<PAGE>
                       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:
March 31, 2002                                           0 - 19957

                                  Quantech Ltd.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

            Minnesota                                         41-1709417
--------------------------------------------------------------------------------
  (State or other jurisdiction                             (I.R.S. Employer
of incorporation or organization)                         identification No.)

                        815 Northwest Parkway, Suite 100
                                 Eagan, MN 55121
--------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip code)

                                 (651)-647-6370
--------------------------------------------------------------------------------
                (Issuer's telephone number, including area code)


--------------------------------------------------------------------------------
              (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 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
                   -----                              -----

         State the number of shares outstanding of each of the issuer's classes
of common equity as of the latest practicable date: 18,666,075 shares of Common
Stock, no par value, as of May 8, 2002.

         Transitional Small Business Disclosure Format:  YES        NO   X
                                                             -----     -----

<PAGE>
        Index

<TABLE>
<CAPTION>
PART I.    FINANCIAL INFORMATION                                                                              Page No.
                                                                                                              --------
<S>                                                                                                           <C>
   Item 1:     Financial Statements:

        Consolidated Balance Sheets as of March 31, 2002 and June 30, 2001                                       3

        Consolidated Statements of Operations for the Three Months and Nine Months
        Ended March 31, 2002 and 2001 and from inception to March 31, 2002                                       4

        Consolidated Statement of Stockholders' Equity from inception
        to March 31, 2002                                                                                        6

        Consolidated Statements of Cash Flows for the Nine Months Ended
        March 31, 2002 and 2001 and from inception to March 31, 2002                                             8

        Notes to Financial Statements                                                                            9

   Item 2:      Management's Discussion and Analysis or Plan of Operation                                        13

PART II.    OTHER INFORMATION                                                                                    17
</TABLE>



                                       2
<PAGE>
                                  QUANTECH LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
                                                                          (UNAUDITED)
                                                                           MARCH 31,       JUNE 30,
ASSETS                                                                       2002           2001
                                                                         ------------    ------------
<S>                                                                      <C>             <C>
CURRENT ASSETS
  Cash and cash equivalents                                              $    321,080    $  2,162,479
  8% demand note receivable from officer                                      148,551         151,963
  Prepaid expenses                                                             30,590          29,376
                                                                         ------------    ------------
Total current assets                                                          500,221       2,343,818
                                                                         ------------    ------------

PROPERTY AND EQUIPMENT
  Equipment                                                                 2,606,217       2,350,964
  Leasehold improvements                                                      119,367          72,059
                                                                         ------------    ------------
                                                                            2,725,584       2,423,023
   Less accumulated depreciation                                           (1,128,168)       (619,183)
                                                                         ------------    ------------
Total property and equipment                                                1,597,416       1,803,840
                                                                         ------------    ------------

OTHER ASSETS
  License agreement, at cost, less amortization (note 2)                    1,510,953       1,755,924
  Patents, net                                                                148,998         128,115
  Deposits                                                                     37,793          37,793
                                                                         ------------    ------------
Total other assets                                                          1,697,744       1,921,832
                                                                         ------------    ------------

TOTAL  ASSETS                                                            $  3,795,381    $  6,069,490
                                                                         ============    ============

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Short term debt (note 8)                                               $  4,320,747    $  1,931,871
  Accounts payable                                                          1,740,614         871,699
  Accrued expenses:
    Payroll and benefits                                                      173,970         203,234
    Interest                                                                    9,640               -
    Current portion of deferred revenue                                       738,412       1,038,412
                                                                         ------------    ------------
Total current liabilities                                                   6,983,383       4,045,216
                                                                         ------------    ------------

DEFERRED REVENUE LESS CURRENT PORTION (NOTE 7)                              2,658,348       3,212,157

STOCKHOLDERS' DEFICIT
  Common stock, no par value; authorized 59,913,000 shares, issued and
   outstanding 18,666,075 shares and 18,583,712 shares,
   at March 31, 2002 and June 30, 2001 respectively                        33,508,613      33,479,786
  Subscriptions receivable                                                     (3,105)         (9,782)
  Additional paid-in capital                                               14,981,342      11,297,626
  Deficit accumulated during the development stage                        (54,333,200)    (45,955,513)
                                                                         ------------    ------------
Total stockholders' deficit                                                (5,846,350)     (1,187,883)
                                                                         ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                              $  3,795,381    $  6,069,490
                                                                         ============    ============
</TABLE>



                                       3
<PAGE>
                                  QUANTECH LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
<TABLE>
<CAPTION>
                                                                                                              PERIOD FROM
                                                                                                              SEPTEMBER 30,
                                                               NINE MONTHS            NINE MONTHS             1991 (DATE OF
                                                                  ENDED                  ENDED               INCEPTION), TO
                                                                MARCH 31,              MARCH 31,                MARCH 31,
                                                                  2002                   2001                     2002
                                                           --------------------   --------------------     --------------------
<S>                                                        <C>                    <C>                      <C>
Net Revenue:
  Product sales                                              $         300,000      $          40,000        $       1,402,495
  Licensing revenue (note 8)                                           553,809                 28,257                  703,240
                                                           --------------------   --------------------     --------------------
TOTAL NET REVENUE                                                      853,809                 68,257                2,105,735
                                                           --------------------   --------------------     --------------------

Expenses:
  General and administrative                                         3,415,220              2,053,834               18,615,005
  Marketing                                                            182,652                822,461                2,699,778
  Research and development                                           5,207,398              6,391,810               25,569,166
  Minimum royalty expense                                                    -                      -                1,300,000
  Minority interest                                                          -               (387,435)                (521,592)
  Other                                                                      -                      -                  488,978
                                                           --------------------   --------------------     --------------------
Total expenses                                                       8,805,270              8,880,670               48,151,335
                                                           --------------------   --------------------     --------------------

LOSS FROM OPERATIONS                                                (7,951,461)            (8,812,413)             (46,045,600)

Other:
  Interest income                                                       26,375                102,565                  367,109
  Interest expense                                                    (452,601)               (27,855)              (2,492,686)
                                                           --------------------   --------------------     --------------------
LOSS BEFORE INCOME TAXES                                            (8,377,687)            (8,737,703)             (48,171,177)

Income taxes                                                                 -                      -                   42,595
                                                           --------------------   --------------------     --------------------
NET LOSS                                                     $      (8,377,687)     $      (8,737,703)       $     (48,213,772)
                                                           ====================   ====================     ====================

Net loss attributable to common shareholders:
   Net loss                                                  $      (8,377,687)     $      (8,737,703)
   Preferred stock accretion                                                 -               (118,249)
   Beneficial conversion feature of preferred stock                          -             (2,470,644)
                                                           --------------------   --------------------
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS                 $      (8,377,687)     $     (11,326,596)
                                                           ====================   ====================

Loss per basic and diluted common share                      $           (0.45)     $           (0.79)
Weighted average common shares
  outstanding                                                       18,617,334             14,340,522
</TABLE>


                                       4
<PAGE>
                                  QUANTECH LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
<TABLE>
<CAPTION>
                                                                          THREE MONTHS            THREE MONTHS
                                                                             ENDED                   ENDED
                                                                            MARCH 31,               MARCH 31,
                                                                              2002                    2001
                                                                       --------------------   ---------------------
<S>                                                                    <C>                    <C>
Net Revenue:
  Product sales                                                          $         300,000      $                -
  Licensing revenue (note 8)                                                       184,603                  28,257
                                                                       --------------------   ---------------------
TOTAL NET REVENUE                                                                  484,603                  28,257
                                                                       --------------------   ---------------------

Expenses:
  General and administrative                                                       970,638                 799,547
  Marketing                                                                         15,673                 346,665
  Research and development                                                       1,074,008               2,577,485
  Minority interest                                                                      -                (157,282)
                                                                       --------------------   ---------------------
Total expenses                                                                   2,060,319               3,566,415
                                                                       --------------------   ---------------------

LOSS FROM OPERATIONS                                                            (1,575,716)             (3,538,158)

Other:
  Interest income                                                                    3,179                  21,696
  Interest expense                                                                (244,151)                 (3,875)
                                                                       --------------------   ---------------------
LOSS BEFORE INCOME TAXES                                                        (1,816,688)             (3,520,337)

