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: June 30, 2000
                                      -------------

                                       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 July 31, 2000,  the issuer had 1,852,209  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)

                                                                    June 30,
                                                                      2000
                                                                    --------
ASSETS

Current assets:
   Cash and cash equivalents                                        $ 6,967
   Short-term investments                                             6,498
   Prepaid expenses and other                                           135
                                                                    -------
        Total assets                                                $13,600
                                                                    =======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                 $    14
   Accrued liabilities                                                  162
                                                                    -------
        Total liabilities                                               176
                                                                    -------

Stockholders' equity:
   Preferred stock, $.002 par value,
     2,000,000 shares authorized,
     none issued                                                          -
   Common stock, $.002 par value, 5,000,000
     shares authorized, 1,852,209 shares
     issued and outstanding                                               4
   Additional paid-in capital                                        99,830
   Accumulated deficit                                             ( 86,410)
                                                                    -------

        Total stockholders' equity                                   13,424
                                                                     ------
        Total liabilities and
          stockholders' equity                                      $13,600
                                                                    =======
















                 See accompanying notes to financial statements.

                                        2


<PAGE>



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

                                                            Three Months Ended
                                                                  June 30 ,
                                                            ------------------
                                                             2000        1999
                                                            ------      ------

Revenues:
  Interest income                                          $   170     $   127
  Gain on disposition
    of property and equipment                                    -          64
  License income (Note 2)                                        -       2,000
  Other income (Note 3)                                         96          15
                                                           -------     -------
     Total revenues                                            266       2,206
                                                           -------     -------

Expenses:
  General and administrative                                    95         146
                                                           -------     -------

Income before income taxes                                     171       2,060
Provision for income taxes                                       8         218
                                                           -------     -------
Net income                                                 $   163     $ 1,842
                                                           =======     =======

Basic and fully diluted net
  income per share                                         $   .09     $   .99
                                                           =======     =======

Weighted average common shares
  outstanding (in 000's)                                     1,852       1,852
                                                           =======     =======




























                 See accompanying notes to financial statements.

                                        3


<PAGE>



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

                                                             Six Months Ended
                                                                  June 30 ,
                                                             -----------------
                                                              2000       1999
                                                             ------     ------

Revenues:
  Interest income                                           $   375    $   251
  Gain on disposition
    of property and equipment                                     -        310
  License income (Note 2)                                         -      2,000
  Other income (Note 3)                                          96         60
                                                            -------    -------
     Total revenues                                             471      2,621
                                                            -------    -------

Expenses:
  General and administrative                                    228        361
                                                            -------    -------

Income before income taxes                                      243      2,260
Provision for income taxes                                       11        218
                                                            -------    -------
Net income                                                  $   232    $ 2,042
                                                            =======    =======

Basic and fully diluted net
     income per share                                       $   .13    $  1.10
                                                            =======    =======

Weighted average common shares
    outstanding (in 000's)                                    1,852      1,852
                                                            =======    =======




























                 See accompanying notes to financial statements.

                                        4


<PAGE>



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

                                                             Six Months Ended
                                                                  June 30 ,
                                                             -----------------

                                                              2000       1999
                                                             ------     ------

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                               $    232   $  2,042
  Adjustments:
    License income                                                -  (   2,000)
    Gain on disposition of equipment                              -  (     310)
    Change in prepaid expenses and other                         20         71
    Change in accounts payable                            (       3) (     131)
    Change in accrued liabilities                                 -  (     220)
                                                           --------   --------
      Net cash provided by (used in)
        operating activities                                    249  (     548)
                                                           --------   --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sales of property and equipment                   -        310
  License income                                                  -      2,000
  Purchases of short-term investments                     (   6,498)         -
  Maturities of short-term investments                        6,568          -
                                                           --------   --------
      Net cash provided by investing activities                  70      2,310
                                                           --------   --------

Net increase in cash and cash equivalents                       319      1,762
Cash and cash equivalents, beginning of period                6,648     11,597
                                                           --------   --------
Cash and cash equivalents, end of period                   $  6,967   $ 13,359
                                                           ========   ========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW
 INFORMATION:
    Cash paid for taxes                                    $      5   $    200
                                                           ========   ========

























                 See accompanying notes to financial statements.

