<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO ___________
Commission file number 000-12471
COLORADO MEDTECH, INC.
----------------------
(Exact name of issuer as specified in its charter)
COLORADO 84-0731006
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6175 Longbow Drive, Boulder, Colorado 80301
-------------------------------------------
(Address of principal executive offices)
(303) 530-2660
--------------
(Issuer's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such report(s), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No _____
As of November 3, 1998, the Company had 10,149,512 shares of Common Stock
outstanding.
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<PAGE>
COLORADO MEDTECH, INC.
FORM 10-Q
PART I FINANCIAL INFORMATION PAGE
--------------------- ----
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets -
September 30, 1998 (Unaudited) and June 30, 1998 3
Condensed Consolidated Statements of Operations (Unaudited)-
Three-months ended
September 30, 1998 and 1997 5
Condensed Consolidated Statements of Cash Flows (Unaudited) -
Three-months ended
September 30, 1998 and 1997 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis 10
of Financial Condition
and Results of Operations
PART II OTHER INFORMATION
-----------------
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
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<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
COLORADO MEDTECH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, 1998 June 30, 1998
------------------ -------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 3,405,151 $ 2,499,072
Short-term investments 10,793,228 12,144,005
Accounts receivable, net 8,505,213 7,813,973
Inventories, net 4,291,147 4,225,680
Deferred income taxes and other
current assets 2,555,391 2,566,487
----------- -----------
Total current assets 29,550,130 29,249,217
----------- -----------
PROPERTY AND EQUIPMENT, net 1,856,969 1,734,272
----------- -----------
GOODWILL, net 1,647,974 1,724,796
----------- -----------
LAND, DEFERRED INCOME TAXES
AND OTHER ASSETS 1,298,997 1,298,997
----------- -----------
TOTAL ASSETS $34,354,070 $34,007,282
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these balance sheets.
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<PAGE>
COLORADO MEDTECH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND
SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, 1998 June 30, 1998
------------------ -------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 2,906,112 $ 4,426,172
Accrued salaries and wages 2,237,106 3,126,671
Accrued product service costs 297,705 291,566
Customer deposits 3,712,576 2,804,450
Other accrued expenses 1,395,723 1,169,004
Income taxes payable 760,788 466,788
----------- -----------
Total current liabilities 11,310,010 12,284,651
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock 11,881,980 11,879,456
Retained earnings 11,127,080 9,808,175
Unrealized gain on available-for-sale investment 35,000 35,000
----------- -----------
Total shareholders' equity 23,044,060 21,722,631
----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $34,354,070 $34,007,282
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these balance sheets.
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<PAGE>
COLORADO MEDTECH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE-MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
SALES AND SERVICE $13,408,421 $ 7,260,230
COST OF SALES AND SERVICE 8,434,125 4,621,058
----------- -----------
GROSS PROFIT 4,974,296 2,639,172
----------- -----------
COSTS AND EXPENSES:
Marketing and selling 551,885 332,358
Operating, general and administrative 1,979,653 1,380,337
Research and development 487,590 45,624
----------- -----------
Total operating expenses 3,019,128 1,758,319
----------- -----------
EARNINGS FROM OPERATIONS 1,955,168 880,853
OTHER INCOME, NET 177,737 193,856
----------- -----------
EARNINGS BEFORE INCOME TAXES 2,132,905 1,074,709
Provision for income taxes 814,000 411,000
----------- -----------
NET INCOME $ 1,318,905 $ 663,709
----------- -----------
----------- -----------
NET INCOME PER COMMON AND
COMMON EQUIVALENT SHARE:
Basic $ .12 $ .07
----------- -----------
----------- -----------
Diluted $ .11 $ .06
----------- -----------
----------- -----------
WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES
OUTSTANDING:
Basic 10,740,529 9,880,302
----------- -----------
----------- -----------
Diluted 12,336,377 11,821,519
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these statements.
