TABLE OF CONTENTS




|                                                                                                          |  |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|INDEX CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES                                                      
|CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)                                         
|PART II. OTHER INFORMATION                                                                               
|SIGNATURES                                                                                               



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SECURITIES AND EXCHANGE COMMISSION



Form 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended December 31, 1999

Commission File Number 0-10691

Check Technology Corporation



|                                                                                      |  |                                            
|------------------------------------------------------------------------------------- |  | -------------------------------------------
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Minnesota(State or other jurisdiction of
	incorporation or organization)              |  | 41-1392000(IRS Employer Identification No.)
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|12500 Whitewater Drive
	Minnetonka, Minnesota(Address of principal executive offices) |  | 55343-9420(Zip Code)                       

Registrants telephone number, including area code:(612) 939-9000

Not Applicable



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 periods that the registrant
was required to file such reports), and (2) has been subject
 to such filing requirements for the past
90 days.  Yes  [X]   No

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practical
 date.

Common Stock, $.10 Par Value Shares 6,153,620 as of
February 10, 2000.



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##### Table of Contents








INDEX


CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

|                              |  |                                                                                                    |  |      |    | 
|----------------------------- |  | -------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                              |  |                                                                                                    |  | Page
|                              |  |                                                                                                    |  |     
|                             
|                             
|                             
|                             
|Part I. FINANCIAL INFORMATION |  |                                                                                                    |  |     
|                             
|                             
|                             
|                             
|Item  1.                      |  | Financial Statements (Unaudited)                                                                   |  |      |    | 
|                             
|                             
|                             
|                             
|                              |  | Condensed consolidated balance sheets 
	December 31, 1999 and September 30, 1999.                 |  |      | 3  | 
|                             
|                             
|                             
|                             
|                              |  | Condensed consolidated statements of operations  Three
	 months ended December 31, 1999 and 1998. |  |      | 5  | 
|                             
|                             
|                             
|                             
|                              |  | Condensed consolidated statements of cash flows  Three
	 months ended December 31, 1999 and 1998. |  |      | 6  | 
|                             
|                             
|                             
|                             
|                              |  | Condensed notes to consolidated financial statements 
	December 31, 1999.                         |  |      | 7  | 
|                             
|                             
|                             
|                             
|Item  2.                      |  | Managements Discussion and Analysis of Results of
	Operations and Financial Condition             |  |      | 10 | 
|                             
|                             
|                             
|                             
|Item  3.                      |  | Quantitative and Qualitative Disclosures about Market Risk                                         |  |      |    | 
|                              |  | See Market Risk in Managements Discussion and Analysis                                            |  |      |    | 
|                             
|                             
|                             
|                             
|PART II. OTHER INFORMATION    |  |                                                                                                    |  |     
|                             
|                             
|                             
|                             
|Item  6.                      |  | Exhibits and reports on Form 8-K                                                                   |  |      | 13 | 
|                             
|                             
|                             
|                             
|SIGNATURES                    |  |                                                                                                    |  |     

