<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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, 1999

                                       OR

[ ]  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934: For the transition period from        to
                                                         --------  -------

     Commission file number: 0-12128


                                 MATRITECH, INC.
             -----------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


        DELAWARE                                     04-2985132
     ---------------                             ------------------
     (State or Other                             (I.R.S. Employer
     Jurisdiction of                             Identification No.)
     Incorporation or
     Organization)


                 330 NEVADA STREET, NEWTON, MASSACHUSETTS 02460
               ---------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (617) 928-0820
              ----------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)


     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
                                 -----              -----

     As of August 5, 1999, there were 21,724,217 shares of Common Stock
outstanding.









                                  Page 1 of 18

                    The Exhibit Index is located on Page 18.

<PAGE>   2


                                 MATRITECH, INC.

                                      INDEX


<TABLE>
<CAPTION>
                                                                                                 PAGE
<S>                                                                                              <C>
PART I         FINANCIAL INFORMATION

     ITEM 1.   FINANCIAL STATEMENTS


                  Balance Sheets at December 31, 1998
                  and June 30, 1999                                                                3


                  Statements of Operations for the three and six
                  months ended June 30, 1998 and 1999                                              5


                  Statements of Cash Flows for the six months ended
                  June 30, 1998 and 1999                                                           6


                  Notes to Financial Statements                                                    8



     ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                       9



     ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
               MARKET RISK                                                                        15



PART II        OTHER INFORMATION


     ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                16


     ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K                                                   16


     SIGNATURES                                                                                   17



</TABLE>



                                  Page 2 of 18



<PAGE>   3




                          PART I. FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS

                                 MATRITECH, INC.
                                 BALANCE SHEETS
                                     ASSETS
<TABLE>
<CAPTION>
                                              DECEMBER 31,     JUNE 30,
                                                  1998           1999
                                              -----------     ----------
                                                              (UNAUDITED)
<S>                                           <C>            <C>
CURRENT ASSETS:

  Cash and cash equivalents                   $4,146,821     $4,844,871
  Accounts receivable, net                       162,261        233,158
  Inventories                                    336,398        326,822
  Prepaid expenses                               113,582         93,466
                                              ----------     ----------
        Total current assets                   4,759,062      5,498,317
                                              ----------     ----------

PROPERTY AND EQUIPMENT, at cost:
  Laboratory equipment                         1,418,042      1,440,920
  Office equipment                               212,698        212,698
  Laboratory furniture                            62,739         62,739
  Leasehold improvements                          56,981         56,981
                                              ----------     ----------
                                               1,750,460      1,773,338

       Less-Accumulated depreciation
              and amortization                 1,065,060      1,155,641
                                              ----------     ----------
                                                 685,400        617,697
                                              ----------     ----------



OTHER ASSETS, net                                 67,363         66,322
                                              ----------     ----------
                                              $5,511,825     $6,182,336
                                              ==========     ==========
</TABLE>





                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                                  Page 3 of 18



<PAGE>   4




                                 MATRITECH, INC.
                                 BALANCE SHEETS
                      LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                     DECEMBER 31,       JUNE 30,
                                                         1998             1999
                                                    -------------     -----------
                                                                      (UNAUDITED)
<S>                                                  <C>              <C>
CURRENT LIABILITIES:
    Current maturities of note payable               $    68,271      $     66,953
    Accounts payable                                     329,660           237,891
    Accrued expenses                                     573,422           649,129
                                                     -----------      ------------
         Total current liabilities                       971,353           953,973
                                                     -----------      ------------

NOTE PAYABLE, LESS CURRENT MATURITIES                    140,491           108,672
                                                     -----------      ------------

STOCKHOLDERS' EQUITY:
          Preferred stock, $1.00 par value -
              Authorized - 4,000,000 shares
              Issued and outstanding - none                   --                --
          Common stock, $.01 par value -
              Authorized - 40,000,000 shares
              Issued and outstanding - 18,626,602
              shares at December 31, 1998 and
              21,724,217 shares at June 30, 1999         186,266           217,242
          Additional paid-in capital                  45,364,731        49,256,929
          Accumulated deficit                        (41,151,016)      (44,354,480)
                                                     -----------      ------------
            Total stockholders' equity                 4,399,981         5,119,691
                                                     -----------      ------------
                                                     $ 5,511,825      $  6,182,336
                                                     ===========      ============

