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:
September 30, 1999                                           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.)

                             1419 Energy Park Drive
                               St. Paul, MN 55108
      (Address of principal executive offices)        (Zip code)

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

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

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the 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: 3,538,052 shares of Common
Stock, no par value, as of November 10, 1999.

         Transitional Small Business Disclosure Format:  YES ___   NO  X

<PAGE>


Index

PART I.    FINANCIAL INFORMATION                                       Page No.

   Item 1: Financial Statements:

        Balance Sheets as of September 30, 1999 and June 30, 1999          3

        Statements of Operations for the Three Months
        Ended September 30, 1999 and 1998 and from inception to
        September 30, 1999                                                 4

        Statement of Stockholders' Equity from inception
        to September 30, 1999                                              5

        Statements of Cash Flows for the Three Months ended
        September 30, 1999 and 1998 and from inception to
        September 30, 1999                                                 7

        Notes to Financial Statements                                      8

   Item 2:  Management's Discussion and Analysis or Plan of Operation      9

PART II.    OTHER INFORMATION                                             13


                                       2

<PAGE>
                                  QUANTECH LTD.
                          (A Development Stage Company)
                                  BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                (Unaudited)
                                                                               September 30,                June 30,
                                                                                    1999                      1999
                                                                              -----------------         -----------------
<S>                                                                        <C>                        <C>
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                                $           500,692        $          436,223
  Prepaid expenses:
      Product development expenses                                                      28,750                    57,500
      Other                                                                             36,352                    36,037
                                                                              -----------------         -----------------
Total current assets                                                                   565,794                   529,760
                                                                              -----------------         -----------------
EQUIPMENT
  Equipment                                                                            459,274                   427,508
  Leasehold improvements                                                                15,000                    15,000
                                                                              -----------------         -----------------
                                                                                       474,274                   442,508
   Less accumulated depreciation                                                      (296,477)                 (276,295)
                                                                              -----------------         -----------------
Total equipment                                                                        177,797                   166,213
                                                                              -----------------         -----------------
OTHER ASSETS
  License agreement, at cost, less amortization                                      2,327,523                 2,409,180
  Patents, at cost                                                                      13,045                    13,045
                                                                              -----------------         -----------------
Total other assets                                                                   2,340,568                 2,422,225
                                                                              -----------------         -----------------
TOTAL  ASSETS                                                              $         3,084,159        $        3,118,198
                                                                              =================         =================
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)

CURRENT LIABILITIES
  Short term debt                                                          $           750,000        $          746,000
  Accounts payable                                                                     343,514                   111,858
  Accrued expenses:
    Interest                                                                             3,100                     3,100
    Minimum royalty commitment                                                         112,500                    75,000
    Accrued payroll/vacation                                                           120,300                   120,300
                                                                              -----------------         -----------------
Total current liabilities                                                            1,329,414                 1,056,258
                                                                              -----------------         -----------------
REDEEMABLE PREFERRED STOCK                                                           5,046,634                 5,113,142

STOCKHOLDERS' EQUITY (DEFICIT)
  Series B Preferred Stock, no par value; authorized 2,500,000
   shares; outstanding 910,001 and 623,334 shares at
   September 30, 1999 and June 30, 1999, respectively                                1,272,818                   891,500
  Common stock, no par value; authorized 50,000,000
   shares; outstanding 3,488,052 shares and 2,741,534 shares
   at September 30, 1999 and June 30, 1999, respectively                            17,242,817                16,498,837
  Subscriptions receivable                                                             (70,000)                  (60,000)
  Additional paid-in capital                                                         2,352,745                 2,342,745
  Deficit accumulated during the development stage                                 (24,090,269)              (22,724,284)
                                                                              -----------------         -----------------
Total stockholders' equity (deficit)                                                (3,291,889)               (3,051,202)
                                                                              -----------------         -----------------
TOTAL LIABILITIES AND STOCKHOLDERS'
      EQUITY (DEFICIT)                                                     $         3,084,159        $        3,118,198
                                                                              =================         =================
</TABLE>

                                       3
<PAGE>

                                 QUANTECH LTD.
                          (A Development Stage Company)
                             STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>

