SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: Commission File Number:
December 31, 1996 0 - 19957
Quantech Ltd.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 41-1709417
------------------ ------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) identification No.)
1419 Energy Park Drive
St. Paul, MN 55108
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(612)-647-6370
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
N/A
- -------------------------------------------------------------------------------
(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 the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date: 47,385,759 shares of
Common Stock, par value $.01 per share, outstanding as of February 12, 1997.
<PAGE>
Index
PART I. FINANCIAL INFORMATION Page No.
Item 1: Financial Statements:
Balance Sheets as of December 31, 1996 and June 30,
1996 3
Statement of Operations for the Three Months and
Six Months Ended December 31, 1996 and 1995 and from
inception to December 31, 1996 4
Statement of Stockholders' Equity from inception
to December 31, 1996 6
Statement of Cash Flows for the Quarters ended
December 31, 1996 and 1995 and from inception to
December 31, 1996 7
Notes to Financial Statements 8
Item 2: Management's Discussion and Analysis or
Plan of Operation 9
PART II. OTHER INFORMATION 13
<PAGE>
PART I
QUANTECH LTD.
(A Development Stage Company)
BALANCE SHEET
<TABLE>
<CAPTION>
(Unaudited)
December 31, June 30,
1996 1996
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,282,866 $ 2,942,871
Other current assets 49,026 41,269
------------ ------------
1,331,892 2,984,140
------------ ------------
EQUIPMENT
Equipment 352,171 268,058
Leasehold Improvements 15,000 15,000
------------ ------------
367,171 283,058
Less:accumulated depreciation (108,251) (78,657)
------------ ------------
258,920 204,401
OTHER ASSETS
License agreement, at cost, less amortization 2,208,446 2,320,334
Organization expenses, at cost, less amortization 188 4,675
------------ ------------
2,208,634 2,325,009
------------ ------------
TOTAL ASSETS $ 3,799,446 $ 5,513,550
============ ============
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
CURRENT LIABILITIES
Short term debt $ 15,048 $ 24,455
Accounts Payable 149,030 114,934
Accrued Expenses:
Spectrum Diagnostics Inc. obligations 45,151 53,637
Other 12,964 0
------------ ------------
Total Current Liabilites 234,193 193,026
------------ ------------
LONG-TERM OBLIGATIONS
Minimum Royalty Commitment 75,000 37,500
------------ ------------
STOCKHOLDERS EQUITY (DEFICIT)
Common stock, $.01 par value;
authorized 90,000,000 shares
issued and outstanding 47,365,759
shares at December 31, 1996; and
46,900,759 at June 30, 1996 $ 473,658 $ 469,008
Additional paid-in capital 15,408,146 15,296,856
Subscription Receivable (57,500) 0
Deficit accumulated during the development stage (12,322,051) (10,482,840)
------------ ------------
Total Stockholders Equity 3,490,253 5,283,024
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 3,799,446 $ 5,513,550
============ ============
</TABLE>
<PAGE>
QUANTECH LTD.
(A Development Stage Company)
STATEMENT OF OPERATIONS-UNAUDITED
<TABLE>
<CAPTION>
Three months Three months
Ended Ended
December 31, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Interest Income $ 26,540 $ 11,176
------------ ------------
Expenses:
General & Administrative 367,170 420,074
Research and development 700,581 217,557
Sales and Marketing 70,424 -
Minimum royalty expense 18,750 43,750
Loses resulting from transactions
with Spectrum Diagnostics Inc. - -
Net exchange (gain) - -
Financing 2,029 51,757
------------ ------------
1,158,954 733,138
------------ ------------
Loss before income taxes (1,132,414) (721,962)
Income taxes - -
------------ ------------
Net loss $ (1,132,414) $ (721,962)
============ ============
Loss per common share $ (0.02) $ (0.03)
Weighted average common shares
outstanding 47,119,129 28,727,176
</TABLE>
<PAGE>
QUANTECH LTD.
