UNITED STATES
                                    SECURITIES AND EXCHANGE COMMISSION
                                            Washington, DC 20549

                                                     FORM 10-Q

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

For the quarterly period ended December 31, 1999.

Commission File Number:                                 0-12661

Exact Name of Registrant as Specified in its Charter:   IMTEC, Inc.

State of Incorporation:                                 Delaware

I.R.S. Employer Identification Number:                  03-0283466

Address of Principal Executive Offices:                 One Imtec Lane
                                                        Bellows Falls, VT  05101

Registrant's Telephone Number:                          802-463-9502



         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 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.

[X] YES   [ ] NO





APPLICABLE ONLY TO CORPORATE ISSUERS:

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date.

         Common shares outstanding as of February 7, 2000,    1,635,313



<PAGE>



IMTEC, INC.

INDEX

                                                                       Page #
Part I   Financial Information

         Item 1   Condensed Financial Statements
                  Condensed Balance Sheets -

                       December 31, 1999 and June 30, 1999              3 - 4

                  Condensed Statements of Operations -
                       Three Months and Six Months Ended
                           December 31, 1999 and 1998                   5

                  Condensed Statements of Cash Flows
                       Three Months and Six Months Ended

                           December 31, 1999 and 1998                   6

                  Notes to Condensed Financial Statements               7 - 10

         Item 2   Management's Discussion and Analysis of

                       Financial Condition and Results of Operations    11 - 13

         Item 3   Quantitative and Qualitative
                       Disclosures about Market Risk                    14

Part II  Other Information                                              15

         Item 4   Submission of Matters to a Vote of
                  Security Holders                                      15

         Item 6   Exhibits and Reports on Form 8-K                      15

         Signatures                                                     16



<PAGE>


                         PART I - FINANCIAL INFORMATION
                    ITEM 1 - CONDENSED FINANCIAL INFORMATION
                                   IMTEC, INC.
                            CONDENSED BALANCE SHEETS

                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                    December 31,            June 30
                                                                     1999                    1999
                                                                   --------                --------
ASSETS

Current assets:
<S>                                                                   <C>                    <C>
     Cash and cash equivalents                                        $107,091               $ 55,260
     Accounts receivable, net of allowance for
         doubtful accounts of $276,600 and
              $260,000 as of December 31, 1999
              and June 30, 1999, respectively                        2,734,125              3,166,970

     Inventories, net                                                2,360,976              2,465,372
     Prepaid expenses and deferred charges                             218,065                143,149
     Deferred  tax asset                                               160,570                160,570
                                                                    ----------             ----------

                  Total current assets                               5,580,827              5,991,321
                                                                   -----------            -----------

Property and equipment - net                                         2,246,821              2,346,727

Construction-in-progress                                             1,811,147                      -

Computer software - net                                                 52,375                 65,987

Other intangibles - net                                              1,833,087              1,683,481
                                                                   -----------            -----------

                                                                   $11,524,257           $ 10,087,516
                                                                     =========              =========

</TABLE>

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


<PAGE>

<TABLE>
<CAPTION>
                         PART I - FINANCIAL INFORMATION
                    ITEM 1 - CONDENSED FINANCIAL INFORMATION
                                   IMTEC, INC.
                      CONDENSED BALANCE SHEETS (CONTINUED)
                                   (Unaudited)

                                                                    December 31,           June 30,
                                                                     1999                   1999
                                                                   --------               ---------
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
<S>                                                                 <C>                    <C>
     Note payable - bank                                            $        -             $  794,253
     Current portion of long-term debt                                 257,155                257,155
     Accounts payable                                                  752,103                750,302
     Income taxes payable                                              141,491                120,989
     Accrued liabilities:
         Salaries and wages                                            123,525                204,503
         Commissions                                                    91,206                 77,376
         Other                                                         502,810                514,328
                                                                   -----------            -----------

                  Total current liabilities                          1,868,290              2,718,906

Long-term capital lease obligation                                   1,811,147                      -
Long-term deferred tax liability                                       119,368                119,368
Long-term debt less current portion                                    158,032                309,291
                                                                    ----------              ---------