                                                                                                               Period From
                                                                                                              September 30,
                                                                 Three Months         Three Months            1991 (Date of
                                                                    Ended                Ended               Inception), to
                                                              September 30,          September 30,            September 30,
                                                                     1999                 1998                    1999
                                                              -------------------  -------------------      ------------------
<S>                                                                 <C>                  <C>                    <C>
Interest Income                                                     $      1,383         $        653           $     186,485
                                                              -------------------  -------------------      ------------------
Expenses:
  General and Administrative                                             601,335              306,828              11,356,570
  Research and Development                                               591,454              528,111               8,661,247
  Minimum Royalty expense                                                 37,500               37,500               1,262,500
  Loses resulting from transactions
   with Spectrum Diagnostics Inc.                                              -                    -                 556,150
  Net Exchange (gain)                                                          -                    -                 (67,172)
  Interest                                                                 9,608              671,532               1,959,973
                                                              -------------------  -------------------      ------------------
Total Expenses                                                         1,239,897            1,543,971              23,729,268
                                                              -------------------  -------------------      ------------------
Loss before income taxes                                              (1,238,514)          (1,543,318)            (23,542,783)

Income Taxes                                                                   -                    -                  42,595
                                                              -------------------  -------------------      ------------------
Net Loss                                                            $ (1,238,514)        $ (1,543,318)          $ (23,585,378)
                                                              ===================  ===================      ==================

Net loss attributable to common shareholders:
   Net loss                                                         $ (1,238,514)        $ (1,543,318)
   Preferred stock accretion                                            (127,471)                   -
                                                              -------------------  -------------------
Net loss attributable to common shareholders                        $ (1,365,985)        $ (1,543,318)
                                                              ===================  ===================
Loss per basic and diluted common share                             $      (0.47)        $      (0.60)
Weighted average common shares
  outstanding                                                          2,922,126            2,577,751

</TABLE>

                                       4
<PAGE>

                                  QUANTECH LTD
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
    Period From September 30, 1991 (date of Inception), to September 30, 1999

<TABLE>
<CAPTION>
                                                                                   Deficit
                                                                                 Accumulated
                                                                                    During
                                    Series B                          Additional     the       Sub-    Paid for    Due    Cumulative
                                Preferred Stock      Common Stock      Paid-In   Development scriptions   Not      From  Translation
                                Shares    Amount   Shares    Amount    Capital      Stage    Receivable Issued   Officers Adjustment
                               ----------------------------------------------------------------------------------------------------
<S>                                    <C>    <C>  <C>     <C>        <C>         <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                                                                                         $387,754
 Common stock issued, September 1992                35,000   $699,033   $875,967              ($53,689)
 Common stock issuance costs                                           ($312,755)
 Common stock to be issued                                                                              $120,000
 Cumulative translation adjustment                                                                                        ($209,099)
 Elimination of cumulative
    translation adjustment                                                                                                ($178,655)
 Officers advances, net                                                                                          ($27,433)
                                    ------------------------------------------------------------------------------------------------
Balance, December 31, 1992             0      $0   225,000 $4,465,353 $1,461,617  ($3,475,608)($53,689) $120,000 ($27,433)       $0
 Net loss                                                                           ($996,089)
 Common stock transactions:
 Common stock issued, January 1993                   8,000     $1,600   $118,400                       ($120,000)
 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                                                                                                        $5,137
                                    ------------------------------------------------------------------------------------------------
Balance,June 30, 1993                  0      $0   234,500    $46,900 $6,012,070  ($4,471,697)($53,689)       $0 ($22,296)       $0
 Net loss                                                                         ($1,543,888)
 240,000 shares of common
    stock to be issued                                                                                   $30,000
 Repayments                                                                                    $53,689            $22,296
                                    ------------------------------------------------------------------------------------------------
Balance, June 30, 1994                 0      $0   234,500    $46,900 $6,012,070  ($6,015,585)      $0   $30,000       $0        $0
 Net loss                                                                         ($2,070,292)
 Common stock issued, June 1995                    107,500    $21,500   $276,068              ($20,000) ($30,000)
 Warrants issued for services                                            $40,200
                                    ------------------------------------------------------------------------------------------------
Balance June 30, 1995                  0      $0   342,000    $68,400 $6,328,338  ($8,085,877)($20,000)       $0       $0        $0
 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
                                    ------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                  QUANTECH LTD
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
    Period From September 30, 1991 (date of Inception), to September 30, 1999
                                  (continued)

