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, 1996                                              0 - 19957

                                  Quantech Ltd.
             (Exact name of registrant 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)

                                 (612)-647-6370
              (Registrant's telephone number, including area code)

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

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for 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 ____


         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock as of the latest practicable date:  47,095,759 shares of
Common Stock, par value $.01 per share, outstanding as of November 11, 1996.


                 
 <PAGE>

                                      Index

PART I.    FINANCIAL INFORMATION                                        Page No.

Item 1: Financial Statements:

     Balance Sheets as of September 30, 1996 and June 30, 1996             3

     Statement of Operations for the Three Months Ended September 30,
     1996 and 1995 and from inception to September 30, 1996                4

     Statement of Stockholders' Equity from inception to September 30,
     1996                                                                  5

     Statement of Cash Flows for the Quarters ended  September 30, 
     1996 and 1995 and from inception to September 30, 1996                6

     Notes to Financial Statements                                         7

Item 2: Management's Discussion and Analysis or
        Plan of Operation                                                  8


PART II.    OTHER INFORMATION                                             10




<PAGE>

PART I
                                  QUANTECH LTD.
                          (A Development Stage Company)
                                  BALANCE SHEET
<TABLE>
<CAPTION>

                                                                (Unaudited)      
                                                               September 30,    June 30,
                                                                    1996           1996
                                                              -------------   -----------
ASSETS

<S>                                                           <C>            <C>
CURRENT ASSETS
  Cash and cash equivalents                                   $  2,267,172   $  2,942,871
  Other current assets                                              68,974         41,269
                                                               -----------    -----------
                                                                 2,336,146      2,984,140
                                                               -----------    -----------
EQUIPMENT
  Equipment                                                        332,712        268,058
  Leasehold Improvements                                            15,000         15,000
                                                               -----------    -----------
                                                                   347,712        283,058
   Less:accumulated depreciation                                   (92,498)       (78,657)
                                                               -----------    -----------
                                                                   255,214        204,401
OTHER ASSETS
  License agreement, at cost, less amortization                  2,264,390      2,320,334
  Organization expenses, at cost, less amortization                    887          4,675
                                                               -----------    -----------
                                                                 2,265,277      2,325,009
                                                               -----------    -----------
TOTAL  ASSETS                                                 $  4,856,637   $  5,513,550
                                                               ===========    ===========
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)

CURRENT LIABILITIES
  Short term debt                                             $     19,850   $     24,455
  Accounts Payable                                                 155,866        114,934
  Accrued Expenses:
    Spectrum Diagnostics Inc. obligations                           49,360         53,637
    Other                                                            8,894              0
                                                               -----------    -----------
   Total Current Liabilites                                        233,970        193,026
                                                               -----------    -----------

LONG-TERM OBLIGATIONS
    Minimum Royalty Commitment                                      56,250         37,500
                                                               -----------    -----------

STOCKHOLDERS EQUITY (DEFICIT)
  Common stock, $.01 par value; authorized 60,000,000 shares
   issued and outstanding 46,910,759 shares at September 30,
   1996; and 46,900,759 at June 30, 1996                      $    469,108   $    469,008
  Additional paid-in capital                                    15,286,946     15,296,856
  Deficit accumulated during the development stage             (11,189,637)   (10,482,840)
                                                               -----------    -----------
  Total Stockholders Equity (Deficit)                            4,566,417      5,283,024
                                                               -----------    -----------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                     $  4,856,637   $  5,513,550
                                                               ===========    ===========
</TABLE>
                           




<PAGE>



                                  QUANTECH LTD.
                          (A Development Stage Company)
                        STATEMENT OF OPERATIONS-UNAUDITED
<TABLE>
<CAPTION>
                                                         
                                                                      Period From
                                                                      September 30,
                                                                         1991
                                       Three months   Three months     (Date 0f
                                          Ended         Ended        Inception), to
                                      September 30,   September 30,   September 30,
                                           1996           1995            1996
                                      ------------    ------------    ------------

<S>                                   <C>             <C>             <C>
Interest Income                       $     34,692    $      1,151    $    124,619
                                      ------------    ------------    ------------

