U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF  THE SECURITIES  EXCHANGE
         ACT OF 1934

         For the quarterly period ended: March 31, 2001
                                         --------------

                                       OR

[ ]      TRANSITION REPORT  UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934

                          Commission File No.: 0-20726
                                               -------


                                  Cortech, Inc.
                                  -------------
        (Exact name of small business issuer as specified in its charter)

          Delaware                                      84-0894091
-------------------------------                  -------------------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                      Identification No.)

                376 Main Street, PO Box 74, Bedminster, NJ 07921
                ------------------------------------------------
                    (Address of principal executive offices)

                                 (908) 234-1881
                                 --------------
                           (Issuer's telephone number)

                                       N/A
                                       ---
              (Former name, former address and former fiscal year,
                          if changed since last report)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the issuer was required to file such  reports),  and (2) has
been subject to such filing requirements for the past 90 days.
                                 Yes X   No
                                    ---    ---

     State the number of shares  outstanding of each of the issuer's  classes of
common  equity:  As of April 30, 2001,  the issuer had  1,847,809  shares of its
common stock, par value $.002 per share, outstanding.

     Transitional Small Business Disclosure Format (check one):
                                 Yes   No X
                                    ---  ---

<PAGE>

PART I.  FINANCIAL INFORMATION
------   ---------------------
ITEM 1.  Financial Statements
------   --------------------



                                  CORTECH, INC.
                                  BALANCE SHEET
                                 ($000 Omitted)
                                   (UNAUDITED)

                                                                  March 31,
                                                                    2001
                                                                  ---------
ASSETS
------

Current assets:
   Cash and cash equivalents                                       $ 7,003
   Short-term investments                                            6,706
   Prepaid expenses and other                                           74
                                                                   -------
        Total assets                                               $13,783
                                                                   =======

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities:
   Accounts payable and accrued liabilities                        $   175
                                                                   -------
        Total liabilities                                              175
                                                                   -------

Stockholders' equity:
   Preferred stock, $.002 par value,
     2,000,000 shares authorized,
     none issued                                                         -
   Common stock, $.002 par value, 5,000,000
     shares authorized, 1,847,809 shares
     issued and outstanding                                              4
   Additional paid-in capital                                       99,782
   Accumulated deficit                                            ( 86,178)
                                                                   -------
        Total stockholders' equity                                  13,608
                                                                   -------

        Total liabilities and
          stockholders' equity                                     $13,783
                                                                   =======


                 See accompanying notes to financial statements.

                                       2

<PAGE>


                                  CORTECH, INC.
                            STATEMENTS OF OPERATIONS
                      ($000 Omitted, except per share data)
                                   (UNAUDITED)


                                                          Three Months Ended
                                                               March 31 ,
                                                       ------------------------
                                                       2001                2000
                                                       ----                ----

Revenues:
   Interest income                                    $  192             $  205

Expenses:
   General and administrative                            124                133
                                                      ------             ------

Income before income taxes                                68                 72
Provision for income taxes                                 4                  3
                                                      ------             ------
Net income                                            $   64             $   69
                                                      ======             ======

Basic net income per share                            $  .03             $  .04
                                                      ======             ======

Diluted net income per share                          $  .03             $  .04
                                                      ======             ======

Basic weighted average common shares
   outstanding (in 000's)                              1,857              1,852
                                                      ======             ======

Diluted weighted average common shares
   outstanding (in 000's)                              1,875              1,852
                                                      ======             ======

                 See accompanying notes to financial statements.

                                       3



<PAGE>

                                  CORTECH, INC.
                            STATEMENTS OF CASH FLOWS
                                 ($000 Omitted)
                                   (UNAUDITED)

                                                         Three Months Ended
                                                             March 31,
                                                    -------------------------
                                                     2001               2000
                                                    ------             ------

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                        $   64             $   69
  Adjustments:
     Change in accrued interest on short-term
        investments                                (    95)           (    69)
     Change in prepaid expenses and other assets         7            (    14)
     Change in accounts payable and accrued
        liabilities                                (    32)                10
                                                    ------             ------
       Net cash used in operating activities       (    56)           (     4)
                                                    ------             ------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of common stock                             175                  -
  Repurchase of common stock                       (   223)                 -
                                                    ------             ------
       Net cash used in financing activities       (    48)                 -
                                                    ------             ------

Net decrease in cash and cash equivalents          (   104)           (     4)
Cash and cash equivalents, beginning of period       7,107              6,648
                                                    ------             ------
Cash and cash equivalents, end of period            $7,003             $6,644
                                                    ======             ======


                 See accompanying notes to financial statements.

