##### Table of Contents



|                               |  |               
|------------------------------ |  | --------------
|For the quarterly period ended |  | March 31, 2001
|                               |  |               
|                               |  |               
|Commission file number         |  | 0-10691       
|                               |  |               



---

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



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---

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 6,186,538 as of May 7, 2001.

1



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TABLE OF CONTENTS



|                                                                                              |                                                             |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- | ----------------------------------------------------------- |  |  |  |  |  |  | 
|Part I. FINANCIAL INFORMATION                                                                
|Item I. Financial Statements (Unaudited)                                                     
|                                                                                              | CONDENSED CONSOLIDATED BALANCE SHEETS                      
|                                                                                              | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS            
|                                                                                              | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS            
|                                                                                              | CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS       
|Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
|Item 3. Quantitative and Qualitative Disclosure of Market Risk                               
|PART II. OTHER INFORMATION                                                                   
|                                                                                              | Item 4. Submission of Matters to a Vote of Security Holders
|                                                                                              | Item 6. Exhibits and Reports on Form 8-K                   
|SIGNATURES                                                                                   



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##### Table of Contents



INDEX

CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

|                              |                                                                                                            
|----------------------------- | -----------------------------------------------------------------------------------------------------------
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|PART I. FINANCIAL INFORMATION
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|Item 1.                       | Financial Statements (Unaudited)                                                                           
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                              | Condensed consolidated balance sheets  March 31, 2001 and
September 30, 2000                              
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                              | Condensed consolidated statements of operations  Three months and six months ended March 31, 2001 and 2000
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                              | Condensed consolidated statements of cash flows  Six months ended March 31, 2001 and 2000                 
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                              | Condensed notes to consolidated financial statements  March 31, 2001                                      
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|Item 2.                       | Managements Discussion and Analysis of Results of Operations and Financial Condition                      
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|Item 3.                       | Quantitative and Qualitative Disclosures about Market Risk                                                 
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|PART II. OTHER INFORMATION   
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|Item 4.                       | Submission of Matters to a Vote of Security Holders                                                        
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|Item 6.                       | Exhibits and Reports on Form 8-K                                                                           
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|                             
|SIGNATURES                   

2



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##### Table of Contents






Part I. FINANCIAL INFORMATION




CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES




CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

|                       |                                                                                                                                                   |                                   |            |           |           |               |            |           |           | 
|---------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ---------- | --------- | --------- | ------------- | ---------- | --------- | --------- | 
|                       |                                                                                                                                                   |                                   |            | March 31, |           | September 30,
|                       |                                                                                                                                                   |                                   |            | 2001      |           | 2000         
|                       |                                                                                                                                                   |                                   |            |           |           |              
|ASSETS                
|                      
|                      
|                      
|                      
|CURRENT ASSETS        
|                      
|                      
|                      
|                      
|                       | Cash and cash equivalents                                                                                                                         |                                   | $          | 994,035   |           |               | $          | 3,043,754 |          
|                      
|                      
|                      
|                      
|                       | Short-term investments                                                                                                                            |                                   |            | 71,085    |           |               |            | 108,760   |          
|                      
|                      
|                      
|                      
|                       | Accounts receivable, less allowance for doubtful,   
accounts of $53,047 and $51,697 as of March 31,   
2001 and September 30, 2000, respectively |                                   |            | 7,785,798 |           |               |            | 5,398,986 |          
|                      
|                      
|                      
|                      
|                       | Inventory:                                                                                                                                       
|                      
|                      
|                      
|                      
|                       |                                                                                                                                                   | Raw materials and component parts |            |           | 7,315,867 |               |            |           | 6,318,199 | 
|                      
|                      
|                      
|                      
|                       |                                                                                                                                                   | Work-in-progress                  |            |           | 1,213,721 |               |            |           | 1,217,165 | 
|                      
|                      
|                      
|                      
|                       |                                                                                                                                                   | Finished goods                    |            |           | 4,085,238 |               |            |           | 4,269,391 | 
|                       |                                                                                                                                                   |                                   |            |           |           |               |            |          
|                       |                                                                                                                                                   |                                   | 12,614,826 |           |           |               | 11,804,755 |          
|                       |                                                                                                                                                   |                                   |            |           |           |               |            |          
|                       | Deferred income taxes                                                                                                                             |                                   |            | 1,338,341 |           |               |            | 1,743,519 |          
|                      
|                      
|                      
|                      
|                       | Other current assets                                                                                                                              |                                   |            | 1,129,372 |           |               |            | 1,379,702 |          
|                       |                                                                                                                                                   |                                   |            |           |           |               |            |          
|TOTAL CURRENT ASSETS   |                                                                                                                                                   |                                   | 23,933,457 |           |           |               | 23,479,476 |          
|                       |                                                                                                                                                   |                                   |            |           |           |               |            |          
|EQUIPMENT AND FIXTURES
|                      
|                      
|                      
|                      
|                       | Machinery and equipment                                                                                                                           |                                   |            | 2,061,559 |           |               |            | 1,983,899 |          
|                      
|                      
|                      
|                      
|                       | Furniture and fixtures                                                                                                                            |                                   |            | 2,363,481 |           |               |            | 2,169,434 |          
|                      
|                      
|                      
|                      
|                       | Leasehold improvements                                                                                                                            |                                   |            | 323,466   |           |               |            | 315,995   |          
|                       |                                                                                                                                                   |                                   |            |           |           |               |            |          
|                       |                                                                                                                                                   |                                   | 4,748,506  |           |           |               | 4,469,328  |          
|                      
|                      
|                      
|                      
|                       | Less accumulated depreciation and amortization                                                                                                    |                                   |            | 3,730,334 |           |               |            | 3,582,931 |          
|                       |                                                                                                                                                   |                                   |            |           |           |               |            |          
|                       |                                                                                                                                                   |                                   | 1,018,172  |           |           |               | 886,397    |          
|                       |                                                                                                                                                   |                                   |            |           |           |               |            |          
|TOTAL ASSETS           |                                                                                                                                                   | $                                 | 24,951,629 |           |           | $             | 24,365,873 |          
|                       |                                                                                                                                                   |                                   |            |           |           |               |            |          

