SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

|X|      QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1999.



|_|      TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
         EXCHANGE  ACT  OF  1934  FOR  THE  TRANSITION  PERIOD  FROM  __________
         TO___________.

                           Commission File No. 0-27302

                                   LABTEC INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                 Massachusetts                                04-3116697
         -------------------------------                  ----------------
         (State or other jurisdiction of                  (I.R.S. Employer
         incorporation or organization)                   Identification No.)

1499 S.E. Tech Center Place, Suite 350, Vancouver, WA                98683
-----------------------------------------------------                -----
       (Address of principal executive offices)                    Zip Code

Registrant's telephone number, including area code: (360) 896-2000
                                                    --------------

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                       Yes      |X|               No       |_|

There were 4,024,118 shares of Common Stock outstanding at February 9, 2000.


<PAGE>

<TABLE>
<CAPTION>

                                   LABTEC INC.

                                      INDEX

PART I - FINANCIAL INFORMATION                                                                               Page
------------------------------                                                                               ----
         <S>                                                                                                  <C>
         Item 1.   Financial Statements

                   Consolidated Balance Sheet as of December 31, 1999 (unaudited)
                           and March 31, 1999.................................................................3

                   Consolidated Statements of Operations (unaudited) for the three month
                           and nine month periods ended December 31, 1999 and 1998............................4

                   Consolidated Statement of Cash Flows (unaudited) for the nine month
                           periods ended December 31, 1999 and 1998...........................................5

                   Notes to Financial Statements (unaudited)..................................................6

         Item 2.   Management's Discussion and Analysis
                   of Financial Condition and Results of Operations..........................................10

         Item 3.   Quantitative and Qualitative Disclosures About Market Risk................................15

PART II - OTHER INFORMATION

         Item 4.   Submission of Matters to a Vote of Security Holders.......................................16

         Item 6.   Exhibits and Reports on Form 8-K..........................................................17

                   Signatures................................................................................21
</TABLE>


                                      -2-
<PAGE>




         PART I. - FINANCIAL INFORMATION

<TABLE>
<CAPTION>

                                   LABTEC INC.
                           CONSOLIDATED BALANCE SHEET

                              ASSETS                                    DECEMBER 31, 1999         MARCH 31, 1999
                              ------                                    -----------------         --------------
                                                                           (UNAUDITED)
CURRENT ASSETS:
<S>                                                                         <C>                  <C>
   Cash...........................................................          $  829,654            $  768,150
   Accounts receivable, net.......................................          23,417,378            17,889,858
   Interest and other receivables.................................              67,577               211,468
   Income tax receivable..........................................             432,160               594,973
   Inventories....................................................          11,517,775            10,661,758
   Prepaid expenses...............................................             193,655               160,523
   Current deferred income taxes..................................             981,826               829,713
                                                                         -------------          ------------
      TOTAL CURRENT ASSETS........................................          37,440,025            31,116,443

Property and equipment, net.......................................           2,329,637             2,329,880
Noncurrent deferred income taxes..................................           1,938,489             1,892,850
Debt issuance costs...............................................           2,386,760             1,983,637
Other noncurrent assets...........................................             301,302               253,535
Goodwill, net.....................................................          18,569,624             9,392,044
                                                                         -------------          ------------
                                                                            62,965,837         $  46,968,389
                                                                         =============          ============
          LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
   Line of credit.................................................         $ 9,202,248           $ 4,000,000
   Current portion of long-term debt..............................           2,850,000                   ---
   Accounts payable...............................................          10,954,608             8,491,828
   Accrued payroll and benefits...................................           1,294,230             1,588,855
   Accrued interest...............................................             211,124               223,214
   Other accrued expenses.........................................           1,415,887             1,877,365
                                                                         -------------          ------------
      TOTAL CURRENT LIABILITIES...................................          25,928,097            16,181,262

Long-term debt...................................................           29,488,519            26,086,184
                                                                         -------------          ------------
                                                                            55,416,616            42,267,446
                                                                         -------------          ------------

Commitments and contingencies....................................                  ---                   ---

SHAREHOLDERS' EQUITY (DEFICIT):
Common  stock,  par  value  $.01,  25,000,000  shares  authorized,
4,010,291 and 3,451,799  shares issued and outstanding at December
31, 1999 and March 31, 1999, respectively.........................              40,103                34,518
   Additional paid-in capital.....................................          23,806,200            20,585,770
   Stock subscription receivable..................................             (16,836)              (25,688)
   Accumulated deficit............................................         (16,233,112)          (15,864,166)
   Accumulated other comprehensive income (loss):
      Cumulative foreign currency translation adjustment..........             (47,134)              (29,491)
                                                                         -------------          ------------
                                                                             7,549,221             4,700,943
                                                                         -------------          ------------
                                                                         $  62,965,837         $  46,968,389
                                                                          ============          ============
</TABLE>


    The accompanying notes are an integral part of these financial statements


                                      -3-
<PAGE>
<TABLE>
<CAPTION>

                                   LABTEC INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (UNAUDITED)

                                            THREE MONTHS ENDED      THREE MONTHS ENDED     NINE MONTHS ENDED     NINE MONTHS ENDED
                                             DECEMBER 31, 1999       DECEMBER 31, 1998     DECEMBER 31, 1999     DECEMBER 31, 1998
                                             -----------------       -----------------     -----------------     -----------------
<S>                                          <C>                     <C>                   <C>                   <C>

Net sales                                          $27,379,209             $18,230,942           $64,565,793           $47,759,132

Cost of sales                                       16,526,223              12,017,438            38,801,997            30,406,712
                                          --------------------------------------------- -------------------------------------------

Gross profit                                        10,852,986               6,213,504            25,763,796            17,352,420
                                          --------------------------------------------- -------------------------------------------

Operating expenses:
  Selling and marketing                              4,755,428               4,299,396            12,028,631            10,750,929
  General and administrative                         1,620,249               1,090,840             3,954,743             4,281,918
  Research and development                             633,201                 304,882             1,706,117             1,160,360
  Depreciation                                         427,280                 376,224             1,185,999             1,059,763
  Amortization of goodwill                             682,362                 441,881             2,611,399             1,325,643
  Amortization of noncompete agreement                     ---                  90,450                   ---               271,350
                                          --------------------------------------------- -------------------------------------------

                                                     8,118,520               6,603,673            21,486,889            18,849,963
                                          --------------------------------------------- -------------------------------------------

Income (loss) from operations                        2,734,466               (390,169)             4,276,907           (1,497,543)
  Interest expense, net                              1,178,971                 870,191             2,941,876             2,634,927
  Other nonoperating (income) expense                    3,127                (17,945)                62,335              (33,576)
                                          --------------------------------------------- -------------------------------------------