<TABLE>
<CAPTION>

                                                                                   Deficit
                                                                                 Accumulated
                                                                                    During
                                    Series B                          Additional     the       Sub-    Paid for    Due    Cumulative
                                Preferred Stock      Common Stock      Paid-In   Development scriptions   Not      From  Translation
                                Shares    Amount   Shares    Amount    Capital      Stage    Receivable Issued   Officers Adjustment
                               ----------------------------------------------------------------------------------------------------
<S>                                    <C>    <C><C>         <C>     <C>         <C>          <C>             <C>      <C>      <C>
Balance, June 30, 1996                 0      $0 2,345,035   $469,008$15,296,856 ($10,482,840)      $0        $0       $0        $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
                                    ------------------------------------------------------------------------------------------------
</TABLE>

                                       5

<PAGE>

                                  QUANTECH LTD
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
    Period From September 30, 1991 (date of Inception), to September 30, 1999

<TABLE>
<CAPTION>

                                                                                     Deficit
                                                                                   Accumulated
                                                                                     During
                                   Series B                             Additional    the        Sub-    Paid for  Due   Cumulative
                                 Preferred Stock     Common Stock        Paid-In  Development  scriptions  Not    From   Translation
                                 Shares    Amount   Shares    Amount      Capital     Stage    Receivable Issued Officers Adjustment
                                 ---------------------------------------------------------------------------------------------------
<S>                              <C>     <C>        <C>       <C>        <C>         <C>           <C>           <C>    <C>      <C>
Balance, June 30, 1997                              2,402,035    $480,408 $15,606,017($14,408,300)       $0      $0     $0        $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                 0         $0 2,565,040 $16,308,438  $1,476,669($18,057,048)       $0      $0     $0        $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
 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                                                           $781,000
 Series B Preferred Stock issued:
    June 1999                    623,334   $891,500                                                ($60,000)
 Accrete to redemption value on
    Series A Preferred Stock                                                            ($377,420)
                                 ---------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                  QUANTECH LTD
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
    Period From September 30, 1991 (date of Inception), to September 30, 1999
                                  (continued)

<TABLE>
<CAPTION>

                                                                                     Deficit
                                                                                   Accumulated
                                                                                     During
                                   Series B                             Additional    the        Sub-    Paid for  Due   Cumulative
                                 Preferred Stock     Common Stock        Paid-In  Development  scriptions  Not    From   Translation
                                 Shares    Amount   Shares    Amount      Capital     Stage    Receivable Issued Officers Adjustment
                                 ---------------------------------------------------------------------------------------------------
<S>                              <C>     <C>        <C>       <C>        <C>         <C>           <C>           <C>    <C>      <C>
Balance, June 30, 1999           623,334   $891,500 2,741,534 $16,498,837  $2,342,745($22,724,284) ($60,000)     $0     $0        $0
 Net Loss                                                                             ($1,238,514)
 Series B Preferred Stock issued:
    July 1999                    216,666   $291,829
    August 1999                   86,667   $116,989
    September 1999                16,667    $22,500
 Common stock issued upon conversion
    of preferred stock:
    July 1999                                          32,000     $24,000
    August 1999                  (33,333)  ($50,000)  179,121    $159,341
    September 1999                                     80,852     $60,639
 Common stock issued upon exercise
    of warrant, September 1999                        454,545    $500,000
 Warrant issued, September 1999                                               $10,000              ($10,000)
 Accrete to redemption value on
    Series A Preferred Stock                                                            ($127,471)
                                 ---------------------------------------------------------------------------------------------------
Balance September 30, 1999       910,001 $1,272,818 3,488,052 $17,242,817  $2,352,745($24,090,269) ($70,000)     $0     $0        $0

</TABLE>


<PAGE>
                                  QUANTECH LTD
                          (A Development Stage Company)
                      STATEMENTS OF CASH FLOWS - UNAUDITED
<TABLE>
<CAPTION>

