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 June 30, 2002

[ ] 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 ______


     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 ______



                                      10Q-1

<PAGE>

                                       i.

                MEDICAL TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIES


                                      Index
                                                                            Page

Part I - Financial Information


Item 1.   Financial Statements

          Condensed Consolidated Balance Sheets -
              June 30, 2002 and March 31, 2002..........................       1


          Condensed Consolidated Statements of Earnings -
              Three Months Ended June 30, 2002 and 2001.................       2


          Condensed Consolidated Statements of Changes in Stockholders' Equity -
              Three Months Ended June 30, 2002..........................       3


          Condensed Consolidated Statements of Cash Flows -
              Three Months Ended June 30, 2002 and 2001.................       4


          Notes to Condensed Consolidated Financial Statements..........  5 - 10


Item 2.   Management's Discussion and Analysis of Financial
              Condition and Results of Operations......................  11 - 13



Part II - Other Information


Item 4.   Submission of Matters to a Vote of Security Holders...........      14

Item 6.   Exhibits and Reports on Form 8-K..............................      14


          Signatures....................................................      14



<PAGE>

                MEDICAL TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE THREE MONTHS ENDED JUNE 30, 2002


                                       1




Item 1.  Financial Statements


                         PART 1 - FINANCIAL INFORMATION

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

                                   (Unaudited)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                           June 30,                  March 31,
                                                                             2002                      2002
                                                                       ----------------          -----------------
                                                                         (Unaudited)
<S>                                                                    <C>                        <C>
Current Assets:
     Cash                                                              $           159            $           410
     Accounts Receivable, Net                                                    4,032                      3,456
     Inventories                                                                 2,287                      2,212
     Prepaids and Other                                                            318                        199
     Deferred Tax Benefits                                                       1,232                      1,232
                                                                       ----------------          -----------------
     Total Current Assets                                                        8,028                      7,509

Property and Equipment, Net                                                      2,482                      2,425
Other Assets, Net                                                                3,463                      2,477
Deferred Tax Benefits                                                            2,843                      3,104
                                                                       ----------------          -----------------

Total Assets                                                           $        16,816            $        15,515
                                                                      ================          =================


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Current Maturities of Long-Term Debt                              $         1,170           $            968
     Accounts Payable and Accrued Liabilities                                    4,064                      3,267
                                                                       ----------------          -----------------
     Total Current Liabilities                                                   5,234                      4,235

Long-Term Debt, Less Current Maturities                                          7,486                     10,812
                                                                       ----------------          -----------------
Total Liabilities                                                               12,720                     15,047
                                                                       ----------------          -----------------

Stockholders' Equity:
     Common Stock                                                                   44                         43
     Preferred Stock                                                                 1                          -
     Capital In Excess of Par Value                                             11,997                      8,806
     Accumulated Deficit                                                        (7,618)                    (8,053)
     Treasury Stock                                                               (328)                      (328)
                                                                       ----------------          -----------------
     Total Stockholders' Equity                                                  4,096                        468
                                                                       ----------------          -----------------
     Total Liabilities and Stockholders' Equity                        $        16,816           $         15,515
                                                                       ================          =================
</TABLE>

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

<PAGE>
                                       2


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

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                           Three Months Ended
                                                                                                  June 30,
                                                                               ------------------------------------------
                                                                                     2002                      2001
                                                                               ---------------           ----------------
<S>                                                                            <C>                       <C>
Revenue:
      Net Sales                                                                $        6,907            $         5,876

Costs and Expenses:
      Cost of Sales                                                                     4,327                      3,480
      Selling, General and Administrative                                               1,461                      1,297
      Research and Development                                                             10                         13
      Depreciation and Amortization                                                       192                        224
      Interest, Net                                                                       221                        240
                                                                               ---------------           ----------------

Total Costs and Expenses                                                                6,211                      5,254
                                                                               ---------------           ----------------

Income Before Income Taxes                                                                696                        622

Income Tax Expense                                                                        261                        239
                                                                               ---------------           ----------------

Net Income                                                                                435                        383

Non-Cash Constructive Dividend Related to Beneficial Conversion
      Feature of Convertible Preferred Stock                                             (347)                         0

Convertible Preferred Stock Dividends Payable                                              (3)                         0
                                                                               ---------------           ----------------