Total other income (expense)                         1,182,098                 852,246             3,004,211             2,601,351
                                          --------------------------------------------- -------------------------------------------

Income (loss) before income taxes                    1,552,368             (1,242,415)             1,272,696           (4,098,894)

Provision (benefit) for income taxes                   370,608               (209,585)               626,092             (932,472)
                                          --------------------------------------------- -------------------------------------------

Net income (loss) before extraordinary
items                                                1,181,760             (1,032,830)               646,604           (3,166,422)

Extraordinary loss on extinguishment of
debt, less applicable income tax benefit
of $677,033                                                ---                     ---           (1,015,550)                   ---
                                          --------------------------------------------- -------------------------------------------

Net income (loss)                                   $1,181,760            $(1,032,830)            $(368,946)          $(3,166,422)
                                          ============================================= ===========================================

Weighted average shares outstanding
     Basic                                           3,751,100               1,770,000             3,575,354             1,770,000
     Diluted                                         3,790,163               1,770,000             3,575,354             1,770,000

Net income (loss) per share before
extraordinary loss
     Basic                                               $0.32                 $(0.58)                 $0.18               $(1.79)
                                          ============================================= ===========================================
     Diluted                                             $0.31                 $(0.58)                 $0.18               $(1.79)
                                          ============================================= ===========================================

Net income (loss) per share
     Basic                                               $0.32                 $(0.58)               $(0.10)               $(1.79)
                                          ============================================= ===========================================
     Diluted                                             $0.31                 $(0.58)               $(0.10)               $(1.79)
                                          ============================================= ===========================================

Comprehensive income (loss):
  Net income (loss)                                 $1,181,760            $(1,032,830)            $(368,946)          $(3,166,422)
  Change in cumulative
    translation adjustment                             (7,988)                     ---              (17,643)                   ---
                                          --------------------------------------------- -------------------------------------------
Comprehensive income (loss)                         $1,173,772            $(1,032,830)            $(386,589)          $(3,166,422)
                                          ============================================= ===========================================
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                      -4-
<PAGE>
<TABLE>
<CAPTION>

                                   LABTEC INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)


                                                                                         NINE MONTHS ENDED DECEMBER 31,
                                                                                  ----------------------------------------------
                                                                                                     1999                  1998
                                                                                                     ----                  ----
        <S>                                                                                 <C>                    <C>
        CASH FLOW FROM OPERATING ACTIVITIES:
          Net loss                                                                              $(368,946)          $(3,166,422)
          Adjustments to reconcile net loss to net cash
            provided by operating activities:
              Depreciation                                                                      1,185,999             1,059,763
              Amortization of goodwill                                                          2,611,399             1,325,643
              Amortization of noncompete agreement                                                    ---               271,350
              Amortization of debt issuance costs                                                 329,662               266,052
              Change in deferred income taxes                                                      12,914             (881,166)
              Compensation expense on common stock                                                    ---               802,660
                  sold to management
              Compensation expense on stock options                                                   ---                 2,264
                   granted
              Write-off of debt issuance costs                                                  1,692,583                   ---
          Changes in current assets and liabilities, net
                   of effects of acquisitions:
              Accounts receivable                                                              (3,182,115)           (3,032,682)
              Interest and other receivables                                                      143,891                15,078
              Income taxes receivable                                                             162,813                   ---
              Inventories                                                                       1,363,389             1,010,949
              Prepaid expenses                                                                    (24,955)                  ---
              Accounts payable                                                                  1,008,567             5,034,441
              Income taxes payable                                                               (448,658)             (262,084)
              Accrued payroll, benefits and other expenses                                     (1,333,968)            1,283,251
              Accrued interest                                                                    (12,090)              (47,000)

                                                                                  ----------------------------------------------
        Net cash provided by operating activities                                               3,140,485             3,682,097
                                                                                  ----------------------------------------------


        CASH FLOW FROM INVESTING ACTIVITIES:
          Capital expenditures                                                                  (992,153)           (1,112,495)
          Other assets                                                                           (57,500)                 2,189
          Costs associated with purchase of CRU                                              (13,900,990)                   ---

                                                                                  ----------------------------------------------
        Net cash used for investing activities                                               (14,950,643)           (1,110,306)
                                                                                  ----------------------------------------------


        CASH FLOW FROM FINANCING ACTIVITIES:
          Net increase (decrease) in short-term credit                                          5,202,248           (2,500,000)
              facility
          Proceeds from issuance of long-term debt                                             28,500,000                   ---
          Repayment of long-term debt                                                         (20,276,425)             (348,603)
          Debt issuance costs                                                                  (2,419,399)              (19,917)
          Proceeds from exercise of stock options                                                  27,796                   ---
          Proceeds from issuance of common stock                                                1,000,000               111,383
          Payments on common stock subscription                                                     8,852                86,972
          Repurchase and cancellation of common                                                  (153,769)             (60,547)
              stock

                                                                                  ----------------------------------------------
        Net cash provided by (used for) financing activities                                   11,889,303           (2,730,712)
                                                                                  ----------------------------------------------

        Effect of foreign currency on cash                                                        (17,641)                  ---

        Net increase (decrease) in cash                                                            61,504              (158,921)

        Cash at beginning of period                                                               768,150               988,417
                                                                                  ----------------------------------------------

        Cash at end of period                                                                    $829,654              $829,496
                                                                                  ==============================================
</TABLE>


    The accompanying notes are an integral part of these financial statements

                                      -5-
<PAGE>



                                   LABTEC INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.     Basis of Presentation

The accompanying  consolidated  financial statements are unaudited and have been
prepared by the Company  pursuant to the rules and regulations of the Securities
and  Exchange   Commission  and  in  the  opinion  of  management   include  all
adjustments,  consisting only of normal recurring adjustments, necessary for the
fair  statement  of results for the interim  periods.  Certain  information  and
footnote  disclosures  normally included in the financial statements prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted pursuant to such rules and  regulations.  These  consolidated  financial
statements  and notes should be read in conjunction  with the audited  financial
statements  and notes thereto  included in the  Company's  annual report on Form
10-K for the year  ended  March 31,  1999.  The  results of  operations  for the
interim  periods are not  necessarily  indicative  of the results for the entire
year.

Reclassifications have been made to amounts in prior years to conform to current
year presentation. These changes had no impact on previously reported results of
operations or shareholders' equity.

2.     Accounts Receivable

Accounts  receivable are net of allowances  for doubtful  accounts and for sales
returns of  $1,540,554  and  $1,443,143 at December 31, 1999 and March 31, 1999,
respectively.   At  December  31,  1999  and  March  31,  1999,   10%  and  18%,
respectively, of receivables were from one customer.