Expenses:
  General & Administrative                 357,494         228,663       6,498,965
  Research and development                 362,832         235,734       2,893,951
  Minimum royalty expense                   18,750          43,750         906,250
  Loses resulting from transactions
   with Spectrum Diagnostics Inc.             --              --           556,150
  Net exchange (gain)                         --              --           (67,172)
  Financing                                  2,413          51,071         483,517
                                      ------------    ------------    ------------
                                           741,489         559,218      11,271,661
                                      ------------    ------------    ------------
Loss before income taxes                  (706,797)       (558,067)    (11,147,042)
Income taxes                                  --              --            42,595
                                      ============    ============    ============
Net loss                              $   (706,797)   $   (558,067)   $(11,189,637)
                                      ============    ============    ============

Loss per common share                 $      (0.02)   $      (0.07)
Weighted average common shares
  outstanding                           46,902,063       8,319,094

</TABLE>


<PAGE>


                                  QUANTECH LTD
                          (A Development Stage Company)
                   STATEMENT OF STOCKHOLDERS' EQUITY-UNAUDITED
    Period From September 30, 1991 (date of Inception), to September 30, 1996
<TABLE>
<CAPTION>

                                                                                  Deficit
                                                                                Accumulated
                                                                                  During
                                                         Par       Additional       the                     Paid for    
                                            Shares      Value       Paid-In     Development  Subscriptions    Not       
                                            Issued      Amount      Capital        Stage      Receivable     Issued     
                                          ------------------------------------------------------------------------------
<S>                                        <C>         <C>          <C>          <C>            <C>           <C>
Balance at Inception
Net Loss                                                                         ($3,475,608)
Common stock transactions:
 Common stock issued,
  October 1991                             3,200,000   $3,154,574  
 Common stock issued,
  November 1991                              600,000     $611,746   $1,788,254
 Common stock issuance costs                                         ($889,849)
 Cumulative translation adjustment                                                                                      
 Common stock issued,
  September 1992                             700,000     $699,033     $875,967                   ($53,689)
 Common stock issuance costs                                         ($312,755)
 Common stock to be issued                                                                                    $120,000
 Cumulative translation adjustment                                                                                      
 Elimination of cumulative translation 
     adjustment                                                                               
Officers advances, net                                                                                                  
                                          ------------------------------------------------------------------------------
Balance, December 31, 1992                 4,500,000   $4,465,353   $1,461,617   ($3,475,608)    ($53,689)    $120,000  
 
Net loss                                                                           ($996,089)
Common stock transactions:
 Common stock issued,                                                           
   January 1993                              160,000       $1,600     $118,400                               ($120,000)
 Common stock issued,
   April 1993                                 30,000         $300      $11,700
 Change in common stock par
   value resulting from merger                                     
 Change in common stock par
   value resulting from merger                        ($4,420,353)  $4,420,353
Repayments                                                                                                              
                                          ------------------------------------------------------------------------------
Balance,June 30, 1993                      4,690,000      $46,900   $6,012,070   ($4,471,697)    ($53,689)          $0  
 
Net loss                                                                         ($1,543,888)
240,000 shares of common
 stock to be issued                                                                                            $30,000
Repayments                                                                                        $53,689               
                                          ------------------------------------------------------------------------------
Balance, June 30, 1994                     4,690,000      $46,900   $6,012,070   ($6,015,585)          $0      $30,000  
 
Net loss                                                                         ($2,070,292)
Common stock issued, June 1995             2,150,000      $21,500     $276,068                   ($20,000)    ($30,000)
Warrants issued for services                                           $40,200                                          
                                          ------------------------------------------------------------------------------
Balance June 30, 1995                      6,840,000      $68,400   $6,328,338   ($8,085,877)    ($20,000)          $0  
Common stock issued, net of
  issuance costs of $848,877:                                      
     July, 1995                            6,160,000      $61,600   $1,304,450
     August, 1995                            717,600       $7,176     $161,460
     September, 1995                      13,807,296     $138,073   $2,370,389
     November, 1995                        1,897,840      $18,978     $425,482
     December, 1995                       11,217,157     $112,172   $1,292,473
     May, 1996                             6,275,000      $62,750   $3,300,422
     June, 1996                                5,058          $51       $3,650
Payments received on                                               
  subscription receivable                    (19,192)       ($192)    ($14,808)                   $20,000
Compensation expense recorded
  on stock options                                                    $125,000
Net loss                                                                         ($2,396,963)
                                          ------------------------------------------------------------------------------
Balance, June 30, 1996                    46,900,759     $469,008  $15,296,856  ($10,482,840)          $0           $0  
Common stock issued Sept., 1996               10,000         $100       $2,400
Stock offering costs                                                  ($12,310)
Net loss                                                                           ($706,797)
                                          ------------------------------------------------------------------------------
Balance, September 30, 1996
(Unaudited)                               46,910,759     $469,108  $15,286,946  ($11,189,637)          $0           $0  
                                          ==============================================================================
</TABLE>
<PAGE>


