<PAGE>   1

================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549
                                _______________

                                 FORM 10-K
(Mark One) 
    X                 ANNUAL REPORT PURSUANT TO SECTION 13
---------  OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
              
                 For the fiscal year ended June 30, 1995
                                       OR
              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
---------         SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                  For the transition period from       to
                              ____________________

                         Commission file number 0-12792

                             APOGEE ROBOTICS, INC.
             (Exact name of Registrant as specified in its Charter)

<TABLE>
    <S>                                                             <C>
                          Colorado                                                         84-0916585
    (State or other jurisdiction of Incorporation or organization)            (I.R.S. Employer Identification No.)

                 1301 Meadowood Lane
                 Charlotte, North Carolina                                                   28211
                 (Address of principal executive offices)                                  (Zip Code)

                                                                                         (704) 362-6816
                                                                    (Registrant's telephone number, including area code)
</TABLE>

Securities registered pursuant to Section 12(b) of the Securities Exchange Act
of 1934: NONE

Securities registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934:

                              Title of Each Class
                           Common Stock, No Par Value

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 report(s), and (2) has been subject to
such filing requirements for the past 90 days.  Yes              No    X
                                                    ------           ------

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.    X
                 ------

Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.  Yes              No    X
                            ------          ------

The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of a date within 60 days prior to the date of filing is not
determinable due to the absence of any bid or asked price during such period.

           The number of shares of Common Stock, no par value, outstanding on
December 31, 1995 was 18,195,022

          Documents Incorporated by Reference into this Report:  None
                  Page 1 of 69 consecutively numbered pages
                         Index to Exhibits on page 41

================================================================================
<PAGE>   2
                                     PART I

ITEM 1.  BUSINESS

General

         Apogee Robotics, Inc. ("Apogee" or the "Company") was founded in 1983
for the purpose of developing advanced materials handling systems utilizing
automatic guided vehicle systems ("AGVS"), for use in manufacturing plants,
warehouses, offices and other facilities.  Apogee's AGVS were computer or
microprocessor controlled, driverless vehicles equipped with various material
handling devices to automatically transport materials for pick-up to various
destinations under the supervision of computer systems.

         On December 9, 1994, Apogee and it's wholly owned subsidiary, AGV
Acquisitions, Inc., filed for protection from their creditors under Chapter 11
of the Federal Bankruptcy Codes in Denver, CO and is currently operating as a
debtor in possession.  This filing was the consequence of transactions
involving the Company and Conagher & Co., Inc.  ("Conagher"), including certain
stock subscription agreements which, in managements view, Conagher and its
principal, Pattinson Hayton III ("Hayton"), failed to honor (see Part I, Item
1. Business, section "Company Restructuring," and Part I, Item 3. Legal
Proceedings, below for a discussion of these matters).  As a consequence of
Apogee's association with Conagher and Hayton, who also served as a director
and chairman of Apogee's Board of Directors, and Apogee's inability to maintain
listing requirements, the Company  was delisted by NASDAQ on February 7, 1995.
(See Part I, Item 1. Business, below for a discussion of these matters.)

Automatic Guided Vehicle Systems ("AGVS")

         An AGVS is a means of transportation that uses robotic vehicles to
move materials through a manufacturing plant, warehouse, office, jail, or other
such facilities, and is frequently used as an alternative to conveyors,
manually operated vehicles, and other conventional methods of materials
handling.  Through a computer system, Apogee's AGVS were capable of tracking
inventory and work-in-process through an entire material handling process,
allowing a user to implement various strategies to improve productivity.

         AGVS sold by Apogee followed wire, optical tape, or magnetic
guidepaths installed in or on a floor.  Apogee's standard optically and
magnetically guided vehicle (the "Orbitor") represented a substantially less
expensive alternative to wire guidance.  On October 5, 1994, Apogee acquired
the AGVS Division of SI Handling Systems, Inc.  ("SI"), which manufactured AGVS
utilizing both wire and non-wire guidance technologies (see Part I, Item 1.
Business, Section "Acquisition of SI Handling AGVS Division" of a discussion of
this matter).  This acquisition would increase Apogee's AGVS product and
distribution network and add to Apogee's technical and personnel resources.

         As a result of Apogee's bankruptcy filing on December 9, 1994, all
development of AGVS technology and product, as well as all manufacturing, sales
and marketing, have been terminated, and management does not expect any
resources to be expended keeping the existing body of technology current.  As a
result, any advantages that Apogee technology and product may have enjoyed
prior to Apogee's bankruptcy filing have eroded subsequent to bankruptcy and
are expected to erode further during the pendency of bankruptcy and thereafter,
unless merger candidates described in the section below entitled "Bankruptcy
Filing,"  devote substantial resources to update these products and technology,
and restore manufacturing, sales and marketing activities.

         In an effort to mitigate the complete loss of any value in the Apogee
product and technology relating to it's Orbitor line of products, the Company
entered into an Asset Purchase Agreement with FMC on July 12, 1995, wherein FMC
acquired certain electro-mechanical technology and products of the Orbitor
line, and a quotation system for $40,000.  The bankruptcy court order approving
this transactions was entered on September 13, 1995.  A condition of this
agreement provides that if Apogee emerges from bankruptcy as an AGVS provider,
or if another purchaser





                                       2
<PAGE>   3
emerges, interested in the acquisition of the entire body of Apogee's AGVS
products and technology, the purchase will revert to an irrevocable license to
utilize the technology.

Relationship with Conagher

         On May 12, 1994, Apogee entered into a Stock Subscription Agreement
(hereinafter the "Subscription Agreement") with Conagher & Co., Inc.
("Conagher"), wherein Apogee exchanged 6,000,000 shares of its Common Stock for
6,000,000 shares of Conagher's Preferred Stock.  The Subscription Agreement
provided that between June 15, 1994 and September 15, 1994, Conagher would
redeem all or a portion of its Preferred Shares for $2,000,000.  At the end of
that period, shares of Conagher Preferred Stock that remained unredeemed could
be exchanged by Apogee for an equal number of shares of Apogee's Common Stock
held by Conagher.  Simultaneous with the execution of the Subscription
Agreement, Conagher assigned, conveyed, transferred, or sold (which cannot be
determined by Apogee) 5,200,000 shares of the Apogee Common Stock it acquired
from Apogee under the Subscription Agreement, to Importationes y Exportationes,
SA ("IMEXSA"), a Nicaraguan company, that subsequently filed a Regulation S
registration of the Apogee Common Stock.  On June 5, 1994, Conagher agreed to
purchase an additional 3,000,000 shares of Apogee's Common Stock for
$1,000,000.

         On September 21, 1994, Apogee and Conagher entered into an Amended and
Restated Stock Acquisition Agreement (hereinafter the "Revised Agreement"),
amending the May 12, 1994 Subscription Agreement and terminating the June 5,
1994 agreement.  The Revised Agreement reduced Conagher's obligations for
payments to Apogee from $3,000,000 to $1,028,000.  The Revised Agreement also
provided Conagher with the right to purchase 1,250,000 shares of Apogee's
Common Stock for $250,000 prior to October 1, 1994.

         The Revised Agreement was purportedly ratified by Apogee's Board of
Directors consisting of Hayton, principal officer, director, and shareholder of
Conagher, and Apogee's Chairman; Sven Kraumanis and William G. Conway, both
nominees of Conagher; and Robert Oliphant.  The Company contends that the
Revised Agreement was not approved by a requisite vote of disinterested board
members and, in any event, was never consummated.

         Subsequent to the foregoing events, Apogee's management determined
that the ratification of the Revised Agreement by Apogee's then current Board
of Directors on September 23, 1994 was improper.  Further investigation by
Apogee management revealed other irregularities relating to Conagher's actions
on behalf of Apogee, in addition to their ongoing obligations to Apogee under
the various agreements.  Negotiations with Conagher to cure these
irregularities were delayed as a result of Hayton's chairmanship of the Company
and his effective control of the Company's Board of Directors, as well as his
extended absences overseas.  Furthermore, an article in the October 13, 1994
edition of The Wall Street Journal revealed allegations regarding Hayton's
character, integrity, and business practices that effectively terminated
Apogee's access to public financial markets and damaged Apogee's reputation
such that it could not execute it's business plan.

         On or about November 1, 1994, Hayton reached an agreement with a
Canadian company, 480452 B.C. Ltd. ("480452"), to acquire substantially all of
Conagher's obligations to Apogee.  These negotiations were conducted without
any participation from Apogee management, but required Apogee's consent to
close the transaction.  At the same time, Company management was advised by
NASDAQ that Apogee would be delisted immediately as a result of its affiliation
with Conagher and Hayton, which delisting notification, Conagher and Hayton
failed to disclose to the principal of 480452.  Company management's subsequent
disclosure of the delisting notice to the principal of 480452 resulted in the
termination of the agreement between Conagher and 480452.   If the agreement
between Conagher and 480452 had closed, it would not have been ratified by the
Company, because the principal of 480452 was under investigation by the
Vancouver (Canada) Exchange for certain securities violations, and the
agreement contained provisions unsatisfactory to the Company.

         Subsequent negotiations with Conagher contained various unfulfilled
commitments for funding the Company,





                                       3
<PAGE>   4
which were ultimately terminated contemporaneously with the abrupt resignation
of Hayton and his designees from Apogee's Board of Directors on November 21,
1994.  In a press release by Conagher dated the same day, Hayton accused Apogee
and certain of its managers and directors of fraudulent misrepresentation.

         On December 2, 1994, Conagher filed an action against Apogee and
certain of its managers and directors in the United States District Court for
the Central District of California, Case #CV-ED94-270 RT (GAKX), alleging
various securities violations and financial misrepresentations.  This case was
removed February 16, 1995 to the U.S. District Court for the District of
Colorado.  By operation of the bankruptcy rules, this action remains under an
automatic stay.  (See Part I, Item 3. Legal Proceedings below for a discussion
of these matters.)

         Additionally, on December 2, 1994, Conagher filed a complaint against
James R. Currier, Sr., Apogee's newly appointed President and CEO,  in the
Superior Court for the State of California for the County of Riverside, Palm
Springs Branch (Case #079188), alleging misrepresentation of certain financial
conditions of Apogee.  This action was dismissed May 1, 1995 due to the lack of
personal jurisdiction.  On May 1,1995, Currier filed an action against Conagher
and Hayton in the U.S. District Court for the Western District of North
Carolina (Case #3:95CV207H) seeking a declaratory judgement relative to
Conagher's California claims and asserting claims of fraud and
misrepresentation against them.  (See Part I, Item 3. Legal Proceedings below
for a discussion of these matters.)

         On December 4, 1994, prior to the declaration of bankruptcy by the
Company on December 9, 1994, Robert Oliphant and James W. Jones were reelected
directors of Apogee.  Oliphant subsequently resigned December 30, 1994 to
pursue other employment interests.  Jones and Currier remain the Company's sole
directors.

         As a result of the declaration of bankruptcy and the failure of the
subscription agreements between Apogee and Conagher, settlement agreements
described in Apogee's Annual Report on Form 10K for the period ended June 30,
1994 under the section "Company Restructuring," with certain persons to whom
Apogee owed approximately $500,000 were not ratified by Apogee's Board of
Directors, and remain obligations of the bankruptcy estate, with the exception
of shares in Princeton Electronic Products that collateralized a loan to the
Company, were subsequently transferred to the security holder by bankruptcy
court order dated August 15, 1995.

Acquisition of SI Handling AGVS Division

         As reported in prior filings, AGV Acquisitions, Inc. ("AGV") (which
became Apogee's wholly owned subsidiary simultaneous with the acquisition)
acquired SI's AGVS Division on October 4, 1994.  Under Amendment #2 to the
Asset Purchase Agreement between AGV and SI, SI was required to furnish Apogee
with certain assignment consents and lien waivers no later than November 4,
1994, which items were omitted under the original purchase documentation.
After receipt of those consents and waivers, Apogee would be required to pay
$250,000 to close the transaction.  SI subsequently failed to provide these
consents and waivers.  Apogee management attempted to restructure certain terms
and conditions of the Asset Purchase Agreement to avoid declaration of default.
Hayton's abrupt resignation from Apogee's Board of Directors and repudiation of
Conagher's stock subscription agreements with Apogee terminated those
negotiations.