3.     Inventories

Inventories  represent product manufactured for the Company by foreign factories
subcontracted by the Company. Of total inventories,  $712,527 and $2,169,918 was
in transit at December 31, 1999 and March 31, 1999,  respectively.  During March
1999,  the Company  began taking title upon receipt of product and prior to that
the Company took title upon shipment from Asia.

4.     Property and Equipment

Property and equipment consists of the following:

                                     December 31, 1999       March 31, 1999
                                     -----------------       --------------
Leasehold improvements                   $   255,512            $   238,948
Tooling and molds                          2,429,639              2,328,602
Furniture and equipment                    2,356,102              1,878,998
Retail displays                            2,117,966              1,526,915
                                        ------------           ------------
                                           7,159,219              5,973,463
Less: accumulated depreciation            (4,829,582)            (3,643,583)
                                        ------------           ------------
                                         $ 2,329,637            $ 2,329,880
                                         ===========            ===========


5.     Stock

On December 1, 1999 the Company  completed a one-for-two  reverse stock split of
its common stock.


                                      -6-
<PAGE>

                                   LABTEC INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Subsequent to the reverse stock split,  one of the  Company's  subordinate  debt
holders converted  $1,500,000  principal amount of its Senior  Subordinated Note
due October 1, 2005 for 262,237  shares of common  stock.  Also,  the  Company's
majority shareholder converted $824,062 of the Unsecured Subordinated Promissory
Note due February 17, 2005 and $27,926 of accrued interest for 148,949 shares of
common stock.

6.     Earnings Per Share

Net loss per share on a diluted basis is based on the weighted average number of
shares of common and all potentially dilutive securities  outstanding during the
periods,  computed using the treasury stock method for stock options.  Given the
Company's net loss for the three and nine months ended December 31, 1998 and for
the nine months ended  December 31, 1999,  the dilutive  effect of stock options
has  been  excluded  from  the  computation  of  the  weighted   average  shares
outstanding.  For the three and nine months ended December 31, 1999 the dilutive
impact of stock  options  are  included in the  computation  of income per share
before  extraordinary  loss and net income per share in accordance with FAS 128.
On December  1, 1999 the Company had a  one-for-two  reverse  stock  split.  The
weighted  average  shares  outstanding in 1998 have been adjusted to reflect the
reverse split.

Weighted average shares outstanding consist of the following:

<TABLE>
<CAPTION>

                                                          For the Three Months Ended        For the Nine Months Ended
                                                                 December 31,                     December 31,
                                                                 ------------                     ------------
                                                             1999             1998            1999            1998
                                                             ----             ----            ----            ----
<S>                                                      <C>               <C>             <C>             <C>
Weighted average shares outstanding (basic)               3,751,100         1,770,000       3,575,354       1,770,000
Effect of dilutive stock options                             39,063                 0               0               0
                                                          ---------         ---------       ---------       ---------
Weighted average shares outstanding (diluted)             3,790,163         1,770,000       3,575,354       1,770,000
                                                          =========         =========       =========       =========
</TABLE>


7.     Purchase of Connector Resources Unlimited, Inc.

On August 20,  1999,  Labtec,  Inc.  ("Labtec")  completed  the  acquisition  of
Connector Resources  Unlimited,  Inc. ("CRU"). As a result,  Labtec acquired all
the  outstanding  shares  of CRU  for  approximately  $13,145,956  in  cash  and
$1,500,000 in debt.  Concurrent with the acquisition of CRU, Labtec entered into
a  $43,000,000  credit  facility  with a lender and also sold 312,500  shares of
common  stock for  $1,000,000.  The net  proceeds  from the credit  facility and
proceeds  from the stock sale were used to retire  outstanding  debt and accrued
interest totaling  $23,400,000,  to pay debt issuance costs and loan fees on the
new  credit  facility,  to pay for  certain  acquisition  costs  related  to the
purchase  of CRU and to fund the  purchase of CRU.  CRU  designs,  develops  and
markets  computer  peripheral  products   principally  in  North  America.   The
acquisition  was accounted for as a purchase and therefore the operations of CRU
have been included with those of the Company since August 20, 1999.


                                      -7-
<PAGE>

                                   LABTEC INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


The following sets forth the reconciliation of fair value of the assets acquired
and the liabilities assumed.

Purchase price                                                  $14,645,956
Fair value of tangible assets acquired                           (5,337,712)
Liabilities  assumed                                              2,098,202
Direct costs of  acquisition                                        755,034
                                                                -----------
Excess of purchase price over fair value of tangible assets     $12,161,480
                                                                ===========

The excess of the purchase price over fair value of tangible  assets acquired is
being amortized over an estimated useful life of twenty years.

The  following  unaudited  pro forma  information  presents  the  results of the
Company's  operations assuming the CRU acquisition  occurred at the beginning of
the  respective  nine-month  periods,  after giving  effect to  adjustments  for
amortization  of  goodwill,  estimated  increase  in  interest  expense  and the
estimated impact on the income tax provision.

<TABLE>
<CAPTION>

                                                      Three Months Ended                   Nine Months Ended
                                                         December 31,                        December 31,
                                                         ------------                        ------------
                                                    1999              1998              1999              1998
                                                    ----              ----              ----              ----
                                                         (unaudited)                          (unaudited)
<S>                                              <C>               <C>               <C>               <C>
Net sales                                         $27,379,209       $21,079,110       $70,474,881       $56,926,310
Net income (loss)
  before extraordinary item                         1,181,760        (1,232,153)          574,522        (3,865,791)
Net income (loss)
  per share before extraordinary item:
Basic                                                    .32              (.64)              .15             (2.01)
Diluted                                                  .31              (.64)              .15             (2.01)
</TABLE>

The unaudited pro forma financial  information is not necessarily  indicative of
the  operating  results that would have  occurred had the CRU  acquisition  been
consummated as of the beginning of each period, nor is it necessarily indicative
of future operating results.  The unaudited pro forma information should be read
in  conjunction  with the current report of the Company on Form 8-K dated August
20, 1999 and the current  report of the Company on Form 8-K/A filed  November 2,
1999.

8.     Borrowings

In  conjunction  with the purchase of CRU in August 1999, the Company repaid its
$7,500,000  revolving line of credit and  $19,250,000  long-term loan with funds
obtained from a $27,000,000  long-term loan and a $16,000,000  revolving line of
credit with other lenders. Also, a $1,500,000 seven and one-half year promissory
note  was  issued  to  the  prior  shareholders  of  CRU.  Fees  related  to the
extinguished   credit   line  are   included  in  the   extraordinary   loss  on
extinguishment  of debt. At December 31, 1999 the long-term  loans and a portion
of the revolving line of credit were accruing  interest at LIBOR plus 3.25-3.50%
and the remaining  portion of the revolving line of credit was accruing interest
at the prime rate plus 1.75%.  In December  1999,  the Company  entered  into an
interest  rate  swap  agreement  with  its  primary  lender  in order to fix the
interest  rate on a portion of its  long-term  debt.  At December 31, 1999,  the
amount of debt subject to the fixed rate was $13,150,000, for which the rate was
9.69%. The bank line of credit is secured by substantially  all of the Company's
assets.  Loan fees paid to the banks and  transaction  fees relating to the term
loan, revolving line of credit and promissory note were $2,419,399 and have been
recorded in debt issuance costs. The current line of credit expires in September
2005 and the long-term debt expires June 30, 2005.