(A Development Stage Company)
STATEMENT OF OPERATIONS-UNAUDITED
<TABLE>
<CAPTION>
Period From
September 30,
1991
Six months Six months (Date 0f
Ended Ended Inception), to
December 31, December 31, December 31,
1996 1995 1996
------------ ------------- --------------
<S> <C> <C> <C>
Interest Income $ 61,232 $ 12,327 $ 151,159
------------ ------------- --------------
Expenses:
General & Administrative 724,664 648,737 6,866,135
Research and development 1,063,413 453,291 3,594,532
Sales and Marketing 70,424 70,424
Minimum royalty expense 37,500 87,500 925,000
Loses resulting from transactions
with Spectrum Diagnostics Inc. - - 556,150
Net exchange (gain) - - (67,172)
Financing 4,442 102,828 485,546
------------ ------------- --------------
1,900,443 1,292,356 12,430,615
------------ ------------- --------------
Loss before income taxes (1,839,211) (1,280,029) (12,279,456)
Income taxes - - 42,595
------------ ------------- --------------
Net loss $ (1,839,211) $ (1,280,029) $ (12,322,051)
============ ============= ==============
Loss per common share $ (0.04) $ (0.07)
Weighted average common shares
outstanding 47,010,487 18,400,213
</TABLE>
<PAGE>
QUANTECH LTD
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY-UNAUDITED
Period From September 30, 1991 (date of Inception), to December 31, 1996
<TABLE>
<CAPTION>
Deficit
Accumulated
During
Par Additional the Paid for Due Cumulative
Shares Value Paid-In Development Subscriptions Not From Translation
Issued Amount Capital Stage Receivable Issued Officers Adjustment
---------- ---------- ---------- ---------- ----------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at Inception
Net Loss ($3,475,608)
Common stock transactions:
Common stock issued,
October 1991 3,200,000 $3,154,574
Common stock issued,
November 1991 600,000 $611,746 $1,788,254
Common stock issuance costs ($889,849)
Cumulative translation adjustment $387,754
Common stock issued,
September 1992 700,000 $699,033 $875,967 ($53,689)
Common stock issuance costs ($312,755)
Common stock to be issued $120,000
Cumulative translation adjustment ($209,099)
Elimination of cumulative
translation adjustment ($178,655)
Officers advances, net ($27,433)
---------- ---------- ---------- ---------- ----------- -------- -------- -----------
Balance, December 31, 1992 4,500,000 $4,465,353 $1,461,617 ($3,475,608) ($53,689) $120,000 ($27,433) $0
Net loss ($996,089)
Common stock transactions:
Common stock issued,
January 1993 160,000 $1,600 $118,400 ($120,000)
Common stock issued,
April 1993 30,000 $300 $11,700
Change in common stock par
value resulting from merger
Change in common stock par
value resulting from merger ($4,420,353) $4,420,353
Repayments $5,137
---------- ---------- ---------- ---------- ----------- -------- -------- -----------
Balance,June 30, 1993 4,690,000 $46,900 $6,012,070 ($4,471,697) ($53,689) $0 ($22,296) $0
Net loss ($1,543,888)
240,000 shares of common
stock to be issued $30,000
Repayments $53,689 $22,296
---------- ---------- ---------- ---------- ----------- -------- -------- -----------
Balance, June 30, 1994 4,690,000 $46,900 $6,012,070 ($6,015,585) $0 $30,000 $0 $0
Net loss ($2,070,292)
Common stock issued, June 1995 2,150,000 $21,500 $276,068 ($20,000) ($30,000)
Warrants issued for services $40,200
---------- ---------- ---------- ---------- ----------- -------- -------- -----------
Balance June 30, 1995 6,840,000 $68,400 $6,328,338 ($8,085,877) ($20,000) $0 $0 $0
Common stock issued, net of
issuance costs of $848,877:
July, 1995 6,160,000 $61,600 $1,304,450
August, 1995 717,600 $7,176 $161,460
September, 1995 13,807,296 $138,073 $2,370,389
November, 1995 1,897,840 $18,978 $425,482
December, 1995 11,217,157 $112,172 $1,292,473
May, 1996 6,275,000 $62,750 $3,300,422
June, 1996 5,058 $51 $3,650
Payments received on
subscription receivable (19,192) ($192) ($14,808) $20,000
Compensation expense recorded
on stock options $125,000
Net loss ($2,396,963)
---------- ---------- ---------- ---------- ----------- -------- -------- -----------
Balance, June 30, 1996 46,900,759 $469,008 $15,296,856 ($10,482,840) $0 $0 $0 $0