-5-
<PAGE>
COLORADO MEDTECH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE-MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 1,318,905 $ 663,709
Adjustment to reconcile net income
to net cash flows from
operating activities-
Depreciation and amortization 351,847 157,352
Non-cash consulting services -- 26,649
Change in assets and liabilities-
Accounts receivable, net (691,240) (2,318,768)
Inventories, net (65,467) (1,364,687)
Deferred income taxes and other assets 11,096 61,401
Accounts payable and accrued expenses (1,882,767) (806,207)
Customer deposits 908,126 273,653
----------- -----------
Net cash flows from operating activities (49,500) (3,306,898)
----------- -----------
INVESTING ACTIVITIES:
Decrease in short-term investments, net 1,350,777 6,879,507
Capital expenditures (397,722) (373,682)
----------- -----------
Net cash flows from investing activities 953,055 6,505,825
----------- -----------
FINANCING ACTIVITIES:
Issuance of common stock 2,524 1,469,617
----------- -----------
Net cash flows from financing activities 2,524 1,469,617
----------- -----------
Net change in cash and cash equivalents 906,079 4,668,544
Cash and cash equivalents, beginning 2,499,072 1,670,821
----------- -----------
Cash and cash equivalents, ending $ 3,405,151 $ 6,339,365
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these statements.
-6-
<PAGE>
COLORADO MEDTECH, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE-MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The financial information is unaudited and should be read in conjunction with
the consolidated financial statements filed with Form 10-K on September 28,
1998. The accounting policies utilized in the preparation of the financial
information herein presented are the same as set forth in the Company's
annual consolidated financial statements filed with Form 10-K, except as
modified for interim accounting policies which are within the guidelines set
forth in Accounting Principles Board Opinion No. 28. Certain amounts have
been reclassified in the prior year financial statements to be consistent
with the current year presentation.
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly the
Company's financial position as of September 30, 1998 and the results of its
operations and its cash flows for the three-month periods ended September 30,
1998 and 1997. All of the adjustments were of a normal and recurring nature.
The following sets forth the supplemental disclosures of cash flow
information for the three-month periods ended September 30, 1998 and 1997,
respectively:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Cash paid for interest $ -- $ 2,349
Cash paid for income taxes $540,000 $28,000
</TABLE>
NOTE 2 - DEBT
The Company entered into a bank financing agreement on October 30, 1997, that
provides for a three year revolving line of credit for $5 million the first
year, $7 million the second year and $9 million the third year. The credit
facility is at the bank's prime lending rate through the term of the
agreement and is secured by all accounts, general intangibles, inventory and
equipment. The agreement contains various restrictive covenants which
include, among others, maintenance of certain financial ratios, maintenance
of a minimum tangible net worth and limitations on annual investments,
dividends and capital expenditures. No amounts had been advanced under the
credit facility as of September 30, 1998.
NOTE 3 - EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings Per Share", ("SFAS 128"),
which was effective December 15, 1997. This statement establishes standards for
computing and presenting earnings per share. Basic earnings per share are
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<PAGE>
computed on the basis of the weighted average common shares outstanding
during each period. Diluted earnings per share are computed on the basis of
the weighted average shares outstanding during each period, including
dilutive common equivalent shares for stock options and warrants. As a result
of adopting SFAS 128, previously reported earnings per share for the
three-month period ended September 30, 1997 were restated. The effect of this
accounting change on previously reported earnings per share was as follows:
<TABLE>
<CAPTION>
Three Months Ended
September 30,
------------------
1998 1997
-------- -------
<S> <C> <C>
Primary and fully diluted earnings per share
(as reported under the prior method) $ .11 $ .06
Effect of SFAS 128
on basic earnings per share .01 .01
-------- -------
Basic earnings per share .12 .07
Effect of SFAS 128
on diluted earnings per share (.01) (.01)
-------- -------
Diluted earnings per share $ .11 $ .06
-------- -------
-------- -------
</TABLE>
A reconciliation between the number of shares used to calculate basic and
diluted earnings per share is as follows:
(In Thousands of Shares)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
------------------
1998 1997
-------- -------
<S> <C> <C>
Weighted average number of common shares
outstanding (shares used in basic earnings
per share computation) 10,741 9,880
Effect of stock options and warrants
(treasury stock method) 1,595 1,942
------ ------
Shares used in diluted earnings per share
computation 12,336 11,822
------ ------
------ ------
</TABLE>
NOTE 4 - STOCK AND STOCK OPTIONS
During the quarter ended September 30, 1998, the Company issued 180,000
warrants to the six outside directors of the Company. The warrants to
purchase the Company's common stock were issued at an exercise price of
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<PAGE>
$7.00 per share, which was the fair market value of the Company's common
stock on the date of the grant. The warrants vest 90,000 on June 30, 1999 and
the balance on June 30, 2000 and expire on June 1, 2003.