See condensed notes to consolidated financial statements.

3



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##### Table of Contents



CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

|                                           |                                                                                               |                                                                                   |            |            |         |               |            |            |         | 
|------------------------------------------ | --------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ---------- | ---------- | ------- | ------------- | ---------- | ---------- | ------- | 
|                                           |                                                                                               |                                                                                   |            | March 31,  |         | September 30,
|                                           |                                                                                               |                                                                                   |            | 2001       |         | 2000         
|                                           |                                                                                               |                                                                                   |            |            |         |              
|LIABILITIES AND SHAREHOLDERS EQUITY      
|                                          
|                                          
|                                          
|                                          
|CURRENT LIABILITIES                       
|                                          
|                                          
|                                          
|                                          
|                                           | Accounts payable                                                                              |                                                                                   | $          | 4,315,531  |         |               | $          | 4,242,943  |        
|                                          
|                                          
|                                          
|                                          
|                                           | Employee compensation and related taxes                                                       |                                                                                   |            | 1,148,466  |         |               |            | 868,362    |        
|                                          
|                                          
|                                          
|                                          
|                                           | Income taxes payable                                                                          |                                                                                   |            | 32,385     |         |               |            | 15,247     |        
|                                          
|                                          
|                                          
|                                          
|                                           | Bank line of credit                                                                           |                                                                                   |            | 650,000    |         |               |            |           |        
|                                          
|                                          
|                                          
|                                          
|                                           | Deferred revenue                                                                              |                                                                                   |            | 2,235,503  |         |               |            | 3,316,085  |        
|                                           |                                                                                               |                                                                                   |            |            |         |               |            |           
|TOTAL CURRENT LIABILITIES                  |                                                                                               |                                                                                   | 8,381,885  |            |         |               | 8,442,637  |           
|                                           |                                                                                               |                                                                                   |            |            |         |               |            |           
|TOTAL LIABILITIES                          |                                                                                               |                                                                                   | 8,381,885  |            |         |               | 8,442,637  |           
|                                           |                                                                                               |                                                                                   |            |            |         |               |            |           
|SHAREHOLDERS EQUITY                      
|                                          
|                                          
|                                          
|                                          
|                                           | Common stock par value
$.10 per share authorized 25,000,000 shares; issued and outstanding:
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                               | 6,188,388 and 6,190,978 as of March 31, 2001
and September 30, 2000, respectively |            |            | 618,839 |               |            |            | 619,098 | 
|                                          
|                                          
|                                          
|                                          
|                                           | Additional paid-in capital                                                                    |                                                                                   |            | 17,146,996 |         |               |            | 17,063,384 |        
|                                          
|                                          
|                                          
|                                          
|                                           | Accumulated other comprehensive loss                                                          |                                                                                   |            | (2,137,675 | )       |               |            | (1,968,736 | )      
|                                          
|                                          
|                                          
|                                          
|                                           | Retained earnings                                                                             |                                                                                   |            | 941,584    |         |               |            | 209,490    |        
|                                           |                                                                                               |                                                                                   |            |            |         |               |            |           
|TOTAL SHAREHOLDERS EQUITY                 |                                                                                               |                                                                                   | 16,569,744 |            |         |               | 15,923,236 |           
|                                           |                                                                                               |                                                                                   |            |            |         |               |            |           
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |                                                                                               | $                                                                                 | 24,951,629 |            |         | $             | 24,365,873 |           
|                                           |                                                                                               |                                                                                   |            |            |         |               |            |           

See condensed notes to consolidated financial statements.

