another term loan in the amount
of $2,000,000 is repayable in equal monthly installments over two (2) years plus interest
at the prime rate plus 2.25% and is subject to an excess cash flow payment provision. The
Company and its lender agreed that the excess cash flow payment that was due on July 1,
2003, approximately $673,000, would be paid in equal monthly installments beginning August
1, 2003 and ending in January 2004, and as a result, the entire original amount of this
term loan will be paid at that date.

The
subordinated note in the amount of $4,000,000 is repayable in five (5) years with interest
only, at 14%, payable monthly until the maturity of the note. The subordinated note is
secured by a second lien on all of the assets of the Company. In addition, the
subordinated note holders were issued 566,517 warrants to purchase common stock
exercisable for ten (10) years at $.01 per share (subject to certain antidilution
provisions) (see Note I). The relative value of the warrants, and certain embedded
features of the warrants, were recorded as part of the stockholders equity and
reduced the carrying amount of the subordinated note as an original issue discount. The
original issue discount is being amortized over the five (5) year term of the subordinated
note. Amortization expense related to the original issue discount was $62,000 for the
three months ended June 30, 2003.

8

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The
terms of the warrant agreement contain certain antidilution provisions and also contain a
make-whole provision that obligates the Company to pay certain amounts to the holders of
the warrants if they do not ultimately receive an amount equal to the price per share of
the common stock on the date they exercise their right to purchase the common shares that
underlie the warrants. The warrant agreement also contains a provision that may obligate
the Company to pay certain amounts to the holders of the warrants in the event there is a
change in control of the voting common stock of the Company, if there is a sale of the
Company, or if there is a public offering of the Companys common stock. In the event
the Company is required to make payments to the holders of the warrants, it may elect to
issue additional warrants in lieu of cash payment. The maximum number of shares that the
Company may be required to issue is 12,500,000.

The
revolving line of credit and bank term loans are collateralized by a first security
interest in all of the assets of the Company.

The
bank term loans also contain provisions that require the Company to maintain certain
financial ratios and minimum stockholders equity levels of the greater of $4,600,000
or 95% of the stockholders equity at the end of the previous fiscal year. In addition,
certain provisions limit the amount of capital expenditures that the Company can make each
year. The Company was in compliance with all provisions of the loan agreements at June 30,
2003.

# NOTE   H 
CONTINGENCIES

In
November 1998, MTL, a discontinued operation, received a refund request in the amount of
$1.8 million from Medicare Program Safeguards (MPS). MTL disputed the refund
request in its response to MPS in December 1998. To date, MTL has not received any further
correspondence from MPS regarding this matter.

The
Company is involved in certain claims and legal actions arising in the ordinary course of
business including the matter referred to above. 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 are not expected to have a material adverse effect
on the financial position, results of operations or liquidity of the Company.

# NOTE  I 
STOCKHOLDER EQUITY

In
June 2002, the Company issued subordinated notes to an investor (see Note G). As part of
the consideration for the notes, the investor received 566,517 warrants to purchase common
stock exercisable at $.01 per share for ten (10) years.

Also
in June 2002, the Company issued 2,000 shares of convertible preferred stock at $1,000 per
share. The holders of the convertible preferred stock are entitled to receive quarterly
dividends at the rate of 11% per annum. The dividends are payable in cash or shares of
convertible preferred stock at the Companys option and are cumulative. Through the
period ended June 30, 2003, all dividends due in the amount of approximately $55,000 were
paid in cash. The preferred stock is convertible into 847,457 shares of the Companys
common stock at $2.36 per share. On the date the convertible preferred stock was issued,
the fair market value of the Companys common stock was $2.77 per share based upon
the closing bid on the OTC Bulletin Board. The difference between the fair market value of
the shares and the conversion price of the convertible preferred stock represented a
constructive dividend to the holders of the preferred stock in the amount of $347,000 (see
Note C). The Company followed the accounting prescribed in EITF 98-5and EITF 00-27for the
recording of the convertible preferred stock and the constructive dividend.