The Company had 833 stock options exercised by certain employees during the
quarter ended September 30, 1998. The stock options were exercised at a price
per share of $3.03. The exercise of the stock options for common stock
increased the equity of the Company by $2,524 for the three months ended
September 30, 1998.
NOTE 5 - SUBESQUENT EVENT
On November 3, 1998, Vencor Operating, Inc., a subsidiary of Vencor, Inc.
("Vencor"), sold 3,560,000 shares of Colorado MEDtech, Inc. common stock held
by Vencor. The Company purchased and retired 655,000 shares of its own stock
for $6.38 per share. The Company used approximately $4.2 million of its
short-term investments to complete this transaction. A number of
institutional investors purchased the remaining 2,905,000 shares. The
Company's repurchase of 655,000 shares replaced the Company's previously
announced plan to repurchase 300,000 shares in open market transactions.
Advest, Inc. acted as managing agent for the sale.
Prior to the transaction, the 3,560,000 shares held by Vencor represented
approximately 33% of the outstanding common stock of the Company. The
transaction decreased the number of total shares outstanding from 10,804,512
to 10,149,512.
-9-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
As an aid to understanding the Company's operating results, the following
table indicates the percentage relationships of income and expense items to
total revenue for the line items included in the Consolidated Statements of
Operations for the three-month periods ended September 30, 1998 and 1997, and
the percentage changes in those items for the three-month period ended
September 30, 1998, from the comparable period in 1997.
<TABLE>
<CAPTION>
Percentage Change From
As a Percentage of Total Revenues Prior Year's Comparable Period
- --------------------------------- ------------------------------
Three-Month Period Three-Month Period
Ended September 30, Ended September 30,
------------------ ------------------
1998 1997 LINE ITEMS 1998
---- ---- ---------- ----
% % %
<S> <C> <C> <C>
100.0 100.0 Sales and Service 84.7
62.9 63.7 Cost of Sales and Service 82.5
----- ----- -----
37.1 36.3 Gross Profit 88.5
----- ----- -----
4.1 4.6 Marketing and Selling 66.1
14.8 19.0 Operating, General and 43.4
Administrative
3.6 .6 Research and Development 968.7
----- ----- -----
22.5 24.2 Total Operating Expenses 71.7
----- ----- -----
14.6 12.1 Earnings from Operations 122.0
1.3 2.7 Other Income, Net (8.3)
----- ----- -----
15.9 14.8 Earnings Before Income 98.5
Taxes
6.1 5.7 Provision for Income Taxes 98.1
----- ----- -----
9.8 9.1 NET INCOME 98.7
----- ----- -----
----- ----- -----
</TABLE>
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<PAGE>
RESULTS OF OPERATIONS
Revenues for the three-month period ended September 30, 1998 were $13.4
million, up 85%, as compared to the same period in the prior year. The
increase in revenue is attributable to the growth of outsourcing services,
which increased by 35% for the quarter ended September 30, 1998, compared to
the same period in 1997. The Company's revenue growth was also improved by
the acquisition of Erbtec Engineering, Inc. ("Erbtec"), in October 1997, and
the start-up of BioMed Y2K, Inc. ("BioMed"), in April 1998, which contributed
approximately $3.9 million in combined revenue during the three months ended
September 30, 1998. The increase in revenue is also a reflection of the
increase in the backlog of orders for services and shipment of products at
June 30, 1998, compared to June 30, 1997.