Income taxes                                                                             -                       -
                                                                       --------------------   ---------------------
NET LOSS                                                                 $      (1,816,688)     $       (3,520,337)
                                                                       ====================   =====================

Loss per basic and diluted common share                                  $           (0.10)     $            (0.19)
Weighted average common shares
  outstanding                                                                   18,636,790              18,648,112
</TABLE>


                                       5
<PAGE>
                                  QUANTECH LTD
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
      PERIOD FROM SEPTEMBER 30, 1991 (DATE OF INCEPTION), TO MARCH 31, 2002
<TABLE>
<CAPTION>
                                                                  Series B                  Series C               Series D
                                                               Preferred Stock           Preferred Stock        Preferred Stock
                                                           Shares            Amount    Shares        Amount   Shares        Amount
                                                      ------------------------------------------------------------------------------
<S>                                                   <C>                    <C>       <C>           <C>      <C>           <C>
Balance at Inception
 Net Loss for 15 months
 Common stock transactions:
 Common stock issued, October 1991
 Common stock issued, November 1991
 Common stock issuance costs
 Cumulative translation adjustment
 Common stock issued, September 1992
 Common stock issuance costs
 Common stock to be issued
 Cumulative translation adjustment
 Elimination of cumulative
    translation adjustment
 Officers advances, net
                                                      ------------------------------------------------------------------------------
Balance, December 31, 1992                                    0                 $0       0            $0        0            $0
 Net loss
 Common stock transactions:
 Common stock issued, January 1993
 Common stock issued, April 1993
 Change in common stock par
    value resulting from merger
 Repayments
                                                      ------------------------------------------------------------------------------
Balance, June 30, 1993                                        0                 $0       0            $0        0            $0
 Net loss
 240,000 shares of common
    stock to be issued
 Repayments
                                                      ------------------------------------------------------------------------------
Balance, June 30, 1994                                        0                 $0       0            $0        0            $0
 Net loss
 Common stock issued, June 1995
 Warrants issued for services
                                                      ------------------------------------------------------------------------------
Balance June 30, 1995                                         0                 $0       0            $0        0            $0
 Net loss
 Common stock issued, net of
  issuance costs of $848,877:
    July, 1995
    August, 1995
    September, 1995
    November, 1995
    December, 1995
    May, 1996
    June, 1996
 Payments received on
    subscription receivable
 Compensation expense recorded
    on stock options
                                                      ------------------------------------------------------------------------------
Balance, June 30, 1996                                        0                 $0       0            $0        0            $0
 Net loss
 Stock offering costs
 Common stock issued upon exercise
 of options and warrants
    September 1996
    October 1996
    November 1996
    December 1996
    January 1997
    February 1997
    March 1997
 Payments received on
    subscription receivable
 Compensation expense recorded
    on stock options
 Common stock issued, June 1997
 Warrants issued with notes payable
                                                      ------------------------------------------------------------------------------
Balance, June 30, 1997                                        0                 $0       0            $0        0            $0
 Net Loss
 Conversion of common stock from par value
    to no par value
 Common stock issued for license agreement:
    September 1997
 Common stock issued for equipment and
    services received: March 1998
 Warrants issued for services received:
    March 1998
    April 1998
 Warrants issued with notes payable
 Amount attributable to value of debt
    conversion feature
 Warrants issued for license agreement
    December 1997
 Compensation expense recorded
    on stock options
 Adjustment of fractional shares due to 1-for 20
    reverse stock split
                                                      ------------------------------------------------------------------------------
Balance, June 30, 1998                                        0                 $0
 Net Loss
 Warrants issued with notes payable
 Common stock issued upon conversion
    of notes payable:
    July 1998
    September 1998
    October 1998
 Common stock issued upon exercise of
    warrant: August 1998
 Common stock issued for equipment and
    services received:
    July 1998
    August 1998
    September 1998
    December 1998
 Stock options issued for services:
    October 1998
 Compensation expense recorded
    on stock options
<CAPTION>
                                                                                                        DEFICIT
                                                                                                      Accumulated
                                                                                                        During
                                                                                        Additional        the
                                                               Common Stock              Paid-In      Development     Subscriptions
                                                         Shares           Amount         Capital         Stage         Receivable
                                                      ------------------------------------------------------------------------------
<S>                                                   <C>             <C>            <C>             <C>             <C>
Balance at Inception
 Net Loss for 15 months                                                                               ($3,475,608)
 Common stock transactions:
 Common stock issued, October 1991                       160,000        $3,154,574
 Common stock issued, November 1991                       30,000          $611,746     $1,788,254
 Common stock issuance costs                                                            ($889,849)
 Cumulative translation adjustment
 Common stock issued, September 1992                      35,000          $699,033       $875,967                       ($53,689)
 Common stock issuance costs                                                            ($312,755)
 Common stock to be issued
 Cumulative translation adjustment
 Elimination of cumulative
    translation adjustment
 Officers advances, net
                                                      ------------------------------------------------------------------------------
Balance, December 31, 1992                               225,000        $4,465,353     $1,461,617     ($3,475,608)      ($53,689)
 Net loss                                                                                               ($996,089)
 Common stock transactions:
 Common stock issued, January 1993                         8,000            $1,600       $118,400
 Common stock issued, April 1993                           1,500              $300        $11,700
 Change in common stock par
    value resulting from merger                                        ($4,420,353)    $4,420,353
 Repayments
                                                      ------------------------------------------------------------------------------
Balance, June 30, 1993                                   234,500           $46,900     $6,012,070     ($4,471,697)      ($53,689)
 Net loss                                                                                             ($1,543,888)
 240,000 shares of common
    stock to be issued
 Repayments                                                                                                              $53,689
                                                      ------------------------------------------------------------------------------
Balance, June 30, 1994                                   234,500           $46,900     $6,012,070     ($6,015,585)            $0
 Net loss                                                                                             ($2,070,292)
 Common stock issued, June 1995                          107,500           $21,500       $276,068                       ($20,000)
 Warrants issued for services                                                             $40,200
                                                      ------------------------------------------------------------------------------
Balance June 30, 1995                                    342,000           $68,400     $6,328,338     ($8,085,877)      ($20,000)
 Net loss                                                                                             ($2,396,963)
 Common stock issued, net of
  issuance costs of $848,877:
    July, 1995                                           308,000           $61,600     $1,304,450
    August, 1995                                          35,880            $7,176       $161,460
    September, 1995                                      690,364          $138,073     $2,370,389
    November, 1995                                        94,892           $18,978       $425,482
    December, 1995                                       560,857          $112,172     $1,292,473
    May, 1996                                            313,750           $62,750     $3,300,422
    June, 1996                                               252               $51         $3,650
 Payments received on
    subscription receivable                                 (960)             (192)      ($14,808)                       $20,000
 Compensation expense recorded
    on stock options                                                                     $125,000
                                                      ------------------------------------------------------------------------------
Balance, June 30, 1996                                 2,345,035          $469,008    $15,296,856    ($10,482,840)            $0
 Net loss                                                                                             ($3,925,460)
 Stock offering costs                                                                    ($12,310)
 Common stock issued upon exercise
 of options and warrants
    September 1996                                           500              $100         $2,400
    October 1996                                           8,500            $1,700        $40,800
    November 1996                                            750              $150         $3,600
    December 1996                                         13,500            $2,700        $64,800                       ($57,500)
    January 1997                                           1,000              $200         $4,800
    February 1997                                          7,500            $1,500        $17,250
    March 1997                                             7,000            $1,400        $33,600
 Payments received on
    subscription receivable                                                                                              $57,500
 Compensation expense recorded
    on stock options                                                                      $48,000
 Common stock issued, June 1997                           18,250            $3,650       $105,850
 Warrants issued with notes payable                                                          $371
                                                      ------------------------------------------------------------------------------
Balance, June 30, 1997                                 2,402,035          $480,408    $15,606,017    ($14,408,300)            $0
 Net Loss                                                                                             ($3,648,748)
 Conversion of common stock from par value
    to no par value                                                    $15,392,446   ($15,392,446)
 Common stock issued for license agreement:
    September 1997                                       150,000          $390,000
 Common stock issued for equipment and
    services received: March 1998                         13,078           $45,584
 Warrants issued for services received:
    March 1998                                                                            $15,215
    April 1998                                                                               $500
 Warrants issued with notes payable                                                          $939
 Amount attributable to value of debt
    conversion feature                                                                   $988,444
 Warrants issued for license agreement
    December 1997                                                                        $230,000
 Compensation expense recorded
    on stock options                                                                      $28,000
 Adjustment of fractional shares due to 1-for 20
    reverse stock split                                      (73)
                                                      ------------------------------------------------------------------------------
Balance, June 30, 1998                                 2,565,040       $16,308,438     $1,476,669    ($18,057,048)            $0
 Net Loss                                                                                             ($4,289,816)
 Warrants issued with notes payable                                                           $76
 Common stock issued upon conversion
    of notes payable:
    July 1998                                              2,000            $7,060
    September 1998                                         3,400           $12,002
    October 1998                                          25,000           $18,750
 Common stock issued upon exercise of
    warrant: August 1998                                   2,045            $5,114
 Common stock issued for equipment and
    services received:
    July 1998                                              5,714           $20,000
    August 1998                                            9,196           $27,589
    September 1998                                        12,557           $11,318
    December 1998                                          6,078            $5,688
 Stock options issued for services:
    October 1998                                                                          $42,000
 Compensation expense recorded
    on stock options                                                                      $43,000
<CAPTION>
                                                         Paid for         Due        Cumulative
                                                           Not            From      Translation
                                                          Issued        Officers     Adjustment
                                                      -------------------------------------------
<S>                                                   <C>             <C>          <C>
Balance at Inception
 Net Loss for 15 months
 Common stock transactions:
 Common stock issued, October 1991
 Common stock issued, November 1991
 Common stock issuance costs
 Cumulative translation adjustment                                                      $387,754
 Common stock issued, September 1992
 Common stock issuance costs
 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                               $120,000       ($27,433)             $0
 Net loss
 Common stock transactions:
 Common stock issued, January 1993                      ($120,000)
 Common stock issued, April 1993
 Change in common stock par
    value resulting from merger
 Repayments                                                               $5,137
                                                      -------------------------------------------
Balance, June 30, 1993                                         $0       ($22,296)             $0
 Net loss
 240,000 shares of common
    stock to be issued                                    $30,000
 Repayments                                                              $22,296
                                                      -------------------------------------------
Balance, June 30, 1994                                    $30,000             $0              $0
 Net loss
 Common stock issued, June 1995                          ($30,000)
 Warrants issued for services
                                                      -------------------------------------------
Balance June 30, 1995                                          $0             $0              $0
 Net loss
 Common stock issued, net of
  issuance costs of $848,877:
    July, 1995
    August, 1995
    September, 1995
    November, 1995
    December, 1995
    May, 1996
    June, 1996
 Payments received on
    subscription receivable
 Compensation expense recorded
    on stock options
                                                      -------------------------------------------
Balance, June 30, 1996                                         $0             $0              $0
 Net loss
 Stock offering costs
 Common stock issued upon exercise
 of options and warrants
    September 1996
    October 1996
    November 1996
    December 1996
    January 1997
    February 1997
    March 1997
 Payments received on
    subscription receivable
 Compensation expense recorded
    on stock options
 Common stock issued, June 1997
 Warrants issued with notes payable
                                                      -------------------------------------------
Balance, June 30, 1997                                         $0             $0              $0
 Net Loss
 Conversion of common stock from par value
    to no par value
 Common stock issued for license agreement:
    September 1997
 Common stock issued for equipment and
    services received: March 1998
 Warrants issued for services received:
    March 1998
    April 1998
 Warrants issued with notes payable
 Amount attributable to value of debt
    conversion feature
 Warrants issued for license agreement
    December 1997
 Compensation expense recorded
    on stock options
 Adjustment of fractional shares due to 1-for 20
    reverse stock split
                                                      -------------------------------------------
Balance, June 30, 1998                                         $0             $0              $0
 Net Loss
 Warrants issued with notes payable
 Common stock issued upon conversion
    of notes payable:
    July 1998
    September 1998
    October 1998
 Common stock issued upon exercise of
    warrant: August 1998
 Common stock issued for equipment and
    services received:
    July 1998
    August 1998
    September 1998
    December 1998
 Stock options issued for services:
    October 1998
 Compensation expense recorded
    on stock options