</TABLE>






                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                                  Page 4 of 18

<PAGE>   5


                                 MATRITECH, INC.
                             STATEMENT OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                                JUNE 30,                           JUNE 30,
                                                          1998             1999               1998             1999
                                                     -----------     -----------       -----------       ------------
<S>                                                  <C>               <C>               <C>               <C>
REVENUE:
  Product sales and collaborative
     research and development revenue                $   269,008       $   150,339       $   533,503       $   320,221
  Interest and other income                              128,017            63,956           274,477            98,368
                                                     -----------       -----------       -----------       -----------
                                                         397,025           214,295           807,980           418,589
                                                     -----------       -----------       -----------       -----------

EXPENSES:
  Research and
     development                                       1,114,608           881,214         2,154,563         1,915,160
  Selling, general and
     administrative                                    1,345,411           868,467         2,776,866         1,706,893
                                                     -----------       -----------       -----------       -----------
                                                       2,460,019         1,749,681         4,931,429         3,622,053
                                                     -----------       -----------       -----------       -----------

NET LOSS                                             $(2,062,994)      $(1,535,386)      $(4,123,449)      $(3,203,464)
                                                     ===========       ===========       ===========       ===========

BASIC/DILUTED
NET LOSS PER SHARE                                   $      (.11)      $      (.07)      $      (.22)      $      (.16)
                                                     ===========       ===========       ===========       ===========

BASIC/DILUTED
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING                                    18,605,554        21,554,164        18,592,468        20,099,788
                                                     ===========       ===========       ===========       ===========

</TABLE>











                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                                  Page 5 of 18



<PAGE>   6



                                 MATRITECH, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                SIX MONTHS ENDED
                                                                                    JUNE 30,
                                                                               1998             1999
                                                                          -----------      ------------
<S>                                                                        <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                              $(4,123,449)     $(3,203,464)
     Adjustments to reconcile net loss to net cash
     used in operating activities -
        Depreciation and amortization                                          115,062           90,581
        Operating expense related to issuance of
           Common stock warrant                                                150,000             --
        Changes in assets and liabilities -
           Accounts receivable, net                                           (100,781)         (70,897)
           Inventories                                                          89,526            9,576
           Prepaid expenses                                                     29,375           21,157
           Accounts payable                                                   (106,529)         (91,769)
           Accrued expenses                                                    144,921           75,707
                                                                           -----------      -----------

               Net cash used in operating activities                        (3,801,875)      (3,169,109)
                                                                           -----------      -----------



CASH FLOWS FROM INVESTING ACTIVITIES:

          Purchases of property and equipment                                  (29,320)         (22,878)
                                                                           -----------      -----------

               Net cash used in investing activities                           (29,320)         (22,878)
                                                                           -----------      -----------

</TABLE>












                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                                  Page 6 of 18


<PAGE>   7

                                 MATRITECH, INC.
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                        SIX MONTHS ENDED
                                                                            JUNE 30,

                                                                     1998               1999
                                                                ------------        -----------
<S>                                                              <C>                <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from sale of common stock                           $        --        $3,919,198
     Proceeds from exercise of common stock options                    66,431             3,976
     Payments on note payable                                         (29,479)          (33,137)
                                                                  -----------        ----------

           Net cash provided by financing activities                   36,952         3,890,037
                                                                  -----------        ----------

NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                                 (3,794,243)          698,050


CASH AND CASH EQUIVALENTS,
   BEGINNING OF PERIOD                                             11,067,414         4,146,821
                                                                  -----------        ----------

CASH AND CASH EQUIVALENTS,
    END OF PERIOD                                                 $ 7,273,171        $4,844,871
                                                                  ===========        ==========



SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION:
   Cash paid during the period for interest                       $    15,127        $   11,469
                                                                  ===========        ==========

</TABLE>







                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                                  Page 7 of 18



<PAGE>   8




                                 MATRITECH, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   OPERATIONS AND BASIS OF PRESENTATION

          Matritech, Inc. ( the "Company") was incorporated on October 29, 1987
to develop, produce and distribute products for the diagnosis and potential
treatment of cancer based on its proprietary nuclear matrix protein technology.
This technology was licensed to the Company by the Massachusetts Institute of
Technology ("MIT").