Stock offering costs ($12,310)
Common stock issued upon
exercise of options and
warrants
September 1996 10,000 $100 $2,400
October 1996 170,000 $1,700 $40,800
November 1996 15,000 $150 $3,600
December 1996 270,000 $2,700 $64,800 ($57,500)
Compensation expense recorded
on stock options $12,000
Net loss ($1,839,211)
---------- ---------- ---------- ---------- ----------- -------- -------- -----------
Balance, December 31, 1996
(Unaudited) 47,365,759 $473,658 $15,396,146 ($12,322,051) ($57,500) $0 $0 $0
========== ========== ========== ========== =========== ======== ======== ===========
</TABLE>
<PAGE>
QUANTECH LTD
(A Development Stage Company)
STATEMENTS OF CASH FLOWS - UNAUDITED
<TABLE>
<CAPTION>
Period From
September 30,
Six Six 1991
Months Months (Date of
ended ended Inception), to
December 31, December 31, December 31,
1996 1995 1996
------------ ------------- --------------
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net Loss $ (1,839,211) $ (1,280,029) $(12,322,051)
Adjustments to reconcile net loss to
net cash used in operating activities:
Elimination of cumulative translation adjustment -- -- (178,655)
Depreciation 29,594 16,123 154,605
Amortization 116,375 119,463 1,244,654
Noncash compensation and interest 12,000 125,000 501,250
Losses resulting from transactions with
Spectrum Diagnostics Inc. -- -- 556,150
Write down of investment -- -- 67,500
Change in assets and liabilities, net of
effects from purchase of Spectrum
Diagnostics Inc.:
(Increase) decrease in prepaid expenses (7,757) 16,118 27,411
Increase (decrease)in accounts payable 34,096 (594,396) 147,475
Increase (decrease) in accrued expenses 41,978 (194,830) 407,239
------------ ------------- --------------
Net cash used in operating activities (1,612,925) (1,792,551) (9,394,422)
------------ ------------- --------------
Cash Flows From Investing Activities
Purchase of property and equipment (84,113) (108,408) (406,554)
Organization expenses -- -- (97,547)
Officer advances -- -- (109,462)
Purchase of investment -- -- (225,000)
Purchase of license agreement -- -- (1,950,000)
Advances to Spectrum Diagnostics, Inc. -- -- (320,297)
Prepaid securities issuance costs -- -- (22,943)
Purchase of Spectrum Diagnostics, Inc., net -- -- --
of cash and cash equivalents acquired -- -- (1,204,500)
------------ ------------- --------------
Net cash used in investing activities (84,113) (108,408) (4,336,303)
------------ ------------- --------------
Cash Flows From Financing Activities
Net proceeds from the sale of common stock $ 53,750 $ 3,312,952 $ 12,661,986
Proceeds on debt obligations -- -- 2,658,435
Payments received on stock subscription
received 5,000 -- 10,000
Stock offering costs (12,310) -- (12,310)
Payments on debt obligations (9,407) (342,797) (507,762)
------------ ------------- --------------
Net cash provided by financing activities 37,033 2,970,155 14,810,349
------------ ------------- --------------
Effect of Exchange Rate Changes on Cash -- -- 203,242
------------ ------------- --------------
Net decrease in cash (1,660,005) 1,069,196 1,282,866
Cash
Beginning 2,942,871 4,276 --
------------ ------------- --------------
Ending $ 1,282,866 $ 1,073,472 $ 1,282,866
============ ============= ==============
</TABLE>
<PAGE>
QUANTECH LTD.
( A Development Stage Company )
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 1. BASIS OF PRESENTATION
In the opinion of the management of the Company, the accompanying unaudited
financial statements contain all adjustments (consisting of only normal,
recurring adjustments) necessary to present fairly the financial position of the
Company as of December 31, 1996 and the results of operations and its cash flows
for the three month and six month periods ended December 31, 1996 and 1995. The
results of operations for any interim period are not necessarily indicative of
the results for the year. These interim financial statements should be read in
conjunction with the Company's annual financial statements and related notes in
the Company's Annual Report on Form 10-KSB for the year ended June 30, 1996.