                                        5


<PAGE>



                                  CORTECH, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.       General
         -------
                  The accompanying  unaudited  financial  statements of Cortech,
         Inc.  ("Cortech" or the  "Company") as of June 30, 2000 and for the six
         months ended June 30, 2000 and 1999  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 generally accepted  accounting  principles 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,  1999 as filed with the
         Securities and Exchange Commission.

                  The  preparation  of financial  statements in conformity  with
         generally accepted  accounting  principles  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.

                  The results of  operations  for the six months  ended June 30,
         2000 and 1999  are not  necessarily  indicative  of the  results  to be
         expected for the entire year or for any other period.

2.       License Income
         --------------
                  In June 1999, the Company finalized an Agreement to license to
         Ono  Pharmaceutical  Co.,  Ltd.  of Osaka Japan  ("Ono") the  worldwide
         rights to an oral elastase inhibitor program on which the two companies
         have been collaborating.  Prior to this Agreement, Ono's rights to this
         technology were limited to the territories of Korea,  Japan,  China and
         Taiwan.  In  connection  with  the  expansion  of Ono's  rights  to the
         technology, Cortech received a $2,000,000 payment less applicable taxes
         both in the  United  States  and  Japan.  Ono  withheld  at the  source
         $200,000  of  withholding  taxes  which they  remitted  directly to the
         Japanese taxing  authorities.  This withholding tax was expensed in the
         accompanying financial statements.

                                        6


<PAGE>



                  If Ono's  studies of the  technology  are  favorable,  Cortech
         could also receive milestone  payments of up to $9.5 million.  Ono also
         agreed to pay Cortech a royalty on sales generated outside the original
         territories on products using Cortech's technology.  Milestone payments
         or  royalties  are not assured and in any event could be expected  only
         after a number of years of continued  evaluation  of the  technology by
         Ono.

3.       Legal Proceedings
         -----------------
                  On February 27,  1998,  a complaint  was filed in the Court of
         Chancery of the State of Delaware,  naming the Company,  the  Company's
         then current directors and BioStar, Inc. as defendants.  The compliant,
         filed by a  stockholder  of the  Company,  claimed to be on behalf of a
         class of all the Company's  stockholders  and the Company and contended
         that the then current directors of the Company breached their fiduciary
         duties to the Company's  stockholder when they unanimously approved the
         proposed  combination with BioStar.  The complaint originally sought to
         enjoin the proposed  combination  with BioStar as well as the operation
         of the Company's stockholder rights plan and sought an order rescinding
         the proposed  combination with BioStar upon its consummation as well as
         compensatory  damages and costs.  The complaint  was amended  following
         termination of the proposed  BioStar merger to seek to force an auction
         of the  Company's  assets and other  relief.  Thereafter,  the  parties
         negotiated  a  settlement  of the claims.  Pursuant to the terms of the
         settlement  a payment in the amount of $235,000  was made to Cortech on
         behalf of  Defendants  by Cortech's  directors  and officers  insurance
         carrier.  On April 6, 2000,  the Court held a hearing and  approved the
         settlement and ordered  Cortech to pay  $129,261.88 in attorney's  fees
         and expenses  from the insurance  proceeds.  There were no objectors to
         the  settlement  and on May 11, 2000 Cortech  received  the  settlement
         payment and paid the attorney's fees and expenses.

4.       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  38% of the  Company's  Common Stock at July 31,
         2000.

5.      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. On  July  18, 2000  a  total  of 180,000  stock
         options  were  issued  to the officers and directors of the Company. On
         August 9, 2000  10,000  stock  options were issued to a newly appointed
         director.

                                        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,  Inc.'s  ("Cortech" or the "Company") 1999 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
-------

     Until 1998, 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
---------------------

     Cortech had net income of $163,000 or $.09 basic and fully  diluted  income
per share and $232,000 or $.13 basic and fully diluted  income per share for the
three and six months ended June 30, 2000 respectively, compared to net income of
$1,842,000  or $.99 basic and fully diluted  income per share and  $2,042,000 or
$1.10  basic and fully  diluted  income per share for the same  periods in 1999,
respectively.