</TABLE>

                                       6
<PAGE>
                                  QUANTECH LTD
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
      PERIOD FROM SEPTEMBER 30, 1991 (DATE OF INCEPTION), TO MARCH 31, 2002
<TABLE>
<CAPTION>
                                                                      Series B                          Series C
                                                                   Preferred Stock                   Preferred Stock
                                                               Shares            Amount           Shares         Amount
                                                          ----------------------------------------------------------------------
<S>                                                       <C>              <C>                <C>            <C>
 Common stock issued upon conversion of preferred stock:
     November 1998
     January 1999
     March 1999
     April 1999
 Warrants issued for services:
     November 1998
 Series B Preferred Stock issued:
    June 1999                                                  623,334          $891,500
 Accrete to redemption value on
    Series A Preferred Stock
                                                          ----------------------------------------------------------------------
Balance, June 30, 1999                                         623,334          $891,500              0               $0
 Net Loss
 Series B Preferred Stock issued:
    July 1999                                                  216,666          $291,829
    August 1999                                                 86,667          $116,989
    September 1999                                              16,667           $22,500
    October 1999 - adjust price to $1.00                       471,666
    November 1999                                              100,000          $100,000
    December 1999                                              480,000          $472,500
    January 2000                                               600,000          $425,500
    February 2000                                            1,318,000          $732,755
 Beneficial conversion expense on
    Preferred Stock
 Series C Preferred Stock issued:
    February 2000                                                                             1,000,000         $973,100
 Common stock issued: February 2000
 Common stock issued upon conversion
    of preferred stock:
    July 1999
    August 1999                                                (33,333)         ($50,000)
    September 1999
    October 1999
    December 1999
    January 2000                                              (880,000)        ($880,000)
    February 2000
    March 2000                                                 (75,000)         ($72,500)
    April 2000                                                (180,000)        ($177,000)
    May 2000
   June 2000
 Common stock issued upon exercise
    of warrants:
    September 1999
    February 2000
    March 2000
    May 2000
   June 2000
 Warrants issued:
    September 1999
    November 1999
    January 2000
    February 2000
    March 2000
 Common stock issued upon exercise of options:
    January 2000
    February 2000
   June 2000
 Common stock issued for equipment and
    services received:
    January 2000
    February 2000
 Compensation expense recorded
    on stock options
 Subsidiary stock issued
 Payment received on
    subscriptions receivable
 Accrete to redemption value on
    Series A Preferred Stock
                                                          ----------------------------------------------------------------------
Balance June 30, 2000                                        2,744,667        $1,874,073      1,000,000         $973,100
 Net Loss
 Series D Preferred Stock issued:
    August 2000
    September 2000
    October 2000
 Common stock issued upon conversion of preferred
 stock:
    August 2000
    September 2000                                             (25,000)         ($22,500)
    October 2000                                            (2,719,667)      ($1,851,573)    (1,000,000)       ($973,100)
 Warrants issued:
    August 2000
    September 2000
    October 2000
    November 2000
    December 2000
    April 2001
 Subsidiary stock and warrant issued $156,770 Common
 stock issued:
    October 2000
    November 2000
    December 2000
 Compensation expense recorded
    on stock options
 Common stock issued upon exercise
    of warrants
 Beneficial conversion expense on
    Preferred Stock
 Payment received on
    subscriptions receivable
 Accrete to redemption value on
    Series A Preferred Stock
                                                          ----------------------------------------------------------------------
Balance June 30, 2001                                                0                $0              0               $0
Unaudited:
 Net Loss
 Warrants issued with notes payable
 Amount attributable to value of debt
    conversion feature
 Compensation expense recorded
    on subsidiary stock options
 Warrants issued:
    October 2001
    November 2001
    December 2001
    February 2002
 Common stock issued:
    February 2002
 Subsidiary stock and warrant issued
 Gain on sale of subsidiary stock
 Payment received on
    subscriptions receivable
                                                          ----------------------------------------------------------------------
Balance March 31, 2002                                               0                $0              0               $0
<CAPTION>
                                                                        Series D
                                                                     Preferred Stock                    Common Stock
                                                                  Shares          Amount          Shares            Amount
                                                          ------------------------------------------------------------------
<S>                                                       <C>              <C>              <C>              <C>
 Common stock issued upon conversion of preferred stock:
     November 1998                                                                                 74,052           $55,539
     January 1999                                                                                  15,952           $11,964
     March 1999                                                                                       500              $375
     April 1999                                                                                    20,000           $15,000
 Warrants issued for services:
     November 1998
 Series B Preferred Stock issued:
    June 1999
 Accrete to redemption value on
    Series A Preferred Stock
                                                          ------------------------------------------------------------------
Balance, June 30, 1999                                              0                $0         2,741,534       $16,498,837
 Net Loss
 Series B Preferred Stock issued:
    July 1999
    August 1999
    September 1999
    October 1999 - adjust price to $1.00
    November 1999
    December 1999
    January 2000
    February 2000
 Beneficial conversion expense on
    Preferred Stock
 Series C Preferred Stock issued:
    February 2000
 Common stock issued: February 2000                                                               125,000          $187,500
 Common stock issued upon conversion
    of preferred stock:
    July 1999                                                                                      32,000           $24,000
    August 1999                                                                                   179,121          $159,341
    September 1999                                                                                 80,852           $60,639
    October 1999                                                                                   50,000           $37,500
    December 1999                                                                                  13,252            $9,939
    January 2000                                                                                  890,000          $887,500
    February 2000                                                                                 866,664          $649,998
    March 2000                                                                                     89,000           $83,000
    April 2000                                                                                    226,880          $212,160
    May 2000                                                                                       68,864           $51,648
   June 2000                                                                                       42,824           $32,118
 Common stock issued upon exercise
    of warrants:
    September 1999                                                                                454,545          $500,000
    February 2000                                                                                  24,256           $18,192
    March 2000                                                                                     60,263          $147,835
    May 2000                                                                                       39,708           $67,318
   June 2000                                                                                        7,321            $7,553
 Warrants issued:
    September 1999
    November 1999
    January 2000
    February 2000
    March 2000
 Common stock issued upon exercise of options:
    January 2000                                                                                    2,000            $2,750
    February 2000                                                                                     200              $226
   June 2000                                                                                        7,001            $8,751
 Common stock issued for equipment and
    services received:
    January 2000                                                                                    2,275            $2,276
    February 2000                                                                                 200,856          $310,684
 Compensation expense recorded
    on stock options
 Subsidiary stock issued
 Payment received on
    subscriptions receivable
 Accrete to redemption value on
    Series A Preferred Stock
                                                          ------------------------------------------------------------------
Balance June 30, 2000                                               0                $0         6,204,416       $19,959,765
 Net Loss
 Series D Preferred Stock issued:
    August 2000                                             1,462,400        $2,817,482
    September 2000                                            533,600        $1,123,817
    October 2000                                              933,800        $1,613,840
 Common stock issued upon conversion of preferred
 stock:
    August 2000                                                                                    14,108           $10,581
    September 2000                                                                                 25,000           $22,500
    October 2000                                           (2,929,800)      ($5,555,139)       12,055,063       $12,982,725
 Warrants issued:
    August 2000
    September 2000
    October 2000
    November 2000
    December 2000
    April 2001
 Subsidiary stock and warrant issued $156,770 Common
 stock issued:
    October 2000                                                                                   56,000           $65,371