4



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##### Table of Contents



CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES




CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

|                                                                                                  |                                            |   |                            |           |                          |   |           |           |      |   |            |            |  |   |            |           |  
|------------------------------------------------------------------------------------------------- | ------------------------------------------ | - | -------------------------- | --------- | ------------------------ | - | --------- | --------- | ---- | - | ---------- | ---------- |  | - | ---------- | --------- | -
|                                                                                                  |                                            |   | For the Three Months Ended |           | For the Six Months Ended
|                                                                                                  |                                            |   | March 31,                  |           | March 31,               
|                                                                                                  |                                            |   |                            |           |                         
|                                                                                                  |                                            |   | 2001                       |           | 2000                     |   | 2001      |           | 2000
|                                                                                                  |                                            |   |                            |           |                          |   |           |           |     
|Sales:                                                                                           
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Printing equipment                         |   | $                          | 6,985,985 |                          |   | $         | 3,686,392 |      |   | $          | 14,489,596 |  |   | $          | 6,562,752 |  
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Maintenance, spares and supplies           |   |                            | 3,848,721 |                          |   |           | 3,178,208 |      |   |            | 7,250,771  |  |   |            | 6,647,285 |  
|                                                                                                  |                                            |   |                            |           |                          |   |           |           |      |   |            |            |  |   |            |          
|NET SALES                                                                                         |                                            |   | 10,834,706                 |           |                          |   | 6,864,600 |           |      |   | 21,740,367 |            |  |   | 13,210,037 |          
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|Costs and Expenses:                                                                              
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Cost of sales                              |   |                            | 5,408,887 |                          |   |           | 3,528,286 |      |   |            | 11,262,956 |  |   |            | 6,381,904 |  
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Selling, general and administrative        |   |                            | 4,116,890 |                          |   |           | 2,908,688 |      |   |            | 7,853,972  |  |   |            | 5,792,483 |  
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | Research and development                   |   |                            | 695,714   |                          |   |           | 699,917   |      |   |            | 1,351,584  |  |   |            | 1,359,927 |  
|                                                                                                  |                                            |   |                            |           |                          |   |           |           |      |   |            |            |  |   |            |          
|                                                                                                  |                                            |   | 10,221,491                 |           |                          |   | 7,136,891 |           |      |   | 20,468,512 |            |  |   | 13,534,314 |          
|                                                                                                  |                                            |   |                            |           |                          |   |           |           |      |   |            |            |  |   |            |          
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                  | INCOME (LOSS) FROMSYSTEM SALES AND SERVICE |   |                            | 613,215   |                          |   |           | (272,291  | )    |   |            | 1,271,855  |  |   |            | (324,277  | )
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|Net interest expense (income)                                                                     |                                            |   | 2,126                      |           |                          |   | (32,753   | )         |      |   | (12,036    | )          |  |   | (52,123    | )        
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|Unrealized exchange loss                                                                          |                                            |   | 222,658                    |           |                          |   | 130,528   |           |      |   | 172,953    |            |  |   | 150,196    |          
|                                                                                                  |                                            |   |                            |           |                          |   |           |           |      |   |            |            |  |   |            |          
|INCOME (LOSS) BEFORE INCOME TAXES                                                                 |                                            |   | 388,431                    |           |                          |   | (370,066  | )         |      |   | 1,110,938  |            |  |   | (422,350   | )        
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|Income taxes                                                                                      |                                            |   | 210,209                    |           |                          |   | (162,553  | )         |      |   | 422,157    |            |  |   | (94,982    | )        
|                                                                                                  |                                            |   |                            |           |                          |   |           |           |      |   |            |            |  |   |            |          
|NET INCOME (LOSS)                                                                                 |                                            | $ | 178,222                    |           |                          | $ | (207,513  | )         |      | $ | 688,781    |            |  | $ | (327,368   | )        
|                                                                                                  |                                            |   |                            |           |                          |   |           |           |      |   |            |            |  |   |            |          
|Basic and diluted earnings (loss) percommon share                                                 |                                            | $ | 0.03                       |           |                          | $ | (0.03     | )         |      | $ | 0.11       |            |  | $ | (0.05      | )        
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|Weighted averagenumber of
shares and equivalents outstandingduring the period                     |                                            |   | 6,179,388                  |           |                          |   | 6,138,916 |           |      |   | 6,179,388  |            |  |   | 6,133,004  |          
|                                                                                                 
|                                                                                                 
|                                                                                                 
|                                                                                                 
|Weighted averagenumber of shares and equivalents
outstanding during the period, assuming dilution |                                            |   | 6,239,537                  |           |                          |   | 6,138,916 |           |      |   | 6,247,560  |            |  |   | 6,133,004  |          