     Interest income was $170,000 and $375,000 in the three and six months ended
June 30,  2000,  respectively,  compared to $127,000  and  $251,000 for the same
periods in 1999,  an increase of $43,000 and $124,000 in the three and six month
periods, respectively. Higher invested balances and higher yields on investments
were the primary reasons for this increase.

     Gains on  disposition  of property and equipment  were $64,000 and $310,000
for the three and six months ended June 30, 1999.

     License  income of  $2,000,000  in the three and six months  ended June 30,
1999  relates to an  agreement  to license to Ono  Pharmaceutical  Co.,  Ltd. of
Osaka, Japan ("Ono") the worldwide rights to an oral elastase inhibitor program.
(See Note 2 of Notes to Financial Statements.)


                                        8


<PAGE>



     Other income in the three and six months ended June 30, 2000 relates to the
settlement of a derivative  action brought on behalf of the Company in which the
Company recovered $96,000 net of court ordered payments. For more information on
the settlement, see Note 3 of Notes to Financial Statements.

     Other  income of $15,000 and $60,000 in the three and six months ended June
30, 1999,  respectively,  relate primarily to the collection of a rental deposit
of  $15,000 in June 1999 and  reimbursement  by one of the  Company's  insurance
carriers of legal fees of $45,000 previously expensed.

     General and administrative  expenses were $95,000 and $228,000 in the three
and six months ended June 30, 2000,  respectively,  and $146,000 and $361,000 in
the same periods in 1999, respectively,  a decrease of $51,000 and $133,000. For
the six  months  ended  June  30,  2000,  general  and  administrative  expenses
consisted of administrative  fees of $90,000;  legal fees of $59,000;  insurance
fees of $30,000 and all other expenses of $49,000. For the six months ended June
30, 1999, general and administrative  expenses consisted of patent related costs
of  $75,000;  legal fees of  $153,000;  insurance  fees of $62,000 and all other
expenses of $71,000.

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

     At  June  30,  2000,   the  Company  had  cash  and  cash   equivalents  of
approximately  $6,967,000.  Cash  equivalents  of  $6,808,000  consisted of U.S.
Treasury  Bills with an original  maturity  of three  months or less with yields
ranging  between  5.460%  and  6.159%.  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.

     Net cash of $249,000  was  provided  by  operating  activities  for the six
months ended June 30,2000  compared to a net use of $548,000 for the same period
in 1999. In 2000,  cash flows from net income of $232,000 was the primary reason
for the cash  provided  by  operations.  In 1999,  cash flows from net income of
$2,042,000  were offset by the gain on  disposition of equipment of $310,000 and
license income of  $2,000,000(classified as investing activities) and a decrease
in  accounts  payable of  $131,000  and a decrease  in  accrued  liabilities  of
$220,000.

     Net cash of $70,000 was provided by investing  activities in the six months
ended  June  30,  2000,  due to  the  purchases  and  maturities  of  short-term
investments.  Net cash of $2,310,000 was provided by investing activities in the
six months  ended June 30, 2000,  due to the sale of property  and  equipment of
$310,000 and license income of $2,000,000.

                                        9


<PAGE>



PART II - OTHER INFORMATION
-------   -----------------

ITEM 4.   Submissions of Matters to a Vote of Security Holders
-------   ----------------------------------------------------

    The Company held its Annual Meeting of Stockholders on May 23, 2000 to elect
one Class III director.  The Company's  Nominee was elected.  The following is a
vote tabulation for the nominee:

               NOMINEE                          FOR                 WITHHELD
               -------                          ---                 --------

         James L. Bicksler, Ph.D.            1,711,682              4,684


ITEM 6.   Exhibits and Reports on Form 8-K
-------   --------------------------------

      a.  Exhibits

             27   Financial Data Schedule for the six months ended June
                  30, 2000

      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: August 10, 2000                       /s/ Sue Ann Itzel
                                            -----------------
                                            Sue Ann Itzel
                                            Treasurer
                                            (Principal Accounting and
                                            Financial Officer)

                                       11