2



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##### Table of Contents



PART I. FINANCIAL INFORMATION

CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


|                       |                                                                      |                                   |                      |               |           |            |            |            |           |            | 
|---------------------- | -------------------------------------------------------------------- | --------------------------------- | -------------------- | ------------- | --------- | ---------- | ---------- | ---------- | --------- | ---------- | 
|                       |                                                                      | December 31,                      |                      | September 30,
|                       |                                                                      | 1999                              |                      | 1999         
|                       |                                                                      |                                   |                      |              
|ASSETS                
|CURRENT ASSETS         |                                                                      |                                   |                      |               |           |            |            |           
|                      
|                      
|                      
|                      
|                       | Cash and cash equivalents                                            |                                   | $                    | 1,928,001     |           |            | $          | 2,882,618  |          
|                      
|                      
|                      
|                      
|                       | Short-term investments                                               |                                   |                      | 334,242       |           |            |            | 164,380    |          
|                      
|                      
|                      
|                      
|                       | Accounts receivable less allowance for doubtful accounts of
	$50,000 |                                   |                      | 4,191,753     |           |            |            | 3,542,350  |          
|                       | Inventories                                                          |                                   |                      |               |           |            |            |            |          
|                      
|                      
|                      
|                      
|                       |                                                                      | Raw materials and component parts |                      |               | 6,154,015 |            |            |            | 6,128,748 |           
|                      
|                      
|                      
|                      
|                       |                                                                      | Work-in-process                   |                      |               | 258,259   |            |            |            | 107,622   |           
|                      
|                      
|                      
|                      
|                       |                                                                      | Finished Goods                    |                      |               | 3,826,108 |            |            |            | 4,218,621 |           
|                       |                                                                      |                                   |                      |               |           |            |            |           
|                       |                                                                      |                                   | 10,238,382           |               |           |            | 10,454,991 |           
|                      
|                      
|                      
|                      
|                       | Deferred income taxes                                                |                                   |                      | 1,597,002     |           |            |            | 1,570,884  |          
|                      
|                      
|                      
|                      
|                       | Other current assets                                                 |                                   |                      | 1,043,662     |           |            |            | 870,633    |          
|                       |                                                                      |                                   |                      |               |           |            |            |           
|                      
|                      
|                      
|                      
|                       |                                                                      |                                   | TOTAL CURRENT ASSETS |               |           | 19,333,042 |            |            |           | 19,485,856 | 
|EQUIPMENT AND FIXTURES |                                                                      |                                   |                      |               |           |            |            |           
|                      
|                      
|                      
|                      
|                       | Machinery and equipment                                              |                                   |                      | 1,985,595     |           |            |            | 2,005,512  |          
|                      
|                      
|                      
|                      
|                       | Furniture and fixtures                                               |                                   |                      | 2,016,687     |           |            |            | 1,985,732  |          
|                      
|                      
|                      
|                      
|                       | Leasehold improvements                                               |                                   |                      | 313,872       |           |            |            | 316,850    |          
|                       |                                                                      |                                   |                      |               |           |            |            |           
|                       |                                                                      |                                   | 4,316,154            |               |           |            | 4,308,094  |           
|                      
|                      
|                      
|                      
|                       | Less accumulated depreciation and amortization                       |                                   |                      | (3,394,015    | )         |            |            | (3,338,081 | )        
|                       |                                                                      |                                   |                      |               |           |            |            |           
|                       |                                                                      |                                   | 922,139              |               |           |            | 970,013    |           
|                       |                                                                      |                                   |                      |               |           |            |            |           
|                       |                                                                      |                                   | TOTAL ASSETS         |               | $         | 20,255,181 |            |            | $         | 20,455,869 | 
|                       |                                                                      |                                   |                      |               |           |            |            |           