          The Company is devoting substantially all of its efforts toward
product research and development, raising capital, securing partners and
marketing products. The Company is subject to risks common to companies in
similar stages of development, including history of operating losses and
anticipated future losses, fluctuation in operating results, uncertainties
associated with future performance, dependence on key individuals, competition
from substitute products and larger companies, the development of commercially
usable products and the need to obtain adequate additional financing necessary
to fund its operations and to develop its future products.

          The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC") and include, in the opinion of management, all
adjustments, consisting of normal, recurring adjustments, necessary for a fair
presentation of interim period results. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The results for the interim periods
presented are not necessarily indicative of results to be expected for any
future period. It is suggested that these condensed financial statements be read
in conjunction with the audited financial statements and notes thereto included
in the Company's Annual Report on Form 10-K for the year ended December 31, 1998
filed with the SEC (File No. 0-12128).


2.   CASH EQUIVALENTS

          Cash equivalents are short-term, highly liquid investments with
original maturities of less than three months. The Company's cash equivalents
primarily consist of auction market preferred stocks, money market accounts and
repurchase agreements at December 31, 1998 and June 30, 1999. The Company
classifies its investments in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and
Equity Securities".


3.   INVENTORIES

          Inventories are stated at the lower of cost or market and consist of
the following:


                                                December 31,        June 30,
                                                   1998               1999
                                                ------------        ---------

           Raw materials                         $225,159            $203,466
           Work-in-process                          3,195               2,923
           Finished goods                         108,044             120,433
                                                 --------            --------
                                                 $336,398            $326,822
                                                 ========            ========

                                  Page 8 of 18

<PAGE>   9

4.   NET LOSS PER COMMON SHARE

          The Company applies SFAS No. 128, "Earnings Per Share", for
calculating and presenting earnings per share. Basic net loss per common share
is computed by dividing net loss by the weighted average number of common shares
outstanding during the year. Diluted loss per share is the same as basic loss
per share as the effects of common stock equivalents are antidilutive. The
calculation of net loss per share did not include options and warrants for the
periods ended June 30, 1999 and 1998.

5.   SEGMENT AND GEOGRAPHIC INFORMATION

          The Company has adopted SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information" in the fiscal year ended December 31,
1998. SFAS 131 establishes standards for reporting information regarding
operating segments in annual financial statements and requires selected
information for those segments to be presented in interim financial reports
issued to stockholders. SFAS 131 also establishes standards for related
disclosures about products and services and geographic areas. Operating segments
are identified as components of an enterprise about which separate discrete
financial information is available for evaluation by the chief operating
decision maker or decision making group, in making decisions how to allocate
resources and assess performance. The Company's chief decision maker, as defined
under SFAS 131, is a combination of the Chief Executive Officer, President and
the Chief Financial Officer. To date, the Company has viewed its operations and
manages its business as principally one segment, the sale of cancer diagnostic
products. Associated services are not significant. As a result, the financial
information disclosed herein, represents all of the material financial
information related to the principal operating segment. Product sales of
$252,000 and $461,000 for the three and six month periods ended June 30, 1998
were primarily to the United States and Europe. Product sales of $150,000 and
$320,000 for the three and six month periods ended June 30, 1999 were primarily
to the United States and Japan. All of the Company's products were shipped from
its facilities located in the United States.


6.   PRIVATE PLACEMENT

          In April 1999, the Company completed a private placement of 3,094,965
shares of Common Stock for an aggregate selling price of approximately $4
million. The Company received net proceeds of approximately $3.9 million after
deducting the fees and expenses of the transaction.