    November 2000                                                                                 178,000          $366,300
    December 2000                                                                                  50,000           $71,700
 Compensation expense recorded
    on stock options
 Common stock issued upon exercise
    of warrants                                                                                     1,125              $844
 Beneficial conversion expense on
    Preferred Stock
 Payment received on
    subscriptions receivable
 Accrete to redemption value on
    Series A Preferred Stock
                                                          ------------------------------------------------------------------
Balance June 30, 2001                                               0                $0        18,583,712       $33,479,786
Unaudited:
 Net Loss
 Warrants issued with notes payable
 Amount attributable to value of debt
    conversion feature
 Compensation expense recorded
    on subsidiary stock options
 Warrants issued:
    October 2001
    November 2001
    December 2001
    February 2002
 Common stock issued:
    February 2002                                                                                  82,363           $28,827
 Subsidiary stock and warrant issued
 Gain on sale of subsidiary stock
 Payment received on
    subscriptions receivable
                                                          ------------------------------------------------------------------
Balance March 31, 2002                                              0                $0        18,666,075       $33,508,613
<CAPTION>
                                                                               DEFICIT
                                                                             Accumulated
                                                                               During
                                                             Additional          the                           Paid for
                                                              Paid-In        Development   Subscriptions          Not
                                                              Capital           Stage       Receivable          Issued
                                                         ---------------------------------------------------------------
<S>                                                       <C>            <C>             <C>               <C>
 Common stock issued upon conversion of preferred stock:
     November 1998
     January 1999
     March 1999
     April 1999
 Warrants issued for services:
     November 1998                                            $781,000
 Series B Preferred Stock issued:
    June 1999                                                                               ($60,000)
 Accrete to redemption value on
    Series A Preferred Stock                                                  ($377,420)
                                                         ---------------------------------------------------------------
Balance, June 30, 1999                                      $2,342,745     ($22,724,284)    ($60,000)            $0
 Net Loss                                                                   ($6,022,853)
 Series B Preferred Stock issued:
    July 1999
    August 1999
    September 1999
    October 1999 - adjust price to $1.00
    November 1999
    December 1999                                                                           ($20,000)
    January 2000
    February 2000
 Beneficial conversion expense on
    Preferred Stock                                         $2,742,670      ($2,742,670)
 Series C Preferred Stock issued:
    February 2000
 Common stock issued: February 2000                                                          ($4,500)
 Common stock issued upon conversion
    of preferred stock:
    July 1999
    August 1999
    September 1999
    October 1999
    December 1999
    January 2000
    February 2000
    March 2000
    April 2000
    May 2000
   June 2000
 Common stock issued upon exercise
    of warrants:
    September 1999
    February 2000
    March 2000
    May 2000
   June 2000
 Warrants issued:
    September 1999                                             $10,000                      ($10,000)
    November 1999                                              $15,000                      ($15,000)
    January 2000                                              $152,000
    February 2000                                             $469,000
    March 2000                                                     $25
 Common stock issued upon exercise of options:
    January 2000
    February 2000
   June 2000
 Common stock issued for equipment and
    services received:
    January 2000
    February 2000
 Compensation expense recorded
    on stock options                                          $332,300
 Subsidiary stock issued                                    $1,250,088
 Payment received on
    subscriptions receivable                                                                 $89,500
 Accrete to redemption value on
    Series A Preferred Stock                                                  ($410,445)
                                                         ---------------------------------------------------------------
Balance June 30, 2000                                       $7,313,828     ($31,900,252)    ($20,000)            $0
 Net Loss                                                                  ($11,466,368)
 Series D Preferred Stock issued:
    August 2000
    September 2000
    October 2000
 Common stock issued upon conversion of preferred
 stock:
    August 2000
    September 2000
    October 2000
 Warrants issued:
    August 2000                                               $576,000
    September 2000                                            $206,000
    October 2000                                              $401,868
    November 2000                                              $34,225
    December 2000                                              $40,850
    April 2001                                                 $75,000
 Subsidiary stock and warrant issued $156,770 Common
 stock issued:
    October 2000
    November 2000
    December 2000
 Compensation expense recorded
    on stock options                                           $22,441
 Common stock issued upon exercise
    of warrants
 Beneficial conversion expense on
    Preferred Stock                                         $2,470,644      ($2,470,644)
 Payment received on
    subscriptions receivable                                                                 $10,218
 Accrete to redemption value on
    Series A Preferred Stock                                                  ($118,249)
                                                         ---------------------------------------------------------------
Balance June 30, 2001                                      $11,297,626     ($45,955,513)     ($9,782)            $0
Unaudited:
 Net Loss                                                                   ($8,377,687)
 Warrants issued with notes payable                           $163,950
 Amount attributable to value of debt
    conversion feature                                        $310,104
 Compensation expense recorded
    on subsidiary stock options                               $862,368
 Warrants issued:
    October 2001                                                $9,700
    November 2001                                              $10,400
    December 2001                                              $64,650
    February 2002                                              $73,000
 Common stock issued:
    February 2002
 Subsidiary stock and warrant issued                        $1,929,544
 Gain on sale of subsidiary stock                             $260,000
 Payment received on
    subscriptions receivable                                                                  $6,677
                                                         ---------------------------------------------------------------
Balance March 31, 2002                                     $14,981,342     ($54,333,200)     ($3,105)            $0
<CAPTION>
                                                                 Due      Cumulative
                                                                 From    Translation
                                                               Officers   Adjustment
                                                          --------------------------
<S>                                                        <C>          <C>
 Common stock issued upon conversion of preferred stock:
     November 1998
     January 1999
     March 1999
     April 1999
 Warrants issued for services:
     November 1998
 Series B Preferred Stock issued:
    June 1999
 Accrete to redemption value on
    Series A Preferred Stock
                                                          --------------------------
Balance, June 30, 1999                                           $0              $0
 Net Loss
 Series B Preferred Stock issued:
    July 1999
    August 1999
    September 1999
    October 1999 - adjust price to $1.00
    November 1999
    December 1999
    January 2000
    February 2000
 Beneficial conversion expense on
    Preferred Stock
 Series C Preferred Stock issued:
    February 2000
 Common stock issued: February 2000
 Common stock issued upon conversion
    of preferred stock:
    July 1999
    August 1999
    September 1999
    October 1999
    December 1999
    January 2000
    February 2000
    March 2000
    April 2000
    May 2000
   June 2000
 Common stock issued upon exercise
    of warrants:
    September 1999
    February 2000
    March 2000
    May 2000
   June 2000
 Warrants issued:
    September 1999
    November 1999
    January 2000
    February 2000
    March 2000
 Common stock issued upon exercise of options:
    January 2000
    February 2000
   June 2000
 Common stock issued for equipment and
    services received:
    January 2000
    February 2000
 Compensation expense recorded
    on stock options
 Subsidiary stock issued
 Payment received on
    subscriptions receivable
 Accrete to redemption value on
    Series A Preferred Stock
                                                          --------------------------
Balance June 30, 2000                                            $0              $0
 Net Loss
 Series D Preferred Stock issued:
    August 2000
    September 2000
    October 2000
 Common stock issued upon conversion of preferred
 stock:
    August 2000
    September 2000
    October 2000
 Warrants issued:
    August 2000
    September 2000
    October 2000
    November 2000
    December 2000
    April 2001
 Subsidiary stock and warrant issued $156,770 Common
 stock issued:
    October 2000
    November 2000
    December 2000
 Compensation expense recorded
    on stock options
 Common stock issued upon exercise
    of warrants
 Beneficial conversion expense on
    Preferred Stock
 Payment received on
    subscriptions receivable
 Accrete to redemption value on
    Series A Preferred Stock
                                                          --------------------------
Balance June 30, 2001                                            $0              $0
Unaudited:
 Net Loss
 Warrants issued with notes payable
 Amount attributable to value of debt
    conversion feature
 Compensation expense recorded
    on subsidiary stock options
 Warrants issued:
    October 2001
    November 2001
    December 2001
    February 2002
 Common stock issued:
    February 2002
 Subsidiary stock and warrant issued
 Gain on sale of subsidiary stock
 Payment received on
    subscriptions receivable
                                                          --------------------------
Balance March 31, 2002                                           $0              $0
</TABLE>