3



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##### Table of Contents



|                                           |                                               |                                                                                                                                                                                              |                            |               |         |            |            |            |         |            | 
|------------------------------------------ | --------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------- | ------- | ---------- | ---------- | ---------- | ------- | ---------- | 
|                                           |                                               | December 31,                                                                                                                                                                                 |                            | September 30,
|                                           |                                               | 1999                                                                                                                                                                                         |                            | 1999         
|                                           |                                               |                                                                                                                                                                                              |                            |              
|LIABILITIES AND STOCKHOLDERS EQUITY       |                                               |                                                                                                                                                                                              |                            |              
|                                          
|CURRENT LIABILITIES                        |                                               |                                                                                                                                                                                              |                            |               |         |            |            |           
|                                          
|                                          
|                                          
|                                          
|                                           | Accounts payable and accrued expenses         |                                                                                                                                                                                              | $                          | 2,771,873     |         |            | $          | 2,533,952  |        
|                                          
|                                          
|                                          
|                                          
|                                           | Employee compensation and related taxes       |                                                                                                                                                                                              |                            | 475,268       |         |            |            | 553,185    |        
|                                          
|                                          
|                                          
|                                          
|                                           | Income taxes payable                          |                                                                                                                                                                                              |                            | 265,383       |         |            |            | 175,449    |        
|                                          
|                                          
|                                          
|                                          
|                                           | Deferred revenue                              |                                                                                                                                                                                              |                            | 375,500       |         |            |            | 448,335    |        
|                                          
|                                          
|                                          
|                                          
|                                           | Current portion of capital lease obligations  |                                                                                                                                                                                              |                            | 11,615        |         |            |            | 38,888     |        
|                                           |                                               |                                                                                                                                                                                              |                            |               |         |            |            |           
|                                           | TOTAL CURRENT LIABILITIES                     |                                                                                                                                                                                              |                            | 3,899,639     |         |            |            | 3,749,809  |        
|                                          
|                                          
|                                          
|                                          
|                                           |                                               |                                                                                                                                                                                              | TOTAL LIABILITIES          |               |         | 3,899,639  |            |            |         | 3,749,809  | 
|STOCKHOLDERS EQUITY                       |                                               |                                                                                                                                                                                              |                            |               |         |            |            |           
|                                           | Capital Stock                                 |                                                                                                                                                                                              |                            |               |         |            |            |            |        
|                                          
|                                          
|                                          
|                                          
|                                           |                                               | Common Stockpar value $.10 per shareauthorized
        25,000,000 shares; issued and outstanding December 31,
        1999 6,154,157 shares; September 30,
        19996,154,157  shares |                            |               | 615,416 |            |            |            | 615,416 |           
|                                          
|                                          
|                                          
|                                          
|                                           | Additional paid in capital                    |                                                                                                                                                                                              |                            | 16,861,417    |         |            |            | 16,861,417 |        
|                                          
|                                          
|                                          
|                                          
|                                           | Accumulated other comprehensive (loss) income |                                                                                                                                                                                              |                            | (1,447,152    | )       |            |            | (1,184,070 | )      
|                                          
|                                          
|                                          
|                                          
|                                           | Retained earnings                             |                                                                                                                                                                                              |                            | 325,861       |         |            |            | 413,297    |        
|                                           |                                               |                                                                                                                                                                                              |                            |               |         |            |            |           
|                                           |                                               |                                                                                                                                                                                              | TOTAL STOCKHOLDERS EQUITY |               |         | 16,355,542 |            |            |         | 16,706,060 | 
|                                           |                                               |                                                                                                                                                                                              |                            |               |         |            |            |           
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |                                               | $                                                                                                                                                                                            | 20,255,181                 |               |         | $          | 20,455,869 |           
|                                           |                                               |                                                                                                                                                                                              |                            |               |         |            |            |           

See notes to consolidated financial statements.