                                  QUANTECH LTD
                          (A Development Stage Company)
                   STATEMENT OF STOCKHOLDERS' EQUITY-UNAUDITED (continued)
    Period From September 30, 1991 (date of Inception), to September 30, 1996
<TABLE>
<CAPTION>
                                         
                                                 Due      Cumulative
                                                 From     Translation
                                               Officers   Adjustment
                                          ----------------------------
<S>                                             <C>        <C> 
Balance at Inception
Net Loss                                     
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                   
 Cumulative translation adjustment                          ($209,099)
 Elimination of cumulative translation 
     adjustment                                             ($178,655)
Officers advances, net                            ($27,433)
                                            --------------------------
Balance, December 31, 1992                        ($27,433)        $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               
 Change in common stock par
   value resulting from merger               
Repayments                                          $5,137
                                          ----------------------------
Balance,June 30, 1993                             ($22,296)        $0
 
Net loss                                     
240,000 shares of common
 stock to be issued                          
Repayments                                         $22,296
                                          ----------------------------
Balance, June 30, 1994                                  $0         $0
 
Net loss                                     
Common stock issued, June 1995              
Warrants issued for services                   
                                          ----------------------------
Balance June 30, 1995                                   $0         $0
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                           
Net loss                                     
                                          ----------------------------
Balance, June 30, 1996                                  $0         $0
Common stock issued Sept., 1996              
Stock offering costs                         
Net loss                                     
                                          ----------------------------
Balance, September 30, 1996
(Unaudited)                                             $0         $0
                                          ============================

</TABLE>

<PAGE>

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

                                                                                        Period From
                                                                                        September 30,
                                                               Three        Three           1991
                                                               Months      Months         (Date of
                                                               ended       ended        Inception), to
                                                           September 30, September 30,  September 30,
                                                                1996         1995           1996
                                                            ----------   ------------   ------------
<S>                                                         <C>          <C>            <C>
Cash Flows From Operating Activities
 Net Loss                                                   $(706,797)   $  (558,067)   $(11,189,637)
 Adjustments to reconcile net loss to net cash used in
  operating activities:
  Elimination of cumulative translation adjustment               --             --         (178,655)
  Depreciation                                                 13,841          6,695        138,852
  Amortization                                                 59,732         59,732      1,188,011
  Noncash compensation and interest                              --             --          489,250
  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                    (27,705)         7,722          7,463
    Increase (decrease)in accounts payable                     40,932       (512,566)       154,311
    Increase (decrease) in accrued expenses                    23,367       (285,710)       388,628
                                                             ---------    ----------    -----------
     Net cash used in operating activities                   (596,630)    (1,282,194)    (8,378,127)
                                                             ---------    ----------    -----------

Cash Flows From Investing Activities
 Purchase of property and equipment                           (64,654)       (65,962)      (387,095)
 Organization expenses                                           --             --          (97,547)
 Officer advances                                                --             --         (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                               --             --          (22,943)
 Purchase of Spectrum Diagnostics, Inc., net of cash             --             --             --
  and cash equivalents acquired                                  --             --       (1,204,500)
                                                             ---------    ----------    -----------
   Net cash used in investing activities                      (64,654)       (65,962)    (4,316,844)
                                                             ---------    ----------    -----------