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

          The Company was incorporated in 1987 to develop, manufacture and
market innovative cancer diagnostic products based on its proprietary NMP
technology. Matritech has been unprofitable since inception and expects to incur
significant operating losses for at least the next several years. For the period
from inception to June 30, 1999, the Company incurred a cumulative net loss of
approximately $44 million.


          In the United States, the Company sells its NMP22(R) Test Kit through
its own direct sales force, and in March 1998 entered into a distribution
agreement with Curtis Matheson Scientific, now Fisher Healthcare ("Fisher")
granting Fisher the right, co-exclusive with Matritech, to distribute the
microtiter plate based NMP22 Test Kit to hospitals and commercial laboratories
within the United States. Outside the United States, the Company sells the NMP22
Test Kit through distributors.






                                  Page 9 of 18

<PAGE>   10

RESULTS OF OPERATIONS


THREE MONTHS ENDED JUNE 30, 1999 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1998


          Product sales and collaborative research and development revenue
decreased to $150,000 from $269,000 for the quarters ended June 30, 1999 and
1998, respectively. Revenue from product sales decreased to $150,000 from
$252,000 for the quarters ended June 30, 1999 and 1998, respectively. This
decrease was due primarily to the following factors: European distributor
inventory balances built up in 1998 were drawn down in 1999 eliminating the need
for additional shipments in the 1999 period; the timing of domestic distributor
inventory purchases; the transitioning of domestic business beginning in the
second quarter of 1998 from Company-direct sales to Fisher-distributed sales; a
lower average per unit sales price in the 1999 period; and, to a lesser extent,
to a decrease in the number of units sold. The lower sales price per unit arose
from increased sales to international customers with lower pricing structures
than that of domestic customers and the reduction of direct product sales
resulting from the Fisher distribution agreement. The emergence of product sales
arising from new partner-based distribution in Japan in the 1999 period helped
to offset these decreases. In addition, collaborative research and development
revenue decreased $17,000 as the SBIR funding for the Company's NuMA tumor
marker project was fulfilled in the 1998 quarter.


          Interest and other income decreased to $64,000 from $128,000 for the
quarter ended June 30, 1999 and 1998, respectively. The decrease was due to
lower average cash balances available for investment in the second quarter of
1999 as compared to the second quarter of 1998.


          Research and development expenses decreased to $881,000 from
$1,115,000 for the quarter ended June 30, 1999 and 1998, respectively. This
decrease is primarily due to the following: a $176,000 reduction derived through
decreased headcount under cost-reduction programs; a $61,000 reduction in
outside patent costs; and a $66,000 reduction in supplies usage due to the
reduction in headcount. These decreases were partially offset by various
immaterial increases totalling $70,000.


          Selling, general and administrative expenses decreased to $868,000
from $1,345,000 for the quarter ended June 30, 1999 and 1998, respectively. The
decrease is primarily due to the following: a reduction of $106,000 associated
with the development of promotional materials in the 1998 period not incurred in
the 1999 period; a $154,000 reduction in reliance on outside marketing and
administrative consultants; $38,000 of expense associated with the issuance of a
common stock warrant for public relations services in the 1998 quarter not
incurred in the 1999 quarter; a $28,000 reduction in printing costs incurred for
the Company's 1998 Annual Report; and a $26,000 reduction in marketing
relocation/recruiting expenses incurred in the 1998 period and not incurred in
the 1999 period.


          The Company incurred a net loss of $1,535,000 for the quarter ended
June 30, 1999, compared to a net loss of $2,063,000 for the quarter ended June
30, 1998. The decrease of $528,000 or 26% in the net loss was primarily the
result of savings in both research and development and selling, general and
administrative expenses partially offset by decreased revenue.