                  Total long-term liabilities                        2,088,547                428,659

Stockholders' equity:
     Common stock - $.01 par value;
         authorized 5,000,000 shares; issued and outstanding:
         1,633,013 shares December 31, 1999 and

         1,587,313 shares June 30, 1999                                 16,330                 15,873
     Additional paid-in capital                                      2,725,450              2,599,163
     Retained earnings                                               4,825,640              4,324,915
                                                                   -----------            -----------

                  Total stockholders' equity                         7,567,420              6,939,951
                                                                   -----------            -----------

                                                                  $ 11,524,257           $ 10,087,516
                                                                      ========               ========
</TABLE>
The  accompanying  notes  are an  integral  part of  these  condensed  financial
statements.


<PAGE>
<TABLE>
<CAPTION>
                                  IMTEC, INC.
                         CONDENSED STATEMENTS OF INCOME
                                  (Unaudited)
                                                         Six Months Ended                  Three Months Ended
                                                            December 31,                       December 31,
                                                        1999           1998                1999           1998
                                                        ----           ----                ----           ----
<S>                                                 <C>            <C>                 <C>            <C>
Net sales                                           $7,530,143     $6,212,386          $4,350,309     $3,363,003
Cost of sales                                        4,428,062      3,627,650           2,506,172      1,969,587
                                                    ----------     ----------          ----------      ---------
         Gross profit                                3,102,081      2,584,736           1,844,137      1,393,416

Selling, general and

     administrative expenses                         2,008,398      1,736,273           1,089,886        875,372
Research and development

     expenses                                          259,638        243,417             146,063        121,146
                                                    ----------     ----------          ----------     ----------

         Operating profit                              834,045        605,046             608,188        396,898

Other income (expense):
     Miscellaneous income and other expenses                96          2,918                  70          2,093
     Interest expense                                  (30,539)       (39,236)            (10,837)        (21,758)
                                                    -----------    -----------         -----------     -----------

         Income before income taxes and
              cumulative effect of
                  accounting change                    803,602        568,728             597,421        377,233

Income tax expense                                     302,877        228,654             225,708        152,789
                                                    ----------     ----------          ----------     ----------

Income before cumulative effect of
     accounting change                                 500,725        340,074             371,713        224,444

Cumulative effect of accounting change,
     net of income tax benefit                               0         51,240                   0              0
                                                    ----------     ----------          ----------     ----------
Net income                                          $  500,725     $  288,834          $  371,713     $  224,444
                                                    ==========     ==========          ==========     ==========
Basic net income per common
     share before cumulative
     effect of accounting change                 $         .31  $         .21       $         .23  $         .14
Cumulative effect of accounting change                       -            .03                   -              -
                                                    ----------     ----------          ----------     ----------
Basic net income per common share                $         .31  $         .18       $         .23  $         .14
                                                    ==========     ==========          ==========     ==========
Diluted net income per common share before
     cumulative effect of accounting change      $         .30  $         .20       $         .22  $         .13
Cumulative effect of accounting change                       -            .03                   -              -
                                                    ----------     ----------          ----------     ----------
Diluted net income per common share              $         .30  $         .17       $         .22  $         .13
                                                    ==========     ==========          ==========     ==========
Weighted shares for basic computation                1,592,068      1,586,966           1,596,328      1,587,220
Weighted shares for diluted computation              1,645,785      1,653,491           1,653,741      1,640,693
</TABLE>

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


<PAGE>
<TABLE>
<CAPTION>

                                  IMTEC, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                                                                 Six Months Ended
                                                                                   December 31,
                                                                             1999             1998
                                                                             ----             ----

Cash flows from operating activities:
<S>                                                                         <C>              <C>
   Net Income                                                               $500,725         $288,834
Adjustments to reconcile net income to
   net cash provided by operating activities:
     Depreciation & amortization                                             274,853          285,598
     Cumulative effect of accounting change                                        -           51,240
Increase (decrease) in cash from:

   Accounts receivable                                                       432,854          349,810
   Inventory                                                                 104,396          (65,762)
   Prepaid expenses and other assets                                         (74,916)         (37,686)
   Accounts payable                                                            1,801          154,608
   Income taxes payable                                                         20,502          110,730
   Accrued liabilities                                                       (78,675)        (505,842)
                                                                            --------        ---------
   Net cash provided by (used in )
     operating activities                                                  1,181,540          631,548
Cash flows from investment activities:
   Expenditures for property & equipment,
     computer software and other
     intangible assets                                                      (310,941)        (682,896)
                                                                            ---------       ---------
Cash flows from financing activities:
   Net borrowing under line of credit                                       (794,253)         135,676
   Principal payments on long-term debt                                     (151,259)        (118,066)
   Proceeds from issuance of stock                                           126,744            7,553
                                                                            --------        ---------
   Net cash provided by (used in) finance
     activities                                                             (818,768)          25,163

Net increase (decrease) in cash and cash equivalents                          51,831          (26,203)
Cash and cash equivalents at the beginning of period                          55,260           84,100
                                                                           ---------        ---------
Cash and cash equivalents at the end of period                              $107,091         $ 57,897
                                                                            ========        =========
Supplemental Information Disclosures:
     Interest paid                                                          $ 30,428         $ 39,236
     Income tax paid                                                        $285,629         $116,334

</TABLE>

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


<PAGE>



                                  IMTEC, INC.
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)

1 -      Basis of Presentation

         The financial  information included herein is unaudited:  however, such
information  reflects all  adjustments  (consisting  solely of normal  recurring
adjustments)  which are,  in the  opinion of  management,  necessary  for a fair
statement of results for the interim periods.

         The results of operations  for the six-month  period ended December 31,
1999 are not  necessarily  indicative of the results to be expected for the full
year.

2 -      Newly Adopted Accounting Pronouncement

         In April 1998, the American  Institute of Certified Public  Accountants
issued Statement of Position  ("SOP") 98-5,  "Reporting on the Costs of Start-Up
Activities,"  which  requires that all start-up  activities  and  organizational
costs be expensed as incurred.  SOP 98-5 is effective for fiscal years beginning
after December 15, 1998,  however,  early  adoption is  encouraged.  The Company
adopted this SOP in the fourth quarter of Fiscal 1999. The Company has reflected
the adoption of this standard in the results of operations for the three and six
months ended  December  31, 1998 as though this  standard had been adopted as of
the  beginning of Fiscal  1999.  The  adoption of this  statement  resulted in a
charge of $51,240 (net of an income tax benefit of  $33,609),  which is included
in the Consolidated Statement of Operations as a cumulative effect of accounting
change.  The  cumulative  effect of the adoption of SOP 98-5 is calculated as if
the new statement was adopted as of the beginning of the year.

3 -      Inventories

         Inventories consist of:
                                               December 31,            June 30,
                                                    1999                 1999
                                                    ----                 ----

         Finished products                      $   38,386           $   72,325
         Work in process                           227,972              397,520
         Purchased components                    2,094,618            1,995,527
                                                ----------           ----------
                                                $2,360,976           $2,465,372
                                                ==========           ==========

         Inventory  cost  consisted  of the  cost of  purchased  components  and
supplies, manufacturing labor and manufacturing overhead.


<PAGE>


4 -      Liability for Estimated Product Warranty

         On December  31,  1999 and June 30,  1999,  the  Company  had  provided
$137,000 against future product warranties based on its experience with customer
claims.  Warranty  expenses charged to income amounted to approximately  $34,800
for the six month period ended  December 31, 1999 and $18,700 for the  six-month
period ended December 31, 1998.

5 -      Income per Share

         Basic  income  per share was  computed  by  dividing  net income by the
weighted average number of shares of common stock outstanding during each period
presented.  Dilutive  income per share  reflects  the  effects of the  Company's
outstanding options (using the treasury stock method at the average price during
the period), except where such items would be antidilutive.