Net Income Available to Common Stockholders                                    $           85            $           383
                                                                               ===============           ================

Net Income per Basic and Diluted Common Share                                  $         0.02            $          0.09
                                                                               ===============           ================

</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
                        THREE MONTHS ENDED JUNE 30, 2002
                                 (In Thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                              COMMON STOCK
                                            --------------------------------------------------------------------------------------
                                              Number          0.01        Capital in     Retained        Treasury
                                                of            Par         Excess of      Earnings          Stock          Total
                                              Shares         Value        Par Value     (Deficit)
                                            -----------   -----------    -----------   ------------    ------------    -----------
<S>                                          <C>           <C>            <C>           <C>             <C>             <C>
Balance, March 31, 2002                      4,331,161     $    43        $   8,806     $  (8,053)      $    (328)      $    468

Stock Options and Warrants
   Exercised                                    28,029          1               (1)                                            0

Warrants Issued                                                              1,564                                         1,564

Costs Related to Equity Issued                                                (368)                                         (368)

Net Income for Three Months
   Ended June 30, 2002                                                                       435                            435
                                            --------------------------------------------------------------------------------------
Balance, June 30, 2002                       4,359,190     $    44       $  10,001      $  (7,618)      $    (328)      $  2,099
                                            -----------   -----------   ------------   ------------    ------------    -----------


                                                                                PREFERRED STOCK
                                            --------------------------------------------------------------------------------------
                                               Number        $.001       Capital in
                                                 of           Par        Excess of                                        Total
                                               Shares        Value       Par Value
                                            -----------   -----------   ------------                                   -----------

Balance, March 31, 2002                              0     $     0       $       0                                             0

Stock Issued                                     2,000           1           1,999                                         2,000

Convertible Preferred Stock Dividend                                            (3)                                           (3)
  Payable

Non-Cash Constructive Dividend Related
  to Beneficial Conversion Feature of
    Convertible Preferred Stock                                               (347)                                         (347)

Amortization of Non-Cash Constructive
Dividend to Beneficial Conversion
    Feature of Convertible Preferred Stock                                     347                                           347
                                            --------------------------------------------------------------------------------------
Balance, June 30, 2002                           2,000     $     1       $   1,996                                         1,997
                                            --------------------------------------------------------------------------------------

Total                                        4,361,190     $    45       $  11,997      $  (7,618)      $     (328)     $  4,096
                                            ===========   ===========   ============   ============    ============    ===========

</TABLE>

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


<PAGE>
                                       4


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

<TABLE>
<CAPTION>
                                                                                     Three Months Ended
                                                                                           June 30,
                                                                           ---------------------------------------
                                                                                2002                     2001
                                                                           --------------           --------------
<S>                                                                        <C>                      <C>
Operating Activities
    Net Income                                                             $         435            $         383
                                                                           --------------           --------------
    Adjustments to Reconcile Net Income to Net Cash
       Provided by Operating Activities:
       Deferred Compensation                                                           0                        4
       Depreciation and Amortization                                                 192                      224
       Income Tax Expense                                                            261                      239
       (Increase) Decrease in:
           Accounts Receivable                                                      (576)                    (123)
           Inventories                                                               122                      107
           Prepaids and Other                                                       (119)                    (216)
       Increase in:
           Accounts Payable and Other Accrued Liabilities                            796                       48
                                                                           --------------           --------------
    Total Adjustments                                                                676                      283
                                                                           --------------           --------------
    Net Cash Provided by Operating Activities                                      1,111                      666
                                                                           --------------           --------------

Investing Activities
    Expended for Property and Equipment                                             (176)                    (255)
    Expended for Product Development                                                (130)                    (134)
    Expended for Patents and Other Assets                                            (24)                      (6)
                                                                           --------------           --------------
    Net Cash (Used) by Investing Activities                                         (330)                    (395)
                                                                           --------------           --------------

Financing Activities
    Payments on Notes Payable and Long-Term Debt                                 (11,494)                    (238)
    Net Advances on Revolving Line of Credit                                       2,892                        0
    Borrowing on Term Loans and Subordinated Notes                                 6,700                        0
    Issuance of Convertible Preferred Stock                                        2,000                        0
    Expended for Financing Costs                                                  (1,130)                       0
    Advances (To) Affiliates - Discontinued Operations                                 0                      (83)
                                                                           --------------           --------------
    Net Cash (Used) by Financing Activities                                       (1,032)                    (321)
                                                                           --------------           --------------

Net (Decrease) in Cash                                                              (251)                     (50)
Cash at Beginning of Period                                                          410                       92
                                                                           --------------           --------------
Cash at End of Period                                                      $         159            $          42
                                                                           ==============           ==============
</TABLE>

Non-cash financing activities:  See Notes F and H

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 in the
USA 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 in
the USA 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, 2002 are not  necessarily  indicative  of the results that
may be  expected  for the year ended March 31,  2003.  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, 2002.