                                      -8-
<PAGE>


ITEM 2.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION  AND
         RESULTS OF OPERATIONS.

OVERVIEW

         The following  discussion  and analysis  should be read in  conjunction
with the financial statements and notes thereto appearing elsewhere herein.

         This  Management's  Discussion and Analysis of Financial  Condition and
Results of Operations contains forward-looking  statements that involve a number
of risks and uncertainties. The following are among the factors that could cause
actual  results  to  differ  materially  from  the  forward-looking  statements:
business  conditions  and  growth  in  the  personal  computer  and  workstation
industries;  general  economies,  both  domestic and  international;  lower than
expected  customer orders or variations in customer order patterns;  competitive
factors,  including increased competition,  new product offerings by competitors
and pricing  pressures;  the  availability of parts and  components;  changes in
product mix; resource  constraints  encountered in developing new products;  and
product  shipment   interruptions   due  to  manufacturing   difficulties.   The
forward-looking  statements  contained in the MD&A  regarding  industry  trends,
product  development  and liquidity  and future  business  activities  should be
considered in light of these factors.

         On August 20, 1999, Labtec, Inc.  ("Labtec")  completed the acquisition
of Connector Resources Unlimited, Inc. ("CRU"). As a result, Labtec acquired all
the  outstanding  shares  of CRU  for  approximately  $13,145,956  in  cash  and
$1,500,000 in debt.  Concurrent with the acquisition of CRU, Labtec entered into
a $43,000,000 credit facility with a bank and also sold 312,500 shares of common
stock for  $1,000,000.  The net proceeds  from the credit  facility and proceeds
from the stock sale were used to retire outstanding debt and accrued interest of
$23,400,000,  to pay issuance costs and loan fees on the new credit facility, to
pay for certain acquisition costs related to the purchase of CRU and to fund the
purchase of CRU. CRU designs,  develops and markets computer peripheral products
principally in North America.

Three and Nine Months Ended December 31, 1999 and December 31, 1998

         Net sales were $27,379,209 for the three months ended December 31, 1999
compared  to  $18,230,942  for the three  months  ended  December  31,  1998 and
$64,565,793  for the nine months ended December 31, 1999 compared to $47,759,132
for the nine months ended December 31, 1998.

                      Three Months Ended               Nine Months Ended
                         December 31,                     December 31,
                         ------------                     ------------
                   (in thousands, except %)         (in thousands, except %)
                 1999     1998    %Change          1999     1998    %Change
                 ----     ----    -------          ----     ----    -------
Net Sales       $27,379  $18,231     50%          $64,566  $47,759     35%

         The  increase in net sales over the periods  was  primarily  due to the
increase in sales for the  Company's  PC Voice  Access line of products  and the
addition of sales from the 3D motion  control  line of products and data storage
products.


                                      -9-
<PAGE>


COST OF SALES
<TABLE>
<CAPTION>

                              Three Months Ended                  Nine Months Ended
                                 December 31,                        December 31,
                                 ------------                        ------------
                           (in thousands, except %)            (in thousands, except %)
                         1999      1998     %Change           1999      1998     %Change
                         ----      ----     -------           ----      ----     -------
<S>                     <C>       <C>       <C>              <C>       <C>       <C>
Cost of Sales           $16,526   $12,017      37%           $38,802   $30,407      28%
As a % of Net Sales        60.4%     65.9%                      60.1%     63.7%

</TABLE>

         Cost of sales  increased  for the three and nine months ended  December
31, 1999 compared to the three and nine months ended December 31, 1998 primarily
as a result of higher  net  sales.  Cost of sales as a  percentage  of net sales
decreased for the three and nine months ended  December 31, 1999 compared to the
three and nine  months  ended  December  31, 1998  primarily  as a result of the
change in product mix from a larger  portion of higher cost products  (speakers)
to a larger portion of lower cost products (voice access and personal audio), as
well as the addition of the 3D controller in 1999 which has higher gross margin.

RESEARCH AND DEVELOPMENT

<TABLE>
<CAPTION>
                                       Three Months Ended                    Nine Months Ended
                                          December 31,                          December 31,
                                          ------------                          ------------
                                    (in thousands, except %)              (in thousands, except %)
                                  1999        1998       %Change       1999         1998       %Change
                                  ----        ----       -------       ----         ----       -------
<S>                              <C>         <C>         <C>          <C>         <C>           <C>
Research & Development             $ 633       $ 305       108%       $ 1,706      $ 1,160        47%
As a % of Net Sales                  2.3%        1.7%                     2.6%         2.4%
</TABLE>

         Research and development  expenses increased over the periods primarily
due to the  increased  investment in the  development  of new speakers and voice
access  products  and the  enhancement  of current  products.  Also,  the dollar
increase  reflects the  increased  hiring of  employees  working in research and
development.

SELLING AND MARKETING

<TABLE>
<CAPTION>

                                       Three Months Ended                          Nine Months Ended
                                          December 31,                                December 31,
                                          ------------                                ------------
                                    (in thousands, except %)                    (in thousands, except %)
                                  1999        1998       %Change             1999         1998       %Change
                                  ----        ----       -------             ----         ----       -------
<S>                               <C>        <C>         <C>               <C>           <C>         <C>
Selling and Marketing             $4,755      $4,299        11%             $12,029      $10,751        12%
As a % of Net Sales                 17.4%       23.6%                          18.6%        22.5%
</TABLE>

         Selling and marketing  expenses increased in dollar amount in the three
and nine months ended  December  31, 1999  compared to the three and nine months
ended  December 31, 1998  primarily as a result of additional  sales  personnel,
higher travel costs to support the increased  sales volume,  increased  variable
costs related to the increased  sale volume and increased  marketing  efforts in
the North American  retail  portion of the business to maintain  market share in
this very competitive market.  Selling and marketing expenses as a percentage of
net sales  decreased  for the three and nine  months  ended  December  31,  1999
compared to the three and nine months ended December 31, 1998 primarily  because
a portion of selling and marketing expenses are fixed in nature.