                                  Page 10 of 18
<PAGE>   11


SIX MONTHS ENDED JUNE 30, 1999 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1998


          Product sales and collaborative research and development revenue
decreased to $320,000 from $534,000 for the six months ended June 30, 1999 and
1998, respectively. Revenue from product sales decreased to $320,000 from
$461,000 for the six months ended June 30, 1999 and 1998, respectively. This
decrease was due primarily to the following factors: European distributor
inventory balances built up in 1998 were drawn down in 1999 eliminating the need
for additional shipments in the 1999 period; the timing of domestic distributor
inventory purchases; the transitioning of domestic business beginning in the
second quarter of 1998 from Company-direct sales to Fisher-distributed sales; a
lower average per unit sales price in the 1999 period; and, to a lesser extent,
to a decrease in the number of units sold. The lower sales price per unit arose
from increased sales to international customers with lower pricing structures
than that of domestic customers and the reduction of direct product sales
resulting from the Fisher distribution agreement. The emergence of product sales
arising from new partner-based distribution in Japan in the 1999 period helped
to offset these decreases. In addition, collaborative research and development
revenue decreased $73,000 as the SBIR funding for the Company's NuMA tumor
marker project was fulfilled in 1998.


          Interest and other income decreased to $98,000 from $274,000 for the
six months ended June 30, 1999 and 1998, respectively. The decrease was due to
lower average cash balances available for investment in the first half of 1999
as compared to the first half of 1998.


          Research and development expenses decreased to $1,915,000 from
$2,155,000 for the six months ended June 30, 1999 and 1998, respectively. The
decrease is primarily due to the following: a $176,000 reduction derived through
decreased headcount under cost-reduction programs; a $61,000 reduction in
outside patent costs; and a $66,000 reduction in supplies usage due to the
reduction in headcount. These decreases were partially offset by various
immaterial increases totalling $63,000.


          Selling, general and administrative expenses decreased to $1,707,000
from $2,777,000 for the six months ended June 30, 1999 and 1998, respectively.
The decrease is primarily due to the following: a $245,000 reduction in expenses
with the development of promotional materials in the 1998 period not incurred in
the 1999 period; $150,000 of expense associated with the issuance of a common
stock warrant for public relations services in the 1998 period not incurred in
the 1999 period; a $106,000 savings through decreased headcount associated with
cost-reduction programs; a $154,000 reduction in reliance on outside marketing
and administrative consultants; $46,000 of license fee expense present in the
1998 period not incurred in the 1999 period; a $28,000 reduction in printing
costs incurred for the Company's 1998 Annual Report; a $26,000 reduction in
marketing relocation/recruiting expenses incurred in the 1998 and not incurred
in the 1999 period; and a reduction of free kit and equipment-related expenses
of $22,000. The remaining $293,000 decrease relates to various other expense
reductions arising from the Company's cost-cutting efforts.


          The Company incurred a net loss of $3,203,000 for the six months ended
June 30, 1999, compared to a net loss of $4,123,000 for the six months ended
June 30, 1998. The decrease of $920,000 or 22% in the net loss was primarily the
result of savings in both research and development and selling, general and
administrative expenses partially offset by decreased revenue.


                                  Page 11 of 18
<PAGE>   12


LIQUIDITY AND CAPITAL RESOURCES

          Since its inception, the Company has financed its operations primarily
through private and public offerings of its securities and through funded
development and marketing agreements. At June 30, 1999 and December 31, 1998,
the Company had cash and cash equivalents of $4,845,000 and $4,147,000,
respectively, and working capital of $4,544,000 and $3,788,000, respectively.


          The Company's operating activities used cash of $3,169,000 and
$3,802,000 for the six months ended June 30, 1999 and 1998, respectively,
primarily to fund the Company's operating loss.


          The Company's investing activities used cash of $23,000 and $29,000 in
the six months ended June 30, 1999 and 1998, respectively, for the purchase of
computer systems and office and laboratory equipment. The Company currently
estimates that it will acquire approximately $30,000 of capital equipment during
the remainder of 1999, consisting primarily of office and laboratory equipment
as well as related capital investments associated with Year 2000 activities.


          The Company's financing activities provided cash of $3,890,000 and
$37,000 for the six months ended June 30, 1999 and 1998, respectively. In April
1999, the Company completed a private placement of common stock which resulted
in net proceeds of approximately $3.9 million. The activity in the 1998 period
and the remainder of the activity in the 1999 period was from the exercise of
common stock options net of equipment loan payments.