4



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##### Table of Contents






CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


|                                                                                                           |                                     |                            |           |           |           |   |           |           |           |  
|---------------------------------------------------------------------------------------------------------- | ----------------------------------- | -------------------------- | --------- | --------- | --------- | - | --------- | --------- | --------- | -
|                                                                                                           |                                     |                           
|                                                                                                           |                                     | Three Month Period        
|                                                                                                           |                                     | Ending December 31,       
|                                                                                                           |                                     |                           
|                                                                                                           |                                     | 1999                       |           | 1998     
|                                                                                                           |                                     |                            |           |          
|Sales:                                                                                                     |                                     |                            |           |           |           |   |           |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                           | Printing equipment                  |                            |           | 2,876,360 |           |   | $         | 1,620,593 |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                           | Maintenance, spares and supplies    |                            |           | 3,469,077 |           |   |           | 3,625,950 |          
|                                                                                                           |                                     |                            |           |           |           |   |           |          
|                                                                                                           |                                     | Net Sales                  |           |           | 6,345,437 |   |           |           | 5,246,543 |  
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Costs and expenses:                                                                                        |                                     |                            |           |           |           |   |           |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                           | Cost of sales                       |                            |           | 2,853,618 |           |   |           | 2,385,544 |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                           | Selling, general and administrative |                            |           | 2,883,795 |           |   |           | 2,772,447 |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                           | Research and Development            |                            |           | 660,010   |           |   |           | 626,399   |          
|                                                                                                           |                                     |                            |           |           |           |   |           |          
|                                                                                                           |                                     |                            | 6,397,423 |           |           |   | 5,784,390 |          
|                                                                                                           |                                     |                            |           |           |           |   |           |          
|(Loss) income from system sales and service                                                                |                                     |                            | (51,986   | )         |           |   | (537,847  | )        
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Interest (income)                                                                                          |                                     |                            | (19,370   | )         |           |   | (51,864   | )        
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Unrealized exchange loss (gain)                                                                            |                                     |                            | 19,668    |           |           |   | 5,652     |          
|                                                                                                           |                                     |                            |           |           |           |   |           |          
|                                                                                                           |                                     | (Loss) income before taxes |           |           | (52,284   | ) |           |           | (491,635  | )
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Income taxes                                                                                               |                                     |                            | 67,571    |           |           |   | (172,000  | )        
|                                                                                                           |                                     |                            |           |           |           |   |           |          
|                                                                                                           |                                     | Net (loss) income          |           | $         | (119,855  | ) |           | $         | (319,635  | )
|                                                                                                           |                                     |                            |           |           |           |   |           |          
|(Loss) earnings per common share                                                                           |                                     |                            |           |           |           |   |           |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                           | Basic and diluted                   |                            | $         | (.02      | )         |   | $         | (.05      | )        
|                                                                                                           |                                     |                            |           |           |           |   |           |          
|Weighted average number of shares and share equivalents
	outstanding during the period                     |                                     |                            | 6,127,157 |           |           |   | 6,134,590 |          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|                                                                                                          
|Weighted average number of shares and share equivalents
	outstanding during the period  assuming dilution |                                     |                            | 6,127,157 |           |           |   | 6,134,590 |          

See notes to consolidated financial statements.

5



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##### Table of Contents






CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


|                                                    |                                              |                                                                                    |                               |          |          |        |           |          |           |        |  
|--------------------------------------------------- | -------------------------------------------- | ---------------------------------------------------------------------------------- | ----------------------------- | -------- | -------- | ------ | --------- | -------- | --------- | ------ | -
|                                                    |                                              |                                                                                   
|                                                    |                                              | Three Months Ending                                                               
|                                                    |                                              | December 31,                                                                      
|                                                    |                                              |                                                                                   
|                                                    |                                              | 1999                                                                               |                               | 1998    
|                                                    |                                              |                                                                                    |                               |         
|OPERATING ACTIVITIES                                |                                              |                                                                                    |                               |          |          |        |           |         
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Net (loss) income                            |                                                                                    | $                             | (119,855 | )        |        | $         | (319,635 | )        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              | Adjustments to reconcile net income to net cash provided by
	operating activities: |                               |          |          |        |           |          |           |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              |                                                                                    | Depreciation and amortization |          |          | 93,233 |           |          |           | 85,789 |  
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              |                                                                                    | Other                         |          |          | 17,872 |           |          |           | (5,178 | )
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Changes in operating assets and liabilities: |                                                                                    |                               |          |          |        |           |          |          
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              | Accounts receivable                                                                |                               |          | (726,317 | )      |           |          | (101,075  | )     
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              | Inventories                                                                        |                               |          | 58,379   |        |           |          | (758,120  | )     
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              | Other current assets                                                               |                               |          | (223,324 | )      |           |          | (156,714  | )     
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              | Accounts payable and accrued expenses                                              |                               |          | 299,267  |        |           |          | 515,478   |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              | Deferred revenue                                                                   |                               |          | (70,607  | )      |           |          | 12,073    |       
|                                                    |                                              |                                                                                    |                               |          |          |        |           |         
|NET CASH (USED IN) OPERATING ACTIVITIES             |                                              |                                                                                    | (671,352                      | )        |          |        | (727,382  | )       
|INVESTING ACTIVITIES                                |                                              |                                                                                    |                               |          |          |        |           |         
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              | Purchase of equipment and fixtures                                                 |                               |          | (74,000  | )      |           |          | (187,220  | )     
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              | Proceeds from sale of equipment                                                    |                               |          | 23,462   |        |           |          |          |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              | Purchase of short-term investments                                                 |                               |          | (195,137 | )      |           |          | (726,365  | )     
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              | Proceeds from sale of short-term investments                                       |                               |          | 20,726   |        |           |          | 1,739,000 |       
|                                                    |                                              |                                                                                    |                               |          |          |        |           |         
|NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES |                                              |                                                                                    | (224,949                      | )        |          |        | 825,415   |         
|FINANCING ACTIVITIES                                |                                              |                                                                                    |                               |          |          |        |           |         
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              | (Purchase) of common stock                                                         |                               |          |         |        |           |          | (60,293   | )     
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |                                              | Repayment of capital leases                                                        |                               |          | (26,490  | )      |           |          | (2,983    | )     
|                                                    |                                              |                                                                                    |                               |          |          |        |           |         
|NET CASH (USED IN) FINANCING ACTIVITIES             |                                              |                                                                                    | (26,490                       | )        |          |        | (63,276   | )       
|                                                   
|                                                   
|                                                   
|                                                   
|EFFECT OF EXCHANGE RATE CHANGES ON CASH             |                                              |                                                                                    | (31,826                       | )        |          |        | (11,215   | )       
|                                                    |                                              |                                                                                    |                               |          |          |        |           |         
|INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS      |                                              |                                                                                    | (954,617                      | )        |          |        | 23,542    |         
|                                                   
|                                                   
|                                                   
|                                                   
|CASH & CASH EQUIVALENTS AT BEGINNING OF YEAR        |                                              |                                                                                    | 2,882,618                     |          |          |        | 2,701,894 |         
|                                                    |                                              |                                                                                    |                               |          |          |        |           |         
|CASH AND CASH EQUIVALENTS AT END OF PERIOD          |                                              | $                                                                                  | 1,928,001                     |          |          | $      | 2,725,436 |         
|                                                    |                                              |                                                                                    |                               |          |          |        |           |         