Note 2. LICENSE AGREEMENT
The Company has a license agreement for certain patents, proprietary information
and associated hardware related to SPR technology. The license calls for an
ongoing royalty of 6 percent on all products utilizing the SPR technology which
are sold by the Company. In addition, if the Company sublicenses the technology,
the Company will pay a royalty of 15 percent of all revenues received by the
Company under any sublicense. If the cumulative payments of these two royalties
fail to reach at least $1,000,000 by December 31, 1997, the licensor has the
right to deprive the Company of its exclusive rights under the license
agreement. As of December 31, 1996 the Company has paid $850,000 of the
cumulative royalty payments. The Company has also ratably accrued additional
minimum royalty payments of $75,000 as of December 31, 1996, because sales or
sublicense revenues through December 31, 1997 may not be adequate to meet the
cumulative minimum royalty payments. The Company intends to accrue the entire
$150,000 by December 31, 1997.
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
History
Quantech Ltd. ("Quantech" or the "Company") was formed under the laws
of Minnesota for the purpose of effecting the change of domicile of Spectrum
Diagnostics S.p.A ("SDS") from Italy to the state of Minnesota through the
merger with SDS on April 14, 1993. Quantech had no operations prior to the
merger and is continuing the business of SDS to commercialize Surface Plasmon
Resonance ("SPR") technology licensed from Ares-Serono. SPR, the core technology
of Quantech's proposed medical diagnostic system, enables the Company to
integrate the existing diagnostic methodologies of immunoassays, DNA probes and
chemical binding into a single, simple economical system in order to provide
rapid, quantitative, diagnostic results. The Quantech system configuration
consists of a small, bench top instrument and a series of disposables each
offering a particular test or series of tests. It is anticipated that the
Quantech system will have the ability to analyze body fluids (e.g. whole blood,
urine, saliva) without preparation or addition of reagents. The Company's
initial focus is to develop its SPR instrument for Critical Care Units of
hospitals; initially for the emergency department. Its first test will aid
physicians in assessing whether a patient has suffered a heart attack, with
additional disposable tests being introduced after the initial introduction of
the Quantech system.
Quantech is a development stage company which has suffered losses from
operations and will require additional financing to commercialize its product.
The Company's product development must be completed, FDA approval obtained, the
product introduced to the market and ultimately Quantech will need to
successfully attain profitable operations. These factors raise substantial doubt
about the Company's ability to continue as a going concern.
Results of Operations
The Company has incurred a net loss of $12,322,051 from September 30,
1991 (date of inception) through December 31, 1996 due to expenses related to
formation and operation of SDS in Italy, continuing costs of raising capital,
normal expenses of operating over an extended period of time, funds applied to
research and development, royalty payments related to the SPR technology, losses
due to expenses of Quantech's predecessor, Spectrum Diagnostics Inc. and
interest on borrowed funds. In addition, an investment of $3,356,629 was made
when Quantech purchased the exclusive rights to the SPR technology.
For the three and six months ended December 31, 1996 the Company had
interest income of $26,540 and $61,232, respectively, compared to $11,176 and
$12,327, respectively, for the same periods in 1995 as a result of a greater
amount of cash on hand obtained from Quantech's fiscal 1996 private placement of
securities. General and administration expenses decreased from $420,074 for the
three months ended December 31, 1995 to $367,170 for such three months ended
December 31, 1996. This decrease was primarily a result of reductions in
professional and consulting fees exceeding increases in salaries, as a result of
additions of employees, and public relations expenditures. The Company has also
been able to lower or maintain other general and administrative expenses even
though it has added to its staff. General and administration expenses increased
from $648,737 for the six months ended December 31, 1995 to $724,664 for such
six months ended December 31, 1996. This increase was in part a result of adding
general and administration personnel and other costs associated with Quantech
continuing to build its infrastructure in anticipation of commercial production
of its system. A significant portion of the increase was also attributable to
increased public relations expenditures as the Company incurred costs for its
annual meeting of shareholders, including its annual report, prospectus for
selling shareholders and investor packages requested by potential shareholders
and brokers. General and administration expenses are anticipated to increase in
the future when the Company nears market introduction of, and begins to sell,
its system.