Cash Flows From Financing Activities
 Net proceeds from the sale of common stock                 $   2,500     $2,882,952    $12,610,736
 Proceeds on debt obligations                                    --             --        2,658,435
 Payments received on stock subscription receivables             --             --            5,000
 Stock offering costs                                         (12,310)          --          (12,310)
 Payments on debt obligations                                  (4,605)      (335,893)      (502,960)
                                                            ---------     ----------    -----------
  Net cash provided by financing activities                   (14,415)     2,547,059     14,758,901
                                                            ---------     ----------    -----------

Effect of Exchange Rate Changes on Cash                          --             --          203,242
                                                            ---------     ----------    -----------
   Net decrease in cash                                      (675,699)     1,198,903      2,267,172
Cash
 Beginning                                                  2,942,871          4,276           --
                                                            ---------     ----------    -----------
 Ending                                                    $2,267,172     $1,203,179    $ 2,267,172
                                                            ---------     ----------    -----------



</TABLE>


<PAGE>


                                  QUANTECH LTD.
                         ( A Development Stage Company )

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

Note 1. BASIS OF PRESENTATION
In the opinion of the  management  of the Company,  the  accompanying  unaudited
financial  statements  contain  all  adjustments  (consisting  of  only  normal,
recurring adjustments) necessary to present fairly the financial position of the
Company as of  September  30,  1996 and the results of  operations  and its cash
flows for the three-month periods ended September 30, 1996 and 1995. 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 the Company's annual financial  statements and related notes in
the Company's Annual Report on Form 10-KSB for the year ended June 30, 1996.

Note 2. LICENSE AGREEMENT
The Company has a license agreement 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 the Company. In addition, if the Company sublicenses the technology,
the  Company  will pay a royalty of 15 percent of all  revenues  received by the
Company under any sublicense.  If the cumulative payments of these two royalties
fail to reach at least  $1,000,000  by December 31,  1997,  the licensor has the
right  to  deprive  the  Company  of its  exclusive  rights  under  the  license
agreement.  As of  September  30,  1996 the  Company  has paid  $850,000  of the
cumulative  royalty  payments.  The Company has also ratably accrued  additional
minimum  royalty  payments  of $37,500  as of June 30,  1996,  because  sales or
sublicense  revenues  through  December 31, 1997 may not be adequate to meet the
cumulative  minimum royalty  payments.  The Company intends to accrue the entire
$150,00 by December 31, 1997.



<PAGE>



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

History

         Quantech Ltd.  ("Quantech"  or the "Company") was formed under the laws
of  Minnesota  for the purpose of  effecting  the change of domicile of Spectrum
Diagnostics  S.p.A  ("SDS")  from Italy to the state of  Minnesota  through  the
merger  with SDS on April 14,  1993.  Quantech  had no  operations  prior to the
merger and is continuing the business of SDS to  commercialize  Surface  Plasmon
Resonance ("SPR") technology licensed from Ares-Serono. SPR, the core technology
of  Quantech's  proposed  medical  diagnostic  system,  enables  the  Company to
integrate the existing diagnostic methodologies of immunoassays,  DNA probes and
chemical  binding into a single,  simple  economical  system in order to provide
rapid, quantitative,  diagnostic results. The Quantech system configuration will
consist of a small,  bench top instrument and a series of disposable slides with
multiple tests per slide.  It is anticipated  that the Quantech system will have
the ability to analyze body fluids (e.g.  whole blood,  urine,  saliva)  without
preparation or addition of reagents.  The Company's  initial focus is to develop
its SPR  instrument  for Critical  Care Units of  hospitals;  initially  for the
emergency  department  of such  Units.  Its first  test will aid  physicians  in
assessing whether a patient has suffered a heart attack.

         Quantech is a development  stage company which has suffered losses from
operations and will require  additional  financing to commercialize its product.
The Company's product development must be completed,  FDA approval obtained, the
product  introduced  to  the  market  and  ultimately   Quantech  will  need  to
successfully attain profitable operations. These factors raise substantial doubt
about the Company's ability to continue as a going concern.

Results of Operations

         The Company has incurred a net loss of  $11,189,637  from September 30,
1991 (date of inception)  through  September 30, 1996 due to expenses related to
formation and operation of 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  Quantech's  predecessor,  Spectrum  Diagnostics  Inc.  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.