See condensed 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)

|                                                                                                      |                                       |   |                          |            |      |   |           |            |  
|----------------------------------------------------------------------------------------------------- | ------------------------------------- | - | ------------------------ | ---------- | ---- | - | --------- | ---------- | -
|                                                                                                      |                                       |   | For the Six Months Ended
|                                                                                                      |                                       |   | March 31,               
|                                                                                                      |                                       |   |                         
|                                                                                                      |                                       |   | 2001                     |            | 2000
|                                                                                                      |                                       |   |                          |            |      |   |           |           
|OPERATING ACTIVITIES                                                                                 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Net income (loss)                                                                                     |                                       | $ | 688,781                  |            |      | $ | (327,368  | )         
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Adjustments to reconcile net income (loss) to net cash
   (used in) provided by operating activities:
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Depreciation and amortization         |   |                          | 180,700    |      |   |           | 185,395    |  
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Provision for bad debts               |   |                          | (1,375     | )    |   |           |           |  
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Forgiveness of executive officer note |   |                          | 112,500    |      |   |           |           |  
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Other                                 |   |                          | 42,744     |      |   |           | 35,922     |  
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Changes in operating assets and liabilities:                                                         
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Accounts receivable                   |   |                          | (2,456,023 | )    |   |           | (2,008,742 | )
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Inventory                             |   |                          | (822,511   | )    |   |           | 1,116,498  |  
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Other current assets                  |   |                          | 565,660    |      |   |           | (754,064   | )
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Accounts payable and accrued expenses |   |                          | 406,026    |      |   |           | (193,314   | )
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Deferred revenue                      |   |                          | (1,074,127 | )    |   |           | 3,284,701  |  
|                                                                                                      |                                       |   |                          |            |      |   |           |           
|NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                                                   |                                       |   | (2,357,625               | )          |      |   | 1,339,028 |           
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|INVESTING ACTIVITIES                                                                                 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Purchase of equipment and fixtures                                                                    |                                       |   | (345,955                 | )          |      |   | (189,418  | )         
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Proceeds from sale of equipment                                                                       |                                       |   | 25,512                   |            |      |   | 47,641    |           
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Purchase of short-term investments                                                                    |                                       |   | (137,640                 | )          |      |   | (507,763  | )         
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Proceeds from sale of short-term investments                                                          |                                       |   | 179,221                  |            |      |   | 20,202    |           
|                                                                                                      |                                       |   |                          |            |      |   |           |           
|NET CASH (USED IN) INVESTING ACTIVITIES                                                               |                                       |   | (278,862                 | )          |      |   | (629,338  | )         
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|FINANCING ACTIVITIES                                                                                 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Issuance of common stock                                                                              |                                       |   | 18,191                   |            |      |   | 51,972    |           
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Repurchase of common stock                                                                            |                                       |   | (47,338                  | )          |      |   | (8,631    | )         
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Borrowing on bank line of credit                                                                      |                                       |   | 4,050,000                |            |      |   |          |           
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Repayment of borrowing on bank line of credit                                                         |                                       |   | (3,400,000               | )          |      |   |          |           
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Payment on capital leases                                                                             |                                       |   |                         |            |      |   | (37,761   | )         
|                                                                                                      |                                       |   |                          |            |      |   |           |           
|NET CASH PROVIDED BY FINANCING ACTIVITIES                                                             |                                       |   | 620,853                  |            |      |   | 5,580     |           
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                               |                                       |   | (34,085                  | )          |      |   | (66,667   | )         
|                                                                                                      |                                       |   |                          |            |      |   |           |           
|(DECREASE) INCREASE IN CASH AND EQUIVALENTS                                                           |                                       |   | (2,049,719               | )          |      |   | 648,603   |           
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                        |                                       |   | 3,043,754                |            |      |   | 2,882,618 |           
|                                                                                                      |                                       |   |                          |            |      |   |           |           
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                                              |                                       | $ | 994,035                  |            |      | $ | 3,531,221 |           
|                                                                                                      |                                       |   |                          |            |      |   |           |           

See condensed 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)

March 31, 2001

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, 2000.