                                      -10-
<PAGE>


GENERAL AND ADMINISTRATIVE

<TABLE>
<CAPTION>

                                       Three Months Ended                   Nine Months Ended
                                          December 31,                         December 31,
                                          ------------                         ------------
                                    (in thousands, except %)             (in thousands, except %)
                                  1999        1998       %Change      1999         1998       %Change
                                  ----        ----       -------      ----         ----       -------
<S>                              <C>         <C>        <C>          <C>          <C>          <C>
General & Administrative          $1,620      $1,091        48%       $3,955       $4,282        (7%)
As a % of Net Sales                  5.9%        6.0%                    6.1%         9.0%
</TABLE>

         General  and  administrative  expenses,  which  include  the  Company's
corporate finance,  human resources and administrative  functions,  increased in
dollar amount in the three months ended  December 31, 1999 compared to the three
months  ended  December  31, 1998  primarily  due to  additional  administrative
personnel  and  increased  rent due to adding  warehouse  space to  support  the
increased  sales volume.  The dollar  amount  decreased in the nine months ended
December  31, 1999  compared to the nine months  ended  December 31, 1998 due to
severance  costs related to the termination of one Company officer in 1998. As a
percentage of net sales,  general and administrative  expenses decreased for the
nine months ended  December 31, 1999 compared to the same period ended  December
31,  1998.  The  decrease  as a  percentage  of net  sales is due  primarily  to
compensation  expense on common  stock sold to  management  recorded  during the
period in 1998.

DEPRECIATION
<TABLE>
<CAPTION>

                                       Three Months Ended                          Nine Months Ended
                                          December 31,                                December 31,
                                          ------------                                ------------
                                    (in thousands, except %)                    (in thousands, except %)
                                  1999        1998       %Change             1999         1998       %Change
                                  ----        ----       -------             ----         ----       -------
<S>                              <C>          <C>        <C>                <C>          <C>         <C>
Depreciation                       $ 427        $376        14%              $1,186       $1,060        12%
As a % of Net Sales                  1.6%        2.1%                           1.8%         2.2%
</TABLE>

         Depreciation  dollar  amounts  increased  for the three and nine months
ended December 31, 1999 compared to the three and nine months ended December 31,
1998 as the result of increased  capital  expenditures  for computer  equipment,
retail  displays and tooling and molds for new products  being  developed.  As a
percentage of net sales depreciation  decreased primarily due to the increase in
net sales.

AMORTIZATION

<TABLE>
<CAPTION>

                                       Three Months Ended                          Nine Months Ended
                                          December 31,                                December 31,
                                          ------------                                ------------
                                    (in thousands, except %)                    (in thousands, except %)
                                  1999        1998       %Change             1999         1998       %Change
                                  ----        ----       -------             ----         ----       -------
<S>                               <C>         <C>        <C>                <C>          <C>         <C>
Amortization                        $682        $532        28%              $2,611       $1,597        63%
As a % of Net Sales                  2.5%        2.9%                           4.0%         3.4%

</TABLE>

         Goodwill (the purchase price paid for Spacetec and Connector  Resources
Unlimited in excess of the fair value of net tangible assets) is being amortized
over three (3) years for Spacetec and twenty (20) years for CRU,  which resulted
in an increase  in the dollar  amount and as a  percentage  of net sales for the
three and nine months  ended  December  31, 1999  compared to the three and nine
months ended December 31, 1998, since the CRU acquisition took place in 1999.


                                      -11-
<PAGE>

INTEREST EXPENSE, NET

<TABLE>
<CAPTION>

                                       Three Months Ended                          Nine Months Ended
                                          December 31,                                December 31,
                                          ------------                                ------------
                                    (in thousands, except %)                    (in thousands, except %)
                                  1999        1998       %Change             1999         1998       %Change
                                  ----        ----       -------             ----         ----       -------
<S>                              <C>         <C>         <C>                <C>          <C>         <C>
Interest Expense                  $1,179        $870        36%              $2,942       $2,635        12%
As a % of Net Sales                  4.3%        4.8%                           4.6%         5.5%

</TABLE>

         Net  interest  expense  increased  for the three and nine months  ended
December 31, 1999 compared to the three and nine months ended  December 31, 1998
as the result of the Company  refinancing and increasing its debt in conjunction
with the  purchase of CRU. Net  interest  expense as a  percentage  of net sales
decreased due to the increase in net sales.

INCOME TAXES

         The percentage  and dollar amount  increase in the income tax provision
for the three and nine  months  ended  December  31,  1999  compared  to 1998 is
primarily  due to the  increase  in  operating  income  and  the  result  of the
amortization of goodwill being nondeductible for income tax purposes. During the
three months ended  December 31, 1999,  the Company's  tax provision  includes a
benefit  of  approximately  $912,000  due to a  reduction  of the  deferred  tax
valuation allowance.

LIQUIDITY AND CAPITAL RESOURCES

         As of December  31,  1999,  the  Company had  $829,654 in cash and cash
equivalents  and working  capital of  $11,511,928.  The working  capital balance
decreased  from March 31, 1999 primarily due to the increase in borrowing on the
line of credit and increase in accounts  payable which was  partially  offset by
the increase in accounts receivable and inventory.

         Net cash provided by operating  activities  was $3,140,485 for the nine
months  ended  December  31,  1999,  compared  to  cash  provided  by  operating
activities  of  $3,682,097  for the nine months ended  December  31,  1998.  The
decrease in net cash provided by operating activities in 1999 was largely due to
the decreased  change in accounts  payable,  the decrease in accrued payroll and
the increase in income from operations over the prior year loss from operations.

         Net cash used for investing  activities  was $14,950,643  for the nine
months ended  December 31, 1999 compared to $1,110,306 in 1998. The increase was
primarily due to the purchase of CRU in August 1999.

         Financing  activities  provided  net cash of  $11,889,303  for the nine
months  ended  December  31,  1999,  principally  from  the  refinancing  of the
Company's  long-term debt and revolving  line of credit in conjunction  with the
purchase of CRU, as well as the issuance of additional common stock.

         The Company refinanced its long-term debt and short-term revolving line
of credit in August 1999.  Outstanding  at December 31, 1999 was  $26,300,000 on
long-term  loans,  $4,500,000 in  subordinated  debt,  $9,202,248 on the line of
credit, $240,938 on a six-year promissory note that was issued to the holders of
Labtec  common  stock  outstanding  just  prior to the time of the  merger  with
Spacetec and a $1,500,000  seven and one-half year promissory note issued to the
prior  shareholders  of CRU. At December  31,  1999,  the  long-term  loans were
accruing  interest at the LIBOR rate plus 3.25 - 3.50%, the subordinated note at
12%, the line of credit at the prime rate plus 1.75% and the promissory notes at
10% and 6%, respectively.  In December  1999,  the Company  entered  into an
interest  rate  swap  agreement  with  its  primary  lender  in order to fix the
interest  rate on a portion of its  long-term  debt.  At December 31, 1999,  the
amount of debt subject to the fixed rate was $13,150,000, for which the rate was
9.69%.