     The  unaudited  condensed  consolidated  financial  statements  include the
accounts of the Company and its subsidiary,  MTS Packaging  Systems,  Inc. ("MTS
Packaging").  All other  subsidiaries  of the  Company  did not have  operations
during the three months ended June 30, 2002 and 2001.


NOTE B - INVENTORIES

     The components of inventory consist of the following:

<TABLE>
<CAPTION>
                                                                      June 30,             March 31,
                                                                        2002                  2002
                                                                  -----------------     -----------------
                                                                              (In Thousands)
               <S>                                                <C>                   <C>
               Raw Materials                                      $        1,118        $          964
               Finished Goods and Work in Progress                         1,226                 1,288
               Less:  Inventory Valuation Allowance                          (57)                 (40)
                                                                  -----------------     -----------------
                                                                  $        2,287        $        2,212
                                                                  =================     =================
</TABLE>


     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 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 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.

     The CEO of the Company  may elect to receive  shares of  restricted  common
stock  in  lieu  of  cash  compensation  according  to the  terms  of his  Stock
Appreciation Rights Agreement with the Company. The terms of the Company's prior
loan agreement  restricted  his ability to make the election to receive  shares;
however,  the terms of the Company's current loan agreements do not contain such
a restriction.  As a result,  the Company has included the number of shares that
he could elect to receive in lieu of cash,  in its  calculation  of earnings per
share.


<PAGE>
                                       6

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

<TABLE>
<CAPTION>
                                                                                         Three Months Ended
                                                                               ------------------------------------
                                                                                   June 30,            June 30,
                                                                                     2002                2001
                                                                               ----------------    ----------------
<S>                                                                            <C>                 <C>
  Numerator:

   Net Income                                                                  $      435,000      $       383,000

     Minus:
        Constructive Dividend Related to Beneficial Conversion Feature of
             the Convertible Preferred Stock                                         (347,000)                   0

        Convertible Preferred Stock Dividend Payable                                   (3,000)                   0
                                                                               -----------------   -----------------

  Net Income Available to Common Shareholders                                  $       85,000      $       383,000
                                                                               -----------------   -----------------

  Denominator:

         Weighted Average Shares Outstanding - Basic                                4,338,000            4,234,000

         Add:  Effect of Dilutive Warrants and Options                                518,000              186,000

               Effect of Conversion of Convertible Preferred Stock
                  Into Common Stock                                                    46,000                    0

               Effect of Shares Available for Issuance under SAR Agreement            239,000                    0
                                                                               -----------------   -----------------

         Weighted Average Shares Outstanding - Diluted                              5,141,000            4,420,000
                                                                               =================   =================

  Net Income Per Basic and Diluted Common Share                                $         0.02      $          0.09
                                                                               =================   =================
</TABLE>


     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 H).


NOTE D - REVENUE RECOGNITION

     The  Company  recognizes  revenue  when  products  are  shipped  and  title
transfers.  Revenue  includes  certain amounts invoiced to customers for freight
and handling charges.

     The Company  includes the actual cost of freight and  handling  incurred in
cost of sales.  The actual cost of freight  and  handling  for the three  months
ended June 30, 2002 and 2001 was $380,000 and $345,000 respectively.


NOTE E - RESEARCH AND DEVELOPMENT AND PRODUCT DEVELOPMENT

         The Company expenses product research and development costs as
incurred. The Company incurred approximately $10,000 and $13,000 during the
three months ended June 30, 2002 and 2001 respectively for research and
development costs.


<PAGE>
                                       7


     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  incurred  approximately  $130,000 and  $134,000 of product  development
costs during the three months ended June 30, 2002 and 2001 respectively.

     Product  development  costs  (predominantly  software  related  costs)  are
generally amortized on a straight-line basis over a five (5) year period.