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

NOTE B  Earnings per Share

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

|             |                                                                                                          |  |                            |           |                          |  |      |           |      |  |   |           |  |  |   |           |  
|------------ | -------------------------------------------------------------------------------------------------------- |  | -------------------------- | --------- | ------------------------ |  | ---- | --------- | ---- |  | - | --------- |  |  | - | --------- | -
|             |                                                                                                          |  | For the Three Months Ended |           | For the Six Months Ended
|             |                                                                                                          |  | March 31,                  |           | March 31,               
|             |                                                                                                          |  |                            |           |                         
|             |                                                                                                          |  | 2001                       |           | 2000                     |  | 2001 |           | 2000
|             |                                                                                                          |  |                            |           |                          |  |      |           |     
|Numerator:  
|            
|            
|            
|            
|             | Net income (loss)                                                                                        |  | $                          | 178,222   |                          |  | $    | (207,513  | )    |  | $ | 688,781   |  |  | $ | (327,368  | )
|             |                                                                                                          |  |                            |           |                          |  |      |           |      |  |   |           |  |  |   |          
|             | Numerator for basic and
diluted   earnings per
shareincome   (loss) applicable to common   shareholders |  | $                          | 178,222   |                          |  | $    | (207,513  | )    |  | $ | 688,781   |  |  | $ | (327,368  | )
|            
|            
|            
|            
|Denominator:
|            
|            
|            
|            
|             | Denominator for basic
earnings   per share, weighted average   shares                                    |  |                            | 6,179,388 |                          |  |      | 6,138,916 |      |  |   | 6,179,388 |  |  |   | 6,133,004 |  
|            
|            
|            
|            
|             | Dilutive potential
common   shares, employee stock   options                                             |  |                            | 60,149    |                          |  |      |          | a    |  |   | 68,172    |  |  |   |          | a
|             |                                                                                                          |  |                            |           |                          |  |      |           |      |  |   |           |  |  |   |          
|             | Denominator for earnings
per   share, assuming
dilution,   adjusted weighted average   shares            |  |                            | 6,239,537 |                          |  |      | 6,138,916 |      |  |   | 6,247,560 |  |  |   | 6,133,004 |  
|            
|            
|            
|            
|             | Earnings (loss) per
common   share                                                                       |  | $                          | 0.03      |                          |  | $    | (0.03     | )    |  | $ | 0.11      |  |  | $ | (0.05     | )
|            
|            
|            
|            
|             | Earnings (loss) per
common   share, assuming dilution                                                    |  |                            | 0.03      |                          |  |      | (0.03     | )    |  |   | 0.11      |  |  |   | (0.05     | )



---

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

7



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##### Table of Contents



CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2001

NOTE C  Comprehensive Income or Loss

The components of comprehensive income or loss, net of related tax, for the
three-month and six-month periods ended March 31, 2001 and 2000 are as follows:

|                                        |  |                            |          |                          |  |      |          |      |  |   |          |   |  |   |          |  
|--------------------------------------- |  | -------------------------- | -------- | ------------------------ |  | ---- | -------- | ---- |  | - | -------- | - |  | - | -------- | -
|                                        |  | For the Three Months Ended |          | For the Six Months Ended
|                                        |  | March 31,                  |          | March 31,               
|                                        |  |                            |          |                         
|                                        |  | 2001                       |          | 2000                     |  | 2001 |          | 2000
|                                        |  |                            |          |                          |  |      |          |     
|Net income (loss)                       |  | $                          | 178,222  |                          |  | $    | (207,513 | )    |  | $ | 688,781  |   |  | $ | (327,368 | )
|                                       
|                                       
|                                       
|                                       
|Foreign currency translation adjustment |  |                            | (335,439 | )                        |  |      | (133,104 | )    |  |   | (168,939 | ) |  |   | (396,186 | )
|                                        |  |                            |          |                          |  |      |          |      |  |   |          |   |  |   |          |  
|Comprehensive (loss) income             |  | $                          | (157,217 | )                        |  | $    | (340,617 | )    |  | $ | 519,842  |   |  | $ | (723,554 | )
|                                        |  |                            |          |                          |  |      |          |      |  |   |          |   |  |   |          |  

NOTE D  Executive Loan

During fiscal 1995, the President and Chief Executive Officer exercised 40,000
options to purchase common stock at $2.00 per share, by executing a $148,996,
five-year, full recourse note, bearing interest at a floating rate, under the
Executive Loan Program. The purpose of the loan was to provide cash for the
exercise of the options and to pay the related income taxes. When exercised,
the Companys stock had a market value of $6.375 per share. In 1998, the loan
terms were amended to change the loan from full recourse to non-recourse, and
the floating rate was fixed at 5.25%. Through March 31, 2001, total principal
payments on the loan have been $54,671. In May of fiscal 2000, acknowledging
the President and Chief Executive Officers contribution to the Company, and
the depressed value of the underlying stock securing the loan, the Company
extended the term of the loan to May 2001 and granted forgiveness of the loan
ratably over the extension period. These modifications resulted in the options
being treated as a fixed stock award. The Company will recognize the fair
market value of the stock award of $225,000 over the extension period. For the
three-month and six-month periods ended March 31, 2001, $56,250 and $112,500,
respectively, were recognized as compensation expense. The balance of $22,686
will be recognized in the next fiscal quarter, at the end of the extension
period.

NOTE E  Closure of the Companys Australian Subsidiary

In February 2001, the Company committed to a plan to close its subsidiary in
Australia. The Company determined that operations in the market served by the
Australian subsidiary could be more profitably served by alternative means,
including independent distributors and sales agents. In connection with the
closure, the Company recorded a one-time charge of $115,000.

8



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##### Table of Contents



CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2001

NOTE F  Line of Credit

Effective March 31, 2001, the Company has a $2,500,000 revolving line of credit
with a bank, expiring April 30, 2002, secured by the Companys accounts
receivable, inventory, equipment and general intangibles. Advances under the
line of credit bear interest at the banks reference rate; a commitment fee at
the annual rate of 0.2% applies to any unused portion of the line.