                                                                                                           Period From
                                                                                                          September 30,
                                                                   Three Months        Three Months        1991 (Date of
                                                                      Ended               Ended           Inception), to
                                                                   September 30,       September 30,        September 30,
                                                                       1999                1998                1999
                                                                   -------------       -------------      --------------
<S>                                                               <C>                  <C>                <C>
Cash Flows From Operating Activities
 Net Loss                                                         $ (1,238,514)        $ (1,543,318)      $ (23,585,378)
 Adjustments to reconcile net loss to net cash used in
  operating activities:
  Elimination of cumulative translation adjustment                           -                    -            (178,655)
  Depreciation                                                          20,182               17,758             342,831
  Amortization                                                         110,408               81,655           2,288,379
  Noncash compensation, services and interest                                -              597,595           2,727,920
  Losses resulting from transactions with
   Spectrum Diagnostics Inc.                                                 -                    -             556,150
  Write down of investment                                                   -                    -              67,500
  Change in assets and liabilities, net of effects from
   purchase of Spectrum Diagnostics Inc.:
   (Increase) decrease in prepaid expenses                                (315)               7,239              47,740
    Increase (decrease) in accounts payable                            231,656              124,543             335,291
    Increase (decrease) in accrued expenses                             37,500              179,872             510,024
                                                                  ------------         ------------       -------------
     Net cash used in operating activities                            (839,083)            (534,656)        (16,888,198)
                                                                  ------------         ------------       -------------
Cash Flows From Investing Activities
 Purchase of property and equipment                                    (31,766)              (8,457)           (531,032)
 Proceeds on disposition of property                                         -                    -              37,375
 Patent expenses                                                             -               (4,016)            (13,045)
 Organization expenses                                                       -                    -             (97,547)
 Officer advances, net                                                       -                    -            (109,462)
 Purchase of investment                                                      -                    -            (225,000)
 Purchase of license agreement                                               -                    -          (1,950,000)
 Advances to Spectrum Diagnostics, Inc.                                      -                    -            (320,297)
 Prepaid securities issuance costs                                           -                    -            (101,643)
 Purchase of Spectrum Diagnostics, Inc., net of cash                                              -
  and cash equivalents acquired                                              -                    -          (1,204,500)
                                                                  ------------         ------------       -------------
   Net cash used in investing activities                               (31,766)             (12,473)         (4,515,151)
                                                                  ------------         ------------       -------------
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                431,318                    -           1,262,818
 Net proceeds from the sale of Common Stock and warrants               500,000                    -          13,380,797
 Proceeds on debt obligations                                            4,000              502,230           6,051,085
 Payments received on stock subscriptions receivable                         -                    -               5,000
 Payments on debt obligations                                                -                    -            (522,810)
                                                                  ------------         ------------       -------------
  Net cash provided by financing activities                            935,318              502,230          21,700,799
                                                                  ------------         ------------       -------------
Effect of Exchange Rate Changes on Cash                                      -                    -             203,242
                                                                  ------------         ------------       -------------
   Net increase (decrease) in cash                                      64,469              (44,899)            500,692
Cash
 Beginning                                                             436,223               46,135                   -
                                                                  ------------         ------------       -------------
 Ending                                                           $    500,692         $      1,236       $     500,692
                                                                  ============         ============       =============
</TABLE>


                                       7
<PAGE>


                                 QUANTECH LTD.
                         ( A Development Stage Company )

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 1. BASIS OF PRESENTATION
In the opinion of the management of Quantech, the accompanying unaudited
financial statements contain all adjustments (consisting of only normal,
recurring adjustments) necessary to present fairly the financial position of
Quantech as of September 30, 1999 and the results of operations and its cash
flows for the three month periods ended September 30, 1999 and 1998. 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, 1999.

Note 2. LICENSE AGREEMENT

Quantech has a license agreement with Ares-Serono for certain patents,
proprietary information and associated hardware related to SPR technology. The
license calls for an ongoing royalty of 6 percent on all products utilizing the
SPR technology which are sold by Quantech. In addition, if Quantech sublicenses
the technology, Quantech will pay a royalty of 15 percent of all revenues
received by Quantech under any sublicense. As of December 31, 1998, Quantech had
paid $1,150,000 of cumulative royalty payments. In order to maintain its
exclusive rights under the license agreement, Quantech must make a final
$150,000 payment by December 31, 1999. Quantech accrues quarterly a pro-rata
portion of the $150,000 annual payment, and will continue to do so until royalty
accruals based on revenues exceed such minimum annual payment amount.

Note 3. SERIES A CONVERTIBLE PREFERRED STOCK

In November 1998, Quantech established an additional class of shares as Series A
convertible preferred stock (the "Series A Preferred Stock"), and designated
2,500,000 of its authorized shares as Series A Preferred Stock. As of November
10, 1999 there were 1,620,547 shares of Series A Preferred Stock issued and
outstanding.