9

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The
terms of the warrant and convertible preferred stock agreements contain certain
antidilution provisions and also contain a make-whole provision that obligates the Company
to pay certain amounts to the holders of the warrants and convertible preferred stock if
they do not ultimately receive an amount equal to the price per share of the common stock
on the date they exercise their right to purchase the common shares that underlie the
warrants or convert the preferred stock into common stock. The warrant agreement also
contains a provision that may obligate the Company to pay certain amounts to the holders
of the warrants in the event there is a change in control of the voting common stock of
the Company, if there is a sale of the Company, or if there is a public offering of the
Companys common stock.

The
value of the warrants was determined as of the date of issuance using the Black-Scholes
options-pricing model. In addition, an independent third party has estimated the value of
certain embedded features contained in the warrant agreement and registration rights
agreement between the Company and the warrant holder (a make-whole and
claw-back feature that obligated the Company to pay additional amounts, in
cash or additional shares at the option of the Company, if certain events occur in the
future). Using the relative value of the debt ($4,000,000), warrants ($1,564,000) and the
warrants embedded features ($233,000), the Company recorded the value of the
warrants and the warrants embedded features as part of its stockholders equity, in
accordance with EITF 00-19,and reduced the carrying amount of the debt as an
original issue discount.

The
make-whole provision and certain antidilution provisions also represent a contingent
beneficial conversion feature of the convertible preferred stock. The effect of this
feature may result in the issuance of additional shares at some future date; however,
since the issuance of these shares is contingent on future events, the effect of this
feature will be recorded at the time the events occur.

In
the event the Company is required to make payments to the holders of the warrants and/or
preferred stock, it may elect to issue additional warrants and/or preferred stock in lieu
of a cash payment. The make-whole provision and other provisions of the warrant agreement
and convertible preferred stock agreement provide for a maximum of 12,500,000 shares that
may be issued pursuant to those provisions.

The
Company has determined the value of the warrants and the make-whole and other provisions
of the warrants and has recorded this amount as a component of its stockholders
equity. This amount, $1,240,000 also represents the original issue discount that will be
amortized over the five-year term of the subordinated note.

The
Company also issued, to its financial advisors, 125,000 warrants to purchase common stock
as part of the fees related to the above referenced financing. The warrants are fully
exercisable for five (5) years at $1.50 per share. The value of these warrants, $324,000,
was determined based upon the value of the Companys common stock on the date the
warrants were issued. The Company recorded the value of the warrants as a component of its
financing costs incurred (see Note J).

# NOTE  J  FINANCING
COSTS

The Company
incurred approximately $1,458,000 of financing costs during the twelve months ended March
31, 2003, including the value of the warrants issued to the Companys financial
advisors related to obtaining certain financing described in Notes F and I. The financing
costs were allocated between the components of the financing that represented debt and
equity. The financing costs that were allocated to the debt proceeds, $1,090,000, have
been recorded as an other asset and will be amortized over the repayment term of the
various loans and notes. The financing costs that were allocated to the equity proceeds,
$368,000, have been recorded as a reduction of the equity proceeds. There were no
additional financing costs incurred during the three-month period ending June 30, 2003.
Amortization expense related to the financing costs that was allocated to the debt was
$85,000 for the three months ended June 30, 2003.

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# NOTE  K  RECENT NEW
ACCOUNTING PRONOUNCEMENTS

In
December 2002, SFAS 148, Accounting for Stock Based Compensation  Transition and
Disclosure: and amendment of FASB Statement 123 (SFAS 123) was issued to provide
alternative transition methods for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, SFAS 148 amends the
disclosure requirements of SFAS 123. The Company does not intend to change the fair value
based method of accounting for stock-based employee compensation and has included the
additional disclosure requirements of SFAS 148 in the accompanying financial
statements.

In
May 2003, SFAS 150, Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity was issued. This statement
establishes standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liability and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an asset in
some circumstances). Many of those instruments were previously classified as equity. The
Company is currently analyzing the effect that SFAS 150 may have on certain financial
instruments that were issued in June 2002 (see Notes G and I). SFAS 150 is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the Companys second quarter or July 1, 2003. It is to
be implemented by reporting the cumulative effect of a change in an accounting principal
for financial instruments created before the issuance date of the statement and still
existing at July 1, 2003. Restatement is not permitted.