          The Company has a term note with Phoenix Leasing Incorporated for
equipment purchases. The term note is payable over 48 months, bears interest at
11.75% and is secured by the underlying equipment. The outstanding balance of
this note at June 30, 1999 and December 31, 1998 is $176,000 and $209,000,
respectively.


          The Company expects to incur continued research and development
expenses and other costs, including costs related to clinical studies to
commercialize additional products based upon its NMP technology. The Company
will require substantial additional funds to fund operations, complete new
product development, conduct clinical trials and manufacture and market its
products.


          The Company's future capital requirements will depend on many factors,
including but not limited to: continued scientific progress in its research and
development programs; the magnitude of its research and development programs;
progress with clinical trials for its diagnostic products; the magnitude of
product sales; the time involved in obtaining regulatory approvals; the costs
involved in filing, prosecuting and enforcing patent claims; competing
technological and market developments; and the ability of the Company to
establish additional development and marketing arrangements to provide funding
for research and development and to conduct clinical trials, obtain regulatory
approvals, and manufacture and market certain of the Company's products.


          The Company anticipates that at its current expense levels, its net
tangible assets will fall below $4 million in the third quarter of 1999 if it is
unable to obtain additional financing before then. In addition, the Company's
common stock has traded below $1.00 for consecutive days in the third quarter of
1999. If the Company's Common Stock continues to trade under $1.00 for 30
consecutive days, the Company may be subject to delisting by Nasdaq. See
"Factors That May Affect Future Results - Risk of Delisting from the Nasdaq
National Market."


                                  Page 12 of 18
<PAGE>   13


          In the fourth quarter of 1998, the Company implemented and has
continued certain cost-reduction measures to conserve capital resources. Such
measures include changing the Company's public relations firm and deferring the
hiring of non-essential personnel. The Company believes that such measures will
not materially detract from its marketing and sales effort for its FDA-approved
product for bladder cancer nor materially affect its existing research and
development programs relating to colon, cervical, breast, or prostate cancer
product development.


          The Company is actively seeking additional long-term funding for its
operations from public and private sources including strategic collaborations
and partnerships. The Company anticipates that its existing capital resources
including working capital and interest thereon will satisfy its capital needs
through the first quarter of 2000. There can be no assurance that the Company's
needs may not change or that funds may not be depleted more rapidly than
planned.


          The foregoing discussion includes forward-looking statements which are
subject to uncertainties and actual results may differ materially from those
currently anticipated depending on a variety of factors including those
discussed below. There can be no assurance that the Company's needs may not
change. See "Factors That May Affect Future Results - Access to Capital." The
survival of the Company in the long term, however, is dependent on its ability
to generate revenue from sales of its products. There can be no assurance that
capital will be available on terms acceptable to the Company, if at all, or that
in the long term, the Company will be able to generate sufficient revenue to
achieve and maintain profitability. If the Company uses equity to finance its
capital needs, such a financing could result in significant dilution to existing
shareholders.


          The Company has reviewed all of its information technology systems to
assess what steps, if any, are required to achieve full Year 2000 ("Y2K")
compliance. The Company relies upon microprocessor-based personal computers and
commercially available applications software. These technologies have been put
into service recently, and the Company's review indicates that certain of the
Company's systems are currently Y2K compliant. The Company has begun to address
the small number of systems that are not yet Y2K compliant, and anticipates
achieving full compliance early in the fourth quarter of 1999. The Company has
reviewed its critical non-information technology systems which include
telecommunications, air ventilation systems, security and certain laboratory
equipment, and expects to remediate all significant Y2K issues by early in the
fourth quarter of 1999. The Company does not anticipate that it will incur
material expenses to make these systems Y2K compliant and has accrued $38,000
and $25,000 in its financial statements at June 30, 1999 and December 31, 1998,
respectively, related to such expenses. The Company is currently discussing Y2K
readiness with its material supply and service vendors. To date, those suppliers
and service vendors that have been contacted have indicated that their hardware
or software is or will be Y2K compliant in time frames that meet the Company's
requirements. The Company intends to continue to assess its exposure to Y2K
noncompliance on the part of any of its material vendors and there can be no
assurance that their systems will be Y2K compliant. In the event that certain
material suppliers or service vendors indicate that they will not successfully
address their Y2K problems in a timely fashion and that such failure may have a
material adverse effect on the Company, management may elect to suspend such
business relationships until such time that such vendors become fully compliant.
The Company is currently formulating contingency plans to address problems that
may arise in the event that either the Company or its material suppliers and
vendors fail to address their Y2K problems in a timely fashion. The Company
presently believes that the Y2K issue will not pose significant operational
problems for the Company. However, if all Y2K issues are not properly
identified, or assessment, remediation and testing are not effected timely with
respect to the Y2K problems that are identified, there can be no assurance that
the Y2K issue will not materially adversely impact the Company's results or
operations or materially adversely affect the Company's relationships with
customers, suppliers or others. Additionally, there can be no assurance that the
Y2K issues of third parties will not have a material adverse impact on the
Company's systems or results of operations.