         For the three months ended  September 30, 1996 the Company had interest
income of $34,692  compared to $1,151 for the same period in 1995 as a result of
cash  on  hand  obtained  from  Quantech's  private   placements.   General  and
administration  expenses  increased  from  $228,663  for the three  months ended
September  30, 1995 to $357,494 for the three months ended  September  30, 1996.
This increase in Quantech's  general and  administration  expenses was in part a
result of adding general and administration personnel and other costs associated
with  Quantech  continuing  to  build  its  infrastructure  in  anticipation  of
commercial  production  of its  system.  A  portion  of the  increase  was  also
attributable to increased public relations  expenditures as the Company incurred
costs  for its year  end  materials  (Form  10-KSB  and  Annual  Report),  proxy
materials,  prospectus for selling  shareholders and investor packages requested
by potential shareholders and brokers.  General and administration  expenses are
not anticipated to increase significantly in the next quarter, but will continue
to grow in the future as the Company nears market introduction of, and begins to
sell, its system.

         Research and  development  costs  increased  from $235,734 in the three
months  ended  September  30, 1995 to $362,832 in the same period of 1996.  This
increase is a result of accelerated  research and development activity including
hiring of  employees  and  consultants  and engaging  firms to perform  contract
development  work.  Minimum royalty expense  decreased in the three months ended
September  30,  1996 as  compared  to the same  1995  period  as a result of the
declining minimum royalties owed under Quantech's license with Ares-Serono.


<PAGE>

         For the three months ended  September  30, 1996  Quantech had a loss of
$706,797 as compared to $558,067 for the same period ended  September  30, 1995.
This increase was a result of the rise in research and  development  and general
and  administrative  expenses in the 1996  period  exceeding  decreases  in such
period in minimum  royalty and  financing  expenses and the increase in interest
income.

         In the three months ended  September 1996, the Company has continued to
contract for the  development of its prototype  instrument and its  manufacture;
continued  to  develop  the  chemistries  necessary  to do  specific  tests  and
contracted the  development of the disposable  slides for the tests.  Management
anticipates  that the  Company  will be able to submit its system to the FDA for
approval  around the end of calendar year 1996. Such FDA approval is anticipated
in the spring of 1997.  After such  approval  the system will be marketed in the
United States.  This  timetable  will be influenced by the Company's  ability to
complete  prototype   development  of  its  system  and  necessary  testing  for
submission  of its FDA filing and  delays it may  encounter  with the FDA in its
review of the system.


Liquidity and Capital Resources

         From inception to September 30, 1996, Quantech has raised approximately
$15,500,000 through a combination of public stock sales, private stock sales and
debt  obligations.  Additional  funds  will be  needed  to  establish  sales and
marketing and production  capabilities and to begin any significant sales of the
Company's  product once  development  is completed.  Although  current funds are
expected  to allow the Company to proceed  through  FDA  approval of its system,
Quantech will not have sufficient funds to commence commercial production of its
system. Although the Company has a limited lending arrangement with its bank, it
does not anticipate receiving significant funding from lenders.  There can be no
assurance  that the Company will obtain  additional  capital when needed or that
additional capital will not have a dilutive effect on current shareholders.

         Quantech incurred capital expenditures of approximately  $65,000 in the
three  months ended  September  30, 1996.  The Company  anticipates  significant
capital  expenditures in fiscal 1997 for laboratory and production equipment and
office  expansion  as the Company  nears  product  introduction.  The timing and
amount of such  expenditures  will be governed by the Company'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. In addition, to capital expenditures, the Company has a final minimum
royalty payment of $150,000 due to Ares-Serono on December 31, 1997.

         The  Company  currently  has  outstanding  47,080,759  shares of Common
Stock.  It also has options and warrants  outstanding  to purchase an additional
16,153,603 shares.

Issued But Not Yet Adopted Accounting Standard

         In October 1995, the Financial Accounting Standards Board (FASB) issued
Statement No. 123, "Accounting for Stock-Based Compensation",  which establishes
financial   accounting  and  reporting   standards  for   stock-based   employee
compensation  plans.  The Company will be required to adopt Statement No. 123 in
fiscal 1997. The Company does not intend to adopt Statement No. 123 in measuring
expense,  however it will present the proforma  disclosures  and those pro forma
amounts  will  likely be less than the  amounts  shown in future  statements  of
income.