         In early January, 1995, SI seized control of the disputed assets.
Thereafter, Apogee filed an adversary proceeding against SI in the Denver
bankruptcy court on January 20, 1995 to resolve the dispute over ownership of
the purchased assets.  In a Compromise Agreement between Apogee and SI, dated
September 12, 1995, a motion was filed with the bankruptcy court and notice
issued, to dismiss the adversary proceeding with prejudice and unwind the Asset
Purchase Agreement of October 4, 1994.  This matter received approval of the
bankruptcy court on October 30, 1995.  (See Part I, Item 3. Legal Proceedings
for a discussion of these matters.)



Bankruptcy Filing





                                       4
<PAGE>   5

         On December 9, 1994, Apogee and it's wholly owned subsidiary, AGV
filed for protection from its creditors under Chapter 11 of the Federal
Bankruptcy codes in the Federal Bankruptcy Court in Denver, CO.  This filing
was the consequence of transactions involving Apogee and Conagher, including
certain stock subscription agreements which, in managements view, Conagher and
Hayton failed to honor.  Management believes the satisfaction of Conagher's
obligations under the stock subscription agreements with Apogee would have
provided adequate liquidity for the Company to prosecute it's ongoing business
objectives.  Company management believes Apogee is current in all of its
bankruptcy filings.  A Creditor's Committee has been appointed by the court and
relations between this committee and the Company  are cooperative and amicable.

         Significant events being addressed within the bankruptcy estate are as
follows:

         1)      Administrative consolidation of the Apogee and AGV bankruptcy
                 estates (Case Nos. 94-22193-CEM and 94- 22194 MSK
                 respectively);

         2)      Sale of 40,000 shares of common stock in Loronix Information
                 Systems, Inc. on or about June 12, 1995 for $128,000;

         3)      Sale of certain technology and products to FMC Corporation,
                 Inc. ("FMC") for $40,000.00 pursuant to the terms and
                 conditions of and Asset Purchase Agreement between the Company
                 and FMC dated July 12, 1995 and approved by the court
                 September 13, 1995;

         4)      Settlement of the adversary complaint against SI pursuant to a
                 Settlement Agreement dated September 12, 1995 wherein the
                 adversary proceeding is dismissed with prejudice, general
                 releases were granted between Apogee and SI, and SI paid to
                 Apogee $150,000;

         5)      Sale of various inventory items for sums not in excess of
                 $20,000; and

         6)      Establishment of October 31, 1995 Bar Date.  Since Apogee's
                 sales contracts provided warranty liabilities to the Company,
                 management cannot fully assess the nature, scope and extent of
                 what additional claims might arise that must be accounted for
                 under the bankruptcy estate.

         Company management, in cooperation with Company bankruptcy counsel are
vigorously pursuing the following items:

         1)      Filing of a Reorganization Plan on or about March 1, 1996
                 under which outstanding claims relating to employees,
                 creditors, and equity holders will be settled.  Company
                 management believes that settlement of all debt will be
                 accomplished through its Plan of Reorganization.  Management
                 intends to pursue merger opportunities with other companies
                 involved in the factory automation industry, and believes that
                 Apogee's substantial NOL carry forwards, in addition to its
                 public status, will make it an attractive merger candidate
                 with successful and profitable privately owned operations.
                 Management is currently investigating several such
                 opportunities, although no assurance can be given that such a
                 merger can be negotiated on terms acceptable to Apogee's
                 shareholders or the bankruptcy court.  Nor can any assurances
                 be given that management's intention to exit the bankruptcy
                 proceeding as a non- operating entity for purposes of
                 arranging a merger will be ratified by Company creditors,
                 equity holders, or the bankruptcy court.

         2)      Company management is currently preparing a Disclosure
                 Statement, and expects to file a Disclosure Statement
                 concurrent with the Reorganization Plan.





                                       5
<PAGE>   6

         3)      Apogee management has appointed special counsel for purposes
                 of litigating claims that the Company plans to assert against
                 various entities and individuals, in addition to defense of
                 claims asserted by Conagher.  Management believes there is a
                 significant probability of successful defense against the
                 Conagher complaint as well as a number of affirmative claims
                 and mandatory counterclaims which management expects to assert
                 against Conagher and Hayton in the near future.  (See Part I,
                 Item 3.  Legal Proceedings below for a discussion of these
                 matters.)

Employees

         On November 28, 1994 all employees of the Company were discharged.
Currently, the Company contracts services from it's officers, and other outside
contractors from time to time as the circumstances dictate.

ITEM 2.  PROPERTIES

Licenses and Proprietary Technologies; Patents

         Apogee has developed proprietary technology for AGVS, including
stationary control systems, featuring guidepath optimization, traffic control,
automatic battery charging, and automatic load transfer;  interface software;
and management reporting systems.  No patent protection was sought for these
software products; however the Company has copyright and trade secret
protection under applicable federal and state statutes.  Apogee has received a
U.S. patent on its magnetic guidance technology.

         As a consequence of the bankruptcy filing, Apogee has not incurred any
expenses for research and development, and approximately $10,000 were incurred
for the period from July 1, 1994 to December 9, 1994, the date of the
bankruptcy filing.  The Company has no plans to make any further expenditures
to maintain the existing body of its AGVS technology, software or products, or
to pursue any enhancements thereof.

Facilities

         Apogee has no plant or office space.  Company officials may be reached
through bankruptcy counsel, Jones & Keller, PC located at 1625 Broadway, Suite
1600, Denver, CO 80202.

ITEM 3.  LEGAL PROCEEDINGS

         The following legal proceedings involving the Company are currently
pending:

         1) Case No. 94-22193-CEM, Chapter 11 and Case No. 94-22194-MSK,
         Chapter 11, Jointly administered under Case No.  94-22193-CEM filed in
         the United States Bankruptcy Court, District of Colorado December 9,
         1994.  Apogee and it's wholly owned subsidiary, AGV sought protection
         from its creditors under Chapter 11 of the Federal Bankruptcy Statutes
         appertaining thereto.  Management believes that the Company is current
         in all of its bankruptcy filings.  (See Item 1.  Business, sections
         "Company Restructuring" and "Bankruptcy Filing" for a discussion of
         this proceeding.)

         2) Case No. CV-ED94-270-RT (GAKX) filed in the U. S. District Court,
         Central District of California, December 2, 1994 and subsequently
         removed to the U.S. District Court, District of Colorado on February
         16, 1995.  This action was filed by Conagher against Apogee; certain
         Company managers and directors; and the Company's outside auditors,
         Brock & Co., Inc., alleging various securities violations and
         misrepresentations.  These proceeding are currently under an automatic
         stay provided under bankruptcy statutes.  As a result of a Proof of
         Claim filed by Conagher, these claims, in addition to counterclaims,
         will be defended in the bankruptcy court under Claims Objection
         proceedings. Company management believes that it will be





                                       6
<PAGE>   7
         successful in the defense of these claims and the assertion of
         counterclaims against Conagher in the bankruptcy court, which,
         management believes, should result in the dismissal of the district
         court action. (See Item 1.  Business, sections "Company Restructuring"
         and "Bankruptcy Filing" for a discussion of this proceeding.)

         3) Case No. 3:95CV207H filed in the U.S. District Court, Western
         District of North Carolina, May 1, 1995 by James R. Currier, Sr.
         against Conagher and Hayton.  This action was filed by Currier to seek
         a declaratory judgement relative to claims asserted by Conagher in an
         action against Currier filed in the Superior Court for the State of
         California that was dismissed for the lack of personal jurisdiction.
         Currier has made additional claims of fraud and misrepresentation
         against Conagher and Hayton in this proceeding.  This action is
         scheduled for trial in November, 1996.

         4) Case No. 95-1071 PAC, an Adversary Proceeding under Case No.
         94-22193-CEM in the U.S. Bankruptcy Court for the District of
         Colorado, January 20, 1995 by AGV Acquisitions, Inc., a wholly owned
         subsidiary of Apogee against SI Handling Systems, Inc.  AGV alleged
         default by SI under the AGV/SI Asset Purchase Agreement of October 4,
         1994.  A compromise agreement between the parties was entered into on
         September 12, 1995, with notice issued and motion filed on September
         13, 1995.  Approval of the bankruptcy court was granted October 30,
         1995.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not Applicable.

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCK HOLDER MATTERS

         The Company's Common Stock was traded in the national over-the-counter
market and was quoted on the NASDAQ System until delisting on February 7, 1995.
It is currently listed on the over-the-counter pink sheets.  The following
table sets forth the high and low bid prices for the Company's Common Stock for
the periods indicated.  Prices set forth below do not reflect retail markups,
markdowns or commissions and may not necessarily represent actual transactions.

<TABLE>
<CAPTION>
                                           High             Low
                                           ----             ---
                 <S>                       <C>              <C>
                 Fiscal 1994
                 -----------
                 First Quarter             $1.00            $0.50
                 Second Quarter            $0.82            $0.62
                 Third Quarter             $0.75            $0.56
                 Fourth Quarter            $0.72            $0.31

                 Fiscal 1995
                 -----------
                 First Quarter             $0.34            $0.16
                 Second Quarter            $0.22            $0.03
                 Third Quarter             TRADING SUSPENDED
                 Fourth Quarter            TRADING SUSPENDED
</TABLE>

         As of January 15, 1996, there were approximately 1100 owners of the
Company's Common Stock.  The number of persons owning the Company's securities
includes both record holders and persons holding the securities through banks,
brokers or other nominees.  No dividends have been paid on the Company's Common
Stock and no dividends will be paid in the foreseeable future.





                                       7
<PAGE>   8
         
ITEM 6.  SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
 STATEMENT OF                               Years Ended June 30,
 OPERATIONS DATA                1991               1992              1993            1994              1995
 ---------------                ----               ----              ----             ----             ----
 <S>                       <C>                 <C>              <C>              <C>             <C>
 Contract Revenues
 Earned                    $  1,813,928        $  652,750       $  1,668,849     $    694,607    $    457,233

 Income (Loss) from
 Operations                $(2,530,442)        $(515,399)       $(1,047,505)     $(1,047,505)    $(2,905,651)

 Net Income (Loss)         $(2,473,036)        $(582,198)       $(1,108,436)     $(3,247,907)    $(4,100,364)

 Income (Loss) Per
 Share                     $     (0.50)        $   (0.10)       $     (0.15)     $     (0.31)    $     (0.23)

 Weighted Number of
 Shares Outstanding
                              4,944,274         5,781,062          7,235,625       10,508,485      18,051,446
</TABLE>


<TABLE>
<CAPTION>
 BALANCE SHEET DATA            1991              1992               1993             1994             1995
 ------------------            ----              ----               ----             ----             ----
 <S>                       <C>                <C>                <C>              <C>            <C>
 Current Assets            $ 1,600,555        $1,437,686         $1,781,218       $1,663,763      $   297,110

 Total Assets              $ 2,212,986        $1,935,237         $2,634,876       $2,157,159      $    97,958

 Current                   $   339,170        $   87,547         $1,082,890       $1,588,373      $    47,861
 Liabilities

 Total Liabilities         $   339,170        $   87,547         $1,082,890       $1,588,373      $3,544,993*

 Working Capital           $ 1,261,385        $1,350,139         $  698,328       $   75,390      $   219,249

 Shareholders'
 Equity (Deficit)          $ 1,873,816        $1,847,690         $1,551,986       $  568,786     ($3,047,035)
</TABLE>

 *Includes disputed claims under the bankruptcy estate

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION

General

         Revenues derived from long-term contracts are recognized according to
the percentage-of-completion method, measured by the percentage of costs
incurred to date versus the estimated total contract cost for each contract.
Costs include materials, direct labor, subcontractors, and engineering and
manufacturing overhead.  Provision for estimated losses is made in the period
for which they become determinable.