See notes to consolidated financial statements.

6



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##### Table of Contents



CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES






CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


December 31, 1999


NOTE A  Basis of Presentation

The accompanying unaudited consolidated financial statements have
 been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. For further information, refer to the
consolidated financial statements and footnotes thereto included
in the Companys annual report on Form 10-K for the
year ended September 30, 1999.

Reclassifications have been made in the prior year to conform
with classifications in the current year.

7



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##### Table of Contents



CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES


CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

NOTE B  Earnings Per Share

The following table sets forth the computation of basic and
diluted earnings per share:

|                                                   |                                                                                                       |                                              |                                  |          |           |           |      |          |           |           | 
|-------------------------------------------------- | ----------------------------------------------------------------------------------------------------- | -------------------------------------------- | -------------------------------- | -------- | --------- | --------- | ---- | -------- | --------- | --------- | 
|                                                   |                                                                                                       |                                             
|                                                   |                                                                                                       | Three Month Period                          
|                                                   |                                                                                                       | Ended December 31,                          
|                                                   |                                                                                                       |                                             
|                                                   |                                                                                                       | 1999                                         |                                  | 1998    
|                                                   |                                                                                                       |                                              |                                  |         
|Numerator:                                         |                                                                                                       |                                              |                                  |          |           |           |      |         
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Net Income (Loss)                                                                                     |                                              |                                  | (119,855 | )         |           |      | (319,635 | )        
|                                                   |                                                                                                       |                                              |                                  |          |           |           |      |         
|                                                   | Numerator for basic and diluted earnings per share 
	income (loss) applicable to common stockholders |                                              |                                  | (119,855 | )         |           |      | (319,635 | )        
|                                                  
|                                                  
|                                                  
|                                                  
|Denominator:                                       |                                                                                                       |                                              |                                  |          |           |           |      |         
|                                                   | Denominator for basic earnings per share                                                             |                                              |                                  |          |           |           |      |          |          
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                                                                                                       | Weighted-average shares                      |                                  |          | 6,127,157 |           |      |          | 6,134,590 |          
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Effect of dilutive securities:                                                                        |                                              |                                  |          |           |           |      |          |          
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                                                                                                       | Employee stock options                       |                                  |          |          |           |      |          |          |          
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                                                                                                       | Employee stock grants                        |                                  |          |          |           |      |          |          |          
|                                                   |                                                                                                       |                                              |                                  |          |           |           |      |         
|                                                   | Dilutive potential common shares                                                                      |                                              |                                  |         | a         |           |      |         | a        
|                                                   |                                                                                                       | Denominator for diluted earnings per share  |                                  |          |           |           |      |          |           |          
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                                                                                                       |                                              | Adjusted weighted-average shares |          |           | 6,127,157 |      |          |           | 6,134,590 | 
|                                                   |                                                                                                       |                                              |                                  |          |           |           |      |         
|                                                  
|                                                  
|                                                  
|                                                  
|Earnings (loss) per common share basic and diluted |                                                                                                       | $                                            | (.02                             | )        |           | $         | (.05 | )       
|                                                   |                                                                                                       |                                              |                                  |          |           |           |      |         