<PAGE>
Research and development costs increased from $217,557 and $453,291 in
the three and six months ended December 31, 1995, respectively, to $700,581 and
$1,063,413 in the same respective periods of 1996. These increases are a result
of accelerated research and development activity including hiring of employees
and consultants, chemistry supplies and engaging firms to perform contract
development work, including design engineering on Quantech's disposable and
instrument. It is expected that research and development expenditures will
continue to increase in the future as Quantech completes development of its
system, begins work on additional disposable tests for its system and maintains
a level of activity to continually improve and advance the Company's technology
and testing system.
The Company, for the three months ended December 31, 1996 incurred
sales and marketing expenses of $70,424. There are no comparative periods for
such sales and marketing expenditures as the Company established its marketing
activity in the quarter ended December 31, 1996. Marketing activity in such
period consisted of market research, including conducting client focus groups,
creating specifications pertaining to user interface software and integrating
user requirements into the test disposable and instrument designs. The Company
anticipates sales and marketing expenses to increase substantially as it nears
product introduction and begins system sales.
Minimum royalty expense decreased in the three and six months ended
December 31, 1996 as compared to the same 1995 periods as a result of the
declining minimum royalties owed under Quantech's license with Ares-Serono.
For the three and six months ended December 31, 1996 Quantech had a
loss of $1,132,414 and $1,839,211, respectively, as compared to $721,962 and
$1,280,029, respectively, for the same periods ended December 31, 1995. These
increases were substantially the result of the rise in research and development
expenses and the beginning of sales and marketing expenditures in the three
month period ended December 31, 1996 exceeding decreases in such periods in
minimum royalty and financing expenses and the increase in interest income.
In the three and six months ended December 31, 1996, the Company has
continued to contract for the development and design of its prototype instrument
and disposable and their manufacture; continued to develop the chemistries
necessary to do specific tests and reevaluated the development and quality of
its coated grating component of its disposable. Quantech has established final
specifications and quality requirements for this coated grating component and
identified multiple sources of manufacturing for such component. Management
anticipates that the Company will be able to submit its system to the FDA for
approval by the summer of 1997 and will introduce its product into the United
States after receiving such FDA approval. This timetable will be influenced by
the Company's ability to complete prototype development of its system and
necessary testing for submission of its FDA filing and delays it may encounter
with the FDA in its review of the system.
Liquidity and Capital Resources
From inception to December 31, 1996, Quantech has raised approximately
$15.5 million through a combination of public stock sales, private stock sales
and debt obligations. Additional funds of at least $15 million will be needed to
significantly expand sales and marketing activity, including establishing a
sales force once development of the Company's product is completed, to establish
manufacturing capabilities, to fund inventory and accounts receivable and to
increase the Company's overall infrastructure (the "Launch Financing"). Although
current funds are expected to allow the Company to submit its system to the FDA
for approval, Quantech does not have sufficient funds to commence commercial
production of its system or begin sales. As a result, if Quantech does not
complete its Launch Financing by May of 1997, it will require funds to maintain
operations while it waits for FDA approval and to continue its final product
commercialization and initial marketing activity. Although the Company has a
limited lending arrangement with its bank, it does not anticipate receiving
significant funding from commercial lenders. Quantech is currently reviewing
multiple avenues of future funding including a secondary offering of securities,
private sale of equity or debt with equity features or arrangements with
strategic partners. The Company does not have any firm commitments for any such
financing and there can be no assurance that the Company will obtain additional
capital when needed or that additional capital will not have a dilutive effect
on current shareholders.
<PAGE>
Quantech incurred capital expenditures of approximately $84,000 in the
six month period ended December 31, 1996. The Company anticipates significant
capital expenditures in calendar 1997 for laboratory and production equipment
and office expansion as the Company nears product introduction. The timing and
amount of such expenditures will be governed by the Company's development and
market introduction schedules which are subject to change due to a number of
factors including development delays, FDA approval and availability of future
financing. In addition to capital expenditures, the Company has a final minimum
royalty payment of $150,000 due to Ares-Serono on December 31, 1997.
The Company currently has outstanding 47,385,759 shares of Common
Stock. It also has options and warrants outstanding to purchase 16,098,603
additional shares.
Issued But Not Yet Adopted Accounting Standard
In October 1995, the Financial Accounting Standards Board (FASB) issued
Statement No. 123, "Accounting for Stock-Based Compensation", which establishes
financial accounting and reporting standards for stock-based employee
compensation plans. The Company will be required to adopt Statement No. 123 in
fiscal 1997. The Company does not intend to adopt Statement No. 123 in measuring
expense, however, it will present the proforma disclosures and those pro forma
amounts will likely be less than the amounts shown in future statements of
income.