Gross margins increased to 37% for the three-month period ended September 30,
1998, compared to 36% in the same period in the prior year. The increase in
the Company's margin is a result of the shifting composition of the Company's
revenues between products and services and the increase in sales of
proprietary products.
Marketing and selling expenses, including salesmen's commissions, increased
66% for the three-month period ended September 30, 1998, compared to the same
period in the prior year. The increase is attributable to the growth in sales
and the addition of Erbtec and BioMed. Marketing and selling expenses as a
percentage of total revenues decreased to 4% for the three- month period
ended September 30, 1998, compared to 5% in the same period in 1997.
Operating, general and administrative expenses increased 43% for the
three-month period ended September 30, 1998, as compared to the same period
in the prior year. The increase is attributable to the addition of Erbtec and
BioMed, and the overall growth of the Company. As a percentage of revenues,
operating, general and administrative expenses decreased to 15%, from 19% in
the same three-month period in the prior year.
Research and development expenses increased by $442,000 for the three-month
period ended September 30, 1998, compared to the same three-month period in
1997. Research and development expenses are attributable to the Erbtec,
BioMed and Respiratory product lines. Consistent with the Company's operating
plans, the Company continues to pursue the acquisition or development of new
or improved technology or products. Should the Company identify such
opportunities, the amount of future research and development expenditures may
increase.
Other income decreased to $178,000 for the three-month period ended September
30, 1998. The decrease is due to the lower interest rates on the invested
funds of the Company during the quarter ended September 30, 1998 compared to
the same period in 1997.
The provision for income taxes remained at 38% of earnings before income
taxes for the three-month periods ended September 30, 1998 and 1997. The
Company's ordinary combined Federal and state tax rate is approximately 38%.
The Company reported net income of $1,319,000 for the three-months ended
September 30, 1998, compared to $664,000 for the same period in the prior
year. Earnings per share for the three-months ended September 30, 1998 were
$.11 calculated on 12.3 million diluted weighted average common share
equivalents outstanding compared to $.06 for the same period in the prior
year calculated on 11.8 million diluted weighted average
-11-
<PAGE>
common equivalent shares. This increase in net income is attributed to the
85% growth in the Company's revenues, while increasing the gross margins to
37% from 36% for the three-month period ended September 30, 1998, compared to
the same period in 1997.
FINANCIAL CONDITION -- LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity have consisted of cash flow from
operations, cash deposits received from customers related to contracts, and
cash proceeds from the issuance of common stock. Historically, the Company
has also utilized proceeds from debt borrowings.
The Company has a bank financing arrangement that provides for a three year
revolving line of credit for $5 million the first year, $7 million the second
year and $9 million the third year. The credit facility is at the bank's
prime lending rate through the term of the agreement and is secured by all
accounts, general intangibles, inventory and equipment. The agreement
contains various restrictive covenants which include, among others,
maintenance of certain financial ratios, maintenance of a minimum tangible
net worth and limitations on annual investments, dividends and capital
expenditures. No amounts had been advanced under this credit facility as of
September 30, 1998.
The ratio of current assets to current liabilities was 2.6 to 1 at September
30, 1998, compared to 2.4 to 1 at June 30, 1998. The Company's working
capital increased approximately $1.3 million since June 30, 1998. Working
capital increased primarily as a result of continued profitability of the
business and the proceeds from the increase in customer deposits. The average
number of days outstanding of the Company's accounts receivable at September
30, 1998 was approximately 56 days, compared to 50 days at June 30, 1998.
Management believes that the average number of days outstanding of the
Company's accounts receivable will be brought back to approximately 50 days
by the end of fiscal year 1999.
The Company used approximately $50,000 of cash for operations during the
three-month period ended September 30, 1998, primarily for the payment of
taxes and other accrued expenses.
During the three-months ended September 30, 1998, the Company made capital
expenditures of approximately $398,000 consisting principally of computer
equipment and office furniture. The Company has no material commitments for
capital expenditures at September 30, 1998.