         A  reconciliation  of  weighted  average  shares  used  for  the  basic
calculation and that used for the diluted calculation was as follows:

                                                Six months ended December 31,
                                                     1999              1998
                                                     ----              ----
Weighted average shares - Basic                      1,592,068        1,586,966
Dilutive effect of options                              53,717           66,525
                                                     ---------        ---------
Weighted average shares - diluted                    1,645,785        1,653,491
                                                     =========        =========

                                               Three months ended December 31,
                                                     1999              1998
                                                     ----              ----

Weighted average shares - Basic                      1,596,328        1,587,220
Dilutive effect of options                              57,413           53,473
                                                     ---------        ---------
Weighted average shares - diluted                    1,653,741        1,640,693
                                                     =========        =========

         Options  to  purchase  95,200 and  75,700  shares of common  stock were
outstanding  as of  December  31,  1999  and  1998,  respectively,  but were not
included in the  computation of diluted  earnings per share because the options'
exercise  prices were greater than the average  market price of the common stock
and, therefore, their effect would be antidilutive.

6 -      Capital Lease Obligation

         The Company has entered into an agreement to lease a 56,000 square foot
facility  in  Keene,  NH  that  is  currently  under  construction.  During  the
construction  period,  the Company has guaranteed the  developer's  construction
loan.  This lease will be accounted  for as a capital  lease.  Accordingly,  the
Company   has   recognized   an  asset  as   construction-in-progress   and  the
corresponding  long-term  liability  as  a  capital  lease  obligation  for  the
construction costs incurred to-date of $1,811,147.  Total construction costs are
anticipated to be $2,650,000.


<PAGE>


7 -      Segment Information

         The Company has identified two distinct and  reportable  segments:  the
Hardware  and the Media  segments.  The  Company  considers  these two  segments
reportable under the requirements of Statement of Financial Accounting Standards
No. 131,  "Disclosures about Segments of an Enterprise and Related Information,"
criteria  as they are  managed  separately  and the  operating  results  of each
segment are regularly  reviewed and evaluated  separately by the Company's chief
decision-maker.

         The Hardware segment provides  printers,  high-performance  applicators
and laminators of labels for industrial environments. The Media segment provides
the high-performance label material for industrial environments.

         The  following  is  a  summary  of  information   about  the  Company's
operations by segment for the six and three month periods ended December 31:
<TABLE>
<CAPTION>

                                                               Hardware            Media             Total
Six months ended December 31, 1999
<S>                                                          <C>              <C>               <C>
Net sales                                                    $2,343,620       $5,186,523        $7,530,143
Cost of sales                                                 1,301,781        3,126,281         4,428,062
Gross profit                                                  1,041,839        2,060,242         3,102,081
Selling, general & administrative (1)                           617,839        1,390,559         2,008,398
Research & development                                          177,438           82,200           259,638
                                                             ----------       ----------        ----------
Operating income                                               $246,562         $587,483          $834,045

Six months ended December 31, 1998
Net sales                                                    $1,782,509       $4,429,877        $6,212,386
Cost of sales                                                 1,074,370        2,553,280         3,627,650
Gross profit                                                    708,139        1,876,597         2,584,736
Selling, general & administrative (1)                           494,973        1,241,300         1,736,273
Research & development                                          161,074           82,343           243,417
                                                             ----------       ----------        ----------
Operating income                                                $52,092         $552,954          $605,046

(1)      Management allocates general and administrative expenses to the two segments.
</TABLE>

Depreciation  and  amortization  for the  Hardware  and Media  segments  for the
six-month   period  ended   December   31,  1999  were  $51,210  and   $223,643,
respectively, and for the six month period ended December 31, 1998 were $103,317
and $182,281, respectively.