In
November 2002, the FASB issued FASB Interpretation No. 45, Guarantors Accounting
and Disclosure Requirements for Guarantors, Including Indirect Guarantors of Indebtedness
to Others (FIN 45). FIN 45 creates new disclosure and liability recognition
requirements for certain guarantees, including obligations to stand ready to perform. The
initial recognition and measurement requirements of FIN 45 are effective prospectively for
guarantees issued or modified after December 31, 2002, and the disclosure requirements are
effective for financial statement periods ending after December 15, 2002. The Company
provides its customers with an indemnification related to patent infringement matters as
part of its OnDemand sales agreement. Due to the uncertainty of potential patent
infringement claims, the Company can not estimate the amount of any future payments, if
any, that may be made.

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# NOTE  L  OTHER
ASSETS

Other
assets consists of the following:

|                                        | Amortization |  |       |  |   |      
|--------------------------------------- | ------------ |  | ----- |  | - | -----
|
|
|
|
|
|Product
      Development  (see Note F) |              |  | 5     |  | $ | 2,141
|Less:  Accumulated Amortization         |              |  |       |  |   | (609 
|                                        |              |  |       | 
|                                        |              |  |       |  | $ | 1,532
|                                        |              |  |       | 
|
|Patents                                 |              |  | 17    |  | $ | 1,229
|Less:   Accumulated Amortization        |              |  |       |  |   | (850 
|                                        |              |  |       | 
|                                        |              |  |       |  | $ | 379  
|                                        |              |  |       | 
|
|Financing
      Costs  (see Note J)     |              |  | 3 - 5 |  | $ | 1,110
|Less:  Accumulated Amortization         |              |  |       |  |   | (356 
|                                        |              |  |       | 
|                                        |              |  |       |  | $ | 754  
|                                        |              |  |       | 
|
|Other                                   |              |  | 5     |  | $ | 201  
|Less:  Accumulated                      |              |  |       |  |   | (117 
|                                        |              |  |       | 
|                                        |              |  |       |  | $ | 84   
|                                        |              |  |       | 
|Total
      Other Assets, Net           |              |  |       |  | $ | 2,749
|                                        |              |  |       | 

All
of the Companys intangible assets are pledged as collateral on bank notes.

# NOTE  M  SUBSEQUENT
EVENTS

On
July 28, 2003, the Company entered into an Asset Purchase Agreement with the Siegel Family
Trust (the Trust) to purchase the rights to certain proprietary technology
that had previously been available to the Company through a license agreement between the
Company and the Trust. The purchase price of the rights was $1,480,000. As part of the
agreement, the Trust agreed to forgive the royalties of $348,000, that were accrued and
unpaid on July 28, 2003, and terminated the license agreement. The purchase price will be
paid to the Trust in the form of a promissory note that is payable in sixty (60) monthly
payments of $28,785 including interest at the rate of 6.25%. In order to assist the
Company in determining the appropriate value of the rights to the proprietary technology,
the Board of Directors formed a special committee comprised of three outside independent
directors. The special committee engaged an independent third party to conduct an
appraisal of the value of the rights. The Company will reduce the purchase price of the
rights by the amount of the unpaid royalties and record the resulting amount as an
intangible asset. The intangible asset will be amortized over a five-year period, which
represents the remaining life of the patents related to these rights.

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In
July 2003, the Company entered into new employment agreements with its Chief Executive
Officer (CEO) and Chief Financial Officer (CFO) that expire on March 31, 2008 and March
31, 2006, respectively. All amounts that may be earned by the CEO and CFO are payable in
cash and do not provide the CEO or CFO with an election to receive any portion of the
amounts earned in the form of discounted common stock of the Company in lieu of cash.

In
July 2003, the Company and its CEO agreed to terminate, effective April 1, 2003, an
Executive Stock Appreciation Rights and a Non-Qualified Stock Option Agreement (SAR) that
was entered into in 1995. The agreement provided the CEO with an SAR equal to 3.25% of the
incremental increase in the aggregate value of the Companys common stock each
successive year. The agreement also allowed the CEO to receive all amounts owed pursuant
to the agreement in the form of discounted common stock of the Company in lieu of cash.

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# MEDICAL TECHNOLOGY
SYSTEMS, INC. AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS FOR THE THREE MONTHS
ENDED JUNE 30, 2003

# 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, believes,
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 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. In particular any comments regarding possible default
waivers related to the Companys loan agreement are forward-looking statements.

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.