<PAGE>

Cautionary Statements

         As provided for under the Private  Securities  Litigation  Act of 1995,
the Company wishes to caution  investors that the following  important  factors,
among  others,  in some cases have  affected  and in the future could affect the
Company'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 the Company:

No History of Operations; Development Stage Company; Going Concern Uncertainty

         To date,  the  Company  does not have a product  ready to be brought to
market and its proposed operations are subject to all of the risks inherent in a
new business enterprise,  including completion of commercial development and FDA
approval of its products within  reasonable time frames and budget  constraints,
lack of marketing  experience and lack of production history.  The likelihood of
the  success  of the  Company  must be  considered  in  light  of the  expenses,
difficulties and delays  frequently  encountered in connection with the start-up
of  new  businesses,  the  development  of a new  product  and  the  competitive
environment  in which the Company will  operate.  The report of the  independent
auditors on the  Company's  financial  Statements  for the period ended June 30,
1996,  includes an  explanatory  paragraph  relating to the  uncertainty  of the
Company's  ability to continue as a going concern.  The Company is a development
stage company which has suffered  losses from  operations,  requires  additional
financing,  and ultimately needs to successfully  attain profitable  operations.
These factors raise substantial doubt about the Company's ability to continue as
a going  concern.  There can be no  assurance  that the Company  will be able to
develop a commercially  viable product or marketing system or attain  profitable
operations.

Future Capital Needs

         The  Company  does not have  sufficient  funds to  commence  commercial
production and sales of its system,  but anticipates that its current funding is
adequate to complete FDA approval of its first  product and start  preproduction
and premarket  activities.  The Company's ability to begin commercial production
and  sales  of its  system  will  depend  upon  the  continued  availability  of
investment capital,  funding made by strategic partner(s) or licensing revenues,
until the revenues from sale of the instruments and associated test  disposables
are sufficient to maintain  operations.  Additional  funds may have to be raised
through equity or debt financing  which could dilute  current  shareholders.  If
funding  is not  available  when  needed,  the  Company  may be  forced to cease
operations and abandon its business.  In such event,  Company shareholders could
lose their entire investment

Other Factors

         As described in the  Company's  Form 10-KSB for the year ended June 10,
1996 under  Cautionary  Statements and Prospectus dated September 12, 1996 under
Risk Factors, 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 , affects of  government  regulation on
product and its sale,  ability to manufacture  product,  exposure to the risk of
product liability and market for the Company's shares.



<PAGE>


                                     PART II
                                OTHER INFORMATION


Item 1. Legal Proceedings
            Not Applicable

Item 2. Changes in Securities
            Not Applicable

Item 3. Defaults upon Senior Securities
            Not Applicable

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

Item 5. Other Materially Important Events
            On April 23, 1996, a group of three  shareholders  of Quantech Ltd.,
calling itself The Group for the  Maximization of Shareholder  Value of Quantech
Ltd. (the  "Group"),  notified the Company that it had filed a Schedule 13D with
the Securities and Exchange Commission. The Group on September 15, 1996 withdrew
its Schedule 13D and the Group disbanded.

Item 6. Exhibits and Reports on 8-K
            a. Exhibits - See "Exhibit Index" on page following signatures.
            b. Reports on 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/ R.H. Joseph Shaw
                                           R.H. Joseph Shaw
                                           President and Chief Executive Officer

                                           /s/ Gregory G. Freitag
                                           Gregory G. Freitag
                                           Chief Financial Officer

Date:  November 12, 1996


<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                                 WASHINGTON D.C.

                          EXHIBIT INDEX TO FORM 10-QSB
                                       OF
                                  QUANTECH LTD.

                    For The Quarter Ended September 30, 1996
                         Commission File Number: 0-19957


Exhibit                          Description
Number



10.1              Design proposal with Robert Case + Associates, Inc. dated 
                  October 2, 1996

10.2              Design proposal with Robert Case + Associates, Inc. dated 
                  October 15, 1996