INFORMATION SYSTEMS AND THE YEAR 2000 ISSUE
As is the case for most other companies using computers in their operations,
the Company and its subsidiaries are in the process of addressing the Year
2000 problem. The Company is currently engaged in a comprehensive project to
upgrade its information technology and manufacturing computer software to
programs that will consistently and properly recognize the Year 2000. Many of
the Company's systems include new hardware and packaged software recently
purchased from vendors who have represented that these systems are already
Year 2000 compliant. The Company is in the process of obtaining assurances
from vendors that timely updates will be made available to make all remaining
purchased software Year 2000 compliant. The Company will utilize both
internal and external resources to test and reprogram or replace all of its
software for Year 2000 compliance.
The Company does not believe that its proprietary products or any of its
outsourcing services involve any material Year 2000 risks. In addition to
reviewing its internal systems, the Company has begun formal communications
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<PAGE>
with its significant vendors concerning Year 2000 compliance. There can be no
assurance that the systems of other companies that interact with the Company
will be sufficiently Year 2000 compliant so as to avoid an adverse impact on
the Company's operations, financial condition and results of operations.
The Company does not presently anticipate that the costs to address the Year
2000 issue will have a material adverse effect on the Company's financial
condition, results of operations or liquidity. Present estimated cost for
remediation is less than $100,000.
The Company presently anticipates that it will complete its Year 2000
assessment and remediation by the end of fiscal year 1999. However, there can
be no assurance that the Company will be successful in implementing its Year
2000 remediation plan according to the anticipated schedule. In addition, the
Company may be adversely affected by the inability of other companies whose
systems interact with the Company to become Year 2000 compliant and by
potential interruptions of utility, communications or transportation systems
as a result of Year 2000 issues.
Although the Company expects its internal systems will be Year 2000 compliant
as described above, the Company intends to prepare a contingency plan that
will specify what it plans to do if it or important external companies are
not Year 2000 compliant in a timely manner. The Company expects to prepare
its contingency plan during fiscal year 1999.
FORWARD -- LOOKING STATEMENTS
The statements contained in this report which are not historical facts are
forward-looking statements that are subject to risks and uncertainties that
could cause actual results to differ materially from those set forth in or
implied by forward-looking statements including, but not limited to, the risk
that a downturn in general economic conditions may tend to adversely affect
research and development budgets of potential customers upon which the
Company is dependent, the risk that the Company's project-oriented revenues
could be delayed or adversely affected if new contracts are not in place when
existing contracts are completed, and the risk that the nature of bidding and
performing research and development-type contracts may result in short-term
fluctuations in revenue or expense that could adversely affect quarterly
results.
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<PAGE>
PART II OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On November 3, 1998, Vencor Operating, Inc., a subsidiary of Vencor, Inc.
("Vencor"), sold 3,560,000 shares of Colorado MEDtech, Inc. common stock held
by Vencor. The Company purchased and retired 655,000 shares of its own stock
for $6.38 per share. The Company used approximately $4.2 million of its
short-term investments to complete this transaction. A number of
institutional investors purchased the remaining 2,905,000 shares. The
Company's repurchase of 655,000 shares replaced the Company's previously
announced plan to repurchase 300,000 shares in open market transactions.
Advest, Inc. acted as managing agent for the sale.
Prior to the transaction, the 3,560,000 shares held by Vencor represented
approximately 33% of the outstanding common stock of the Company. The
transaction decreased the number of total shares outstanding from 10,804,512
to 10,149,512.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - See Index to Exhibits
(b) Reports on Form 8-K during the first quarter of the Company's fiscal
year ended September 30, 1998: The Company filed a current report on
Form 8-K dated September 30, 1998 relating to a press release regarding
the Company's filing of a Form S-3 registration statement.
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<PAGE>
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.
Colorado MEDtech, Inc.