                                       7
<PAGE>
                                  QUANTECH LTD
                          (A DEVELOPMENT STAGE COMPANY)
                CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
<TABLE>
<CAPTION>
                                                                                                                   PERIOD FROM
                                                                                                                  SEPTEMBER 30,
                                                                                                                  1991 (DATE OF
                                                                                                                 INCEPTION), TO
                                                                       MARCH 31,                                     MARCH 31,
                                                                         2002                   2001                  2002
                                                                 ---------------------  ---------------------  --------------------
<S>                                                              <C>                    <C>                    <C>
Cash Flows From Operating Activities
 Net Loss                                                          $       (8,377,687)    $       (8,737,703)    $     (48,213,772)
 Adjustments to reconcile net loss to net cash used in
  operating activities:
  Elimination of cumulative translation adjustment                                  -                      -              (178,655)
  Depreciation                                                                508,985                 72,021             1,273,532
  Amortization                                                                244,967                163,315             3,077,733
  Gain on disposal of property and equipment                                        -                      -                (1,777)
  Noncash compensation, services and interest                               1,546,559                      -             6,922,149
  Minority interest in subsidiary                                                   -               (230,153)                    -
  Deferred revenue                                                                  -                      -             5,352,495
  Amortization of deferred revenue                                           (853,809)                     -            (1,955,735)
  Other                                                                             -                      -               623,650
  Change in assets and liabilities:
   (Increase) decrease in prepaid expenses                                     (1,214)                (5,848)              111,001
    Increase (decrease) in accounts payable                                   868,915                 91,727             1,397,046
    Increase (decrease) in accrued expenses                                   (19,624)                (3,750)              457,734
                                                                 ---------------------  ---------------------  --------------------
     NET CASH USED IN OPERATING ACTIVITIES                                 (6,082,908)            (8,650,391)          (31,134,599)
                                                                 ---------------------  ---------------------  --------------------

Cash Flows From Investing Activities
 Purchase of property and equipment                                          (302,561)              (758,326)           (2,413,683)
 Proceeds on disposition of property                                                -                      -                39,775
 Patent costs                                                                 (20,883)               (54,588)             (150,537)
 Organization costs                                                                 -                      -               (97,547)
 Deposits                                                                           -                (21,462)             (101,092)
 Officer advances, net                                                              -                      -              (109,462)
 Note receivable from officer                                                   3,412                 (7,440)             (148,551)
 Purchase of investment                                                             -                      -              (225,000)
 Purchase of license agreement                                                      -                      -            (1,950,000)
 Advances to Spectrum Diagnostics, Inc.                                             -                      -              (320,297)
 Prepaid securities issuance costs                                                  -                      -              (101,643)
 Purchase of Spectrum Diagnostics, Inc., net of cash
  and cash equivalents acquired                                                     -                      -            (1,204,500)
                                                                 ---------------------  ---------------------  --------------------
   NET CASH USED IN INVESTING ACTIVITIES                                     (320,032)              (841,816)           (6,782,537)
                                                                 ---------------------  ---------------------  --------------------

Cash Flows From Financing Activities
 Net proceeds from the sale of Series A Preferred Stock                             -                      -             1,523,909
 Net proceeds from the sale of Series B Preferred Stock                             -                      -             2,993,573
 Net proceeds from the sale of Series C Preferred Stock                             -                      -               973,100
 Net proceeds from the sale of Series D Preferred Stock                             -              5,555,139             5,555,139
 Net proceeds from the sale of common stock and warrants                            -              1,763,158            14,325,137
 Net proceeds from the sale of common and
  preferred stock of subsidiary                                             2,165,988                125,000             3,572,846
 Proceeds from debt obligations                                             2,388,876                      -             9,621,832
 Payments received on stock subscriptions receivable                            6,677                      -                61,895
 Payments on debt obligations                                                       -               (777,336)             (592,457)
                                                                 ---------------------  ---------------------  --------------------
  NET CASH PROVIDED BY FINANCING ACTIVITIES                                 4,561,541              6,665,961            38,034,974
                                                                 ---------------------  ---------------------  --------------------

Effect of Exchange Rate Changes on Cash                                             -                      -               203,242
                                                                 ---------------------  ---------------------  --------------------

   NET INCREASE (DECREASE) IN CASH                                         (1,841,399)            (2,826,246)              321,080

Cash and Cash Equivalents
 Beginning                                                                  2,162,479              1,328,797                     -
                                                                 ---------------------  ---------------------  --------------------
 Ending                                                            $          321,080     $       (1,497,449)    $         321,080
                                                                 =====================  =====================  ====================
</TABLE>

                                       8
<PAGE>
                                  QUANTECH LTD.
                         (A DEVELOPMENT STAGE COMPANY)

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

In the opinion of the management of Quantech, the accompanying unaudited
consolidated financial statements contain all adjustments (consisting of only
normal, recurring adjustments) necessary to present fairly the financial
position of Quantech as of March 31, 2002 and the results of operations and its
cash flows for the three month and nine month periods ended March 31, 2002 and
2001, and the period from inception to March 31, 2002. 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
Quantech's annual financial statements and related notes in Quantech's Annual
Report on Form 10-KSB for the year ended June 30, 2001. FasTraQ Solutions, Inc.
has been established as a wholly owned subsidiary, but there has been no
activity to date.