# ESTIMATES AND CRITICAL
ACCOUNTING POLICIES

The
preparation of the Companys unaudited condensed financial statements in conformity
with US GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the date of the financial statements and
revenues and expenses for the respective period-ended for such statements. The
determination of estimates requires the use of judgment because future events and their
affect on the Companys operations cannot be determined with absolute certainty.
Actual results typically differ from these estimates in some fashion, and at times, these
variances may be material to the Companys financial statements. Management
continually evaluates its estimates and assumptions, which are based on historical
experience and other factors that are believed to be reasonable under these circumstances.
These estimates and the Companys actual results are subject to the risk factors
listed above under this Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations. Nevertheless, management of the
Company believes the following items involve a higher degree of complexity and, judgment
and therefore, has commented on these items below.

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Valuation of Accounts
Receivable at June 30, 2003

The
Companys allowance for doubtful accounts of $153,000 at June 30, 2003 is based on
managements estimates of the credit-worthiness of its customers, current economic
conditions and historical information. In the opinion of management, the Companys
allowance for doubtful accounts is believed to be an amount sufficient to respond to
normal business conditions. Historically, the levels of recorded bad debt expense and
write-offs have not been material to the Companys financial statements. Should
business conditions deteriorate or any large customer default on its obligations to the
Company, this allowance may need to be significantly increased, which would have a
negative impact upon the Companys operations.

Inventory Obsolescence
Valuation Allowance

The
Companys allowance for inventory obsolescence and slow moving inventory is reviewed
on a regular basis. The Company reviews various information related to the age and
turnover of specific inventory items to assist in its assessment. In the opinion of
management, the valuation allowance is believed to be sufficient to absorb the ultimate
obsolescence of certain inventory as they may occur. The inventory obsolescence valuation
allowance was $188,000 at June 30, 2003.

Self Insurance Plan
Reserve

The
Company established a reserve for unpaid medical claims of $85,000 at June 30, 2003.
Management reviews claims history information provided to it by the third-party
administrator of the self insured plan on a regular basis and believes that the reserve is
sufficient to respond to the claims that may be incurred by the participants in the plan.

Deferred Tax Asset
Valuation Allowance

The
Companys deferred tax asset is comprised primarily of a tax loss carryforward. The
Company believes that it is more likely than not that the income tax benefits associated
with the tax loss carryforward will be realized in the future. Management bases its
belief, in part, on the historical profitability of its operations and its expectations
that profitable operations will continue in the future. Based upon these expectations
regarding the realization of the tax benefits, management has not established a valuation
allowance for its deferred tax asset.

Impairment Valuations

On
a quarterly basis, management assesses the composition of the Companys assets and
liabilities, as well as the events that have occurred and the circumstances that have
changed since the most recent fair value determination. If events occur or circumstances
change that would more likely than not reduce the fair value of the related asset or
liability below its carrying amount, the related asset or liability would be tested for
impairment.

The
Company evaluates the recoverability of its long-lived assets whenever circumstances
indicate that the carrying amount of an asset may not be recoverable. Factors considered
include current operating results, trends and anticipated undiscounted future cash flows.
An impairment loss is recognized to the extent the sum of discounted (using the
Companys incremental borrowing rate) estimated future cash flows (over a period
ranging from generally four to ten years) expected to result from the use of the asset is
less than the carrying value. Management of the Company believes no impairment existed for
any of the periods presented.

Product Development

All
costs incurred subsequent to the completion of research and development activities
associated with a products hardware components and the software components
achievement of technological feasibility are capitalized until the product is available
for general release to customers. Product development costs are generally amortized over a
five-year period beginning on the date the product is released for sale to customers. On a
quarterly basis, the Company reviews the viability and recoverability of these project
costs.

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Estimated Liabilities

The
Company makes a number of estimates in the ordinary course of business. Historically, past
changes to these estimates have not had a material impact on the Companys financial
condition. However, circumstances could change, which would alter future financial
information based upon a change in estimated-vs.-actual results.

The
Company is subject to various matters of litigation in the ordinary course of business. As
the outcome of any litigation is unknown, management estimates the potential amount of
liability, if any, in excess of any applicable insurance coverage, based on historical
experience and/or the best estimate of the matter at hand. Significant changes in
estimated amounts could occur. To date, the Company has not had to pay any legal
settlements in excess of existing insurance coverage.