         Since Apogee's contract revenues have historically consisted of large
sales to a limited number of customers and since large projects are billed
under the percentage-of-completion method, certain balance sheet items will
fluctuate substantially between periods.  As many large projects are billed at
certain intervals, as opposed to monthly, the balance sheet category Costs and
Estimated Earnings will increase as costs on the project accumulate.  Once an
invoice is sent to the customer, such amounts are transferred to Contract
Receivables.  Contract receivables in turn will vary as Costs and Earnings on
large projects are billed and subsequently collected. Conversely, if Apogee
receives an advance or down payment on an order, the amounts received are
reflected as Billings in Excess of Costs and Estimated Earnings.  Such amounts
are gradually transferred to Contract Revenues Earned as Apogee progresses with
work on the particular project.

         On November 28, 1994, Apogee suspended operations pending the filing
of a petition under Chapter 11 of the





                                       8
<PAGE>   9
Federal Bankruptcy Rules on December 9, 1994.  The financial statements for the
fiscal year ended June 30, 1995 reflect both the short period of operations, as
well as activities undertaken as a debtor-in-possession.

Liquidity and Capital Resources

         Apogee's current assets decreased from $1,663,763 on June 30, 1994 to
$297,110 on June 30, 1995 as a result of the following items:

         (a)     Surrender of a Certificate of Deposit of $200,000 to the
                 lender holding this deposit as security for a line of working
                 capital;

         (b)     Write down of substantially all of Apogee's inventory to
                 reflect salvage value only;

         (c)     Write down, liquidation, and/or surrender of securities to
                 collateral holders;

         (d)     Suspension of operations as a result of bankruptcy;

         (e)     Consumption of prepaid expenses;

         (f)     Write down of other assets; and

         (g)     Increase in Cash as a result of the liquidation of certain
                 inventories.

         As a result of the bankruptcy filing, all of Apogee's current
liabilities as of December 9, 1994 were reclassified and recorded as
Liabilities Subject to Compromise, and consist of all creditor claims against
Apogee's bankruptcy estate, including claims that the Company will contest.  In
particular, the Company intends to contest all creditors and employee claims in
connection with the acquisition of the AGVS assets of SI and the subsequent
settlement thereof.

         Historically, Company operations did not generate cash.  Working
capital was generated through public and private sales of the Company's Common
Stock and from short-term, fully collateralized borrowings.  Since 1983, Apogee
has received net proceeds from the sale of its Common Stock in excess of
$9,500,000.

         Apogee's only material future capital commitments are funding the
extensive litigation necessitated by the Conagher lawsuit.  Management believes
that sufficient funds exist for the sponsorship of this litigation as a result
of the liquidation of its remaining assets.

Results of Operations

Fiscal 1995

         The net loss of $4,100,364 for the year ended June 30, 1995 resulted
from operations prior to their suspension on November 28, 1994; and the
subsequent write down of substantially all Company assets, contract
receivables, stock subscription receivables, accrual of professional fees, and
recording of creditor claims under the bankruptcy estate.  Any proceeds of
liquidation will be recorded in subsequent periods and distributed pursuant to
the Company's Reorganization Plan.

Fiscal 1994

         The net loss of $3,247,907 for the year ended June 30, 1994 resulted
primarily from ongoing operations, a change in the control of the Company, and
write-downs in the Company's investments in three unaffiliated





                                       9
<PAGE>   10
corporations.

         The Company continued to experience depressed sales throughout the
year due to delays in completing new contracts and overall lower sales
activity.  The Company experienced a negative gross margin due to low sales,
costs significantly in excess of estimates for completing two large, complex
jobs, and the write-off of $430,000 in inventories.

         Selling, general and administrative costs increased to $974,081 in
1994, compared to $749,759 for 1993 and $628,286 for 1992 as the result of
increased sales efforts and additional personnel needed to complete jobs.
Research and development expenses declined as the Company concentrated on
marketing existing product lines and generally limited new research and
development to job specific requirements, the costs of which were charged to
the particular contract.

         Interest expense was significantly higher in fiscal 1994 as the
Company relied on debt financing to fund its operating losses.

         During May, 1994, the Company exchanged 6,000,000 shares of its common
stock for 6,000,000 shares of redeemable preferred stock of Conagher.
Subsequent to this transaction, Conagher principal shareholder, officer and
director, Hayton began to participate in the Company's management and the
Company began to change its overall corporate strategy.  During the fourth
quarter, the Company made certain accounting adjustments as a result of its new
focus.  In this regard, the Company increased its inventory reserve from
$220,000 to $650,000, wrote off fully depreciated purchased AGVS software with
a cost of $465,403 and wrote down the remaining balance of  $29,361 to net
realizable value, and expensed certain prepaid expenses.

         During 1993 and 1994, the Company acquired nonmarketable equity
interests in three unaffiliated corporations.  The shares of one corporation
were publicly traded and the other two corporations expected to complete
initial public offerings during 1994.  The Company recorded the investments in
these corporations at the lower of cost or net realizable value.  During the
fourth quarter of 1994, the Company recorded reserves of $771,425 to reflect
the investment in these corporations at net realizable value.  The reserves
were necessary based upon the lower trading price of the stock in the public
corporation, the inability of the second corporation to complete its initial
public offering, and the Company's plans to transfer its investments in these
three corporations to third parties as payment for outstanding loans.

Fiscal 1993

         The loss for the year ending June 30, 1993 was primarily due to low
revenues, decreased gross profit margins, increased research and development
expenses, and the Company's share of losses incurred by its European Joint
Venture.  During the year ended June 30, 1993, sales of the Company's Orbitor
vehicles represented 100% of the Company's AGVS sales.

         During the year ending June 30, 1993, Apogee had a negative gross
margin from sales, compared to a gross profit of 33% for the year ending June
30, 1992 due to pricing concessions extended to customers to increase sales and
cost overruns on three large projects.  Research and development expenses
increased due to enhancements developed for the Orbitor vehicle and AGVS
software.

         The Company's net loss during fiscal 1993 included the Company's share
($55,046) of the loss sustained by Apogee Europe, the Company's joint venture
with Stow International NV ("Stow").  In April, 1993 this joint venture was
terminated by the mutual consent of Apogee and Stow.

         During the year ending June 30, 1993, selling, general and
administrative expenses decreased (as a percentage





                                       10
<PAGE>   11
of total revenues) as the result of efforts to reduce such costs and the use of
outside distributors as opposed to salaried sales personnel.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         See the financial statements attached to this report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

         See disclosure on Form 8-K filed October 18, 1995.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The following table sets forth the names, ages and positions of the
Company's directors and executive officers:

<TABLE>
<CAPTION>
Name                              Age              Position
----                              ---              --------
<S>                               <C>              <C>
James R. Currier, Sr.             49               Chairman of the Board of Directors, President,
                                                   Chief Executive Officer,  Chief Financial Officer,
                                                   and Director

James W. Jones                    49               Vice-President, Secretary, and Director
</TABLE>

         There are no family relationships among the Company's officers and
directors.  The directors of the Company will serve in such capacity until the
next annual meeting of the Company's shareholders and until their successors
have been duly elected and qualified.  The Company's officers serve at the
discretion of the Company's Board of Directors.

         James R. Currier, Sr. has been Apogee's President and Chief Executive
Officer since October 5, 1994, and it's Chairman and Chief Financial Officer
since December 7, 1994.  From August, 1982 through November, 1992, Currier was
Executive Vice President of NDC Automation, Inc.

         James W. Jones has been Apogee's Vice President since September, 1994.
From June, 1983 through August, 1994, Jones was Apogee's President and Chief
Executive Officer.  From 1968 through May, 1983, Jones was employed as a
research and development engineer at Hewlett-Packard Company.

Transactions with Related Parties

         In May, 1993, Apogee borrowed $200,000 from Dr. Marvin Clothier's
("Clothier") pension plan at an interest rate of 12% per year.  Clothier, at
the time was a director of the Company, but resigned his directorship in May,
1994 pursuant to the terms of the Apogee/Conagher Subscription Agreement.
$100,000 of this loan was repaid in 1993, with the balance currently pending
under the bankruptcy estate.  As consideration for this loan to Apogee, the
Company paid $10,000 to the retirement plan and issued 20,000 shares of
Apogee's Restricted Common Stock to the retirement plan.

Change in Control

         In connection with the Subscription Agreement between the Company and
Conagher, Jones, Oliphant, Clothier,





                                       11
<PAGE>   12
Gerald Olesh, and Dennis Foss resigned as directors of the Company. Pat Hayton;
and Sven Kraumanis ("Kraumanis") and William G. Conway ("Conway") (nominees of
Conagher), were then elected directors of the Company.  Currier was elected a
director in October, 1994.  On November 2, 1995, Conway resigned as a director. 
On November 21, 1994, Hayton and Kraumanis resigned as directors and Conagher
renounced its obligations to the Company, thus eliminating their control.  (See
Part I, Item 1.  Business, sections "Relationship with Conagher" and
"Acquisition of SI Handling AGVS Division," and Item 3. Legal Proceedings, for
other discussions of this matter).

ITEM 11.  EXECUTIVE COMPENSATION

Compensation

         The following table sets forth in summary form the compensation
received during each of the Company's last three completed fiscal years by (i)
the Chief Executive Officer of the Company, and (ii) by each other executive
officer of the Company who received annual compensation in the form of salary
and bonus in excess of $100,000.

                              ANNUAL COMPENSATION
<TABLE>
<CAPTION>
                                                                                  LONG TERM                            
                                                             OTHER ANNUAL       COMPENSATION         ALL OTHER         
 NAME/PRINCIPAL                                SALARY        COMPENSATION      OPTIONS GRANTED     COMPENSATION        
 POSITION             FISCAL YEAR               (1)               (2)                (3)                (4)            
 --------             -----------               ---               ---                ---                ---            
 <S>                      <C>                 <C>               <C>                 <C>               <C>
 James R.
 Currier, Sr.
 President/CEO            1995                $43,750           $20,000                  -            $43,025


 James W.  Jones
 President/CEO            1995                $23,077              $508                               $18,917

                          1994                $71,154           $14,185             350,000                -

                          1993                $70,000           $13,015                                    -
</TABLE>

         (1)  The dollar value of base salary (cash and non-cash) received.

         (2)   Any other annual compensation not properly categorized as salary
         or bonus, including prerequisites and other personal benefits,
         securities or property.  In the case of Jones, amount represents an
         automobile allowance of $2,500 per year received from the Company, a
         disability insurance premium of approximately $4,000 per year, and an
         allowance for health club expenses of $1,500 per year, premiums on a
         life insurance policy and funding the supplemental compensation
         arrangement described below.  The Company is not the beneficiary of
         the disability policy or the life insurance policy and the
         supplemental compensation arrangement.

         (3) The shares of Common Stock to be received upon the exercise of all
         stock options granted during the period covered by the Table.

         (4) Compensation received for consulting services in the post-petition
         bankruptcy estate.

         Apogee paid the premium on one $250,000 insurance policy on the life
of Jones.  During the four years beginning August, 1990, Apogee also paid
approximately $9,000 each year into a bank account for the benefit of Jones.
Upon the termination of Jones's employment on November 28, 1994, the Company
agreed to the transfer of an insurance policy and supplemental compensation
fund, provided Jones assume all tax liabilities thereof.

Stock Options





                                       12
<PAGE>   13

         There were no stock options granted during the fiscal year ended June
30, 1995.  (See Part III, Item. 12 Security Ownership of Certain Beneficial
Owners and Management, for additional information concerning stock options and
warrants held by the Company's officers and directors and certain other
persons).

Long Term Incentive Plans - Awards in Last Fiscal Year

         None.

Employee Pension, Profit Sharing or Other Retirement Plans

         The Company The company has a defined contribution plan for the
benefit of the Company's employees.  The plan was established in accordance
with the provisions of Section 401(k) of the Internal Revenue Code.  Since the
401(k) plan was adopted, the Company has not made any contributions to this
plan.  Other than the foregoing, the Company does not have a defined benefit,
pension plan, profit sharing or other retirement plan.

Compensation of Directors

         During the fiscal year ended June 30, 1995, the directors of the
Company were paid no compensation.