                                      -12-
<PAGE>


         In December  1999 the Company  completed a  one-for-two  reverse  stock
split of its common stock.  Subsequent  to the reverse  stock split,  one of the
Company's  subordinate debt holders converted $1,500,000 principal amount of its
Senior Subordinated Note due October 1, 2005 for 262,237 shares of common stock.
Also, the Company's  majority  shareholder  converted  $824,062 of the Unsecured
Subordinated  Promissory  Note due  February  17,  2005 and  $27,926  of accrued
interest for 148,949 shares of common stock.

         Capital  expenditures  were $992,153 for the nine months ended December
31, 1999.  This  compares to $1,112,495  for the nine months ended  December 31,
1998.  These capital  expenditures  were  primarily for the purchase of computer
equipment, tooling and molds and retail displays.

         The Company  believes  that its  existing  cash and  revolving  line of
credit,  together with future funds from  operations,  will satisfy its need for
working capital and other cash  requirements for at least the next  twelve-month
period.

YEAR 2000 ISSUES

         The Year 2000 issue is the result of  date-sensitive  devices,  systems
and computer  programs that were  deployed  using two digits rather than four to
define  the  applicable  year.  Any  such  technologies  may  recognize  a  year
containing "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculation  causing disruption of operations  including,
among other things, a temporary  inability to process  transactions or engage in
similar normal business activities.

         The Company did not experience any  significant  malfunctions or errors
in its information or business  systems when the date changed from 1999 to 2000.
Based on its  operations  since January 1, 2000, the Company does not expect any
significant  problems  related to the Year 2000 issue.  However,  it is possible
that the full  impact of the date  change  has not been  fully  recognized.  For
example,  it is  possible  that Year 2000 or similar  issues,  such as leap year
related problems,  may occur with financial closings.  The Company believes that
any such problems will be minor and easily corrected.  In addition,  the Company
could still be negatively  impacted if the Year 2000 or similar issues adversely
affect its  customers or suppliers.  Currently,  the Company is not aware of any
significant Year 2000 or similar problems that have arisen with its customers or
suppliers.

Disclosure Regarding Private Securities Litigation Reform Act of 1995
---------------------------------------------------------------------

         From  time to time,  the  Company,  through  its  management,  may make
forward-looking  public  statements in press  releases or other  communications,
such as  statements  concerning  then-expected  future  revenues  or earnings or
concerning  projected  plans,  performance,   marketing  initiatives,  corporate
alliances,  product development and commercialization as well as other estimates
relating  to future  operations.  Forward-looking  statements  may be in reports
filed under the Securities  Exchange Act of 1934, as amended,  in press releases
or in oral statements made with the approval of an authorized executive officer.
The words or phrases "will likely  result," "are expected to," "will  continue,"
"is  anticipated,"  "estimate," or similar  expressions are intended to identify
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933,
as amended, as enacted by the Private Securities Litigation Reform Act of 1995.

         The Company  wishes to caution  readers not to place undue  reliance on
these  forward-looking  statements which speak only as of the date on which they
are  made.  Various  factors  could  affect  the  Company's  financial  or other
performance  and could cause the Company's  actual results for future periods


                                      -13-
<PAGE>


to differ  materially from any opinions or statements  expressed with respect to
future periods or events in any current  statement.  These factors include,  but
are not limited to: business  conditions and growth in the personal computer and
workstation  industries and general economies,  both domestic and international;
dependence  on a limited  number of retail  customers;  dependence  on a limited
number of source suppliers; lower than expected customer orders or variations in
customer  order  patterns due to changes in demand for  customers'  products and
customers'   inventory  levels;   competitive   factors,   including   increased
competition, new product offerings by competitors and pricing pressures; changes
in product mix; dependency on proprietary technology; technological difficulties
and  resource  constraints  encountered  in  developing  new  products;  product
shipment interruptions;  and other factors discussed herein and in the Company's
other filings with the Securities and Exchange Commission.

         The Company will not undertake and specifically declines any obligation
to  publicly  release  the  result  of any  revisions  which  may be made to any
forward-looking  statements to reflect events or circumstances after the date of
such  statements or to reflect the occurrence of  anticipated  or  unanticipated
events  which  may  cause   management  to  re-evaluate   such   forward-looking
statements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

          None.


                                      -14-
<PAGE>


                           PART II - OTHER INFORMATION

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

         (a) The  annual  meeting of  stockholders  of the  Company  was held on
September  15, 1999 for the  purpose  of: (i)  approving  the  amendment  of the
Restated  Articles of  Organization  to eliminate the Company's three classes of
directors  in favor of one class of  directors  to be elected  annually and (ii)
electing  five  directors.  Proxies for the meeting were  solicited  pursuant to
Regulation 14A of the Securities Exchange Act of 1934, as amended, and there was
no solicitation in opposition.

         The  proposal  to approve the  amendment  of the  Restated  Articles of
Organization  to eliminate the Company's  three classes of directors in favor of
one class of  directors to be elected  annually  was  approved by the  following
vote:

                For                         Against
                ---                         -------
             4,690,711                      50,132

         The following directors were elected by the following vote:

                                                     Votes
                                   ------------------------------------------
                                           For               Withheld
                                           ---               --------
         J. Grant Jagelman               5,341,095            51,843
         Julian Rubinstein               5,341,428            51,510
         Jonathan Stearns                5,341,428            51,510
         Joseph Pretlow                  5,341,428            51,510
         Robert G. Wick                  5,341,428            51,510

         (b) A  special  meeting  of  stockholders  of the  Company  was held on
November 24, 1999 for the purpose of  approving  an  amendment of the  Company's
Restated Articles of Organization,  as amended, in order to effect a one-for-two
reverse  split of the  Company's  common  stock.  Proxies for the  meeting  were
solicited pursuant to Regulation 14A of the Securities  Exchange Act of 1934, as
amended, and there was no solicitation in opposition.