<PAGE>
<TABLE>
<CAPTION>

                                                               Hardware            Media             Total
Three months ended December 31, 1999
<S>                                                          <C>              <C>               <C>
Net sales                                                    $1,555,804       $2,794,505        $4,350,309
Cost of sales                                                   860,433        1,645,739         2,506,172
Gross profit                                                    695,371        1,148,766         1,844,137
Selling, general & administrative (1)                           326,160          763,726         1,089,886
Research & development                                          101,063           45,000           146,063
                                                             ----------       ----------        ----------
Operating income                                               $268,148         $340,040          $608,188

Three months ended December 31, 1998
Net sales                                                    $1,021,583       $2,341,420        $3,363,003
Cost of sales                                                   606,609        1,362,978         1,969,587
Gross profit                                                    414,974          978,442         1,393,416
Selling, general & administrative (1)                           269,770          605,602           875,372
Research & development                                           79,766           41,380           121,146
                                                             ----------       ----------        ----------
Operating income                                                $65,438         $331,460          $396,898

(1)      Management allocates general and administrative expenses to the two segments.
</TABLE>

Depreciation  and  amortization  for the  Hardware  and Media  segments  for the
three-month   period   ended   December  31,  1999  were  $13,433  and  $58,664,
respectively,  and for the  three-month  period  ended  December  31,  1998 were
$51,932 and $91,623, respectively

8 -      Pending sale

         On December 10, 1999, Brady Corporation (Milwaukee,  WI) announced that
they were in talks with  IMTEC,  Inc.  to acquire  the  Company.  Subject to due
diligence, negotiation of a definitive agreement, and other matters, Brady would
acquire the outstanding capital stock of IMTEC, Inc. for $12 per share in a cash
transaction valued at approximately $21 million.

9 -      Acquisition

         During November 1999, the Company  acquired the  manufacturing  rights,
engineering  and inventory for the "Online"  printer/applicator  from Cognitive,
based in Golden,  CO., a division  of Axiohm  Transaction  Solutions,  Inc.  The
purchase price of $263,908 has preliminarily been allocated to Inventory,  Fixed
Assets and $203,292 to Other Intangibles.


<PAGE>


                                   IMTEC, INC.
           ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995

         The statements contained in the following  Management's  Discussion and
Analysis  of  Financial  Condition  and  Results  of  Operations  which  are not
historical are "forward looking statements" within the meaning of Section 27A of
the  Securities  Act of 1933,  as amended,  and  Section  31E of the  Securities
Exchange Act of 1934, as amended. These forward looking statements represent the
Company's present expectations or beliefs concerning future events,  however the
Company cautions that such statements are qualified by important  factors.  Such
factors, could cause actual results to differ materially from those indicated in
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations.

RESULTS OF OPERATIONS

Three Months and Six Months Ended December 31, 1999
as compared to Three Months and Six Months Ended December 31, 1998

         Revenues for the three  months and six months  ended  December 31, 1999
increased  approximately 29.4% and approximately 21.2%,  respectively,  over the
corresponding periods in 1998.

         Revenues from Bar Code labels and printing supplies were $2,794,505 and
$5,186,523  for the three month and six month  periods  ended  December 31, 1999
compared to $2,341,420 and $4,429,877,  respectively,  for the same periods last
year. Bar Code labels and printing supplies represented 64.2% and 68.9% of total
revenue  for the three  month and six month  periods  ended  December  31,  1999
compared to 69.6% and 71.3%, respectively, for the same periods last year.

         Revenues  from  the  sales  of  Industrial   Bar  Code  Equipment  were
$1,555,804 and $2,343,620 for the three and six month periods ended December 31,
1999  compared  to  $1,021,583  and  $1,782,509  for the same  periods  in 1998.
Industrial Bar Code Equipment sales represented 35.8% and 31.1% of total revenue
for the three month and six month  periods  ended  December 31, 1999 compared to
30.4% and 28.7%  respectively  for the same periods last year.  During  November
1999, the Company acquired the manufacturing  rights,  engineering and inventory
for the "Online"  printer/applicator  from  Cognitive,  based in Golden,  CO., a
division of Axiohm Transaction Solutions, Inc. During the quarter ended December
31, 1999,  shipments of this equipment  amounted to 7.6% of all equipment sales,
for the six months ended December 31, 1999, the "Online"  product  accounted for
5.1% of equipment sales. In September, 1999 the Company was awarded a $2 million
purchase  order from  Intermec  Technologies  Corporation  for 216 Model 4420E-1
automated  printer/applicators.  For the  three  and  six  month  periods  ended
December  31,  1999,  this  purchase  order  accounted  for  50.1%  and 36.3% of
equipment shipments, respectively.