NOTE 2. LICENSE AGREEMENT

Quantech has a license agreement with Ares-Serono for certain patents,
proprietary information and associated hardware related to Surface Plasmon
Resonance ("SPR") technology which was acquired for approximately $4.3 million
and is being amortized over its estimated useful life of 15 years. In addition,
the license calls for an ongoing royalty of 6 percent on all products utilizing
the SPR technology which are sold by Quantech. Also, if Quantech sublicenses the
technology, Quantech will pay a royalty of 15 percent of all revenues received
by Quantech under any sublicense. To date, Quantech has paid $1,300,000 of
cumulative royalty payments. This amount satisfies the requirements of the
license agreement until royalty accruals based on revenues exceed such minimum
payment amount.

NOTE 3. OPTION REPRICING

During the quarter ended December 31, 2001, HTS Biosystems ("HTS") repriced
1,065,000 shares of stock options. The compensation expense is being recognized
over the remaining vesting period of the options and resulted in a charge of
$852,000 during the quarter ended December 31, 2001. In addition, variable
accounting applies for future periods.

NOTE 4. HTS BIOSYSTEMS

Quantech's consolidated financial statements include the results of HTS
Biosystems, Inc. of which Quantech currently has 57% ownership. The HTS
PROTEOMATRIX(TM) solution is a portfolio of proprietary detection technologies,
chemistries and bioinformatics forming a matrix of tools that addresses the
proteomics market. HTS Biosystems was formed by combining technology and
intellectual property from its initial shareholders Quantech and Applied
Biosystems.

NOTE 5. SEGMENTS

The Company has two reportable segments: Quantech Ltd. (Quantech) and HTS
Biosystems, Inc. (HTS). Quantech is completing development of a system for the
hospital emergency department that is expected to run tests for a number of
different medical conditions utilizing its proprietary technology, surface
plasmon resonance (SPR) and other technologies. HTS is focused on the proteomics
market, and is developing detection systems using SPR as well as fluorescence
and chemiluminescent based technologies for drug discovery and the development
of unique diagnostics. The accounting policies of the segments are the same as
those described in the summary of significant accounting policies included in
Quantech's annual report on Form 10-KSB.




                                       9
<PAGE>
<TABLE>
<CAPTION>
                                                                 Three months ended March 31, 2002
                                                        Quantech                 HTS                 Total
-----------------------------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>                   <C>
Net Revenue                                          $    52,659         $   431,944           $   484,603
Interest Income                                            2,570                 609                 3,179
Interest Expense                                         243,651                 500               244,151
Depreciation and amortization                            216,984              39,247               256,231
Segment loss                                         (1,156,346)           (660,342)           (1,816,688)
<CAPTION>
                                                                 Three months ended March 31, 2001
                                                        Quantech                 HTS                 Total
-----------------------------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>                   <C>
Net Revenue                                          $    11,303         $    16,954           $    28,257
Interest Income                                           17,687               4,009                21,696
Interest Expense                                           3,875                   0                 3,875
Depreciation and amortization                            196,121               4,208               200,329
Segment loss                                         (2,930,539)           (589,798)           (3,520,337)
<CAPTION>
                                                                  Nine months ended March 31, 2002
                                                        Quantech                 HTS                 Total
-----------------------------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>                   <C>
Net Revenue                                          $   157,977         $   695,832           $   853,809
Interest Income                                           11,118              15,257                26,375
Interest Expense                                         452,101                 500               452,601
Depreciation and amortization                            654,115              99,837               753,952
Segment loss                                         (4,404,516)         (3,973,171)           (8,377,687)
Cash                                                      16,749             304,331               321,080
Total assets                                         $ 2,909,964         $   885,417           $ 3,795,381
-----------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                  Nine months ended March 31, 2001
                                                        Quantech                 HTS                 Total
-----------------------------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>                   <C>
Net Revenue                                          $    11,303         $    56,954           $    68,257
Interest Income                                           65,187              37,378               102,565
Interest Expense                                          27,855                   0                27,855
Depreciation and amortization                            425,295              10,370               435,665
Segment loss                                         (7,022,972)         (1,714,731)           (8,737,703)
Cash                                                     563,042           1,505,440             2,068,482
Total assets                                         $ 4,330,894         $ 1,649,017           $ 5,979,911

-----------------------------------------------------------------------------------------------------------
</TABLE>

NOTE 6. RECENT ACCOUNTING PRONOUNCEMENTS

In July, 2001, the Financial Accounting Standards Board issued two statements -
Statement 141, Business Combinations, and Statement 142, Goodwill and Other
Intangible Assets, which will potentially impact the Company's accounting for
its reported intangible assets. The standards generally are required to be
implemented by the Company in its 2002 financial statements. The Company has
determined that the adoption of these standards will not have a material impact
on the Company's financial statements.

In September 2001, the FASB issued Statement 143, Asset Retirement Obligations.
This Statement addresses financial accounting and reporting for obligation
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. The Statement will be effective for the Company's fiscal
year ending June 30, 2003. Management expects the adoption of this standard will
not have a material impact on the financial statements.



                                       10
<PAGE>

In August 2001, the FASB issued Statement 144, Accounting for Impairment or
Disposal of Long-Lived Assets. This Statement addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. The Statement
will be effective for the Company's fiscal year ending June 2003. The Company
does not believe that the adoption of this pronouncement will have a material
effect on its financial statements.

NOTE 7. DEFERRED REVENUE

During fiscal year 2001, Quantech and HTS recorded deferred revenue for payments
received from Mitsubishi Chemical Corporation ("Mitsubishi") for future product
deliveries and license and distribution agreements. Quantech received payments
of $900,000 and $350,000, respectively, for license and distribution rights. HTS
received payments of $1,350,000 and $1,500,000, respectively, for license and
distribution rights, and received $300,000 for evaluation systems to be
delivered during fiscal year 2002. The patent licensing revenue is being
recognized over the remaining life of the patents of approximately 8 years, and
the distribution agreement revenue is being recognized over the term of the
agreement which runs through January 2006. Revenue for the evaluation systems
was recognized when the systems were shipped to and accepted by Mitsubishi.

NOTE 8. CONVERTIBLE DEBT

During August and October 2001, Quantech sold $1,135,000 of convertible
promissory notes and warrants to accredited investors. The notes have an
interest rate of 10% per year paid semi-annually and are due upon demand after
one year. The Company pledged as collateral 1,452,800 shares of HTS common stock
owned by Quantech. The notes may be converted into shares of the equity security
(the "Next Financing Shares") sold by Quantech in its next equity financing of
at least $5 million (the "Next Financing"). Noteholders will have the option of
converting their notes at a price equal to the lesser of 80% of the per share
price of the Next Financing Shares or 80% of the applicable conversion price of
such shares. If the Next Financing does not occur within one year from the
issuance date of the notes, the noteholders may, at their option, convert the
notes into shares of Quantech common stock at $1.00 per share. The noteholders
also received a five-year warrant to purchase one Next Financing Share for each
Next Financing Share into which such investor's note is convertible. The warrant
exercise price shall be the lesser of 80% of the purchase price per share of the
Next Financing Shares or 80% of the applicable conversion price of such shares.
If the Next Financing does not occur within one year from the issuance date of
the warrant, the warrant becomes exercisable to purchase, at $1.00 per share,
the number of shares of common stock into which the note is then convertible.
Quantech paid commissions and expenses in the aggregate amount of $131,540 to
registered investment banks for acting as selling agents, and in addition issued
the investment banks warrants to purchase common shares of up to 10% of shares
of common stock into which the notes are convertible. The warrants were valued
at $136,200 and were recorded as paid in capital and debt discount. The discount
is being accreted using the interest method over one year, the term of the debt.
The Company also recognized a beneficial conversion feature of $136,200, which
was similarly accounted for and is also being accreted using the interest method
over one year. The unamortized amount of the debt discount attributable to the
warrant value and beneficial conversion feature of $182,600 has been offset
against the outstanding note amount on the balance sheet.