|  |  |                                                                                                    
|- |  | ---------------------------------------------------------------------------------------------------
|a |  |  No incremental shares related to options are included
	 because the impact would be antidilutive.

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##### Table of Contents



CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES


CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

NOTE C  Comprehensive Income/(Loss)

As of October 1, 1998, the Company adopted Statement of
Financial Accounting Standards Number 130 (Statement
No. 130) Reporting Comprehensive Income.
Statement No. 130 establishes standards for the reporting
and display of comprehensive income/(loss) and its components;
however, the adoption of this statement had no impact on the
Companys net income/(loss) or stockholders equity.
Statement No. 130 requires foreign currency translation
adjustments, which prior to adoption were reported separately in
stockholders equity, to be included in other
comprehensive income/(loss). Amounts in prior year
financial statements have been reclassified to conform to
Statement No. 130.

The components of comprehensive income/(loss), net of related
tax, for the three-month period ended December 31, 1999 and
1998 are as follows:

|                                         |  |                     |          |      |  |   |          |  
|---------------------------------------- |  | ------------------- | -------- | ---- |  | - | -------- | -
|                                         |  |                    
|                                         |  | Three Month Period 
|                                         |  | Ending December 31,
|                                         |  | 1999                |          | 1998
|                                         |  |                     |          |     
|Net (loss)/income                        |  | $                   | (119,855 | )    |  | $ | (319,635 | )
|                                        
|                                        
|                                        
|                                        
|Foreign currency translation adjustments |  |                     | (263,082 | )    |  |   | (37,195  | )
|                                         |  |                     |          |      |  |   |          |  
|Comprehensive (loss)/income              |  | $                   | (382,937 | )    |  | $ | (356,830 | )
|                                         |  |                     |          |      |  |   |          |  

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##### Table of Contents



ITEM 2.  Managements Discussion and
Analysis of Results of Operations and Financial Condition

Results of Operations

The Companys revenues consist of (i) sales of document
 production systems and related equipment and
(ii) maintenance contracts, spare parts, supplies and
consumable items. For the three-month period ended
December 31, 1999, total revenues were $6.3 million, up
 21 percent from $5.2 million for the same period a
year ago. Revenues from the sale of document production equipment
 were $2.9 million, up 77 percent from
$1.6 million for the same period in fiscal 1999. The
increased revenues of document production equipment were
primarily due to increased North American sales of the Imaggia
product line and the Companys first sale of an Océ
PS75 system. The document production equipment revenue for the
current fiscal quarter included approximately $1.7 million
from the sale of the Companys Imaggia product line, an
increase of 55% over the same period a year ago. The Company has
held for some time a dominant position in many of the
international markets in which its Checktronic equipment is sold.
 Demand for the Checktronic product line has softened in these
international markets and revenues from this product line are now
 largely dependent on sales to emerging markets such as Latin
America, Asia and Africa. The present uncertain economic
environments in Asia, South America and other emerging countries
has limited the Companys current opportunities to sell
high-end capital equipment into those regions.

For the three month period ended December 31, 1999, revenues
 from maintenance contracts, spare parts, supplies and consumable
 items decreased 4% primarily due to a reduction in maintenance
and consumables revenue from Pacific Rim customers and the timing
 of purchase of supplies and consumables by European customers.