                                       8

<PAGE>

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

History

         Quantech Ltd. is a Minnesota company originally founded in 1991.
Quantech is completing development of its Hospital Emergency Department Patient
Treatment Information Platform. We refer to this platform as the PTIP. The PTIP
is expected to run tests for a number of different medical conditions and
deliver that test information by wireless communication devices to the Emergency
Department ("ED") staff treating a patient.

         The PTIP consists of an instrument that sits on the top of a counter or
cart and reads disposable test cartridges developed by Quantech. Each Quantech
test cartridge will contain from one to four different medical tests such as
those for a heart attack or pregnancy. The instrument produces test results in a
manner different than other testing systems because it uses Quantech's
proprietary technology based on the scientific phenomenon known as surface
plasmon resonance ("SPR"), which involves the interaction of light with
electrons. Quantech's technology creates SPR in a controlled environment which
enables its instrument to detect and transmit information concerning the
presence and quantity of certain native and foreign molecules in blood, urine or
other fluids which may be associated with specific diseases or medical
conditions. Transmission of this test information to the ED treatment staff will
be performed though the use of a wireless local area network communications
system and handheld receiving devices similar to a pager.

         We are designing the PTIP for the emergency department. It is expected
to have the range of available tests and quality performance of hospitals'
central and STAT labs, but with test time turnaround of 10 to 20 minutes. The
system will analyze both whole blood and urine without preparation or addition
of other substances or removal of the sample from the collection device. We
believe this ease of use and the ability to locate the PTIP in the ED will
economically provide physicians with faster test results than hospital central
or STAT laboratories.

         We expect our system to include an initial menu of more than 20 STAT
tests grouped in patient diagnosis-related panels such as cardiac enzymes (heart
attack), pregnancy, red and white blood cell counts, blood coagulation, kidney
function, pancreas function and electrolytes. Tests for liver functions, drugs
of abuse, therapeutic drugs and additional STAT tests will also be made
available on the system. Quantech's cardiac markers for myoglobin and CK-MB have
received FDA 510(k) approval. A test for pregnancy is being reviewed by the FDA.
The final heart attack marker for Troponin I meets clinical requirements and the
remaining launch menu of tests are in various stages of development.

         The ED is a significant and consolidated market. Current processes for
providing test information to the ED staff are complicated and require a
multitude of steps that greatly increase patient treatment turnaround time. The
challenge is to increase efficiency and decrease costs. Time delays and
interruption of batch testing in the central lab, and the cost of tests run in
STAT labs, have caused both to fall well short of meeting the burden of
providing fast and economic STAT test results. Although there are some
point-of-care STAT testing products available for the ED, they do not have the
required test menu, ease of use, communication capability or quality of results
necessary to streamline the entire ED testing process. The solution is seven day
a week, 24 hour a day disintermediation of the process for providing ED
treatment information. We believe our product will provide this capability.

         Quantech and The Perkin-Elmer Corporation, a leading supplier of life
science systems and analytical instruments, are parties to a technology and
development agreement. This agreement provides Perkin-Elmer with exclusive
licenses to some of our technology for use outside of our core area of medical
diagnostics. We have licensed back from Perkin-Elmer

                                       9
<PAGE>

technology that provides a large density, high throughput diagnostic testing
capacity for our SPR technology. We believe this capability will allow us to
expand our digital SPR technology into central lab, ICU/CCU, surgical suites,
doctor office and home testing markets.

         Quantech is a development stage company which has suffered significant
losses from operations, requires immediate additional financing, and ultimately
needs to complete development of its product, generate revenues, and
successfully attain profitable operations to realize the value of its license
agreement. These factors raise substantial doubt about Quantech's ability to
continue as a going concern.

Results of Operations

         Quantech has incurred a net loss of $23,585,378 from September 30, 1991
(date of inception) through September 30, 1999 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 an extended period of time, funds applied to research and
development, royalty payments related to the SPR technology, losses due to
expenses of SDS and interest on borrowed funds. In addition, an investment of
$3,356,629 was made when Quantech purchased the exclusive rights to the SPR
technology.

         General and administration expenses increased to $601,335 for the three
months ended September 30, 1999 from $306,828 for the same period in 1998
primarily due to market research expenses including fees paid to consultants and
research firms and costs to attend industry trade shows. We expect general and
administrative expenses to increase in the future as we complete development of
our system, prepare for market launch and begin to manufacture and distribute
our products. Quantech will also begin to incur increasing sales and marketing
expenses.