                                       4



<PAGE>

                                  CORTECH, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.       General
         -------

              The  accompanying  unaudited financial   statements   of  Cortech,
         Inc. ("Cortech"  or  the  "Company") as  of  March 31, 2001 and for the
         three  months  ended  March  31, 2001  and  2000  reflect  all material
         adjustments consisting of only normal recurring adjustments,  which, in
         the  opinion  of  management,  are necessary for a fair presentation of
         results  for  the  interim  periods.  Certain  information and footnote
         disclosures  required  under  accounting principles generally  accepted
         in the United States of America have been condensed or omitted pursuant
         to the rules and regulations of the Securities and Exchange Commission,
         although the Company believes that the disclosures are adequate to make
         the information presented not misleading. These  financial   statements
         should be read in conjunction with  the financial statements and  notes
         thereto included  in the Company's Annual Report on Form 10-KSB for the
         year ended  December 31, 2000 as filed with the Securities and Exchange
         Commission.

              The  preparation  of  financial  statements  in   conformity  with
         accounting  principles  generally  accepted  in  the  United  States of
         America   requires  management  to make  estimates and assumptions that
         affect  the  reported amounts of assets  and liabilities and disclosure
         of contingent  assets and  liabilities  at  the  date of the  financial
         statements  and  the  reported  amounts of revenues and expenses during
         the reporting period. Actual results could differ from those estimates.

              Prior  years'  financial  statements  have  been  reclassified  to
         conform to the current year's presentation.

                  The results of operations for the three months ended March 31,
         2001  and  2000  are  not  necessarily indicative  of the results to be
         expected for the entire year or for any other period.

2.       Related Party Transactions
         --------------------------

              An  administrative  fee  of  $15,000  per  month  is paid to Asset
         Value Fund Limited Partnership("AVF") for management services performed
         for the Company. These services include corporate governance, financial
         management and accounting services.  AVF  is  the  beneficial  owner of
         approximately 39% of the Company's Common Stock at March 31, 2001.

                                       5

<PAGE>

3.       Stock Options
         -------------

              On  June  19,  2000,  the  Board  of  Directors  restored the 1986
         stock  option  plan  and the 1993 equity incentive plan. Both plans had
         been suspended in 1997.  In  2000, 190,000 stock options were issued to
         the officers and directors of the Company. Of the 190,000 stock options
         issued,   75,000  were   incentive  stock  options   and  115,000  were
         non-qualified stock options. On February 22, 2001, 25,000 non-qualified
         stock options were exercised for proceeds of $175,000.

4.       Common Stock
         ------------

              On  October  30,  2000  the  Board  of  Directors approved a stock
         repurchase program authorizing the Company to  repurchase up to 160,000
         shares of its Common Stock at prices deemed favorable from time to time
         in the open market or in privately negotiated  transactions  subject to
         market   conditions,  the   Company's  financial   position  and  other
         considerations. As  of  March  31, 2001, 29,400  shares of Common Stock
         were repurchased for approximately  $223,000.  All  shares  repurchased
         were returned to the status of authorized but unissued shares.

5.       Net Income Per Share
         --------------------

              Basic  net  income  per  share  is computed by dividing net income
         by the weighted-average number of common  shares  outstanding.  Diluted
         net income per share is computed by dividing net income by  the  sum of
         the  weighted-average  number of common  shares  outstanding  plus  the
         dilutive  effect  of  shares  issuable  through  the  exercise of stock
         options.


                                       6

<PAGE>


              The shares used for basic earnings per share and diluted  earnings
         per share are reconciled below (in 000's).

                                                         Three Months Ended
                                                              March 31,
                                                         ------------------
                                                         2001          2000
                                                         ----          ----

         Average shares outstanding
            for basic earnings per share                1,857         1,852

         Dilutive effect of stock options                  18             -
                                                        -----         -----

         Average shares outstanding
            for dilutive earnings per share             1,875         1,852
                                                        =====         =====

6.       Subsequent Event
         ----------------

              On May 14, 2001 the Company announced a 100%  stock  dividend. The
         record date for the stock dividend is May 22, 2001 and the distribution
         date is June 1, 2001.