The gross margin percentage for the three-month period ended
December 31, 1999, was 55%, flat with the same period a year
 ago. The Company anticipates that its gross margin percentage
for fiscal 2000 may be somewhat lower than fiscal 1999 as revenue
 from the Imaggia and Océ lines constitutes a larger portion
 of the Companys total revenues.

For the three month period ended December 31, 1999, selling,
 general and administrative expenses were $2.9 million
compared to $2.7 million for the same period a year ago.
Research and development expense for the three month period ended
 December 31, 1999 was $0.7 million, flat with the
research and development expense for the same period last year.

Net interest income for the three-month period ended
December 31, 1999, was $19 thousand compared to $52 thousand for the
same period a year ago. The decrease was due to lower cash
balances available for investment.

For the three month period ended December 31, 1999, the
Company reported a loss before income taxes of ($52) thousand,
compared to the loss before income taxes of ($492) thousand for the
same period a year ago. Income taxes for the three-month period
ended December 31, 1999 were an expense of $68 thousand compared
to a benefit of ($172) thousand for the same period last year.

The current fiscal year income tax expense was a result of
income generated in one of the Company's foreign subsidiaries.

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For the three month period ended December 31, 1999, the
Company reported a net loss of ($0.02) per share as compared to a
 net loss of ($0.05) per share in the comparable period last
year. The improvement was primarily attributable to the increase
in revenue offset by the unfavorable effects of higher selling,
general and administrative expenses and income tax expense.

Market Risk:

The Company presently has three foreign subsidiaries, located in
England, France and Australia, does business in 51 countries, and
 generates approximately 80% of its revenues from outside North
America. The Companys ability to sell its products in these
 foreign markets may be affected by changes in economic,
political or market conditions in the foreign markets in which it
 does business.

The Company experiences foreign currency gains and losses, which
are reflected on the Companys income statement, due to the
strengthening and weakening of the U.S. dollar against the
currencies of the Companys three foreign subsidiaries and
the resulting effect on the valuation of the intercompany
accounts and certain assets of the subsidiaries, which are
denominated in U.S. dollars. The net exchange loss for the
three-month period ended December 31, 1999 was $20,000,
compared to a loss of $6,000 in the comparable period last year.
The Company anticipates that it will continue to have exchange
gains or losses from foreign operations in the future.

The Companys net investment in its foreign subsidiaries was
 $8,500,000 and $8,443,000 at December 31, 1999, and
September 30, 1999, translated into U.S. dollars at the
 closing exchange rates. The potential loss in value resulting
from a hypothetical 10% change in foreign exchange rates is not
material. The impact of the stronger U.S. dollar on the
translation of foreign currency denominated sales and related
gross profit thereon was not material in 1999 or in the first
three months of fiscal 2000.

Factors Affecting Results of Operations:

The Company is continuing development of the Imaggia system,
including improving its overall reliability and robustness. The
Company is using the Gemini digital print technology, which has
been developed by Delphax Systems, as the print engine for the
Imaggia system. Over the course of the development, the Company
has experienced delays due in part to development delays
associated with the Gemini print engine and finalization of the
engines toner formulation, which are outside of the
Companys control. No assurance can be given that further
delays will not occur or that product development or warranty
expenses will not be higher than anticipated.

In January 2000, the Company accepted a three-year equipment and
service contract, valued at approximately $40.0 million, for
 its Imaggia system. The contract value includes the sales of
document production systems and related equipment, maintenance,
spare parts, supplies and consumable items for the three-year
period. Equipment deliveries under the contract are expected to
begin in the second quarter of fiscal 2000 with delivery
completion during the fourth quarter of fiscal 2001. Achievement
of the Companys future revenue plans depends upon the
successful completion of the three-year contract.