     At March 31, 2002 and June 30,  2002,  the  Company's  capitalized  product
development  costs  included  its  new  OnDemand   product,   which  represented
$1,314,000  and  $1,247,000   respectively  of  the  total  capitalized  product
development costs (see Note L).  Manufacturing  costs of approximately  $441,000
and $285,000 were included in the OnDemand capitalized product development costs
at March 31, 2002 and June 30, 2002 respectively. The first OnDemand machine was
sold in June 2002.


NOTE F - LONG-TERM DEBT

     Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                                       June 30,         March 31,
                                                                                         2002             2002
                                                                                    -------------    --------------
                                                                                             (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 $7.1 million on that date secured by all tangible and
    intangible assets of the Company.                                                $       0       $    11,449

  Revolving  Line of Credit  due June 26,  2005 plus  interest  payable  at 1%
    above the prime rate (5.75% at June 30, 2002).                                       2,892                 0

  Bank Term Loan payable in monthly  installments  of $83,333 plus interest at
    2.25% above the prime rate (7.0% at June 30, 2002) through June 2004.                2,000                 0

  Bank Term Loan payable in monthly  installments  of $11,667 plus interest at
    1.25% above the prime rate (6.0% at June 30, 2002) through June 2007.                  700                 0

  Subordinated Note - Face amount of $4,000,000, less original issue discount of
    $1,240,000 (see Note H), due June 26, 2007 plus interest payable
    monthly at 14%.                                                                      2,760                 0

  Unsecured Note Payable plus interest at 3%, payable in monthly  installments
    of $2,394 through September 2006.                                                      115               122

  Unsecured Note Payable under settlement agreement with State of Florida
    Department of Revenue, payable in monthly installments of $3,500 over a
    period of four years.                                                                  160               171

   Other Notes and Agreements                                                               29                38
                                                                                    --------------   ---------------
  Total Long -Term Debt                                                                  8,656            11,780
  Less Current Portion                                                                  (1,170)             (968)
                                                                                    --------------   ---------------
  LONG-TERM DEBT DUE AFTER 1 YEAR                                                    $   7,486       $    10,812
                                                                                    ===============  ================
</TABLE>


<PAGE>
                                       8


     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.
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 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 H.)

     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
make  additional  principal  payments  based upon its excess  cash flow and also
requires  the Company to maintain  certain  financial  ratios and  stockholders'
equity  levels.  In  addition,  certain  provisions  limit the amount of capital
expenditures that the company can make each year.


NOTE G - 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.

     Certain creditors of LifeServ have commenced legal actions against LifeServ
seeking  payment of liabilities  assumed by the buyers of LifeServ.  The Company
intends to vigorously  defend these actions and seek  appropriate  remedies from
the buyers.

     The Company is involved in certain claims and legal actions  arising in the
ordinary course of business  including the matters 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 H - STOCKHOLDER EQUITY

     In June 2002,  the Company  issued  subordinated  notes to an investor (see
Note F). 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.  The preferred  stock is convertible  into
847,457  shares of the Company's  common stock at $2.36 per share.  The terms of
the preferred stock contain a make-whole provision that obligates the Company to



<PAGE>
                                       9


pay certain  amounts to the holders if they do not ultimately  receive an amount
equal to the  price  per share of the  common  stock on the date  they  elect to
convert the  preferred  stock into  common  stock.  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).

     In addition,  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.

     The terms of the warrant and convertible preferred stock agreements contain
certain antidilution provisions.

     The warrant  agreement also contains 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.  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 that 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 cash payment. Although 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,  based upon current conditions, the Company
believes it is unlikely that the maximum number of shares would be issued.

     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 its 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 I).


NOTE I - FINANCING COSTS

     The Company incurred approximately $1,458,000 during the three months ended
June 30,  2002,  including  the value of the  warrants  issued to the  Company's
financial advisors, in costs related to obtaining certain financing described in
Notes F and H. 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.


<PAGE>
                                       10


NOTE J - NEW ACCOUNTING PRONOUNCEMENTS

     On July 20, 2001, the Financial  Accounting  Standards  Board (FASB) issued
Statement of Financial Accounting  Standards (SFAS) 141, Business  Combinations,
and SFAS 142,  Goodwill and  Intangible  Assets.  SFAS 141 is effective  for all
business  combinations  completed after June 30, 2002. SFAS 142 is effective for
the fiscal year beginning  April 1, 2002;  however,  certain  provisions of that
Statement apply to goodwill and other intangible assets acquired between July 1,
2001 and the effective date of SFAS 142.