Employment Contracts

         Apogee entered into an employment agreement with James R. Currier, Sr.
for a three year term ending in October, 1997 at a base salary of $210,000 per
year.  Under the terms of the agreement, Currier's salary would have been
increased on each anniversary of the employment agreement by a percentage equal
to the annual percentage increase in the consumer price index.  Currier's
employment agreement also provides for paid vacations and the right to
participate in any employee benefit plans that the Company may, from time to
time, adopt.

         The employment agreement with Currier remains in full force and effect
and constitutes an obligation of the Company under the bankruptcy estate.
Currier is compensated $75 per hour for services rendered the Company while the
Company remains a debtor in possession.

Compensation Committee Interlocks and Insider Participation

         During the fiscal year ended June 30, 1995, the Company did not have a
compensation committee.  During that period, the following officers
participated in deliberations of the Company's Board of Directors concerning
executive officer compensation:

<TABLE>
         <S>     <C>                               <C>
         1)      James R. Currier, Sr.             President and Chief Executive Officer,
                                                   From October 5, 1994

         2)      James W. Jones                    President and Chief Executive Officer,
                                                   Through September 23, 1994

         3)      Robert Oliphant                   Secretary, Treasurer and Chief Financial Officer,
                                                   (resigned in October, 1994)
</TABLE>

         During the fiscal year ended June 30, 1995, no director of the Company
was also an executive officer of another entity which had an executive officer
of the Company serving as a director of such entity or as a member of the
compensation committee of such entity.





                                       13
<PAGE>   14
The Company did not have any employment or non-competition agreements with any
of its key employees.  The Company does not have any pension, profit sharing or
retirement plan.  All employees were covered by a group health plan provided by
the Company, but such plan lapsed on November 15, 1994 as a result of liquidity
problems associated with Conagher's default under its Subscription Agreement,
just prior to the termination of all employees on November 28, 1994 and the
bankruptcy filing of December 9, 1994.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth, as of January 15, 1996 the number and
percentage of outstanding shares of Common Stock owned by each officer and
director of the Company, by all officers and directors as a group and by each
person known to own more than 5% of the Company's Common Stock.  Other than the
officers and directors listed below, there are no holders of five percent or
more of the Company's Common Stock.

<TABLE>
                                                                                    
Name and Address                           Number of Shares                  Percentage of Class
----------------                           ----------------                  -------------------
<S>                                                <C>                              <C>    
James R. Currier, Sr.                               30,000                           .17%
1301 Meadowood Lane
Charlotte, NC 28211

James W. Jones                                     158,000                           .88%
1428 Glenda Court
Loveland, CO 80537

All Officers and                                   188,000                          1.05%
Directors as a Group
(2 persons)
</TABLE>

Incentive Stock Options

         The Company had in effect four Incentive Stock Option Plans, three of
which were approved by the Company's shareholders.  The 1994 Plan, which was
adopted by the Company's Board of Directors in May, 1994 was not submitted to
the Company shareholders for approval on a timely basis, and the existing Board
of Directors terminated the plan.  The remaining options granted expired in
accordance with the terms and conditions of the respective plans coincident
with the expiration of the employment of Jones and Oliphant.

Non-Qualified Options

         The Company has granted to three former directors of the Company,
non-qualified options to purchase shares of the Company's Common Stock.  These
options terminated pursuant to the terms and conditions of the plan.

Restricted Warrants

         The Company has a number of warrants outstanding.  These warrants and
the shares of Common Stock issuable upon their exercise are restricted
securities as that term is defined by Rule 144 of the Securities Act of 1933.

         The following table provides certain information concerning the
Restricted Warrants:

<TABLE>
<CAPTION>
Note             Warrant                   Issue   Expiration       Shares           Exercise
References       Holder                    Date    Date             Issuable         Price
----------       ------                    ----    ----             --------         -----
<S>              <C>                       <C>     <C>            <C>                <C>
(1)(2)           Brookstreet Securities
</TABLE>


                                     14
                                                            
<PAGE>   15
<TABLE>
<S>              <C>                       <C>     <C>              <C>              <C>
                 Corporation               12/91   12/96            150,000          $0.60
(1)              W. Robert White            1/93    1/98             50,000          $0.75
(1)              W. Robert White            1/93    1/98             75,000          $1.00
(1)              David Jackson              1/93    1/98             50,000          $0.75
(1)              David Jackson              1/93    1/98             75,000          $1.00
(1)(3)           Private Investors         12/93   10/95            506,456          $1.00
(1)(3)           Private Investors         12/93   10/96            506,456          $2.00
                                                                    -------               
                                                   TOTAL          1,412,912
</TABLE>

(1) The Company has agreed upon written request of the holder(s) of at least a
majority of the interests represented by this Warrant and any Common Stock
issued upon the exercise during the period this Warrant is exercisable, the
Company will file a registration statement or notification on Form 1-A of the
Securities Act of 1933, registering or qualifying the underlying shares of
Common Stock for sale.  The Company also agreed to bear the cost of
registration or qualification of these warrants.

(2) The Company has agreed that for the life of this Restricted Warrant, if the
Company should file a registration statement pursuant to the Securities Act of
1933, it will include in such registration statement the shares of Common Stock
issuable upon exercise of the Restricted Warrant and keep such registration
statement current for a certain period of time.  The cost of any such
registration will be paid by the Company.

(3) Warrants were issued as part of Units sold in a 1993 private placement.

         Holders of the Restricted Warrants are protected against dilution of
the equity interest represented by the underlying shares of the Company's
Common Stock upon the occurrence of certain events, including, but not limited
to, stock splits and stock dividends.  In the event of liquidation, dissolution
or winding-up of the Company, the holders of the Restricted Warrants are not
entitled to participate in the distribution of the Company's assets.  The
Company believes that under bankruptcy statutes, it's covenants to register or
qualify these warrants and pay the cost thereof, is unenforceable, and as a
result, the warrants are void.  Furthermore, as part of the Company's
Reorganization, the Company intends to revoke these Restricted Warrants.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         None.

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

                   
                   
         (a)   The following financial statements are filed with this report:

<TABLE>            
          <S>   <C>
                - Opinion of independent certified public accountants; 
                - Balance Sheets as of June 30, 1994 and 1995;
                - Statements of Stockholders' Equity for years ended June 30,  1993, 1994 and 1995; 
                - Statements of Operations for years ended June 30, 1993, 1994 and 1995; 
                - Statements of Cash Flows for years ended June 30, 1993, 1994 and 1995; and 
                - Notes to Financial Statements.
</TABLE>

         (b)   The following reports on Form 8-K were filed during the quarter
               ended December 31, 1994:

         8-K Report dated December 6, 1994 describing the resignations  of
         Hayton, Kraumanis and Conway   
         




                                      15
                                      
<PAGE>   16
        from the Company's Board of Directors; the reelection of Jones and
        Oliphant to fill their  vacancies; the dispute with SI regarding
        defaults under the AGV/SI Asset Purchase Agreement;  and Conagher's
        lawsuit against the Company and certain of its officers and directors. 
        
          (c)       Exhibits
                    --------
<TABLE>
<S>     <C> 

3 (a)   Articles of Incorporation         Incorporated by reference to Exhibit 3(a) to the Company's
                                          Registration Statement on Form S-18, Registration No.
                                          2-87181-D.
                                          
  (b)   Amended Articles                  Incorporated by reference to Exhibit 3(c) of the Company's
                                          Registrations Statement, Registration No. 33-7805.
                                          
  (c)   Bylaws                            Incorporated by reference to Exhibit 3(b) to the Company's
                                          Registration Statement on Form S-18, Registration No.
                                          2-87181-D.
                                          
  (d)   Amended Bylaws                    Incorporated by reference to Exhibit 3(d) to the Company's
                                          Registration Statement, Registration No. 33-7805.

4 (a)   Specimen copy of                  Incorporated by reference to Exhibit 4(a) to the Company's
        Stock certificate                 Registration Statement on Form S-18, Registration No.
                                          2-87181-D.

  (b)   Warrant Agreement                 Incorporated by reference to Exhibit 4(c) to the Company's
        respecting Redeemable             Registration Statement, Registration No. 33-7805.
        Purchase Warrants

  (c)   Form of Warrant                   Incorporated by reference to Exhibit 4(d) to the Company's
        Certificate                       Registration Statement, Registration No. 33-7805.

10(a)   License Agreement                 Incorporated by reference to Exhibit 10(b) to the
                                          Company's  Registration Statement on Form S-18,
                                          Registration No. 2-87181-D.

  (b)   Supply Agreement                  Incorporated by reference to Exhibit 10(c) to the
                                          Company's Registration Statement on Form S-18,
                                          Registration No. 2-87181-D.
  
  (c)   Amendment to License              Filed as Exhibit 10(e) to the Company's Registration  
                                          Agreement Statement on Form S-1, Registration No. 33-7805.
  
  (d)   License Agreement with            Incorporated by reference to Exhibit 10(h) to the
        Hewlett-Packard Company           Company's Registration Statement, Registration No.
                                          33-7805.
  
  (e)   Agreement with Stow               Filed as Exhibit 10(e) to the Company's Registration
        International NV                  Statement on Form S-1, Registration No. 33-42749.
  
  (f)   Amended and Restated              Filed as Exhibit 10(f) to the Company's Report on Form
</TABLE>




                                      16
                                                     
<PAGE>   17
<TABLE>
<S>      <C>                               <C>
         Stock Acquisition                 8-K dated September 23, 1994.
         Agreement

   (g)   Asset Purchase Agreement          Filed as Exhibit 10(g) to the Company's Report on Form
         relating to SI Handling           8-K dated September 23, 1994.
         Systems

   (h)   Consulting Agreement              Filed as Exhibit 10(h) to the Company's Report on Form
         (Pat Hayton)                      8-K dated September 23, 1994.

   (i)   Employment Agreement              Filed as Exhibit 10(i) to the Company's Report on Form
         (James R. Currier, Sr.)           8-K dated September 23, 1994.

   (j)   Asset Purchase Agreement          Filed with this report.
         between FMC Corporation
         and Apogee

   (k)   Settlement Agreement              Filed with this report.
         between SI and Apogee

11       Statement regarding computation   None
         of per share
         earnings

18       Letter regarding change in        None
         accounting principles

23       Consents of experts and           Filed with this report.
         counsel

27       Financial Data Schedule           Filed with this report.
</TABLE>


                                       17
<PAGE>   18
                                   SIGNATURES


Pursuant to the requirements of Section 13 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.

                             APOGEE ROBOTICS, INC.

                             By: /s/ James R. Currier, Sr.   
                                     -------------------------------------------
                                 James R. Currier, Sr., Chairman, President,
                                 Chief Executive Officer, and Chief Financial
                                 Officer

                             Date:


Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

     Signature                     Title             Date      
     ---------                     -----             ----


/s/ James R. Currier, Sr.         Director      January 29, 1996
    ---------------------                 
James R. Currier, Sr.


/s/ James W. Jones                Director      January 29, 1996
    ----------------------                
James W. Jones


                                       18
<PAGE>   19



                         INDEX TO FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                                                                     PAGE
                                                                                                                     ----
<S>                                                                                                                  <C>
INDEPENDENT AUDITOR'S REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   F-2

BALANCE SHEETS - June 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   F-4

STATEMENTS OF OPERATIONS - For the Years Ended June 30, 1995, 1994, and 1993  . . . . . . . . . . . . . . . . . . .   F-5

STATEMENT OF STOCKHOLDERS' (DEFICIT) EQUITY - For the Period from July 1, 1992 through June 30, 1995  . . . . . . .   F-6

STATEMENTS OF CASH FLOWS - For the Years Ended June 30, 1995, 1994, and 1993  . . . . . . . . . . . . . . . . . . .   F-8

NOTES TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   F-9
</TABLE>


                                      F-1
<PAGE>   20

                          INDEPENDENT AUDITOR'S REPORT


Board of Directors
Apogee Robotics, Inc.
Fort Collins, Colorado


We have audited the accompanying balance sheet of Apogee Robotics, Inc. as of
June 30, 1995, and the related statements of operations, stockholders'
(deficit) equity, and cash flows for the year then ended.  These financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Apogee Robotics, Inc. as of
June 30, 1995, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern.  As discussed in Note 1 to the financial
statements, the Company has recurring operating losses and negative cash flows
from operations, and has filed for reorganization under Chapter 11 of the U.S.
Bankruptcy Code.  These factors raise substantial doubt about the Company's
ability to continue as an ongoing concern.  Management's plans in regard to
these matters are described in Note 2.  The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.