         Total   backlog  for  all   products  as  of  December   31,  1999  was
approximately $3,621,253, the majority of which is scheduled to ship by June 30,
2000,   compared  to   approximately   $2,048,580   as  of  December  31,  1998.
Approximately  $1.2  million  of the  current  backlog  is  related to the above
mentioned purchase order.
<PAGE>

     Cost of sales,  as a percentage of net sales,  for the three months and six
months ended  December 31, 1999 were 57.6% and 58.8%, respectively,  compared to
58.6% and 58.4% for the same periods in 1998.

         Selling,  general and  administrative  expenses were $1,089,886 for the
quarter ended December 31, 1999 and $2,008,398 for the six months ended December
31,  1999,  as  compared  to  $875,372  and  $1,736,273,  respectively, for  the
corresponding  periods ended  December 31, 1998.  This increase is the result of
increased Sales and Marketing activity,  increased national service coverage and
the addition of a new Chief Financial Officer.

     Development  and  engineering  expenses for the three months and six months
ended  December  31,  1999 were  $146,063  (3.4% of  sales),  respectively,  and
$259,638 (3.4% of sales) compared to $121,146 (3.6% of sales) and $243,417 (3.9%
of sales), respectively, for the same periods last year.

         The Company's  effective tax rate was  approximately  38% for the three
and six month  periods  ended  December  31,  1999 and 40% for the three and six
month periods ended December 31, 1998,  and is based on the Company's  estimated
effective tax rate for the full year.

         Net income for the three months and six months ended  December 31, 1999
was  $371,713 and  $500,725,  respectively,  compared to $224,444 and  $288,834,
respectively, for the same periods ended December 31, 1998. This increase in net
earnings  is  directly  related  to the  increase  revenues.  In  addition,  the
cumulative  effect of the adoption of SOP 98-5  decreased net income for the six
months  ended  December  31,  1998.  (See  Note  2 of  the  Condensed  Financial
Statements)

         On December 10, 1999, Brady Corporation (Milwaukee,  WI) announced that
they were in talks with  IMTEC,  Inc.  to acquire  the  Company.  Subject to due
diligence, negotiation of a definitive agreement, and other matters, Brady would
acquire the outstanding capital stock of IMTEC, Inc. for $12 per share in a cash
transaction valued at approximately $21 million.


<PAGE>


LIQUIDITY AND CAPITAL RESOURCES:

     As of December 31,  1999,  the  Company's  principal  available  sources of
liquidity  were from  operations  and a $2,000,000  bank line of credit,  all of
which was available as of December 31, 1999.

     Accounts  receivable,  net decreased from $3,166,970 as of June 30, 1999 to
$2,734,125 as of December 31, 1999, a direct result of the increased  efforts at
collection of past due accounts.

     Inventories,  net  decreased  from  $2,465,372  as  of  June  30,  1999  to
$2,360,976 as of December 31, 1999.

         The Company's capital commitments for fiscal 2000 are expected to be at
the same level as fiscal  1999.  The Company has entered  into an  agreement  to
lease a 56,000  square  foot  facility  in  Keene,  NH that is  currently  under
construction.  During the  construction  period,  the Company has guaranteed the
developer's  construction  loan.  This lease will be accounted  for as a capital
lease.    Accordingly,    the    Company    has    recognized    an   asset   as
construction-in-progress  and the corresponding long-term liability as a capital
lease  obligation for the  construction  costs  incurred  to-date of $1,811,147.
Total construction costs are anticipated to be $2,650,000.

         The  Company  believes  that it will be able to offset  the  effects of
inflation by selected price  increases in its products,  although it can give no
assurances in this regard.