         The  proposal  to approve the  amendment  of the  Restated  Articles of
Organization,  as amended, in order to effect a one-for-two reverse split of the
Company's common stock was approved by the following vote:


                          For                         Against
                          ---                         -------
                       4,361,682                       4,110


                                      -15-
<PAGE>


ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

       (a)         Exhibits:

<TABLE>
<CAPTION>

Number    Description of Exhibit                           Method of Filing
------    ----------------------                           ----------------
<S>      <C>                                              <C>
3.1       Restated Articles of Organization                Incorporated  by  reference to Exhibit 3.1 to the
                                                           Company's  Annual  Report  on Form  10-K  for the
                                                           fiscal  year ended March 31, 1999 (the "1999 Form
                                                           10-K")
3.2       Articles of Amendment                            Incorporated  by  reference to Exhibit 3.2 to the
                                                           1999 Form 10-K
3.3       Articles of Amendment                            Incorporated  by  reference to Exhibit 3.3 to the
                                                           Form  10-Q  for  the   quarterly   period   ended
                                                           September 30, 1999
3.4       Articles of Amendment                            Filed herewith
3.5       Amended and Restated By-Laws of the Company      Incorporated  by  reference to Exhibit 3.3 to the
                                                           1999 Form 10-K
4.1       Specimen   certificate  for  shares  of  common  Incorporated  by  reference to Exhibit 4.1 to the
          stock of the Company                             1999 Form 10-K
10.1      Labtec Inc.  Amended and Restated 1997 Employee  Incorporated  by reference to Exhibit 10.1 to the
          Stock Option Plan                                1999 Form 10-K
10.2      1997  Employee   Stock  Option  Plan  -  Option  Incorporated  by reference to Exhibit 10.2 to the
          Certificate and Agreement                        1999 Form 10-K
10.3      Amended  and  Restated  1997   Employee   Stock  Incorporated  by reference to Exhibit 10.3 to the
          Option Plan - Option Certificate and Agreement   1999 Form 10-K
10.4      Amended and Restated Stock Option Plan           Incorporated  by reference to Exhibit 10.1 to the
                                                           Company's  Registration  Statement  on  Form  S-1
                                                           (Commission     File    No.     33-98064)    (the
                                                           "Registration Statement")
10.5      Amended  and  Restated  1995   Director   Stock  Incorporated  by reference to Exhibit 10.2 to the
          Option Plan                                      Company's  Annual  Report  on Form  10-K  for the
                                                           fiscal year ended March 31, 1997
10.6      1995 Employee Stock Purchase Plan                Incorporated  by reference to Exhibit 10.3 to the
                                                           Registration Statement
</TABLE>


                                      -16-
<PAGE>

<TABLE>
<CAPTION>

Number    Description of Exhibit                           Method of Filing
------    ----------------------                           ----------------
<S>      <C>                                              <C>
10.7      Amended  and  Restated  Agreement  and  Plan of  Incorporated  by  reference to Exhibit 2.1 to the
          Merger  among  Spacetec IMC  Corporation,  SIMC  Company's   Current  Report  on  Form  8-K  dated
          Acquisition  Corporation and Labtec Inc., dated  October  21,   1998  (date  of   earliest   event
          as of October 2, 1998,  as amended and restated  reported)  filed  with the  Commission  (File No.
          as of November 13, 1998                          0-27302) on November 17, 1998
10.8      Spacetec     IMC     Corporation      Unsecured  Incorporated  by reference to Exhibit 10.8 to the
          Subordinated  Promissory  Note  for  $1,065,000  1999 Form 10-K
          dated February 17, 1999
10.9      Stock  Purchase  Agreement,  dated as of August  Incorporated  by  reference to Exhibit 2.1 to the
          4, 1999,  among the Purchaser,  the Company and  Company's   Current  Report  on  Form  8-K  dated
          each   of   the   stockholders   of   Connector  August   20,   1999  (date  of   earliest   event
          Resources Unlimited, Inc.                        reported)  filed  with the  Commission  (File No.
                                                           0-27302)  on  September  2, 1999 (the  "1999 Form
                                                           8-K")
10.10     Promissory  Note,  dated as of August 20, 1999,  Incorporated  by  reference to Exhibit 2.2 to the
          issued  by the  Company  and  payable  to  Carl  1999 Form 8-K
          Gromada,  as  collection  agent for each of the
          stockholders of Connector Resources  Unlimited,
          Inc.
10.11     Form of  Credit  Agreement,  dated as of August  Incorporated  by  reference  to Exhibit  10.11 to
          20,   1999,   among  the  Company  and  certain  the Form  10-Q  for the  quarterly  period  ended
          subsidiaries,   various   guarantors,   various  September 30, 1999
          lending  institutions  and The Chase  Manhattan
          Bank, as agent
10.12     Recapitalization  Agreement  and Plan of Merger  Incorporated  by  reference  to Exhibit  10.12 to
          between  Speaker   Acquisition  Corp.  and  LEI  the 1999 Form 10-K
          Holdings, Inc., dated as of August 26, 1997
10.13     Lease Agreement,  dated April 24, 1997, between  Incorporated  by  reference  to Exhibit  10.13 to
          Pacific  Realty  Associates,  L.P.,  and Labtec  the 1999 Form 10-K
          Enterprises, Inc.
10.14     Lease   Agreement,   dated  February  4,  1998,  Incorporated  by  reference  to Exhibit  10.14 to
          between  Columbia  Tech  Center,   L.L.C.,  and  the 1999 Form 10-K
          Labtec Inc.
10.15     Labtec Enterprises,  Inc. $6,000,000  Principal  Incorporated  by  reference  to Exhibit  10.16 to
          Amount of Senior  Subordinated Notes and 50,000  the 1999 Form 10-K
          Shares  of  Common  Stock  Purchase  Agreement,
          dated October 7, 1997

</TABLE>


                                      -17-
<PAGE>
<TABLE>
<CAPTION>

Number    Description of Exhibit                           Method of Filing
------    ----------------------                           ----------------
<S>      <C>                                              <C>
10.16     Amendment  to Purchase  Agreement,  dated as of  Incorporated  by  reference  to Exhibit  10.17 to
          October  25,  1999 and  effective  as of August  the Form  10-Q  for the  quarterly  period  ended
          20, 1999,  between Labtec  Corporation  and The  September 30, 1999
          KB Mezzanine Fund II, L.P.
10.17     Recognition,   Non-Disturbance   and   Attorney  Incorporated  by reference to Exhibit 10.5 to the
          Agreement,  dated  December 26,  1995,  between  1996 Form 10-K
          the Company  and  Historic  Boott Mill  Limited
          Partnership
10.18     Royalty Agreement,  dated May 29, 1991, between  Incorporated  by reference to Exhibit 10.6 to the
          the Company and John A. Hilton                   Registration Statement
10.19     Resale  Agreement,  dated  as of May  1,  1991,  Incorporated  by reference to Exhibit 10.8 to the
          between  the  Company   and   Electronic   Data  Registration  Statement.   See  also  footnote  1
          Systems    Corporation    (as   successors   to  below.
          McDonnell Douglas  Corporation),  as amended by
          Amendment  No. 1 dated  December 23, 1993,  and
          Amendment No. 2 dated October 6, 1994
10.20     Distribution  and  Marketing  Agreement,  dated  Incorporated  by reference to Exhibit 10.9 to the
          April  28,   1994,   between  the  Company  and  Registration  Statement.   See  also  footnote  1
          Sumisho Electronic Devices Corporation           below.
10.21     Form   of   Confidentiality    and   Inventions  Incorporated  by  reference  to Exhibit  10.11 to
          Agreement between the Company and its employees  the Registration Statement.
10.22     Form of  Non-Disclosure  Agreement  between the  Incorporated  by  reference  to Exhibit  10.12 to
          Company and its consultants                      the Registration Statement.
10.23     Severance  Agreement,  dated  March  18,  1998,  Incorporated  by  reference  to Exhibit  10.15 to
          between the Company and Dennis T. Gain           the Company's  Annual Report on Form 10-K for the
                                                           fiscal year ended March 31, 1998
10.24     Employment  Agreement,   dated  June  1,  1998,  Incorporated  by  reference  to Exhibit  10.24 to
          between the Company and Gregory Jones            the 1999 Form 10-K
27.1      Financial Data Schedule                          Filed herewith
</TABLE>