                                       7

<PAGE>


ITEM 2.  Management's  Discussion  and  Analysis  of  Financial   Condition  and
------   -----------------------------------------------------------------------
         Results of Operations
         ---------------------

     The following  discussion and analysis  should be read in conjunction  with
Cortech's  2000 Annual Report on Form 10-KSB as well as the Company's  financial
statements and notes thereto included elsewhere in this Quarterly Report on Form
10-QSB. When used in this discussion, the word "expects" and similar expressions
are intended to identify forward-looking statements. Such statements are subject
to risks and uncertainties  that could cause actual results to differ materially
from those projected. The forward-looking statements contained herein speak only
as of the date  hereof.  The  Company  expressly  disclaims  any  obligation  or
undertaking to release publicly any updates or revisions to any  forward-looking
statements contained herein to reflect any change in the Company's  expectations
with regard  thereto or any change in events,  conditions  or  circumstances  on
which any such statement is based.

General
-------

     Cortech  operated  as  a  biopharmaceutical   company  whose  research  and
development  efforts  focused  primarily on bradykinin  antagonists and protease
inhibitors.  Those  efforts  produced  a  technology  portfolio  which  may have
potential  therapeutic  application across a broad range of medical  conditions.
Cortech's strategy is to seek collaborative  partners to conduct and fund future
research and development on the components of its portfolio,  although there can
be no assurance  that any particular  agreement  will be completed.  At the same
time, the Company is seeking to redeploy its assets into an operating business.

Results of Operations
---------------------

Revenues
--------

     Cortech had net income of $64,000 or $.03 basic and fully diluted  earnings
per share for the three months  ended March 31, 2001,  compared to net income of
$69,000 or $.04 basic and fully  diluted  earnings per share for the same period
of 2000.

     Interest  income was $192,000 and $205,000 for the three months ended March
31,  2001 and  2000,  respectively,  a  decrease  of  $13,000.  Lower  yields on
investments was the primary reason for the decrease.

                                       8

<PAGE>

Expenses
--------

     General and  administrative  expenses  decreased from $133,000 in the three
months ended March 31, 2000 to $124,000 in the three months ended March 31, 2001
a decrease of $9,000.  For the three months  ended March 31,  2001,  general and
administrative  expenses consisted of administrative fees of $45,000, legal fees
of $30,000,  consulting  fees of $23,000 and all other expenses of $26,000.  For
the three  months  ended March 31,  2000,  general and  administrative  expenses
consisted of administrative  fees of $45,000;  legal fees of $42,000;  insurance
fees of $18,000 and all other expenses of $28,000.

Liquidity and Capital Resources
-------------------------------

     At  March  31,  2001,  the  Company  had  cash  and  cash   equivalents  of
approximately  $7 million.  Cash  equivalents of $6.9 million  consisted of U.S.
Treasury  Bills with an original  maturity  of three  months or less with yields
ranging  between  4.42%  and  4.96%.  Management  believes  its  cash  and  cash
equivalents  are  sufficient for its remaining  business  activities and for the
costs of seeking an acquisition of an operating  business.  The Company also had
short-term   investments   consisting  of  U.S.  Treasury  Bills  with  original
maturities of six months of $6.7 million at March 31, 2001.

     Net cash of $56,000 was used in operations  for the quarter ended March 31,
2001,  compared to net cash used in  operations  of $4,000 for the quarter ended
March 31,  2000.  In 2001,  cash flows from net income of $64,000  offset by the
decrease in accounts payable and accrued liabilities of $32,000 and the increase
in accrued  interest  on  short-term  investments  of $95,000  were the  primary
reasons for the cash used in operations.

     In 2000, cash flows from net income of $69,000 and the increase in accounts
payable  and  accrued  liabilities  of $10,000  were  offset by the  increase in
accrued  interest  on  short-term  investments  of $69,000  and the  increase in
prepaid expenses and other assets of $14,000.

     Net cash of $48,000 was used in financing  activities  in the first quarter
of 2001 due to the  issuance  and  repurchase  of common  stock of $175,000  and
$223,000 respectively.


                                       9

<PAGE>

PART II - OTHER INFORMATION
-------   -----------------
ITEM 1.   Legal Proceedings
------    -----------------

ITEM 6.      Exhibits and Reports on Form 8-K

      a.   Exhibits

               None

      b.   Reports on Form 8-K

             No  reports  on  Form  8-K  were filed during the quarter for which
             this report is being filed.


                                       10

<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.

                                                      CORTECH, INC.
Date: May 14, 2001                                    /s/ Sue Ann Itzel
                                                      ------------------------
                                                      Sue Ann Itzel
                                                      Treasurer
                                                      (Principal  Accounting and
                                                      Financial Officer)


                                       11