Warranty

The
Company establishes a reserve for warranty costs it may incur during the warranty period
that is provided for in the OnDemand machine sales agreements with its customers. To date,
warranty costs have not been material.

# RESULTS OF OPERATIONS

Three Months Ended June
30, 2003 and 2002

Net
sales for the three months ended June 30, 2003 increased 1.4% to $7.0 million from $6.9
million during the same period the prior year. Net sales increased primarily as a result
of an increase in the amount of disposable punch cards and machines sold to new and
existing customers. Prices for disposable products were stable during the first quarter of
fiscal 2004 compared to the prior year. The Company expects that pricing on disposables
will continue to be subject to a certain amount of competitive pressure through the
balance of the fiscal year. The volume of disposable cards and machines is currently
anticipated to continue to grow as a result of the addition of new customers in existing
and new markets. Net sales during the period ended June 30, 2002 included the sale of one
OnDemand machine. There were no sales of OnDemand machines in the period ended June
30, 2003.

Cost
of sales for the three months ended June 30, 2003 decreased 2.3% to $4.2 million from $4.3
million during the same period the prior year. Cost of sales as a percentage of sales
decreased to 60.4% from 62.6% during the same period the prior year. The decrease in cost
of sales results primarily from the fact that in the prior year, the Company sold one (1)
OnDemand machine for an amount which approximated its cost.

Selling,
general and administration expenses for the three months ended June 30, 2003 increased
6.7% to $1.6 million from $1.5 million in the same period during the prior year primarily
due to increased personnel benefit costs and costs associated with the Companys
operations in the United Kingdom.

Depreciation
and amortization expenses for the three months ended June 30, 2003 increased 43.8% to
$276,000 from $192,000 during the same period the prior year. The increase is a result of
the fact that the Company began amortizing the capitalized product development costs
associated with the OnDemand machine during the second quarter of the prior year. In
addition, depreciation expense related to capital expenditures made during the prior
fiscal year contributed to the increase.

Interest
expense for the three months ended June 30, 2003 decreased 8.1% to $203,000 from $221,000
during the same period the prior year. The decrease results from a reduction in existing
debt resulting from regular monthly principal payments made according to the terms of the
Companys loan agreements, as well as a decrease in borrowing costs that resulted
from a decrease in the prime rate.

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Other
expenses related to the June 2002 refinancing of the Companys long-term debt (see
Note G) were $147,000 during the three months ended June 30, 2003. There were no expenses related to the
financing in the prior year quarter because the financing was completed at the end of that quarter. These expenses resulted
from the amortization of certain costs associated with the financing ($85,000) as well as
the amortization of the original issue discount associated with the subordinated debt
portion of the financing ($62,000).

Income
tax expense decreased 21.1% to $206,000 during the three months ended June 30, 2003
compared to $261,000 the prior year. The decrease results from income tax expense
associated with lower net income.

# LIQUIDITY AND CAPITAL
RESOURCES

During
the three months ended June 30, 2003, the Company had net income of $338,000 compared to
net income of $435,000 the prior year. Cash provided by operations was $488,000 during the
three months ended June 30, 2003 compared to $1,111,000 provided in the prior year. The
Company had working capital of $5,173,000 at June 30, 2003.

The
decrease in cash provided by operating activities during the three months ended June 30,
2003 compared to the same period the prior year was primarily due to decreases in accounts
payable that resulted from payments made to vendors in order to comply with invoice terms,
as well as deposits paid to certain vendors for future delivery of manufacturing
equipment and subcontracted OnDemand machine components.

Investing
activities used $288,000 during the three months ended June 30, 2003 compared to $330,000
the prior year. The decrease results primarily from a decrease in expenditures for product
development and patents.

Financing
activities used $387,000 during the three months ended June 30, 2003 compared to
$1,032,000 the prior year. The decrease results primarily from the fact that in the same
period the prior year, the Company incurred certain costs to obtain capital to refinance
its long-term debt.

The
Companys short-term and long-term liquidity is primarily dependent on its ability to
generate cash flow from operations. Inventory levels may change significantly if the
Company is successful in selling its OnDemand machine. Increases in net sales may result
in corresponding increases in accounts receivable. Cash flow from operations and borrowing
availability on the revolving line of credit is anticipated to support an increase in
accounts receivable and inventory.