     The Company  anticipates  that cash flows from  operations,  together  with
current cash balances and funds  available  under the Company's  line of credit,
will be sufficient to meet the Company's  working capital and capital  equipment
expenditure requirements for the foreseeable future.

Recent Accounting Pronouncements

     In April 1998,  the  American  Institute of  Certified  Public  Accountants
issued Statement of Position  ("SOP") 98-5,  "Reporting on the Costs of Start-Up
Activities,"  which  requires that all start-up  activities  and  organizational
costs be expensed as incurred.  SOP 98-5 is effective for fiscal years beginning
after December 15, 1998,  however,  early  adoption is  encouraged.  The Company
adopted this SOP in the fourth quarter of Fiscal 1999. The Company has reflected
the adoption of this standard in the results of operations for the three and six
months ended  December  31, 1998 as though this  standard had been adopted as of
the  beginning of Fiscal  1999.  The  adoption of this  statement  resulted in a
charge of $51,240 (net of an income tax benefit of  $33,609),  which is included
in the Consolidated Statement of Operations as a cumulative effect of accounting
change.  The  cumulative  effect of the adoption of SOP 98-5 is calculated as if
the new statement was adopted as of the beginning of the year.


<PAGE>


     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  (SFAS) No.  133,  "Accounting  for  Derivative
Instruments  and Hedging  Activities,"  subsequently  amended in June 1999,  and
effective for fiscal years, including fiscal quarters,  beginning after June 15,
2000. SFAS No. 133 establishes accounting and reporting standards for derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts and for hedging activities.  It requires that an entity recognizes all
derivatives  as either assets or  liabilities  in the balance sheet and measures
those  instruments  at fair value.  The  Company  will adopt SFAS No. 133 in the
first quarter of fiscal 2001. The Company is currently analyzing the impact this
statement will have on its financial statements.

Year 2000

     The Company has reviewed the issue of Year 2000.  All of the  manufacturing
and  accounting  software has been brought into  compliance,  effective June 16,
1998.  There are  neither  internal  clocks  nor  dating  mechanisms  within the
Company's  products  that would be effected by  changing  dates.  The Company is
confident  that its products and services will continue  uninterrupted  into the
new millennium. No material additional costs are anticipated at this time.

         The Company's  contingency  plan in the event other  parties  should be
unable to  provide  Year 2000  compliant  electronic  data is to revert to paper
documentation from these parties. However, to the extent that customers, vendors
or other  entities  with which the Company  has  material  relationships  do not
adequately  address  Year 2000  issues,  the Company  could  experience  payment
delays.

         To date the  Company  has not  experienced  any  significant  Year 2000
issues.  The Company will  continue to monitor Year 2000 issues  throughout  the
calendar year.


Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The  Company's  outstanding  short-term  debt at  December  31,  1999 bears
interest at variable rates; therefore, the Company's results of operations would
be  affected by interest  rate  changes to the extent of the notes  outstanding.
There were no notes  outstanding  at December  31,  1999.  Due to the short term
nature,  an  immediate  10 percent  change in  interest  rates  would not have a
material  effect on the  Company's  results of  operations  over the next fiscal
year.


<PAGE>


PART II - OTHER INFORMATION
Item 1 - Legal Proceedings

         None

Item 2 - Changes in Securities

         Not applicable

Item 3 - Defaults upon Senior Securities

         None

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

         A.       November 1, 1999 - Annual Meeting of Stockholders
         B.       Election of Directors - all nominees elected

Item 5 - Other Information

         None

Item 6 - Exhibits and Reports on Form 8-K

         Exhibit 27 - Financial Data Schedule

         The Company filed no reports on form 8-K during the quarter




<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 hereunto duly authorized.

                           IMTEC, INC.






                  BY:____/s/ Steven D. Anton____________
                         -------------------
                           Steven D. Anton
                           President & Chief Executive Officer

                  BY:___/s/ George S. Norfleet III_________
                        --------------------------
                           George S. Norfleet III
                           Secretary / Treasurer