The line of credit agreement places certain restrictions on the Company,
including, among others, requirements as to profitability and minimum levels of
tangible net worth. As of March 31, 2001, borrowings under the line of credit
were $650,000, and the Company was in compliance with the covenants under the
agreement.

NOTE G  Accounting for Derivative Instruments and Hedging Activities

Effective October 1, 2000, the Company adopted Statement of Financial
Accounting Standards Number 133, Accounting for Derivative Instruments and
Hedging Activities(SFAS 133). SFAS 133 establishes standards for recognition
and measurement of derivatives and hedging activities. The Statement requires
all derivatives to be recorded on the balance sheet at fair value. As a result
of the adoption, the Company did not incur any transition adjustment to
earnings. The adoption of this Statement is not expected to have a significant
impact on the Company.

NOTE H  Revenue Recognition in Financial Statements

On December 3, 1999, the Securities and Exchange Commission issued SEC Staff
Accounting Bulletin Number 101, Revenue Recognition in Financial Statements
(SAB 101). SAB 101 summarizes certain of the staffs views on applying
generally accepted accounting principles to revenue recognition in financial
statements. SAB 101 will be effective for the Company in the fourth quarter of
fiscal 2001 and will have no material impact on the Companys operations or
financial position.

NOTE I  Repurchase of Common Stock

In September 1998, the Company announced a stock repurchase program of up to
500,000 shares of Common Stock. At September 30, 2000 and March 31, 2001, the
Company had repurchased 170,500 shares at a cost of $434,400. Subsequent to
March 31, 2001, the Company repurchased an additional 1,850 shares at a cost of
$4,398.

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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 revenue consists 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 March 31, 2001 (second
quarter of fiscal 2001), net revenue was $10.8 million, up 58% from $6.9
million for the same period a year ago. Revenue from the sale of document
production equipment was $7.0 million, up 90% from $3.7 million for the same
period in fiscal 2000. For the six months ended March 31, 2001, net revenue
was $21.7 million, up 65% from $13.2 million for the same period a year ago.
Revenue from the sale of document production equipment was $14.5 million, up
121% from $6.6 million for the same period in fiscal 2000. The Companys
document production systems primarily consist of the Imaggiaproduct line, the
PS MICRsystems product line (manufactured by Océ Printing Systems GmbH and
sold on a private label basis as the PS75 MICRand PS155 MICR) and the
Checktronicproduct line. The increased revenue from document production
equipment was primarily due to increased North American sales of the Imaggia
and PS MICRsystems product lines. Document production equipment revenue for
the three and six months ended March 31, 2001 included (i) $6.4 million and
$11.9 million, respectively, from the sale of the Companys Imaggiaproduct
line, increases of 213% and 216% over the $2.0 million and $3.8 million for the
comparable year-ago periods, and (ii) $539,000 and $1.3 million from the sale
of the Companys PS MICRsystems product line, an improvement over comparable
prior-year-to-date sales of $157,000 recognized in the first quarter of fiscal
2000.

For some time, the Company has held a dominant position in many of the
international markets in which its Checktronicequipment is sold. Demand for
the Checktronicproduct line has softened in these international markets, and
revenue from this product line is now largely dependent on sales to emerging
markets such as Latin America, Asia and Africa. The uncertain economic
environment in many of these emerging markets has limited the Companys current
opportunities to sell high-end capital equipment into those regions.

For the second quarter of fiscal 2001, revenue from maintenance contracts, spare parts, supplies and consumable items increased 21%, compared with the
same period a year ago, from $3.2 million to $3.8 million. Maintenance, spare parts, supplies and consumable items revenue for the six-month periods ended March 31, 2001 and 2000, were $7.3 million and $6.6 million, respectively,
a 9%
increase. The increases between quarters and year-to-date periods were due primarily to increases in domestic revenues from maintenance contracts, spare
parts, supplies and consumable items, on a substantially higher installed base of Imaggia. The Company expects domestic revenue from maintenance contracts,
spare parts, supplies and consumable items to increase further in fiscal 2001 with the projected growth of the Imaggiaproduct line.

The Companys gross margin percentages for the second quarter and first six
months of fiscal 2001 were 50% and 48%, respectively, compared with 49% and 52%
for the same periods a year ago. The gross margin percentage for the second
quarter of fiscal 2001 increased over the percentage for the second quarter of
fiscal 2000 primarily due to improved productivity and the increased margins on
supplies and consumable items. The decrease in gross margin percentage for the
comparative year-to-date periods was primarily due to the shift in the product
mix from the Checktronicproduct line to the Imaggiaand PS MICRsystems
product lines, which have lower gross margins. The Company anticipates that
its gross margin percentage for fiscal 2001 will be somewhat lower than for
fiscal 2000 as revenue from the Imaggiaand PS MICRsystems product lines
constitutes a larger portion of the Companys total revenue.