Cautionary Statements
As provided for under the Private Securities Litigation Act of 1995,
the Company wishes to caution investors that the following important factors,
among others, in some cases have affected, and in the future could affect, the
Company's actual results of operations and cause such results to differ
materially from those anticipated in forward-looking statements made in this
document and elsewhere by or on behalf of the Company:
No History of Operations; Development Stage Company; Going Concern Uncertainty
To date, the Company does not have a product ready to be brought to
market and its proposed operations are subject to all of the risks inherent in a
new business enterprise, including completion of commercial development and FDA
approval of its products within reasonable time frames and budget constraints,
lack of marketing experience and lack of production history. The likelihood of
the success of the Company must be considered in light of the expenses,
difficulties and delays frequently encountered in connection with the start-up
of new businesses, and specifically those historically encountered by Quantech,
the development of a new product and the competitive environment in which the
Company will operate. The report of the independent auditors on the Company's
financial Statements for the period ended June 30, 1996, includes an explanatory
paragraph relating to the uncertainty of the Company's ability to continue as a
going concern. The Company is a development stage company which has suffered
losses from operations, requires additional financing, and ultimately needs to
successfully attain profitable operations. These factors raise substantial doubt
about the Company's ability to continue as a going concern. There can be no
assurance that the Company will be able to develop a commercially viable product
or marketing system or attain profitable operations.
Future Capital Needs
The Company does not have sufficient funds to commence commercial
production and sales of its system as provided above in "Management's Discussion
and Analysis or Plan of Operation - Liquidity and Capital Resources". The
Company's ability to begin commercial production and sales of its system will
depend upon the continued availability of investment capital, funding made by
strategic partner(s) or licensing revenues, until the revenues from sale of the
instruments and associated test disposables are sufficient to maintain
operations. Additional funds may have to be raised through equity or debt
financing which could dilute current shareholders. If funding is not available
when needed, the Company may be forced to cease operations and abandon its
business. In such event, Company shareholders could lose their entire investment
Other Factors
As described in the Company's Form 10-KSB for the year ended June 30,
1996 under Cautionary Statements and Prospectus dated September 12, 1996 under
Risk Factors, there are additional factors concerning the Company that should be
considered including: uncertainty of market acceptance of Quantech's product
once introduced, inability or delay in , effects of government regulation on
product and its sale, ability to manufacture product, exposure to the risk of
product liability and market for the Company's shares.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual meeting on November 25, 1996, in
Minneapolis, Minnesota. The Company solicited proxies and filed a
definitive proxy statement with the Securities and Exchange Commission
pursuant to Regulation 14A of the Securities Act of 1934, as amended..
The matters voted upon at the meeting and the votes cast were as
follows:
No. 1 Election of Mr. Robert Case as class 1 director Votes for - 28,817,762
Votes Withheld - 8,100
No. 2 Amendment to Articles of Incorporation to increase the number of
authorized shares to 120,000,000 shares consisting of 90,000,000 Common
Shares and 30,000,000 undesignated shares Votes for - 27,229,611 Votes
Against - 785,919 Abstain 810,332
Item 5. Other Materially Important Events
Not Applicable
Item 6. Exhibits and Reports on 8-K
a. Exhibits - None
b. Reports on 8-K - None
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.
QUANTECH LTD
/s/ R.H. Joseph Shaw
R.H. Joseph Shaw
President and Chief Executive Officer
/s/ Gregory G. Freitag
Gregory G. Freitag
Chief Financial Officer
Date: February 13, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements contained in the Form 10-QSB for the quarter ended
12/31/96.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 1,282,866
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,331,892
<PP&E> 367,171
<DEPRECIATION> 108,251
<TOTAL-ASSETS> 3,799,446
<CURRENT-LIABILITIES> 234,193
<BONDS> 0
0
0
<COMMON> 473,658
<OTHER-SE> 15,396,146
<TOTAL-LIABILITY-AND-EQUITY> 3,799,446
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,839,211)
<INCOME-TAX> 0
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</TABLE>