/s/ HEIN + ASSOCIATES LLP
---------------------------------
HEIN + ASSOCIATES LLP

Denver, Colorado
December 28, 1995


                                      F-2
<PAGE>   21



                         [BROCK AND COMPANY LETTERHEAD]

                          Independent Auditor's Report




Board of Directors and Stockholders
Apogee Robotics, Inc.
Fort Collins, Colorado



         We have audited the accompanying balance sheet of Apogee Robotics,
Inc. as of June 30, 1994, and the related statements of operations,
stockholders' equity and cash flows for each of the two years in the period
ended June 30, 1994. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

         We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Apogee Robotics,
Inc. as of June 30, 1994, and the results of its operations and its cash flows
for each of the two years in the period ended June 30, 1994, in conformity with
generally accepted accounting principles.

         The accompanying financial statements have been prepared assuming the
Company will continue as a going concern.  As discussed in Note 1 to the
financial statements, the Company has recurring operating losses and negative
cash flows from operations, and has entered into commitments for the
acquisition of a business. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.




                                        /s/ BROCK AND COMPANY, CPAs, P.C.
                                        Certified Public Accountants


Fort Collins, Colorado
October 12, 1994




                                      F-3
<PAGE>   22
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                              JUNE 30,             
                                                                                 ----------------------------------
                                                                                      1995               1994      
                                                                                 ---------------   ----------------
                                                      ASSETS
                                                      ------
<S>                                                                                 <C>                <C>
CURRENT ASSETS:
    Cash                                                                            $   118,364        $   49,675
    Certificates of deposit                                                               -               200,000
    Inventories                                                                          10,491           299,738
    Costs and estimated earnings in excess of billings on uncompleted contracts           -               176,650
    Prepaid expenses                                                                      -                73,408
    Nonmarketable securities (1995 at estimated fair value, 1994 at net                 168,255           824,250
        realizable value, aggregate cost of $438,480 in 1995 and $1,595,675 in
        1994)
    Other current assets                                                                  -                40,042
                                                                                    -----------        ----------
            Total current assets                                                        297,110         1,663,763
                                                                                    -----------        ----------
OTHER ASSETS:
    Investment in AGVI                                                                  150,000              -
    Purchased AGVS software (less accumulated amortization of $360,231 in 1995           40,000           345,126
        and $51,045 in 1994)
    Equipment, net, less accumulated depreciation of $581,266 and $429,400                -               130,873
    Deposits and other assets                                                            10,848            17,397
                                                                                    -----------        ----------
            Total other assets                                                          200,848           493,396
                                                                                    -----------        ----------

TOTAL ASSETS                                                                        $   497,958        $2,157,159
                                                                                    ===========        ==========

                                  LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
                                  ----------------------------------------------
CURRENT LIABILITIES:
    Notes payable                                                                   $     -            $  526,105
    Note payable - related party                                                          -               288,534
    Accounts payable                                                                      -               268,719
    Estimated losses on uncompleted contracts                                             -               107,766
    Other accrued liabilities                                                            47,861           178,018
    Billings in excess of costs and estimated earnings on uncompleted contracts           -               219,231
                                                                                    -----------        ----------

            Total current liabilities                                                    47,861         1,588,373
                                                                                    -----------        ----------

LIABILITIES SUBJECT TO COMPROMISE                                                     3,497,132              -

COMMITMENTS AND CONTINGENCIES (NOTES 8 AND 14)

STOCKHOLDERS' (DEFICIT) EQUITY:
    Preferred stock, $.01 par value; 100,000 shares authorized;                                                  
        1,082,912 shares outstanding in 1994                                              -                10,829
    Common stock, no par value; 50,000,000 shares authorized;                                                    
        18,195,022 and 16,472,110 shares issued and outstanding in 1995 and
        1994, respectively                                                           10,683,590         9,968,153
    Redeemable preferred stock of investee received in exchange for common                                        
        stock                                                                             -              (600,000)
    Other capital                                                                        33,349           853,414
    Accumulated deficit                                                             (13,763,974)       (9,663,610)
                                                                                    -----------        ---------- 
            Total stockholders' (deficit) equity                                     (3,047,035)          568,786
                                                                                    -----------        ----------

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY                                $   497,958        $2,157,159
                                                                                    ===========        ==========
</TABLE>


   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART TO THESE FINANCIAL STATEMENTS.





                                      F-4
<PAGE>   23
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                                   FOR THE YEARS ENDED
                                                                                         JUNE 30,               
                                                                      ----------------------------------------------     
                                                                          1995              1994             1993      
                                                                      ---------------  ---------------- ------------
<S>                                                                   <C>                                <C>
CONTRACT REVENUES AND SALES                                              $457,233       $   694,607      $ 1,668,849

COST OF REVENUES AND SALES                                              1,622,174         2,068,901        1,779,399
                                                                      -----------       -----------      -----------

GROSS LOSS                                                             (1,164,941)       (1,374,294)        (110,550)
                                                                      -----------       -----------      ----------- 
OPERATING EXPENSES:
    Selling, general and administrative expenses                        1,104,627           974,081          749,759
    Loss on investment in AGVI                                            636,083             -                 -
    Research and development                                                -                18,730          187,196
                                                                      ----------        -----------      -----------

        Total operating expenses                                        1,740,710           992,811          936,955
                                                                      -----------       -----------      -----------
LOSS FROM OPERATIONS                                                   (2,905,651)       (2,367,105)      (1,047,505)
                                                                      -----------       -----------      ----------- 

OTHER INCOME (EXPENSE):
    Investment losses                                                      (3,750)         (760,800)           -
    Interest expense                                                      (72,846)         (122,455)         (14,265)
    Other, net                                                            (11,815)           (2,453)         (46,666)
                                                                      -----------       -----------      ---------- 

        Net other income (expense)                                        (64,781)         (880,802)         (60,931)
                                                                      -----------       -----------      ---------- 

LOSS BEFORE REORGANIZATION ITEMS                                       (2,970,432)       (3,247,907)      (1,108,436)

Reorganization Items:
    Interest income                                                         1,482             -                -
    Provision for rejected executory contracts                         (1,066,994)            -                -
    Professional fees                                                     (64,420)            -                -    
                                                                      -----------       -----------      -----------
        Net loss                                                      $(4,100,364)      $(3,247,907)     $(1,108,436)
                                                                      ===========       ===========      =========== 

LOSS PER COMMON SHARE                                                 $      (.23)      $      (.31)     $      (.15)
                                                                      ===========       ===========      =========== 
WEIGHTED AVERAGE SHARES OUTSTANDING                                    18,051,446        10,508,485        7,235,625
                                                                      ===========       ===========      ===========
</TABLE>




                                       
  THE ACCOMPANYING NOTES ARE AN INTEGRAL PART TO THESE FINANCIAL STATEMENTS.


                                      F-5
<PAGE>   24
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                       STATEMENT OF STOCKHOLDERS' EQUITY
             FOR THE PERIOD FROM JULY 1, 1992 THROUGH JUNE 30, 1995

<TABLE>
<CAPTION>
                                          PREFERRED STOCK             COMMON STOCK                                    
                                       ---------------------   --------------------------      OTHER       ACCUMULATED
                                         SHARES      AMOUNT      SHARES          AMOUNT       CAPITAL        DEFICIT  
                                       ----------   --------   -----------    -----------    ---------    ------------
 <S>                                  <C>                      <C>                           <C>         <C>
 BALANCES, JULY 1, 1992                    -         $-         6,505,109     $7,122,407      $32,550     $(5,307,267)


     Issuance of common stock and
      warrants in private
      placement less offering
      costs of $43,021                     -          -           900,001        344,979         -              -
     Issuance of common stock and
      common stock warrants for
      services                             -          -           155,000         47,656          800           -
     Issuance of Series A
      preferred shares in exchange
      for common stock of investee        39,000        390         -              -          194,610           -
     Issuance of common stock for
      the conversion of Series A
      preferred shares at a rate
      of 10 for 1                        (39,000)      (390)      390,000        195,000     (194,610)          -
     Issuance of common stock for
      short-term debt premiums             -          -            30,000          8,672        -               -
     Issuance of common stock in
      exchange for common stock of
      investee                             -          -           666,666        215,625        -               -
     Net loss for the year ended
     June 30, 1993                         -          -             -              -            -          (1,108,436)
                                       ----------   --------   -----------    -----------    ---------    ------------


 BALANCES, JUNE 30, 1993                   -          -         8,646,776      7,934,339       33,350      (6,415,703)


     Issuance of Series B
      preferred shares and Class A
      and B warrants less offering
      costs of $50,256                    63,700        637         -              -          299,457           -
     Issuance of common stock for
      the conversion of Series B
      preferred shares at a rate
      of 10 for 1                        (63,700)      (637)      637,000        300,094     (299,457)          -
     Issuance of common stock in
      exchange for common stock of
      investee less issuance costs
      of $13,099                           -          -           333,334        236,991        -               -
     Issuance of Series C
      preferred shares in private
      placement less offering
      costs of $81,088                 1,012,912     10,129         -              -          465,963           -

</TABLE>




                                     F-6
<PAGE>   25
<TABLE>
<CAPTION>
                                          PREFERRED STOCK             COMMON STOCK                                    
                                       ---------------------   --------------------------      OTHER       ACCUMULATED
                                         SHARES      AMOUNT      SHARES          AMOUNT       CAPITAL        DEFICIT  
                                       ----------   --------   -----------    -----------    ---------    ------------

 <S>                                  <C>           <C>        <C>           <C>             <C>         <C>
     Issuance of Series D
      preferred shares in exchange
      for common stock of investee
      less issuance costs of
      $7,100                              60,000        600         -              -          397,300           -
     Issuance of common stock for
      the conversion of Series D
      preferred shares at a rate
      of 10 for 1                        (60,000)      (600)      600,000        397,900     (397,300)          -
     Issuance of Series E
      preferred shares less
      offering costs of $10,400           30,000        300         -              -          104,800           -
     Issuance of Series F
      preferred shares in exchange
      for common stock of investee
      less issuance of costs of
      $9,049                              40,000        400         -              -          249,301           -
     Issuance of common stock in
      exchange for preferred
      shares of investee less
      issuance costs of $28,525            -          -         6,000,000        999,475        -               -
     Issuance of common stock for
      services less issuance costs
      of $8,615                            -          -           250,000         96,854        -               -
     Exercise of options                   -          -             5,000          2,500        -               -
     Net loss for the year ended
      June 30, 1994                        -          -             -              -            -          (3,247,907)
                                       ----------   --------   ----------     -----------    ---------    ------------
                                                                          
 BALANCES, June 30, 1994               1,082,912     10,829    16,472,110      9,968,153      853,414      (9,663,610)
                                                                          
     Conversion of preferred stock                                        
      to common stock                 (1,082,912)   (10,829)    1,712,912        830,894     (820,065)          -
     Write-off unredeemed                                                 
      preferred stock of investee                                         
      determined to be                                                    
      uncollectible issued for                                            
      common stock                         -          -             -           (165,457)       -               -
     Issuance of common stock for                                         
      commissions payable                                          10,000         50,000        -               -
     Net loss for the year ended                                          
      June 30, 1995                        -          -             -              -            -          (4,100,364)
                                       ----------   --------   ----------    -----------    ---------    ------------
                                                                          
                                                                          
 BALANCES, June 30, 1995                   -        $ -        18,195,022    $10,683,590    $  33,349    $(13,763,974)
                                       ==========   ========   ==========    ===========    =========    ============
</TABLE>


   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART TO THESE FINANCIAL STATEMENTS.