----------------------
(Registrant)
DATE: November 10, 1998
/s/ John V. Atanasoff II
------------------------
John V. Atanasoff II
Chief Executive Officer
DATE: November 10, 1998
/s/ Bruce L. Arfmann
--------------------
Bruce L. Arfmann
Chief Financial Officer
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<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page No.
- ------- ----------- ----------
<S> <C> <C>
3.1 Articles of Incorporation; Complete Copy, as Amended. (A)
3.2 Bylaws, as Amended. (B)
4.2 Specimen of Common Stock Certificate. (C)
10.22 Promissory Notes payable to Lockett E. Wood and Deeds of Trust
with respect to Louisville, Colorado property acquisition. (D)
10.31 Colorado MEDtech, Inc. Stock Option Plan. (E)
10.32 Employment Agreement between Colorado MEDtech, Inc. and
John V. Atanasoff, II. (F)
10.33 Standstill Agreement dated June 30, 1994 between Vencor, Inc.
and Colorado MEDtech, Inc. (G)
10.35 Employment Agreement between Colorado MEDtech, Inc. and
Bruce L. Arfmann (H)
10.37 Employment Agreement between Colorado MEDtech, Inc. and
Lockett E. Wood (H)
10.38 Extension of Employment Agreement between Colorado MEDtech, Inc.
and John V. Atanasoff, II (I)
10.39 Agreement and Plan of Reorganization among Colorado MEDtech,
Inc., Novel Biomedical, Inc. and Jonathan Kagan (J)
10.40 Employment Agreement between Novel Biomedical, Inc. and
Jonathan Kagan (K)
10.41 Employment Agreement between Colorado MEDtech, Inc. and Lee Erb (L)
10.42 Colorado MEDtech, Inc. 1996 Employee Stock Purchase Plan as
Amended on November 21, 1997, Effective as of January 1, 1998 (M)
10.43 Asset Purchase Agreement by and among Colorado MEDtech, Inc.,
Erbtec Engineering, Inc., and Lee Erb, dated October 1, 1997 (N)
10.44 Loan Agreement, Commercial Security Agreement, and Promissory
Note dated October 30, 1997 between Colorado MEDtech, Inc. and
Bank One, Colorado N.A. (E)
21.1 Subsidiaries of Business Issuer (E)
27.1 Financial Data Schedule for the quarter ended September 30, 1998
</TABLE>
(A) Filed as an exhibit to the Company's Current Report on Form 8-K, dated
May 14, 1993.
(B) Filed with Registration Statement (No. 2-83841-D) on Form S-18 on May
17, 1983, with amendment filed as exhibit to the Company's Annual
Report on Form 10-K for the year ended October 31, 1984.
(C) Filed with Registration Statement (No. 2-83841-D) on Form S-18 on
May 17, 1983.
(D) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
the quarter ended April 30, 1987.
(E) Filed as an exhibit to the Company's Annual Report on Form 10-K for
the year ended June 30, 1998.
(F) Filed as an exhibit to the Company's Current Report on Form 8-K,
dated June 21, 1993
(G) Filed as an exhibit to Schedule 13D Amendment No. 2 dated July 18,
1994 filed by Vencor, Inc.
(H) Filed as an exhibit to the Company's Annual Report on Form 10-KSB
for the year ended June 30, 1994.
(I) Filed as an exhibit to the Company's Quarterly Report on Form 10-QSB
for the quarter ended March 31, 1996.
(J) Filed as an exhibit to the Company's Current Report on Form 8-K,
dated February 28, 1997.
(K) Filed as an exhibit to the Company's Annual Report on Form 10-KSB for
the year ended June 30, 1997.
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<PAGE>
(L) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1997.
(M) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q
for the quarter ended December 31, 1997.
(N) Filed as an exhibit to the Company's Current Report on Form 8-K,
dated October 1, 1997.
-17-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> SEP-30-1998
<CASH> 3,405,151
<SECURITIES> 10,793,228
<RECEIVABLES> 8,505,213
<ALLOWANCES> 0
<INVENTORY> 4,291,147
<CURRENT-ASSETS> 29,550,130
<PP&E> 1,856,969
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0
0
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</TABLE>