                                  Page 13 of 18
<PAGE>   14


FACTORS THAT MAY AFFECT FUTURE RESULTS



          The Company's future financial and operational results are subject to
a number of material risks and uncertainties that may affect such results or
conditions, including:



          Access to Capital. Even with the proceeds from the Private Placement,
the Company needs to obtain additional long-term financing. The Company is
currently seeking to raise additional capital and will consider various
alternatives, including equity or debt financing and corporate partnering
arrangements. There can be no assurance, however, that this funding will be
available on terms acceptable to the Company, if at all. If additional financing
is not available, the Company may be required to further curtail expenses or
take other steps that adversely affect the Company's future performance.



          Risk of Delisting from the Nasdaq National Market. The Company's
Common Stock is currently listed on the Nasdaq National Market ("NNM"). For
continued listing of the Company's Common Stock on the NNM, it must, among other
things, maintain at least $4 million in net tangible assets and a minimum bid
price of $1.00. If the Company's net tangible assets fall below $4 million, or
the Company's Common Stock trades at a price of less than $1.00 for 30
consecutive business days or more, it may result in the delisting of the
Company's securities from NNM, and trading, if any, of the Company's securities
would thereafter be conducted on a non-Nasdaq over-the-counter market. If the
Company's securities are delisted, an investor could find it more difficult to
dispose of, or to obtain accurate quotations as to the market value of, the
Company's securities. In addition, if the Company's securities were delisted,
they may be subject to a rule that imposes additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors. For transactions covered by this
rule, the broker-dealer must make a special suitability determination for the
purchaser and must have received the purchaser's written consent to the
transaction prior to sale. Consequently, delisting, if it occurred, may affect
the ability of broker-dealers to sell the Company's securities and the ability
of the stockholders to sell their securities.



          History of Operating Losses and Anticipated Future Losses. The Company
has incurred operating losses since its inception and does not expect to be
profitable within the next several years. While the Company expects to improve
operating results in future periods, there can be no assurance that the Company
will achieve or maintain profitability or that its revenue will grow in the
future.



          Fluctuation in Operating Results. The Company's future operating
results may vary significantly from quarter to quarter or from year to year
depending on a number of factors including: the timing and size of orders from
the Company's customers and distributors; changes in prices; the timing of
payments from corporate partners and research grants, if any; regulatory
approvals and the introduction of new products by the Company; and the market
acceptance of the Company's products. The Company's current planned expense
levels are based in part upon expectations as to future revenue. Consequently,
profits may vary significantly from quarter to quarter or year to year based on
the timing of revenue. Revenue or profits in any period will not necessarily be
indicative of results in subsequent periods.


                                  Page 14 of 18
<PAGE>   15


          Uncertainties Associated with Future Performance. The Company's
success in the market for diagnostic products will depend, in part, on the
Company's ability to: successfully develop, test, produce and market its
products; obtain necessary governmental approvals in a timely manner; attract
and maintain key employees; and successfully respond to technological changes in
its marketplace. The Company's success in markets outside the United States is
dependent on the performance of independent distributors over which the Company
has limited control.