                                     F-7
<PAGE>   26
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                      FOR THE YEARS ENDED
                                                                                            JUNE 30,                    
                                                                         -----------------------------------------------
    CASH FLOWS FROM OPERATING ACTIVITIES:                                     1995            1994             1993      
                                                                         -------------     -----------      -----------
    <S>                                                                   <C>              <C>              <C>
    Net loss                                                               $(4,100,364)    $(3,247,907)     $(1,108,436)
    Adjustments to reconcile net loss to net cash used in operating
        activities:
            Depreciation and amortization                                       83,016         175,694          142,223
            Write-down of property and software to net realizable              352,220          29,361           33,600
                value
            Provision for inventory losses                                     280,000         430,000           39,020
            Equity in net loss of affiliate                                      -               -               55,046
            Loss on investment in AGVI                                         636,083           -                -
            Investment losses                                                    3,750         (10,625)
            Investments in excess of net realizable value                        -             771,425            -
            Common stock and common stock warrants issued for                    -             105,469           57,128
                services and debt premiums
    Increase (decrease) from changes in assets and liabilities:              2,239,365           -                -
            Cost and estimated earnings in excess of billings on               176,650         219,303         (335,361)
                uncompleted contracts
            Precontract costs                                                    -               -              217,133
            Accounts payable and accrued liabilities                          (325,254)        122,656          286,800
            Billings in excess of costs and estimated earnings on             (219,231)        158,703           60,528
                uncompleted contracts
            Other                                                                2,703         (22,738)         (12,421)
                                                                         -------------     -----------      -----------
        Net cash used in operating activities                                 (854,498)     (1,270,073)        (543,461)
                                                                         -------------     -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of certificates of deposit                                         -             (100,000)        (300,000)
    Proceedsofromfinvestmentses of deposit                                     199,245         237,500            -    
                                                                                                                  -    
    Purchase of AGVS software                                                    -            (225,100)        (147,702)
    Other                                                                      (42,553)        (32,110)         (35,385)
                                                                         -------------     -----------      -----------
        Net cash provided by (used in) investing activities                    156,692          80,290         (483,087)
                                                                         -------------     -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Cash advance from an affiliate of a former director                        115,000           -                -
    Borrowings under short-term debt agreements                                  -           1,785,000          447,424
    Repayments under short-term debt agreements                                (12,426)     (1,728,757)            (984)
    Borrowings from related party                                                -             185,000          183,906
    Repayments of related party borrowings                                       -            (100,000)           -
    Proceeds from issuance of common stock and common                          663,921       1,022,950          278,800
        stock warrants                                                           -                                -     
    Payments of offering costs                                                   -            (207,962)         (43,023)
                                                                         -------------     -----------      -----------
        Net cash provided by financing activities                              766,495       1,067,931          866,123
                                                                         -------------     -----------      -----------

INCREASE (DECREASE) IN CASH                                                     68,689        (121,852)        (160,425)

CASH, at beginning of year                                                      49,675         171,527          331,952
                                                                         -------------     -----------      -----------
CASH, at end of year                                                     $     118,364     $    49,675      $   171,527
                                                                         =============     ===========      ===========
</TABLE>




   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART TO THESE FINANCIAL STATEMENTS.





                                      F-8
<PAGE>   27
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                         NOTES TO FINANCIAL STATEMENTS



1.     PROCEEDINGS UNDER CHAPTER 11:

       On December 9, 1994 (petition date), Apogee Robotics, Inc. (the Debtor)
       and it's wholly owned subsidiary, AGV Acquisitions, Inc., filed a
       voluntary petition for reorganization under Chapter 11 of the U.S.
       Bankruptcy Code in the United States Bankruptcy Court (the Chapter 11
       proceedings).  The Debtor continues business operations as
       debtor-in-possession, subject to the approval of the Court for certain
       of its proposed actions.

       As of the petition date, actions to collect pre-petition indebtedness
       were stayed and other contractual obligations may not be enforced
       against the Debtor.  In addition, the Debtor may reject executory
       contracts and lease obligations during pendency of the Chapter 11
       proceedings, and parties affected by these rejections may file claims
       with the Bankruptcy Court in accordance with the reorganization process.
       Substantially all unsecured liabilities of the Debtor as of the petition
       date are subject to compromise under a plan of reorganization which has
       not yet been completed; when completed, the plan of reorganization must
       be voted upon by all impaired classes of creditors and equity security
       holders and approved by the Bankruptcy Court (see Note 8 for a
       description of the liabilities subject to compromise).

       The Company has accounted for all transactions related to the
       reorganization proceedings in accordance with Statement of Position
       90-7, "Financial Reporting by Entities in Reorganization Under the
       Bankruptcy Code," issued by the American Institute of Certified Public
       Accountants in November 1990.  Accordingly, all pre-petition liabilities
       of the Debtor that are expected to be impaired under the plan of
       reorganization and ultimately approved by the Bankruptcy Court are
       reported separately in the Debtor's balance sheet as liabilities subject
       to compromise (see Note 8).  Reorganization items, primarily
       professional fees and interest income, are reported separately in the
       statements of operations.


2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

       Company's Activities - The Company previously designed, manufactured,
       sold, and installed comprehensive, advanced material handling and
       information systems.  These activities were discontinued in December
       1994 when the Company filed for bankruptcy.  Management plans to merge
       the Company with or otherwise acquire additional operations in the same
       line of business.

       Contract Revenue and Cost Recognition - Revenues under long-term
       contracts have been recognized on the percentage-of-completion method,
       measured by the percentage of costs incurred to date to estimated total
       contract costs for each contract.  Costs include material, direct labor,
       subcontracts, engineering and manufacturing overhead.  Provisions for
       estimated losses were made in the period in which they first become
       determinable.  All significant performance warranty costs are provided
       at the time of completion of the warranted product contracts.





                                      F-9
<PAGE>   28
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                         NOTES TO FINANCIAL STATEMENTS



       Costs and estimated earnings in excess of billings on uncompleted
       contracts represents revenue recognized in excess of amounts billed. 
       Billings in excess of costs and estimated earnings on uncompleted
       contracts represents billings in excess of revenues recognized.
              
       Inventories - Inventory cost includes materials, labor and overhead
       costs.  Inventories are stated at lower of first-in, first-out (FIFO)
       cost or market.

       Investments - The Company used the equity method of accounting for its
       investment in an affiliated company in 1993.  Investments in restricted
       securities or equity securities of privately held companies were valued
       at the lower of cost or net realizable value at June 30, 1994.

       Effective July 1, 1994, the Company adopted Statement of Financial
       Accounting (SFAS) No. 115, "Accounting for Certain Investments in Debt
       and Equity Securities."  This pronouncement addresses the accounting and
       reporting for certain investments in debt and equity securities.  SFAS
       No. 115 requires that certain securities be classified into one of three
       categories, which then determines the accounting and reporting for that
       security.  The Company's investments at June 30, 1995 are considered to
       be available for sale in accordance with SFAS No. 115, and are valued at
       estimated fair value.

       Depreciation and Amortization - The Company provided for depreciation
       and amortization using the straight-line method over the estimated
       useful lives of the assets which was five to twelve years for office,
       plant, and promotional equipment.  All property and equipment was
       written down to its estimated net realizable value of $-0- as of June
       30, 1995.

       The purchased automated guided vehicle systems (AGVS) software was
       recorded at cost and was being amortized using the greater of the
       straight-line method over the estimated economic life, generally five
       years, or the ratio of current revenues to estimated total revenues of
       each product.  The amount by which the unamortized costs of computer
       software exceed the net realizable value of the software is charged to
       expense in the period it is first determinable.  Unamortized costs of
       $243,192 and $29,361 were charged to expense in 1995 and 1994,
       respectively.  During 1994, fully amortized purchased AGVS software of
       $465,403 was written off.

       Income Taxes - In 1994, the Company adopted the provisions of Statement
       of Financial Accounting Standards No.  109, "Accounting for Income
       Taxes" (SFAS 109).  Under this method, deferred tax assets and
       liabilities are determined, based on the difference between the
       financial statements and tax bases of assets and liabilities using
       enacted tax rates in effect for the year in which the differences are
       expected to reverse.  The adoption of SFAS 109 did not have a material
       impact on the financial statement.

       Research and Development - Acquisition of materials used in research and
       development activities which had alternative future uses were
       capitalized.  All other research and development costs were charged to
       expense as incurred.





                                      F-10
<PAGE>   29
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                         NOTES TO FINANCIAL STATEMENTS



       Per Share Data - Earnings (loss) per common share is based on the
       weighted average number of common shares outstanding during the period.
       Outstanding stock warrants, options, and convertible preferred shares
       have not been included in the computation of the loss per common share
       since the effect would have been antidilutive.

       Cash and Cash Equivalents - For purposes of the statements of cash
       flows, the Company considers all highly liquid investments purchased
       with a maturity of three months or less to be cash equivalents.

       Impact of Recently Issued Accounting Standards - In March 1995, the
       Financial Accounting Standards Board issued a new statement titled
       "Accounting for Impairment of Long-Lived Assets."  In October 1995, the
       Financial Accounting Standards Board issued a new statement titled
       "Accounting for Stock-Based Compensation" (FAS 123).  The new statements
       are effective for fiscal years beginning after December 15, 1995.  The
       Company does not believe that adoption of the new standard will have a
       material effect on the financial statements.


3.     ACQUISITION OF AGV ACQUISITIONS INC.:

       On October 5, 1994, the Company acquired the net assets of AGV
       Acquisitions, Inc. (AGVI), a company wholly owned by certain of the
       Company's directors, which on the same date acquired substantially all
       of its net assets from SI Handling Systems, Inc. (SI).  The acquired
       assets consisted primarily of technology, inventories, equipment and
       machinery, and contract rights.  An affiliate of a former director
       advanced $250,000 at closing of the acquisition on behalf of the
       Company.  SI failed to provide certain consents and waivers, and
       subsequent to the Company filing for bankruptcy, SI seized control of
       the disputed assets.  Apogee and SI reached a compromise agreement in
       September 1995 to unwind the transaction.  The agreement was approved by
       the bankruptcy court in October 1995.  The Company's investment in AGVI,
       originally recorded at $250,000 paid at closing, was reduced to the
       $150,000 which SI agreed to remit to the Company in accordance with the
       Compromise Agreement.

       The Company has not consolidated the assets of AGVI as of June 30, 1995
       since control was temporary; claims filed by AGVI's creditors and
       employees have been included in liabilities subject to compromise as
       disputed claims.


4.     INVENTORIES:

       Inventories consist of the following at June 30:
<TABLE>
<CAPTION>
                                                                             1995            1994     
                                                                         -----------      ----------
       <S>                                                                <C>             <C>
       Robotics components and assembly supplies                          $   10,491      $ 727,055
</TABLE>





                                      F-11
<PAGE>   30
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                         NOTES TO FINANCIAL STATEMENTS



<TABLE>
                            <S>                                                                <C>             <C>
                            Work-in-process                                                           -           17,822
                            Finished vehicles                                                         -          204,861
                            Valuation reserve                                                         -         (650,000)
                                                                                               ----------      --------- 

                                                                                               $   10,491      $ 299,738
                                                                                               ==========      =========
</TABLE>

         Inventory has been written down to estimated net realizable value, and
         cost of revenues and sales for 1994 include a corresponding charge of
         $430,000.  The fourth quarter of 1994 includes a charge of $405,000 of
         the annual write down.

5.       NONMARKETABLE SECURITIES:

         In March 1993, the Company acquired 100,000 shares of the common stock
         of ACT Teleconferencing Services, Inc.  (ACT), representing
         approximately 7% interest, in exchange for 39,000 shares of the
         Company's Series A Preferred Shares.  The common stock of ACT is not
         publicly traded.  The investment was valued at $195,000, based on the
         fair market value of the Company's stock at the date of exchange.
         During March 1994, the Company sold 25,000 shares of ACT for $62,500,
         realizing a gain of $10,625.  During June 1994, the Company recorded a
         charge of $71,250 to reflect the remaining shares at estimated net
         realizable value.  During fiscal 1995, the remaining 75,000 shares of
         ACT were sold for a loss of $3,750.