Selling, general and administrative expense increased 42%, from $2.9 million
for second quarter of fiscal 2000, to $4.1 million for second quarter of fiscal
2001, but decreased as a percentage of net sales, from 42% to 38% for the
current fiscal quarter. For the six-month periods ended March 31, 2001 and
2000, respectively, selling, general and administrative expenses similarly
increased, from $5.8 million to $7.9 million, or 36%, and similarly decreased
as a percentage of net sales from 44% to 36%. The increased expense was
primarily due to the increase in personnel and associated expenses required to
support the increase in total revenue. The Company anticipates
that its selling, general and administrative expenses in fiscal 2001 will
continue to increase to support the projected growth in total

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##### Table of Contents



revenue, but at a rate less than the projected total revenue rate of growth. Research and
development expense for the three and six months ended March 31, 2001 was $0.7
million and $1.4 million, respectively, flat compared with the same periods a
year ago.

Net interest expense for the second quarter of fiscal 2001 was $2,000, compared
with net interest income of $33,000 for the same period a year ago, due to the
Company borrowing against the bank line of credit in fiscal 2001, but not in
fiscal 2000. As a result, fiscal-year-to-date net interest income is also
lower, by $40,000 year to year.

Unrealized exchange gains or losses are related to the Companys foreign
operations. The Company experiences foreign currency gains and losses, which
are reflected on the Companys statements of operations, due to the
strengthening and weakening of the U.S. dollar against the currencies of the
Companys 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 losses for the second quarter
and the first six months of fiscal 2001 were $223,000 and $173,000,
respectively, compared with $131,000 and $150,000 for the same periods in
fiscal 2000. In all of the current and prior year periods, these losses were
due to the strengthening of the U.S. dollar against the currencies of the
Companys foreign subsidiaries. The Company anticipates that it will
continue to have exchange gains or losses from foreign operations in the
future, although strategies to reduce the size of the gains or losses will be
reviewed and implemented whenever economical and practical.

For the second quarter of fiscal 2001, income before income taxes was $388,000,
compared with a loss before income taxes for the second quarter of fiscal 2000
of $370,000. Income tax expense for the three-month period ended March 31,
2001 was $210,000, compared with an income tax benefit of $163,000 for the
three months ended March 31, 2000. For the six months ended March 31,
2001, income before income taxes was $1.1 million, compared with a loss before
income taxes for the first half of fiscal 2000 of $422,000. Income tax expense
for the six-month period ended March 31, 2001 was $422,000, compared with an
income tax benefit of $95,000 for the six months ended March 31, 2000. Income
tax expense and benefit in all of the current and prior year periods were the
result of income and losses, respectively, generated by domestic operations.
Interim effective tax rates may vary based on sources of income or loss and
best estimates of the annual effective tax rate for the fiscal year.

For the second quarter of fiscal 2001, the Companys basic and diluted earnings
were $0.03 per share, compared with a net loss per share, basic and diluted, of
$0.03 in the comparable prior period. For the first six months of fiscal 2001,
the Companys earnings per share, basic and diluted, were $0.11, compared with
a net loss per share, basic and diluted, of $0.05 for the first six months of
fiscal 2000. The improvements in the quarter and year-to-date periods were
primarily attributable to the increase in revenue, partially offset by the
higher cost of sales, and selling, general and administrative expenses, higher
unrealized exchange losses and higher income taxes.

The Company has determined that operations in the Asian market served by its
Australian subsidiary could be served more profitably by alternative means,
including independent distributors and sales agents, and is in the process of
closing the Australian subsidiary. In connection with the closure, the Company
recorded a one-time charge of $115,000. By taking this action, the
Company anticipates eliminating annual operating expenses of
approximately $500,000, beginning in fiscal 2002.

Market Risk

The Company has foreign subsidiaries, located in England and France (in
addition to the subsidiary in the process of being closed in Australia), does
business in more than 50 countries and generates approximately 31% of its
revenue 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s net investment in its foreign subsidiaries was $6,488,000 and
$7,006,000 at March 31, 2001 and September 30, 2000, respectively, translated
into U.S. dollars at the closing exchange rates. The potential loss
based on end-of-period balances and prevailing exchange rates resulting from a
hypothetical 10% strengthening of the dollar against foreign currencies was not
material in the year-to-date period ended March 31, 2001.

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From time to time, the Company has entered into foreign exchange contracts as a
hedge against specific foreign currency receivables. In fiscal 2000 and the
first six months of fiscal 2001, the Company did not enter into any foreign
exchange contracts and does not anticipate entering into any such contracts in
fiscal 2001.