     In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets. This statement addresses financial  accounting
and reporting for the impairment or disposal of long-lived assets and supersedes
FASB Statement No. 121,  Accounting for the Impairment of Long-Lived  Assets and
for  Long-Lived  Assets to be Disposed Of. The  provisions  of the statement are
effective  for  financial  statements  issued for fiscal years  beginning  after
December 15, 2001.

     The  Company's  initial  analysis  of the  effect  of these  new  standards
indicates that the adoption of the standards will not have a material  impact on
its  financial  statements.  As of March 31, 2001 and 2002 and June 30, 2002, no
amounts of goodwill are recorded.


NOTE K - RECLASSIFICATIONS

     Certain  reclassifications  were  made  to  the  June  30,  2001  financial
statements to conform to the 2002 presentations.


NOTE L - OTHER ASSETS

     Other assets consist of the following:

<TABLE>
<CAPTION>
                                                                                    June 30,            March 31,
                                                                                      2002                2002
                                                                                ----------------    ----------------
  <S>                                                                          <C>                  <C>
  Product Development                                                          $       2,135        $      2,202
      Less Accumulated Amortization                                                     (334)               (315)
                                                                               -----------------    ----------------
                                                                                       1,801               1,887
                                                                               -----------------    ----------------

  Patents                                                                              1,213               1,196
      Less Accumulated Amortization                                                     (746)               (725)
                                                                               -----------------    ----------------
                                                                                         467                 471
                                                                               -----------------    ----------------

  Financing Costs                                                                      1,090                   0
      Less Accumulated Amortization                                                       (5)                  0
                                                                               -----------------    ----------------
                                                                                       1,085                   0
                                                                               -----------------    ----------------

  Other                                                                                  197                 190
      Less Accumulated Amortization                                                      (87)                (71)
                                                                               -----------------    ----------------
                                                                                         110                 119
                                                                               -----------------    ----------------

  Total Other Assets Net                                                       $       3,463        $      2,477
                                                                               =================    ================
</TABLE>



<PAGE>
                                       11

                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, 2002


     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 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.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2002 and 2001

     Net sales for the three months ended June 30, 2002 increased  16.9% to $6.9
million  from $5.9  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.  In addition, the Company
sold its first  OnDemand  machine  during the three  months ended June 30, 2002.
Prices for  disposable  products  were stable during the first quarter of fiscal
2003  compared  to the prior  year.  The  Company  anticipates  that  pricing on
disposables  will continue to be stable  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.

     Cost of sales for the three months ended June 30, 2002  increased  22.9% to
$4.3 million from $3.5  million  during the same period the prior year.  Cost of
sales as a  percentage  of sales  increased  to 62.3% from 59.3% during the same
period the prior year.  The  increase in cost of sales  results  from  increased
costs  associated  with  higher  revenue.  The  increase  in the  cost of  sales
percentage is due in part to the fact that the first  OnDemand  machine was sold
for an amount that  approximated its cost. In addition,  during the three months
ended June 30, 2002, the Company  incurred higher overhead costs compared to the
same period the prior year.  The higher costs related  primarily to the addition
of personnel in its factory operations in anticipation of expected growth.


<PAGE>
                                       12


     Selling,  general and  administration  expenses  for the three months ended
June 30, 2002  increased  15.4% to $1.5  million  from $1.3  million in the same
period  during  the prior  year  primarily  due to  increased  personnel  costs,
marketing expenditures and costs associated with the Company's operations in the
United Kingdom.

     Research  and  development  expenses  for three  months ended June 30, 2002
decreased  23.1% to $10,000 from $13,000  during the same period the prior year.
The decrease resulted  primarily from the fact that the Company directed more of
its  development  resources to the  completion of new products as opposed to the
research of new products.

     Depreciation and amortization  expenses for the three months ended June 30,
2002 decreased  14.3% to $192,000 from $224,000 during the same period the prior
year.  The  decrease is a result of the fact that  certain  assets  became fully
depreciated since June 30, 2001.

     Interest expense for the three months ended June 30, 2002 decreased 7.9% to
$221,000  from  $240,000  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.