During February 2002, Quantech sold $500,000 of convertible debentures and
warrants to accredited investors. The debentures have an interest rate of 8% per
year and are due on July 31, 2002. The debentures may be converted into shares
of Quantech common stock at the lesser of $0.39 per share or 80% of the closing
share price for the 15 days prior to conversion. The investors also received
warrants to purchase shares of Quantech common stock equal to 10% of the number
of shares their debentures will convert into at an exercise price of $0.39 per
share. The sale of such notes and warrants was deemed to be exempt from
registration under Section 4(2) of the 1933 Act and rule 506 promulgated
thereunder. Quantech paid commissions and expenses in the aggregate amount of
$65,000 to a registered investment bank for acting as selling agent, and in
addition issued the investment bank warrants to purchase 250,000 common shares
of Quantech common stock.


                                       11
<PAGE>

ITEM 2                 MANAGEMENT'S DISCUSSION AND ANALYSIS
                              OR PLAN OF OPERATION

HISTORY

         Quantech Ltd. is a Minnesota company originally founded in 1991 which
has been developing the "FasTraQ(TM)-ER" Patient Treatment Information System.
The FasTraQ system employs Quantech's proprietary surface plasmon resonance
("SPR") and other technologies, in the field of emergency room ("ER")
point-of-care diagnostics and patient information management. In December 2001,
Quantech's created a wholly-owned subsidiary, FasTraQ Solutions, Inc. ("FSI"),
but there has been no activity to date. In the event that FSI raises financing
sufficient to continue development of the FasTraQ system, Quantech would license
the FasTraQ and related technology to FSI in exchange for future royalties and
other payments. Following such a restructuring, Quantech's primary assets would
be the FSI stock, note and license agreement and, as discussed below, the HTS
Biosystems, Inc. stock and license agreement. Quantech would also own the rights
to certain non-ER applications of the SPR and related technologies but is not
planning to pursue development of these applications in the foreseeable future.

         In January 2002, Quantech received clearance from the United States
Food and Drug Administration (the "FDA") to market for public sale the FasTraQ
system and a test for the pregnancy enzyme hCG. In December 2001, Quantech filed
an application for a test to detect the cardiac enzymes myoglobin, troponin I
and CK-MB. After reviewing the filing, the FDA requested additional data.
Quantech intends to collect the data and resubmit the filing when it obtains the
financing needed to expand its operations from the current minimal level of
activity. Other tests and instrument modules are under development and are
expected to be added to the FasTraQ system to provide the various quantitative
tests the emergency department requires on an urgent basis.

         Quantech also owns a majority interest in HTS Biosystems, Inc. ("HTS").
HTS has identified and acquired proprietary detection technologies and strategic
partnerships to create its PROTEOMATRIX(TM) Portfolio. From the Proteomatrix
Portfolio, HTS is developing and integrating technologies to provide solutions
to the Proteomics research market. The first product from this Portfolio is the
FLEX CHIP Kinetic Analysis System, a novel, high throughput, label-free
detection system that will be used in biotechnology research for new drug
discovery and improved diagnostic tests. HTS is preparing the FLEX CHIP for
market launch with its distribution partners Applied Biosystems, Inc. and
Mitsubishi Chemical Corporation.

RESULTS OF OPERATIONS

         Quantech has incurred a net loss of $48,213,772 from September 30, 1991
(date of inception) through March 31, 2002 due to expenses related to formation
and operation of Quantech's predecessor, Spectrum Diagnostics Inc. ("SDS") in
Italy, continuing costs of raising capital, normal expenses of operating over
the period since inception, funds applied to research and development, royalty
payments related to the SPR technology, losses due to expenses of SDS and HTS
and interest on borrowed funds. Quantech reported losses of $1,816,688 and
$8,377,687 for the three months and nine months ended March 31, 2002 as compared
to $3,520,337 and $8,737,703 for the same periods in 2001. The lower losses were
primarily due to increased revenues and lower operating expenses at Quantech,
partially offset by higher spending at HTS and higher interest expense.

         Net revenue increased to $484,603 and $853,809 for the three months and
nine months ended March 31, 2002 from $28,257 and $68,257 for the same periods
in 2001 due to higher shipments of evaluation systems and the amortization of
licensing and distribution revenue (see Notes to Financial Statements, Note 7 -
Deferred Revenue). We expect additional sales of evaluation systems and
licensing and distribution revenue amortization during the remainder of the
year, but do not expect revenue from the sale of commercial systems, and we
remain in the development stage.

         General and administration expenses increased to $970,638 and
$3,415,220 for the three months and nine months ended March 31, 2002 from
$799,547 and $2,053,834 for the same periods in 2001



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<PAGE>

primarily due to expansion of HTS operations partially offset by lower spending
at Quantech. Year-to-date results include a non-cash charge of $852,000 for HTS
option repricing. As Quantech and HTS raise funding, complete development of
their systems, prepare for market launch and begin to manufacture and distribute
their products, we expect general and administration expenses to increase.

         Marketing expenses decreased to $15,673 and $182,652 for the three
months and nine months ended March 31, 2002 from $346,665 and $822,461 for the
same periods in 2001 due to reduced spending at Quantech. We expect marketing
expenses to increase in the future as we prepare for market launch and begin to
distribute our products.

         Research and development costs decreased to $1,074,008 and $5,207,398
for the three months and nine months ended March 31, 2002 from $2,577,485 and
$6,391,810 for the same periods in 2001 primarily due to reduced spending at
Quantech partially offset by higher spending at HTS. We expect R&D spending to
increase in the future as Quantech and HTS raise funding to complete the
commercial development of their systems.

         Minority interest in the HTS net loss was $0 for the three months and
nine months ended March 31, 2002 as compared to ($157,282) and ($387,435) during
the same periods in 2001. The accounting treatment during the current fiscal
year is to fully absorb the HTS losses in the Quantech consolidated financial
statements.

         Interest income decreased to $3,179 and $26,375 for the three months
and nine months ended March 31, 2002 compared to $21,696 and $102,565 for the
same periods in 2001 as a result of less cash on hand from the proceeds of
offerings for Quantech and HTS.

         Interest expense increased to $244,151 and $452,601 for the three
months and nine months ended March 31, 2002 from $3,875 and $27,855 during the
same periods in 2001 as a result of higher average debt at Quantech.

         The timetable for submitting additional tests to the FDA and
introduction of Quantech's system to the market will be influenced by Quantech's
ability to obtain further funding, enter into strategic relationships, complete
commercial prototype development of its system and develop further tests, and
delays it may encounter with the FDA in its review of Quantech's tests and
system. There can be no assurance that Quantech will be able to obtain the
required funding, enter into any strategic agreements or ultimately complete its
commercial system.

LIQUIDITY AND CAPITAL RESOURCES

         From inception to March 31, 2002, Quantech has raised approximately $42
million through a combination of sales of public stock, private stock and
convertible debt obligations and receipts from strategic partners.

         In February 2002, Quantech raised bridge financing with net proceeds of
$425,000 through the sale of convertible debentures and warrants. In early March
2002, Quantech experienced a serious cash shortage and was forced to scale back
its operations. Later in March and during April it obtained $361,250 in funding
through the sale of 501,923 shares of HTS stock to accredited investors and
certain Quantech directors, which allowed Quantech to continue its operations.
Quantech is currently seeking additional funding, including private sales of
equity or debt with equity features and sales of additional HTS Biosystems
stock. If we fail to obtain immediate additional financing we may have to cease
operations.

         Quantech also has a bank credit facility of up to $2.5 million, in
which certain of Quantech's directors participated as co-borrowers. The credit
facility expires on December 5, 2002. As of May 8, 2002, $2.5 million was
outstanding on this credit facility. Quantech does not anticipate receiving any
significant additional funding from commercial lenders.



                                       13
<PAGE>

         We will require approximately $12 million to develop and submit to the
FDA additional tests, complete customer evaluations of the FasTraQ system,
establish manufacturing capabilities and prepare for sales of the FasTraQ
system. We are currently reviewing multiple avenues of future funding including
private sales of equity or debt with equity features or arrangements with
strategic partners. There are currently no commitments for any such financing
and there can be no assurance that we will obtain any capital on favorable
terms, if at all. Subsequently, we will need to raise additional funding when we
begin sales of our systems.