         Research and development costs increased to $591,454 for the three
months ended September 30, 1999 from $528,111 for the same period in 1998
primarily due to increased internal development work. We expect R&D spending to
significantly increase as we complete the commercial development of our system,
conduct additional FDA work, and begin to establish higher volume manufacturing
capabilities.

         Minimum royalty expense of $37,500 was unchanged for the three months
ended September 30, 1999 compared to the same period in 1998. We will continue
to accrue royalty expense of $37,500 per quarter until the final minimum payment
is made in December 1999. In the future we expect to incur additional royalty
expense when royalties based on revenues exceed minimum payments (see Notes to
Financial Statements, Note 2 - License Agreement).

         Interest expense decreased to $9,608 for the quarter ended September
30, 1999 from $671,532 in the same period in 1998 as a result of reduced debt.
Interest expense is expected to remain flat for the remainder of the fiscal year
as Quantech does not anticipate any debt other than borrowing up to $750,000
from its bank credit facility.

         For the three months ended September 30, 1999 Quantech had a loss of
$1,238,514 as compared to $1,543,318 for the same period in 1998 primarily due
to lower interest expense partially offset by higher operating expenses.

         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.

                                       10
<PAGE>

Liquidity and Capital Resources

         From inception to September 30, 1999, Quantech has raised approximately
$22,200,000 through a combination of public stock sales, private stock sales and
debt obligations. Quantech began offering for sale shares of Series B Preferred
Stock in May 1999, and amended the provisions of such stock in October 1999. The
shares are priced at $1.00 per share and each share is convertible into one
share of common stock. In September 1999, Quantech received $500,000 pursuant to
the exercise of a warrant for 454,545 shares of common stock.

         Quantech has minimal cash on hand and requires immediate proceeds from
the sale of additional Series B Preferred Stock to allow it to maintain
operations. Quantech is currently trying to raise $1 million through the sale of
Series B Preferred Stock, which funds if raised in total will allow it to
operate through February 2000. Additional financing of approximately $10 million
will be needed to develop and submit to the FDA additional tests, complete
clinical evaluation of the system, establish manufacturing capabilities and
prepare for sales of the system. Quantech is currently reviewing multiple
avenues of future funding including private sale of equity or debt with equity
features or arrangements with strategic partners. Quantech does not have any
commitments for any such financing and there can be no assurance that Quantech
will obtain additional capital when needed or that additional capital will not
have a dilutive effect on current stockholders. See "Cautionary Statements -- We
need additional cash and will require at least $10 million in additional
financing to complete commercial development of our system and have no
commitment to receive any additional significant funding." Although Quantech has
a limited lending arrangement with its bank to a maximum of $750,000, all of
which credit line will be used by the end of calendar 1999, it does not
anticipate receiving any additional significant funding from commercial lenders.

         Quantech incurred capital expenditures of $31,766 in the three month
period ended September 30, 1999. Quantech anticipates significant capital
expenditures in the future for laboratory and production equipment and office
expansion as Quantech nears product introduction. The timing and amount of such
expenditures will be governed by Quantech's development and market introduction
schedules which are subject to change due to a number of factors including
development delays, FDA approval and availability of future financing.

         As of November 10, 1999 Quantech had 3,538,052 shares of common stock
outstanding. It also had options and warrants outstanding to purchase an
additional 5,372,445 shares at exercise prices from $0.75 to $14.40, and Series
A and B Preferred Stock convertible into 7,863,855 shares of common stock.

Cautionary Statements

         Quantech wishes to caution investors that the following important
factors, among others, in some cases have affected, and in the future could
affect, Quantech's actual results of operations and cause such results to differ
materially from those anticipated in forward-looking statements made in this
document and elsewhere by or on behalf of Quantech.

         We immediately need additional cash and will require at least $10
million in additional financing to complete commercial development of our system
and have no commitment to receive any additional significant funding.

         Quantech does not have sufficient funds to remain in operation, or
complete commercial development or commence production and sales of its system.
Quantech has minimal cash on hand and no more availability on its bank credit
facility. Quantech must immediately complete the sale of its Series B
convertible preferred stock offering for $1 million to maintain current
operations and continue operations through February 2000. Additional financing
of at least $10 million of investment capital, funding by strategic partner(s)
or licensing revenues will be needed for the following: to develop and submit to
the FDA additional tests, complete clinical evaluation of the system, establish
manufacturing capabilities and prepare for sales of the system. Quantech does
not have any commitments for any such additional financing and does not
anticipate receiving any additional significant funding from commercial lenders.