--------

(1) Certain confidential material contained in the document has been omitted and
filed  separately with the Securities and Exchange  Commission  pursuant to Rule
406 of the Securities Act of 1933, as


                                      -18-
<PAGE>

amended, and Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

         (b)      Reports on Form 8-K

         On November 1, 1999,  the  Company  filed a Current  Report on Form 8-K
relating to Item 5, Other Events,  in connection  with the filing of a September
30, 1999 balance sheet for the purpose of complying with Nasdaq requirements.

         On December 1, 1999,  the  Company  filed a Current  Report on Form 8-K
relating to Item 5, Other Events, in connection with the conversion of a portion
of outstanding debt into equity for the purpose of complying with Nasdaq listing
requirements.

         On November 2, 1999,  the Company filed a Current  Report on Form 8-K/A
relating  to  Item  7,  Financial   Statements,   in  connection  with  the  CRU
acquisition.


                                      -19-
<PAGE>


                                   SIGNATURES
                                   ----------

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended,  the  Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.


                                     LABTEC INC.


Dated:  February 11, 2000            By:/s/ Marc J. Leder
                                        ---------------------------------------
                                        Marc J. Leder
                                        Chief Financial Officer




                                      -20-
<PAGE>

<TABLE>
<CAPTION>
                                  EXHIBIT INDEX
                                  -------------


Exhibit Number                             Description
--------------                             -----------
<S>                                       <C>
3.1                                        Restated Articles of Organization

3.2                                        Articles of Amendment

3.3                                        Articles of Amendment

3.4                                        Articles of Amendment

3.5                                        Amended and Restated By-Laws of the Company

4.1                                        Specimen certificate for shares of common stock of the
                                           Company

10.1                                       Labtec Inc. Amended and Restated 1997 Employee Stock
                                           Option Plan

10.2                                       1997 Employee Stock Option Plan - Option Certificate and
                                           Agreement

10.3                                       Amended  and  Restated  1997  Employee  Stock  Option  Plan
                                           - Option Certificate and Agreement

10.4                                       Amended and Restated Stock Option Plan

10.5                                       Amended and Restated 1995 Director Stock Option Plan

10.6                                       1995 Employee Stock Purchase Plan

10.7                                       Amended and Restated  Agreement  and Plan of Merger
                                           among  Spacetec IMC Corporation, SIMC Acquisition
                                           Corporation and Labtec Inc., dated as of October 2, 1998,
                                           as amended and restated as of November 13, 1998

10.8                                       Spacetec  IMC  Corporation  Unsecured Subordinated
                                           Promissory Note for $1,065,000 dated February 17, 1999

10.9                                       Stock  Purchase  Agreement,  dated as of August 4, 1999,
                                           among the Purchaser,  the Company and each of the
                                           stockholders  of  Connector Resources Unlimited, Inc.

10.10                                      Promissory Note, dated as of August 20, 1999,  issued by
                                           the Company and payable to Carl  Gromada,  as  collection
                                           agent for each of the stockholders of Connector Resources
                                           Unlimited, Inc.
</TABLE>

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<PAGE>

<TABLE>
<CAPTION>


Exhibit Number                             Description
--------------                             -----------
<S>                                       <C>
10.11                                      Form of Credit  Agreement,  dated as of August 20, 1999,
                                           among the Company  and  certain  subsidiaries,  various
                                           guarantors,  various lending institutions and The Chase
                                           Manhattan Bank, as agent

10.12                                      Recapitalization  Agreement  and  Plan  of  Merger  between
                                           Speaker Acquisition  Corp.  and LEI Holdings,  Inc.,  dated as
                                           of August 26, 1997

10.13                                      Lease  Agreement, dated April 24, 1997,  between Pacific
                                           Realty Associates,  L.P.,  and Labtec Enterprises, Inc.

10.14                                      Lease  Agreement,  dated  February 4, 1998,  between
                                           Columbia  Tech Center, L.L.C., and Labtec Inc.

10.15                                      Labtec  Enterprises,  Inc.  $6,000,000  Principal  Amount
                                           of Senior Subordinated Notes and 50,000 Shares of Common
                                           Stock Purchase Agreement, dated October 7, 1997

10.16                                      Amendment to Purchase  Agreement,  dated as of October,
                                           25,  1999 and effective as of August 20, 1999, between
                                           Labtec Corporation and The KB Mezzanine Fund II, L.P.

10.17                                      Recognition,  Non-Disturbance and Attorney Agreement,
                                           dated December 26, 1995, between the Company and
                                           Historic Boott Mill Limited Partnership

10.18                                      Royalty Agreement,  dated May 29, 1991, between the
                                           Company and John A. Hilton

10.19                                      Resale Agreement,  dated as of May 1, 1991, between the
                                           Company and Electronic  Data Systems  Corporation (as
                                           successors to McDonnell  Douglas Corporation), as amended
                                           by Amendment No. 1 dated  December 23,  1993,  and
                                           Amendment No. 2 dated October 6, 1994

10.20                                      Distribution and Marketing Agreement,  dated April 28,
                                           1994, between the Company and Sumisho Electronic
                                           Devices Corporation

10.21                                      Form of Confidentiality and Inventions   Agreement  between
                                           the Company and its employees

10.22                                      Form  of  Non-Disclosure Agreement  between  the  Company
                                           and  its consultants
</TABLE>

                                      -22-
<PAGE>

<TABLE>
<CAPTION>


Exhibit Number                             Description
--------------                             -----------
<S>                                       <C>
10.23                                      Severance  Agreement,  dated March 18, 1998, between the
                                           Company and Dennis T. Gain

10.24                                      Employment  Agreement,  dated June 1, 1998,  between the
                                           Company and Gregory Jones

27.1                                       Financial Data Schedule
</TABLE>

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