         In addition, HTS is seeking additional equity capital. An equity
financing by HTS would result in a dilution of Quantech ownership of HTS.
Although HTS is consolidated with Quantech for financial reporting purposes, HTS
funds its own operations and does not receive funds from Quantech.

CAUTIONARY STATEMENTS

         MANY OF THE STATEMENTS CONTAINED IN THIS 10-QSB CONSTITUTE "FORWARD
LOOKING STATEMENTS." SUCH STATEMENTS ARE MANAGEMENT'S EXPECTATIONS OR FORECASTS,
NOT HISTORICAL FACTS, AND TYPICALLY RELATE TO PRODUCT DESIGN AND DEVELOPMENT,
FDA APPROVAL, COMMERCIALIZATION, FINANCING NEEDS AND FINANCIAL RESULTS, AMONG
OTHERS. FORWARD LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF TERMINOLOGY
SUCH AS "ANTICIPATE," "BELIEVE," "ESTIMATE," "EXPECT," "INTEND," "MAY," "COULD,"
"POSSIBLE," "PLAN," "PROJECT," "WILL," "FORECAST," AND SIMILAR WORDS OR
EXPRESSIONS. SUCH STATEMENTS CANNOT BE GUARANTEED AND INVOLVE RISK AND
UNCERTAINTIES, KNOWN AND UNKNOWN, INCLUDING THOSE IDENTIFIED BELOW AND ELSEWHERE
IN THIS REPORT AND OTHER FILINGS WITH THE SEC. SUCH RISKS MAY CAUSE ACTUAL RISKS
TO DIFFER SIGNIFICANTLY FROM THOSE ANTICIPATED IN THE FORWARD-LOOKING
STATEMENTS. QUANTECH UNDERTAKES NO OBLIGATION TO UPDATE FORWARD-LOOKING
STATEMENTS. IT IS NOT POSSIBLE TO FORESEE OR IDENTIFY ALL FACTORS THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER FROM EXPECTED OR HISTORIC RESULTS. AS SUCH,
INVESTORS SHOULD NOT CONSIDER ANY LIST OF SUCH FACTORS TO BE AN EXHAUSTIVE
STATEMENT OF ALL RISKS, UNCERTAINTIES OR POTENTIALLY INACCURATE ASSUMPTIONS.

WE REQUIRE IMMEDIATE FINANCING TO SERVICE OUR OUTSTANDING INDEBTEDNESS AND
SURVIVE. WE ALSO NEED SUBSTANTIAL ADDITIONAL FINANCING TO COMPLETE DEVELOPMENT
OF THE FASTRAQ SYSTEM.

         While we have recently significantly scaled back our operations to
reduce our burn rate, we currently have over $5 million in trade and other short
term debt outstanding. We are not currently generating any cash from operations,
and there can be no assurances that we ever will. Therefore, we need immediate
additional financing to service our outstanding short term debt. Additionally,
we will require significant additional financing to complete development of the
FasTraQ system, submit to the FDA additional tests, complete customer
evaluations of the system, establish manufacturing capabilities and prepare for
commercial sales of the system. Thereafter, we will require additional capital
to establish sales and marketing capacity to put us in a position to achieve a
sales level sufficient to generate break-even cash flow.

         We are currently reviewing multiple avenues of short and long term
funding, including private sales of equity or debt with equity features and
sales of a portion of our HTS Biosystems stock. We do not currently have any
commitments for any financing, and we cannot assure you that we will obtain any
funds on favorable terms, if at all. Any additional equity financing by us may
result in dilution to our shareholders and could depress the market price of our
stock. Further, any equity financing by FasTraQ Solutions or a sale of a portion
of our HTS stock would result in a dilution of our ownership in these
subsidiaries. We are also pursuing a sale of our business or the licensing of
all of our technology, although we have received no commitments for any such
transaction. If we fail to obtain immediate additional financing to service our
outstanding indebtedness or to sell the business, we may have to cease
operations or



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<PAGE>

be forced into bankruptcy. Likewise, if we fail to obtain the significant
additional financing necessary to complete development of and thereafter
commercialize the FasTraQ system, we may have to cease operations. If we were to
cease operations or become bankrupt, our stock would likely become worthless.

WE HAVE INCURRED SIGNIFICANT LOSSES IN THE PAST, WILL CONTINUE TO INCUR LOSSES
FOR THE FORESEEABLE FUTURE AND MAY NOT BE ABLE TO CONTINUE AS A GOING CONCERN.

         We have incurred net losses in each year since inception (1991) and
expect to continue to do so for the foreseeable future. We have not had any
significant revenues to date. As of June 30, 2001 and March 31, 2002, we had
accumulated deficits of $45,955,513 and $54,333,200 respectively. Our business
model and financial prospects must be considered in light of the risks, expenses
and difficulties frequently encountered by companies in their development stage.

         As indicated in the "going concern" statement in the independent
auditor's report and Note 2 to the financial statements as of June 30, 2001, we
are a development stage company which has suffered significant losses from
operations, requires significant additional financing, and needs to continue
development of its product, obtain FDA approval, generate significant revenues,
and successfully attain profitable operations to remain a going concern. This
"going concern" statement may make it more difficult for us to raise the
necessary capital to allow us to continue operations.

DEVELOPMENT OF THE FASTRAQ SYSTEM IS NOT COMPLETE AND HAS BEEN SIGNIFICANTLY
SCALED BACK.

Components of the FasTraQ system are under various stages of development.
However, due to our current cash situation, we have had to greatly scale back
our development efforts. Therefore, we cannot predict when development will be
completed, if at all. Until the FasTraQ development is completed and cleared
through the FDA, we do not have any salable products. Additionally, the final
price that we will need to charge to cover the costs of the FasTraQ instrument
and the PrePaQ test cartridges cannot be determined until development is
complete and FDA clearances have been obtained. If we cannot receive FDA
approval and offer the FasTraQ system with certain required features and tests
at a cost acceptable to potential customers, it will be impossible for us to
continue operations. Failures in any of these areas will disappoint investors
and could result in a decline in our stock price thus causing investors to lose
substantial money.

OTHER FACTORS

         As described in Quantech's Form 10-KSB for the year ended June 30, 2001
under Cautionary Statements, there are factors concerning Quantech and the
FasTraQ system in addition to those identified above that should be considered,
including, but not limited to: uncertainty of market acceptance of the FasTraQ
system once introduced, inability or delay in obtaining FDA product approval,
competition, lack of marketing and manufacturing experience, technological
obsolescence, ability to maintain patent protection on technology and not
violate others' rights, effects of government regulation on the FasTraQ system
and its sale, ability to manufacture its product, dependence on key personnel,
exposure to the risk of product liability, risk of loss of investment in HTS and
the limited market for Quantech shares.






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<PAGE>

PART II
                                OTHER INFORMATION

Item 1.  Legal Proceedings
         None

Item 2.  Changes in Securities
         During February 2002, Quantech sold $500,000 of convertible debentures
         and warrants to accredited investors. The debentures have an interest
         rate of 8% per year and are due on July 31, 2002. The debentures may be
         converted into shares of Quantech common stock at the lesser of $0.39
         per share or 80% of the closing share price for the 15 days prior to
         conversion. The investors also received warrants to purchase shares of
         Quantech common stock equal to 10% of the number of shares their
         debentures will convert into at an exercise price of $0.39 per share.
         The sale of such notes and warrants was deemed to be exempt from
         registration under Section 4(2) of the 1933 Act and rule 506
         promulgated thereunder. Quantech paid commissions and expenses in the
         aggregate amount of $65,000 to a registered investment bank for acting
         as selling agent, and in addition issued the investment bank warrants
         to purchase 250,000 common shares of Quantech common stock. The
         purchasers acquired these securities for their own accounts and not
         with a view to any distribution thereof to the public.

Item 3.  Defaults upon Senior Securities
         Not Applicable

Item 4.  Submission of Matters to a Vote of Security Holders
         Not Applicable

Item 5.  Other Information
         Not Applicable

Item 6.  Exhibits and Reports on 8-K
         a.  Exhibits - None
         b.  Reports on Form 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/ James Lyons
                                                 ---------------
                                                 James Lyons
                                                 Chief Executive Officer and
                                                 Interim Chief Financial Officer



Date: May 15, 2002



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