The Companys revenues and operating results may also
fluctuate from quarter to quarter because (i) the
Companys sales cycle is relatively long, (ii) the size
 of orders may vary significantly, (iii) the availability of
 financing for customers in some countries is variable,
(iv) customers may postpone or cancel orders, and
(v) economic, political and market conditions in some
markets change with minimal notice and effect the timing and size
 of orders. Because the Companys operating expenses are
based on

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anticipated revenue levels and a high percentage of the
Companys operating costs are relatively fixed, variations
in the timing of revenue recognition could result in significant
fluctuations in operating results from period to period.

Year 2000:

The Company satisfactorily completed its Year 2000 readiness work.
Since entering the Year 2000, the Company has not experienced any
major disruptions to its business nor is it aware of any significant
Year 2000-related disruptions impacting its customers or suppliers.
The Company will continue to monitor its critical systems during the
calendar year 2000 but does not anticipate any significant impacts
due to Year 2000 exposures from its internal systems or from the
activities of its suppliers or customers.  Costs incurred to achieve
Year 2000 readiness were approximately $300 thousand.

Euro Conversion:

On January 1, 1999, certain member countries of the European
 Union established fixed conversion rates between their existing
currencies and the European Unions common currency (Euro).
The transition period for the introduction of the Euro will be
between January 1, 1999 and January 1, 2002. The
Company has prepared for the introduction of the Euro and has
evaluated methods to address the many issues involved with the
introduction of the Euro, including the conversion of information
 technology systems, recalculating currency risk, strategies
concerning continuity of contracts, and impacts on the processes
for preparing taxation and accounting records. The Company
believes the Euro conversion will not have a material impact on
its financial statements.

Liquidity and Capital Resources:

Working capital was $15.4 million at December 31, 1999,
 compared to $15.7 million at September 30, 1999. The
Companys inventory levels decreased from $10.5 million
 at September 30, 1999, to $10.2 million at
December 31, 1999, primarily due to a decrease in Imaggia
related inventory. Cash and short-term investments amounted to
$2.3 million at December 31, 1999, compared to
$3.0 million at September 30, 1999.

Stockholders equity was $16.4 million at
December 31, 1999, compared to $16.7 million at
September 30, 1999. In September 1998, the Company announced
 a stock repurchase program of up to 500,000 shares. At
December 31, 1999, the Company had repurchased
170,500 shares at a cost of $434,000.

The Companys long-term debt to equity ratio was less than
0.01 at December 31, 1999, and September 30, 1999. The
Company maintains a $2.5 million unsecured bank line of
credit. At December 31, 1999, the line was unused. The
credit agreement expires March 31, 2000, and the Company
presently expects to negotiate a new bank line of credit. The
Company believes that its current financial arrangements and
anticipated level of internally generated funds will be
sufficient to fund its working capital requirements in fiscal
2000.

At December 31, 1999, the Company had no material
commitments for capital expenditures.

Cautionary Statement:

Statements included in this Managements Discussion and
Analysis of Financial Condition and Results of Operations, the
Companys Annual Report, the Companys Form 10-K,
in other filings with the

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Securities and Exchange Commission, in the Companys press
releases and in oral statements made to securities market
analysts and stockholders, which are not historical or current
facts, are forward-looking statements made pursuant
to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to
certain risks and uncertainties that could cause the
Companys actual results to differ materially from
historical earnings and those presently anticipated or projected.

The factors mentioned under the subheading Factors
Affecting Results of Operations are among those that in
some cases have affected and in the future could affect the
Companys actual results and could cause the Companys
actual financial performance to differ materially from that
expressed in any forward-looking statement.




PART II. OTHER INFORMATION

ITEM 6.  Exhibits and Reports on Form 8-K

The Company did not file any reports on Form 8-K during the
three months ended December 31, 1999.

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SIGNATURES

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



| |                             
| | ----------------------------
| | CHECK TECHNOLOGY CORPORATION
| | Registrant                  

|     |  |                                                                                       
|---- |  | --------------------------------------------------------------------------------------
|Date |  | /s/ JAY A. HERMANJay A. Herman
	President and Chief Executive Officer                 
|    
|Date |  | /s/ ROBERT M. BARNISKISRobert M. Barniskis
	Vice President and Chief Financial Officer

14