                                       11
<PAGE>

There can be no assurance that any such additional financing can be obtained on
favorable terms, if at all. Any additional equity financing will result in
dilution to Quantech stockholders.

"Going concern" statement in auditor's report may make it difficult to raise new
capital.

         Quantech has not had any significant revenues to date. As of June 30,
1999 and September 30, 1999, we had accumulated deficits of $22,727,284 and
$24,090,269, respectively. The report of the independent auditors on Quantech's
financial statements for the year ended June 30, 1999, includes an explanatory
paragraph relating to the uncertainty of Quantech's ability to continue as a
going concern, which may make it more difficult for Quantech to raise additional
capital.

Failure to complete development of the system on the current timetable and
budget would increase the amount of additional financing required and might make
it impossible for Quantech to continue operations.

         Components of the system are under various stages of development. Until
system development is completed and cleared through the FDA, there can be no
assurance that the system will be finished according to our current development
timetable and budget. Failure to timely finish on budget will require Quantech
to seek funding greater than currently anticipated and make it more difficult to
raise the additional funding. Additionally, the final price that we will need to
charge to cover the costs of the instrument and the test cartridges cannot be
determined until development is complete and FDA clearances have been obtained.
If Quantech cannot receive FDA approval and offer the system with certain
required features at a cost acceptable to potential customers, it will be
impossible for Quantech to continue operations.

Year 2000 Compliance

         We believe our internal information and non-information systems are
year 2000 compliant. Quantech is in a stage of development of its products at a
time when awareness of year 2000 issues allows it to build year 2000 compliance
into its products and operations. We believe that any existing suppliers to
Quantech who are lost due to year 2000 problems could be replaced at our current
stage of development without any serious interruption to our business or any
material adverse effect on our operations or financial condition. We are
diligently ascertaining at each step of development that our products are
compliant and are in the process of contacting key suppliers to address their
exposure to year 2000 related risks. We have, therefore, not developed any
contingency plans relating to year 2000 issues and have not budgeted any funds
for year 2000 issues. Although we believe that our systems are year 2000
compliant, unanticipated year 2000 problems may arise which, depending on the
nature and magnitude of the problem, could adversely affect our business.
Furthermore, year 2000 problems involving third parties may have a negative
impact on our suppliers and potential customers, the general economy or the
ability of businesses to receive essential services such as telecommunications
and banking. Any such occurrence could adversely affect our business.

Other Factors

         As described in Quantech's Form 10-KSB for the year ended June 30, 1999
under Cautionary Statements, there are additional factors concerning the Company
that should be considered including: uncertainty of market acceptance of
Quantech's product once introduced, inability or delay in obtaining FDA product
approval, competition, lack of marketing and manufacturing experience,
technological obsolescence, ability to maintain patent protection on the
Company's technology and not violate others' rights, effects of government
regulation on Quantech's product and its sale, ability to manufacture its
product, dependence on key personnel, exposure to the risk of product liability
and the limited market for the Company's shares.

                                       12
<PAGE>


PART II
                                OTHER INFORMATION


Item 1. Legal Proceedings
        Not Applicable

Item 2. Changes in Securities
        During September 1999, Quantech issued 454,545 shares of common stock
        pursuant to the exercise of a warrant to an accredited investor. The
        sale of such shares was deemed to be exempt from registration under
        Section 4(2) of the Securities Act of 1933. The purchaser acquired
        these securities for its own account 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 -
             27   Financial Data Schedule (filed in electronic format only)
        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/ Robert Case
                                                 Robert Case
                                                 Chief Executive Officer

                                                 /s/ Gregory G. Freitag
                                                 Gregory G. Freitag
                                                 Chief Operating Officer and
Date: November 15, 1999                          Chief Financial Officer


                                       13
<PAGE>



                                  EXHIBIT INDEX
                                  QUANTECH LTD.
                          FORM 10-QSB for Quarter Ended
                               September 30, 1999


Exhibit Number                  Description
--------------  ---------------------------------------------------------
         3            Articles of Incorporation as amended to date

        10.1          Amendment dated November 4, 1999 to December 16, 1997
                      and June 29, 1998 License Agreements with
                      The Perkin-Elmer Corporation

        27            Financial Data Schedule (filed in electronic format only)