The
Company has new product development projects underway, principally new versions of its
OnDemand machine, 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 and other sources of capital.

The
Company had an additional $409,000 available on its revolving line of credit at June 30,
2003 based upon its eligible accounts receivable and inventory. In addition, the Company
had $1,000,000 available on its capital equipment line of credit.

The
revolving line of credit, term loans and subordinated notes each contain financial
covenants that, among other things, requires the Company to maintain certain financial
ratios, limits the amount of capital expenditures and requires the Company to obtain the
lenders approval for certain matters. The Company was in compliance with all provisions of
the loan agreements at July 31, 2003.

The
Company believes that the cash generated from operations during this fiscal year, and
amounts available on its revolving line of credit, are expected to be sufficient to meet
its capital expenditures, product development, working capital needs and the principal
payments required by its term loan agreements.

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# ITEM 3.     QUANTITATIVE
        AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There
have been no material changes in our market risk during the three months ended
June 30, 2003. Market risk information is contained under the caption
Quantitative And Qualitative Disclosures About Market Risk of our annual
report on Form 10-K for the fiscal year ended March 31, 2003 and is incorporated
herein by reference.

# ITEM 4.     CONTROLS AND
PROCEDURES

We
carried out an evaluation required by Rules 13a-15 and 15d-15 under the Securities Exchange Act (the
Evaluation), under the supervision and with the participation of our
management, including our Chief Executive Officer (CEO) and Chief Financial
Officer (CFO), of the effectiveness of our disclosure controls and procedures
as defined in Securities Exchange Act Rules 13a-15 and 15d-15 under the Securities Exchange Act
(Disclosure Controls). Although we believe that our pre-existing Disclosure
Controls, including our internal controls, were adequate to enable us to comply with our
disclosure obligations, as a result of such Evaluation, we implemented minor changes,
primarily to formalize, document and update the procedures already in place. Based on the
Evaluation, our CEO and CFO concluded that, subject to the limitations noted below, our
Disclosure Controls are effective in timely alerting them to material information required
to be in our periodic SEC reports.

Changes in Internal
Controls

There
has not been any change in our internal control over financial reporting identified in
connection with the Evaluation that occurred during the quarter ended June 30, 2003 that
has materially affected or is reasonably likely to materially affect, those controls.

Limitations on the
Effectiveness of Controls

Our
management, including our CEO and CFO, does not expect that our disclosure controls and
internal controls will prevent all error and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control system must
reflect the fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the company have been detected. These inherent
limitations include the realities that judgments in decision-making can be faulty, and
that breakdowns can occur because of simple error or mistake. Additionally, controls can
be circumvented by the individual acts of some persons, by collusion of two or more
people, or by management override of the control.

The
design of any system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions; over time, a control may
become inadequate because of changes in conditions, or the degree of compliance with the
policies or procedures may deteriorate. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and not be
detected.

CEO and CFO
Certifications

Exhibits
33.1 and 33.2 are Certifications of the CEO and the CFO. The Certifications are required
in accord with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302
Certifications). This item of this report, which you are currently reading, is the
information concerning the Evaluation referred to in the Section 302 Certifications and
this information should be read in conjunction with the Section 302 Certifications for a
more complete understanding of the topics presented.

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# PART II  OTHER
INFORMATION

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

|    |                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Exhibits                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                              
|    | 10.1                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                              
|    | 10.2                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                              
|    | 10.3                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                              
|    | 31.1                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                              
|    | 31.2                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                              
|    | 32.1                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                              
|    | 32.2                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                              
|(b) | Reports on Form 8-K                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                              
|    | On June 18, 2003, we filed a Current
        Report on Form 8-K in which we disclosed under Items 7 and 9 a press release announcing the results of
        operations for the fourth quarter and fiscal year ended March 31,

# 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.

|                        | MEDICAL TECHNOLOGY SYSTEMS, INC.
|----------------------- | --------------------------------
|
|Date:   August 13, 2003 |                                 
|                        |                                 
|                        |                                 
|                        |                                 

|                        | 
|----------------------- | 
|Date:   August 13, 2003 | 
|                        | 
|                        | 
|                        |