         In June 1993, the Company acquired 200,000 shares of restricted common
         stock of Princeton Electronic Products, Inc. (Princeton) in exchange
         for 666,666 shares of the Company's restricted common stock.  The
         investment was valued at $215,625, based on the fair market value of
         the Company's stock at the date of exchange.  In September 1993, the
         Company acquired an additional 333,334 shares of restricted common
         stock of Princeton, in exchange for 333,334 shares of the Company's
         restricted common stock.  The investment was valued at $250,000, based
         on the fair market value of the Company's stock at the date of
         exchange.  During June 1994, the Company recorded a charge of $265,625
         to reflect its entire investment in Princeton at estimated net
         realizable value.  All of the Princeton shares collateralized a
         $200,000 note payable.  In fiscal 1995, the note holder enforced his
         security interest and obtained ownership of the 533,334 shares of
         Princeton.

         During 1994, the Company acquired 100,000 restricted common shares of
         Loronix Information Systems, Inc. in exchange for 60,000 Series D
         Preferred shares and 40,000 Series F preferred shares.  The investment
         was valued at $730,800, based on the fair market value of the
         Company's stock at the date of exchange.  During June 1994, the
         Company recorded a charge of $434,550 to reflect the investment at
         estimated net realizable value.  In June 1995, the Company sold 40,000
         shares of Loronix stock at no gain or loss.  The remaining 60,000
         shares are held by a third party until a dispute related to the shares
         is resolved.  A note holder claims the shares





                                      F-12
<PAGE>   31
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                         NOTES TO FINANCIAL STATEMENTS



         collateralize the related note payable under a pledge agreement.  The
         Company maintains that the return of the stock certificate to an
         officer of the Company resulted in non-enforceability of the pledge
         agreement.


6.       COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS:

         The Company's costs and estimated earnings on uncompleted contracts
         consist of the following components at June 30, 1994:

<TABLE>
              <S>                                               <C>
              Costs incurred on uncompleted contracts           $   3,007,024
              Estimated earnings                                     (741,227)
                                                                 ------------
                                                                    2,265,747
                                                                
              Less billings to date                                 2,308,328
                                                                 ------------
                                                                
                                                                 $    (42,581)
                                                                 ============
</TABLE>


         Included in accompanying balance sheets under the following captions:

<TABLE>
              <S>                                                      <C>
              Costs and estimated earnings in excess of billings 
                on uncompleted contracts                               $176,650
              Billings in excess of costs and estimated earnings 
                on uncompleted contracts                                219,231
                                                                       --------
                                                                       $(42,581)
                                                                       ======== 
</TABLE>


7.       NOTES PAYABLE:

         Following is a summary of notes payable:

<TABLE>
<CAPTION>
                                                                                    1995             1994  
                                                                                 ------------      ---------    
              <S>                                                                <C>               <C>
              Notes Payable
              
              Line-of-credit agreement with a bank, paid in full                 $   -             $ 181,000
              in October

              Notes payable with a bank collateralized by contract                   -                31,427
              receivables, inventory, equipment, and intangible 
              assets, paid in full in October 1994.
</TABLE>





                                      F-13
<PAGE>   32
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                         NOTES TO FINANCIAL STATEMENTS



<TABLE>
<CAPTION>
                                                                                    1995              1994       
                                                                                  ---------         ---------
              
              <S>                                                                 <C>               <C>
              Notes payable with combined face amount of $300,000.  The notes      100,000           283,668
              were issued with cash payments of $22,000.  A $200,000 note was
              collateralized by 533,334 shares of Princeton.  During fiscal
              1995, the note holder enforced his security interest and
              obtained ownership of the Princeton stock.  However, the note
              holder has filed a claim in bankruptcy for both notes.  The
              $100,000 note is included in liabilities subject to compromise
              at June 30, 1995.
              
              Other.                                                                 -                30,010
                                                                                  ---------         ---------
              
                            Total notes payable                                   $ 100,000         $ 526,105
                                                                                  =========         =========
              
              Notes Payable - Related Parties
              -------------------------------
              
              An unsecured note payable to a former director of the Company       $ 100,000         $ 100,000
              with a balance of $100,000 at June 30, 1994 and 1995. The note
              was issued together with 20,000 shares of the Company's common
              stock and $10,000 cash payments.  Note is included in
              liabilities subject to compromise at June 30, 1995.
              
              A note payable to a former director of the Company with a face                                
              amount of $200,000. The note was issued with a cash payment of
              $15,000. During September 1994, the Company agreed to exchange
              60,000 shares of Loronix Information Systems, Inc., with a
              carrying value of $168,255, in full payment of the note. The
              exchange was not completed. The note is included in liabilities 
              subject to compromise at June 30, 1995.                               200,000           188,534
                                                                                  ---------         ---------
                            Total notes payable - related parties                 $ 300,000         $ 288,534
                                                                                  =========         =========
              
</TABLE>





                                      F-14
<PAGE>   33
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                         NOTES TO FINANCIAL STATEMENTS



8.       LIABILITIES SUBJECT TO COMPROMISE:

         Liabilities recorded by the Debtor that will be subject to compromise
         under a plan of reorganization as of June 30, 1995 consist of the
         following:

<TABLE>
                                  <S>                                                                          <C>
                                  Undisputed priority claims filed by former employees                         $   37,753
                                  Undisputed claims filed by tradercreditorssand miscellaneous                    330,980
                                                                                                                         
                                           claims                                                                        
                                  Undisputed claim filed by note holder                                           100,000
                                  Accrued payroll taxes                                                           131,673
                                  Other, including accrued interest on notes payable                              174,956
                                                                                                               ----------
                                                  Subtotal - undisputed claims                                  1,002,518
                                                                                                               ----------

                                  Disputed claims filed by trade creditors of AGVI                                411,688
                                  Disputed claims filed by former employees of AGVI                                81,079
                                  Disputed warranty claims by former customers                                    239,036
                                  Disputed claims filed by former trade creditors                                 154,064
                                  Disputed claims filed by former employees                                       943,747
                                                                                                               ----------
                                              Subtotal - disputed claims                                        1,829,614
                                                                                                               ----------
                                  Related Parties
                                  ---------------

                                  Notes payable to former director                                                100,000
                                  Notes payable to former director                                                200,000
                                  Advances from an affiliate of a former director                                 365,000
                                                                                                               ----------
                                                                                                                  665,000
                                                                                                               ----------

                                              Total                                                            $3,497,132
                                                                                                               ==========
</TABLE>


         The Company is in the process of disputing certain claims filed,
         including all claims filed by former employees and trade creditors of
         AGV Acquisitions, Inc.  Management of the Company believes that such
         liabilities represent a liability of SI Handling, Inc.  The Company is
         unable to predict whether or not it will be successful in disputing
         claims filed.

         No provision has been made for the effect of preference or other
         actions as they cannot be determined at this time.





                                      F-15
<PAGE>   34
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                         NOTES TO FINANCIAL STATEMENTS



9.       STOCKHOLDERS' EQUITY:

         Following is a summary of preferred stock authorized, issued, and
         outstanding as of June 30, 1995 and 1994:
<TABLE>
<CAPTION>
                                                                                                                   Par Value        
                                                                                                          --------------------------
                                                             Title                                           1995          1994    
                          ----------------------------------------------------------------------------    -----------  -----------
                          <S>                                                                             <C>           <C>
                          Series  A Preferred  Shares -  $.01 par value;  11,000 shares authorized;  no   $    -       $  -
                          shares  issued or  outstanding; noncumulative;  convertible to  ten shares of
                          the Company's common stock.

                          Series B  Preferred Shares  - $.01  par value;  6,300  shares authorized;  no        -           -
                          shares  issued or outstanding;  noncumulative; convertible  to ten  shares of
                          the Company's common stock.

                          Series C  Preferred Shares - $.01 par value; 1,200,000 shares authorized; -0-        -         10,129
                          and  1,012,912 shares   issued  and   outstanding,  respectively;   aggregate
                          liquidation  preference   $607,647;  $.05 per   share  annual   dividend,  if
                          declared; noncumulative;  convertible to  one share  of the  Company's common
                          stock.

                          Series E  Preferred Shares -  $.01 par value;  200,000 shares authorized; -0-        -            300
                          and  30,000  shares  issued  and  outstanding,  respectively;  noncumulative;
                          convertible to ten shares of the Company's common stock.

                          Series  F Preferred Shares  - $.01  par value;  40,000 shares authorized, -0-        -            400
                          and  10,000  shares  issued and  outstanding,  respectively;  $.70 per  share
                          annual  dividend, if  declared; noncumulative;  convertible to  ten shares of
                          the Company's common stock.

                          Preferred  Stock -  $0.1 par value;  8,542,700 shares  authorized; no  shares        -          -
                          outstanding.

                          Series  G Preferred  Shares  - $.01  par  value; 100,000  shares  authorized,        -          -    
                          aggregated  liquidation  preference  $1,000,000;  $.20 semi-annual  dividend,
                          cumulative; convertible to common stock of the Company based on the ratio  of
                          $10 divided by  the average closing bid  price of the Company's  common stock
                          for the 30-day period  preceding conversion.  This series was  authorized for
                          purposes of the  AGVI acquisition.  The  shares were returned to  the Company
                          when the transaction was unwound.                                               -----------  ----------

                                                                                                          $    -       $ 10,829
                                                                                                          ===========  ==========
</TABLE>





                                      F-16
<PAGE>   35

         During August 1994, all shares of preferred stock outstanding were
         converted to 1,712,912 shares of the Company's common stock.

         During 1993, the Company issued 633,637 units consisting of one share
         of common stock and one common stock purchase warrant in a private
         placement for $.44 per unit.  Two warrants entitled the holder to
         purchase one share of common stock for $.75 per share.  Additionally,
         the Company received subscription agreements totaling $29,200 to
         purchase an additional 66,364 units.  Proceeds from the subscribed
         agreements were received in July 1993.

         During 1993, warrants to purchase 300,000 shares of the Company's
         common stock at prices ranging from $.75 to $1.00 per share were
         issued to financial consultants.

         During 1993, warrants to purchase 80,000 shares of common stock at
         $1.50 to $1.88 per share were extended for one year from the original
         expiration date.

         During August 1993, the Company received net proceeds of $300,094 from
         a private offering of 63,700 shares of Series B Preferred Shares and
         Class A and Class B warrants entitling the holders to purchase a total
         of 637,000 shares of the Company's common stock.  Class A warrants
         entitle the holders to purchase 318,500 shares of common stock for
         $1.00 per share.  Class B warrants entitle the holders to purchase
         318,500 shares of common stock for $2.00 per share.  All warrants
         expired in July 1995.  During September 1993, the outstanding Series B
         Preferred Shares were converted to 637,000 shares of the Company's
         common stock.

         During September 1993, the Company issued 333,334 shares of common
         stock in exchange for 333,334 shares of common stock of Princeton
         Electronic Products, Inc.

         During 1993, the Company received net proceeds of $476,092 from the
         private offering of 1,012,912 shares of Series C Preferred Shares and
         Class A and Class B warrants entitling the holders to purchase a total
         of 1,012,912 shares of the Company's common stock.  Class A warrants
         entitle the holders to purchase 506,456 shares of common stock for
         $1.00 per share.  Class B warrants entitle the holders to purchase
         506,456 shares of common stock for $2.00 per share.  Class A warrants
         expired in October 1995 and Class B warrants expire in October 1996.





                                      F-17
<PAGE>   36
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                         NOTES TO FINANCIAL STATEMENTS



         During May 1994, the Company issued 250,000 shares of common stock to 
         an officer of Conagher for consulting services.

         On May 12, 1994, Apogee entered into a Stock Subscription Agreement
         with Conagher, wherein Apogee exchanged 6,000,000 shares of its common
         stock for 6,000,000 shares of Conagher's preferred stock.  The
         Subscription Agreement provided that between June 15, 1994 and
         September 15, 1994, Conagher would redeem all or a portion of its
         preferred shares for $2,000,000.  At the end of that period, shares of
         Conagher preferred stock that remained unredeemed could be exchanged
         by Apogee for an equal number of shares of Apogee's common stock held
         by Conagher.  Simultaneous with the execution of the Subscription
         Agreement, Conagher assigned, conveyed, transferred, or sold (which
         cannot be determined by Apogee) 5,200,000 shares of the Apogee common
         stock it acquired from Apogee under the Subscription Agreement, to
         Importationes y Exportationes, SA ("IMEXSA"), a Nicaraguan company,
         that subsequently filed a Regulation S registration of the Apogee
         common stock.  On June 5, 1994, Conagher agreed to purchase an
         additional 3,000,000 shares of Apogee's common stock for $1,000,000.