     Income tax expense increased 9.2% to $261,000 during the three months ended
June 30, 2002  compared to $239,000 the prior year.  The  increase  results from
income tax expense associated with higher income.

LIQUIDITY AND CAPITAL RESOURCES

     During the first  three  months  ended June 30,  2002,  the Company had net
income of  $435,000  compared to net income of  $383,000  the prior  year.  Cash
provided by  operations  was  $1,111,000  during the three months ended June 30,
2002  compared to $666,000  provided in the prior year.  The Company had working
capital of $2,794,000 at June 30, 2002.

     The  increase in cash  provided by  operating  activities  during the three
months  ended  June 30,  2002  compared  to the same  period  the prior year was
primarily  due to  increases  in  accounts  payable  that  resulted  from slower
payments related to changes in credit terms provided by certain vendors.

     Investing  activities  used $330,000 during the three months ended June 30,
2002 compared to $395,000 the prior year. The decrease results  primarily from a
reduction in expenditures for improvements to the Company's facilities.

     Financing activities used $1,032,000 during the three months ended June 30,
2002 compared to $361,000 the prior year. In June 2002,  the Company  repaid the
entire  amount,  $11,310,000,  of its bank  term  loan  with  cash on hand,  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. 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  revolving  line of  credit  and the  term  loans  are  secured  by the
Company's accounts receivable,  inventory, machinery and equipment and all other
assets of the Company.



<PAGE>
                                       13



     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.)

     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.  The preferred  stock is convertible  into 846,000
shares of the  Company's  common  stock at $2.36 per share.  (Subject to certain
antidilution provisions.)

     The warrant  agreement  and the terms of the  convertible  preferred  stock
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 and the convertible  preferred  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 that 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 that 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.  Although  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,  based upon current conditions,
the Company  believes it is unlikely that the maximum  number of shares would be
issued.

     The revolving  line of credit,  the term loans and the  subordinated  notes
each contain certain financial covenants that, among other things,  requires the
maintenance  of  certain  financial   ratios,   limits  the  amount  of  capital
expenditures and requires the Company to obtain the lenders approval for certain
matters.

     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 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.

     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 the cash generated from  operations  during this
fiscal  year is  expected to be  sufficient  to meet its  capital  expenditures,
product  development,  working capital needs and the principal payments required
by its loan agreements.



<PAGE>
                                       14


PART II - OTHER INFORMATION

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

         None

Item 6.  Exhibits and Reports on Form 8-K


A.       Reports on Form 8K

                  None

B.       Exhibit 99.1

                  Certification Pursuant to 18 U.S.C.ss.1350



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:  August 14, 2002              By:     /s/ Michael P. Conroy
----------------------              -------------------------------------------
                                    Michael P. Conroy
                                    Vice President & Chief Financial Officer



                                    By: /s/ Mark J. Connolly
                                    -------------------------------------------
                                    Mark J. Connolly
                                    Principal Accounting Officer and Controller




<PAGE>
                                       15


                                                             Exhibit 99.1

                   Certification Pursuant to 18 U.S.C.ss.1350


     In  connection  with the  filing  with the  United  States  Securities  and
Exchange  Commission  of Medical  Technology  Systems,  Inc.'s  (the  "Company")
Quarterly Report on Form 10-Q for the period ended June 30, 2002 (the "Report"),
the undersigned,  the Chief Executive Officer and the Chief Financial Officer of
the Company,  hereby  certify (i) in our  capacities as officers of the Company,
(ii) to each of our own respective  actual  knowledge,  and (iii) solely for the
purpose of compliance with 18 U.S.C. ss.1350, that:

     (1) the Report fully complies with the requirements  ofss.13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and

     (2)  the  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.

     The  above  certification  is  given as of the  date of the  Report  and is
limited to the periods covered by the Report.  The above  certification  is made
severally and not jointly.

     IN WITNESS  WHEREOF,  the  undersigned  have executed this  Certificate  on
August 14, 2002.



                            MEDICAL TECHNOLOGY SYSTEMS, INC.

                            By: /s/ Todd E. Siegel
                            ----------------------------------
                            Todd E. Siegel
                            Chief Executive Officer



                            By: /s/ Michael P. Conroy
                            ----------------------------------
                            Michael P. Conroy
                            Chief Financial Officer