          Near-Term Dependence Upon NMP22. The Company anticipates that in the
near-term it will be substantially dependent on the success of the NMP22(R) Test
Kit for bladder cancer, which was approved for sale in the U.S. by the FDA in
1996 and approved for sale in Japan in 1998. The Company expects to generate
substantially all of its near-term product sales from the sale of NMP22 Test
Kits, and would experience a material adverse effect on its business, financial
condition and results of operations if the NMP22 Test Kit does not achieve wide
market acceptance. The remainder of the Company's products have not been
approved by the FDA or are in development, and there can be no assurance that it
will be successful with such regulatory approvals and product development.



          Reliance on Sole Suppliers. The Company currently relies on sole
suppliers for certain key components for its NMP22 Test Kit. In the event that
the components from such suppliers should become unavailable for any reason, the
Company would seek alternative sources of supply, which may entail making
regulatory submissions and obtaining regulatory approvals from the FDA or such
alternative suppliers. Although the Company attempts to maintain an adequate
level of inventory to provide for these and other contingencies, should its
manufacturing process be disrupted as a result of a shortage of key components
or a revalidation of new components, there can be no assurance that the Company
would be able to meet its commitments to customers.




ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          Investment Portfolio. The Company does not use derivative financial
instruments that meet high credit quality standards, as specified in the
Company's investment policy guidelines; the policy also limits the amount of
credit exposure to any one issue, issuer, and type of instrument. It is
suggested that this paragraph be read in conjunction with Note 1 of Notes to
Financial Statements - "Operations and Significant Accounting Policies" of the
Company's Annual Report on Form 10-K for the year ended December 31, 1998 filed
with the SEC (File No. 0-12128).


                                  Page 15 of 18
<PAGE>   16


                           PART II. OTHER INFORMATION


ITEM 4. SUBMISSION OF MATTERS TO A VOTE A SECURITY HOLDERS

     (a)  The annual meeting (the "Annual Meeting") of stockholders of Matritech
          was held on June 18, 1999.

     (b)  The following directors were elected at the Annual Meeting:


                                                         VOTES
                                                         -----
     ELECTION OF DIRECTORS                    FOR                  WITHHELD
     ---------------------                    ---                  --------
     J. Robert Buchanan                       18,648,809           171,445
     Stephen D. Chubb                         18,516,050           304,204
     David L. Corbet                          17,941,758           878,496
     David Rubinfien                          18,592,474           227,780
     Richard A. Sandberg                      18,654,624           165,630
     T. Stephen Thompson                      18,656,751           163,503
     C. William Zadel                         18,009,809           810,445


          The following other matter was proposed and voted upon as indicated:

          To ratify the selection of the firm of Arthur Andersen LLP as auditors
          for the fiscal year ending December 31, 1999. With 18,686,479 voting
          for, 105,714 against, and 28,061 abstaining, the proposal was passed.



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a)  EXHIBITS:

             27   Financial Data Schedule

        (b)  Reports on Form 8-K:

        On April 7, 1999 the Company filed a Current Report on Form 8-K dated as
        of April 6, 1999 including Items 5 and 7.

        Item 5 reported the following other event:

             (i)  In April 1999, the Company completed a private placement of
                  3,094,965 shares of Common Stock for an aggregate selling
                  price of approximately $4 million.

        Item 7 included a Form of Subscription Agreement dated March 10, 1999 by
        and between the Company and certain investors.


                                  Page 16 of 18
<PAGE>   17


                                   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.

                                             MATRITECH, INC.



Date:  August 13, 1999                       By: /s/Stephen D. Chubb
                                                --------------------
                                                 Stephen D. Chubb
                                                 Director, Chairman and
                                                 Chief Executive Officer
                                                 (principal executive officer)


Date:  August 13, 1999                       By: /s/Robert W. Morgan
                                                --------------------
                                                 Robert W. Morgan
                                                 Vice President,
                                                 Chief Financial Officer and
                                                 Treasurer
                                                 (principal accounting and
                                                 financial officer)


                                  Page 17 of 18
<PAGE>   18


                                  EXHIBIT INDEX

Exhibit
Number                        Description
-------                       -----------

27                            Financial Data Schedule


                                  Page 18 of 18