         On September 23, 1994, Apogee and Conagher entered into an Amended and
         Restated Stock Acquisition Agreement, amending the May 12, 1994
         Subscription Agreement and terminating the June 5, 1994 agreement.
         This Revised Agreement reduced the total payments to Apogee from
         $3,000,000 to $1,200,000.  It also provided for the purchase of an
         additional 1,750,000 shares of Apogee's common stock for $310,000
         prior to October 1, 1994.  The Revised Agreement was purportedly
         ratified by Apogee's Board of Directors.  The Company contends that
         the Revised Agreement never closed.

         As of June 30, 1994, 1,021,400 shares were redeemed for $175,000 by
         Conagher.  During fiscal 1995, an additional $663,921 was received
         from Conagher, and $23,623 of the Company's liabilities were paid on
         behalf of the Company.  Additionally, $115,000 was received from
         another entity which was apparently on behalf of Conagher.  However,
         this entity has filed claims in bankruptcy for this amount, therefore,
         it has been recorded as an advance.





                                      F-18
<PAGE>   37
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                         NOTES TO FINANCIAL STATEMENTS



         A summary of common stock purchase warrants outstanding at June 30,
         1995 is as follows:
         
<TABLE>
<CAPTION>
                                                                         Number of         Exercise           Expiration
                                   Issued For                             Shares             Price               Date        
                    ----------------------------------------         ----------------   --------------   --------------------
                    <S>                                            <C>                        <C>           <C>
                    Common stock                                   506,456                    $1.00          October 1995*
                    Common stock                                   506,456                    $2.00          October 1996
                    Common stock                                   293,750                    $0.75         September 1995*
                    Common stock                                   318,500                    $1.00            July 1995*
                    Common stock                                   318,500                    $2.00            July 1995*
                    Services                                       150,000                    $1.00           January 1998
                    Services                                       150,000                    $0.60          December 1996
                    Services                                       100,000                    $3.00            July 1995*
                    Services                                       100,000                    $0.75           January 1998
                    Short-term debt                                 56,250                    $0.75          September 1996
                    Services                                        50,000                    $0.88          February 1998
                                                                 ---------                                                
                    Total shares reserved for common stock       2,549,912
                                                                 =========
                                 purchase warrants
         ------------------------                 
</TABLE>
         *  Warrants expired unexercised subsequent to June 30, 1995.

10.      STOCK OPTION PLANS:

         The Company maintained the 1987 and 1988 Incentive Stock Option Plans
         which provide for the grant of up to 300,000 shares of the Company's
         common stock in the 1987 plan and 700,000 shares in the 1988 plan.  A
         1994 Incentive Stock Option Plan for 800,000 shares was terminated
         when it was not submitted for approval by stockholders.





                                      F-19
<PAGE>   38
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                         NOTES TO FINANCIAL STATEMENTS



         Options granted pursuant to the stock option plans were incentive stock
         options within the meaning of the Internal Revenue Code.  The exercise
         price of the options granted under the plans was not less than the fair
         market value of the common stock.  The options were granted for terms
         of five or ten years. No options were exercisable until at least one
         year following the date of the grant, and the options were subject to
         certain acceleration and termination provisions.
        
         A summary of incentive stock option activity is as follows:

<TABLE>
<CAPTION>
                                                                Number of            Option            Exercisable
                                                                  Shares             Price            Option Shares  
                                                                -------------   ----------------   ------------------
                            <S>                                  <C>                <C>                  <C>
                            Outstanding, July 1, 1992              916,697          .50-$2.25            653,822
                                                                                                                
                                 Granted                            10,000              $ .53              -

                                 Exercised                           -                  $ -                -

                                 Cancelled                          (2,000)             $ .94              -
                                                                ----------                   
                            Outstanding, June 30, 1993             924,697         $.50-$2.25            820,947

                                 Granted                           834,000          $.69-$.81              -

                                 Exercised                          (5,000)             $ .50              -

                                 Cancelled                        (129,294)        $.50-$2.25              -
                                                                ----------         ----------          

                            Outstanding, June 30, 1994           1,624,403         $.50-$2.00            764,403
                                                                                                                
                                 Cancelled                      (1,624,403)        $.50-$2.00
                                                                ----------                   
                            Outstanding, June 30, 1995               -                  -                  -
                                                                ==========                                  
</TABLE>

         Directors of the Company had nonqualified options to purchase 125,000
         shares of common stock at prices ranging from $.50 to $1.375 per
         share.  The options were terminated in fiscal 1995 pursuant to the
         terms and conditions of the plan.





                                      F-20
<PAGE>   39
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                         NOTES TO FINANCIAL STATEMENTS





11.      INCOME TAXES:

         The Company has net operating loss carryforwards of approximately $11
         million available to offset future taxable income, if any; the net
         operating losses expire in varying amounts beginning in 1998 through
         2010.  However, the net operating losses may be limited on an annual
         basis due to changes in control.

         The components of deferred tax assets (liabilities) in the balance
         sheet, which are fully eliminated by a valuation allowance, are as
         follows:
<TABLE>
<CAPTION>
                                                                                                1995                  1994        
                                                                                             ----------            ----------
       <S>                                                                                   <C>                   <C>
       Net operating loss carryforwards                                                      $3,736,000            $2,303,000
       Inventory reserves                                                                        66,000               182,000
       Investment value reserves                                                                105,000               216,000
       Disputed claims                                                                          714,000                43,700
       Other, net                                                                                78,000                 -   
                                                                                             ----------            ----------
                                                                                              4,699,000             2,744,700
       Less valuation allowance                                                              (4,699,000)           (2,744,700)
                                                                                             ----------            ---------- 
       
       Net deferred tax asset                                                                $    -                $    -   
                                                                                             ==========            ==========
</TABLE>

12.      CASH FLOW INFORMATION:

         The supplemental disclosures for the statements of cash flows are as
         follows:

<TABLE>
<CAPTION>
                                                                                June 30,                       
                                                           --------------------------------------------------
                                                                 1995                1994             1993      
                                                           -------------       -------------     ------------
       <S>                                                 <C>                 <C>               <C>
       Cash paid during the year for interest              $   23,128          $ 122,455         $  12,001
       Noncash investing and financing activities:
                Common stock and preferred shares                                                         
                      issued for common and preferred
                      shares of investees                  $    -              1,983,750         $ 410,235
                Common stock and compensatory stock                                                       
                      options and warrants issued for
                      services and premiums on short-
                      term debt                            $   50,000          $ 105,469         $  57,128
</TABLE>





                                      F-21
<PAGE>   40
                             APOGEE ROBOTICS, INC.
                             (DEBTOR-IN-POSSESSION)

                         NOTES TO FINANCIAL STATEMENTS



<TABLE>
                                                                      June 30,                       
                                                  ---------------------------------------------
                                                     1995             1994              1993
                                                  ----------       ----------       ----------
       <S>                                        <C>                 <C>               <C>
       Exchange of preferred shares for           
             common shares                        $  830,894          $   -             $   -
       Advance from affiliate of Conagher         $  250,000          $   -             $   -
             paid for acquisition of AGVI
       Surrender of investments in payment                                                    
             of debt                              $  400,000          $   -             $   - 
</TABLE>
                                               

13.      MAJOR CUSTOMERS:

         Two customers in 1993 and four customers in 1994 accounted for 10% or
         more of the Company's revenue earned.  The percentages of the
         Company's revenues earned from these customers totaled 62.1% and 22.2%
         in 1993 and 24.8%, 17.3%, 14.8%, and 10.1% in 1994.


14.      CONTINGENCIES:

         The Company is a defendant in certain legal actions with creditors,
         investors and former investors.  These actions include an action filed
         by Conagher against Apogee, certain company managers and directors,
         and the Company's former auditors and legal counsel, alleging various
         securities violations and misrepresentations, seeking damages in an
         unspecified amount.  Conagher has filed a proof of claim for $978,436
         related to this litigation, which is disputed by the Company and has
         not been included in liabilities subject to compromise at June 30,
         1995.  The Company plans to assert counter claims against Conagher,
         Pat Hayton, and others.  All pre- petition claims will be subject to
         settlement in accordance with a plan of reorganization.




                                     F-22
<PAGE>   41
                                    EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT
NUMBER       EXHIBIT DESCRIPTION                                                                          PAGE
-------      -------------------                                                                          ----
<S>     <C>                               <C>                                                             <C>

3 (a)   Articles of Incorporation         Incorporated by reference to Exhibit 3(a) to the Company's
                                          Registration Statement on Form S-18, Registration No.
                                          2-87181-D.
                                          
  (b)   Amended Articles                  Incorporated by reference to Exhibit 3(c) of the Company's
                                          Registrations Statement, Registration No. 33-7805.
                                          
  (c)   Bylaws                            Incorporated by reference to Exhibit 3(b) to the Company's
                                          Registration Statement on Form S-18, Registration No.
                                          2-87181-D.
                                          
  (d)   Amended Bylaws                    Incorporated by reference to Exhibit 3(d) to the Company's
                                          Registration Statement, Registration No. 33-7805.

4 (a)   Specimen copy of                  Incorporated by reference to Exhibit 4(a) to the Company's
        Stock certificate                 Registration Statement on Form S-18, Registration No.
                                          2-87181-D.

  (b)   Warrant Agreement                 Incorporated by reference to Exhibit 4(c) to the Company's
        respecting Redeemable             Registration Statement, Registration No. 33-7805.
        Purchase Warrants

  (c)   Form of Warrant                   Incorporated by reference to Exhibit 4(d) to the Company's
        Certificate                       Registration Statement, Registration No. 33-7805.

10(a)   License Agreement                 Incorporated by reference to Exhibit 10(b) to the
                                          Company's  Registration Statement on Form S-18,
                                          Registration No. 2-87181-D.

  (b)   Supply Agreement                  Incorporated by reference to Exhibit 10(c) to the
                                          Company's Registration Statement on Form S-18,
                                          Registration No. 2-87181-D.
  
  (c)   Amendment to License              Filed as Exhibit 10(e) to the Company's Registration  
                                          Agreement Statement on Form S-1, Registration No. 33-7805.
  
  (d)   License Agreement with            Incorporated by reference to Exhibit 10(h) to the
        Hewlett-Packard Company           Company's Registration Statement, Registration No.
                                          33-7805.
  
  (e)   Agreement with Stow               Filed as Exhibit 10(e) to the Company's Registration
        International NV                  Statement on Form S-1, Registration No. 33-42749.
  
  (f)   Amended and Restated              Filed as Exhibit 10(f) to the Company's Report on Form
</TABLE>



<PAGE>   42
                                    EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT
NUMBER       EXHIBIT DESCRIPTION                                                                          PAGE
-------      -------------------                                                                          ----
<S>      <C>                               <C>                                                            <C>
         Stock Acquisition                 8-K dated September 23, 1994.
         Agreement

   (g)   Asset Purchase Agreement          Filed as Exhibit 10(g) to the Company's Report on Form
         relating to SI Handling           8-K dated September 23, 1994.
         Systems

   (h)   Consulting Agreement              Filed as Exhibit 10(h) to the Company's Report on Form
         (Pat Hayton)                      8-K dated September 23, 1994.

   (i)   Employment Agreement              Filed as Exhibit 10(i) to the Company's Report on Form
         (James R. Currier, Sr.)           8-K dated September 23, 1994.

   (j)   Asset Purchase Agreement          Filed with this report.
         between FMC Corporation
         and Apogee

   (k)   Settlement Agreement              Filed with this report.
         between SI and Apogee

11       Statement regarding computation   None
         of per share
         earnings

18       Letter regarding change in        None
         accounting principles

23       Consents of experts and           Filed with this report.
         counsel

27       Financial Data Schedule           Filed with this report.
</TABLE>