Factors Affecting Results of Operations

The Company is continuing development of the Imaggiasystem, including
improving its overall reliability and robustness. The Company is using as the
print engine for the Imaggiasystem the Gemini digital print technology, which
was developed, and is supplied to the Company, by Delphax Systems. Delphax
Systems is wholly owned by Xerox Corporation, which recently has experienced
financial difficulties. The Company believes, but cannot assure, that these
difficulties will not materially impair Delphax Systems performance as a
supplier. 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 from a U.S. customer, valued at approximately $40.0 million, for its
Imaggiasystem. The contract value includes the sales of document production
systems and related equipment for approximately $22.0 million, and maintenance,
spare parts, supplies and consumable items estimated to be worth approximately
$18.0 million over the three-year period. Equipment deliveries under the
contract began in the second quarter of fiscal 2000, with delivery completion
expected during the fourth quarter of fiscal 2001. Under the contract, the
Company records document production systems and related equipment revenue with
the delivery of each component piece of equipment. The Company records
revenue for maintenance, spare parts, supplies and consumable items based on
the monthly usage of these components. Revenue under the contract for
maintenance, spare parts, supplies and consumable items may fluctuate with
changes in the customers demand for these items. Achievement of the Companys
future revenue plans depends upon continued market acceptance of the Imaggia
system.

The Companys PS MICRsystems product line is marketed under an agreement with
Océ Printing Systems GmbH for the worldwide exclusive rights to private label,
sell and service the PS75 MICRproduct and provides for certain non-exclusive
rights to private label, sell and service other Océ high-performance sheet-fed
MICR and non-MICR printing systems. The Company anticipates that sales of the
PS MICRsystems product line will comprise a larger portion of its document
production systems revenue in fiscal 2001 than in fiscal 2000.

The Companys net sales 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 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.

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 is from January 1, 1999 to 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
ramifications 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.

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##### Table of Contents



Liquidity and Capital Resources

Working capital was $15.6 million at March 31, 2001, compared with $15.0
million at September 30, 2000. The Companys inventory levels increased from
$11.8 million at September 30, 2000, to $12.6 million at March 31, 2001,
primarily due to higher levels of Imaggiafinished goods and related stock.
Accounts receivable increased from $5.4 million at September 30, 2000, to $7.8
million at March 31, 2001 due to increased sales. Cash and short-term
investments amounted to $1.1 million at March 31, 2001, compared with $3.2
million at September 30, 2000. The $2.1 million decrease in cash and
short-term investments was primarily due to increases in inventory and accounts
receivable.

The Company has undertaken no significant investing activities. No significant
capital investment has been undertaken or is planned, and at March 31, 2001,
the Company had no material commitments for capital expenditures. Short-term
investments are purchased as cash is available and sold as they mature.

The Company has undertaken no significant new financing activities. The
Company maintains a $2.5 million bank line of credit, which expires on April
30, 2002 and is secured by the Companys accounts receivable, inventory,
equipment and general intangibles. Advances under the line of credit bear
interest at the banks reference rate. The line of credit agreement places
certain restrictions on the Company, including, among others, a covenant to
maintain a minimum level of tangible net worth. At March 31, 2001, the Company
is in compliance with all loan covenants, and the amount owed under the line
was $650,000.

Under the Companys stock repurchase program announced in 1998, no shares were
repurchased in fiscal 2000 or in the first six months of fiscal 2001.
Subsequent to March 31, 2001, the Company repurchased 1,850 shares at a cost of
$4,398, bringing the total repurchased under the program to 172,350 shares at a
cost of approximately $439,000.

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 2001.

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 Securities and Exchange Commission, in the
Companys press releases and in oral statements made to securities market
analysts and shareholders, 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.




Item 3. Quantitative and Qualitative Disclosure of Market Risk

The information called for by this item is provided under the caption Market
Risk under Item 2.  Managements Discussion and Analysis of Financial
Condition and Results of Operations.

13



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##### Table of Contents






PART II. OTHER INFORMATION




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

The Company held its annual meeting of shareholders on March 22, 2001. The
shareholders elected four directors for a term ending in 2002 and until their
successors are elected. The shareholders present in person or by proxy cast
the following number of votes in connection with the election of directors,
resulting in the election of all the nominees:

|                      |  |           |                |  |  |  |         | 
|--------------------- |  | --------- | -------------- |  |  |  | ------- | 
|                      |  | Votes
For | Votes
Withheld
|                      |  |           |               
|R. Stephen Armstrong  |  |           | 5,282,072      |  |  |  | 374,678 | 
|                     
|                     
|                     
|                     
|Thomas H. Garrett III |  |           | 5,170,694      |  |  |  | 486,056 | 
|                     
|                     
|                     
|                     
|Jay A. Herman         |  |           | 5,282,272      |  |  |  | 374,478 | 
|                     
|                     
|                     
|                     
|Gary R. Holland       |  |           | 5,286,472      |  |  |  | 370,278 | 

The shareholders also approved adoption of the 2000 Stock Plan, casting
2,193,969 votes for the resolution and 873,445 votes against the resolution,
with 28,702 votes abstained and a broker non-vote of 2,560,634.

The shareholders approved the selection of Ernst & Young LLP as the Companys
independent auditors for 2001, casting 5,616,501 votes for the resolution and
27,678 votes against the resolution, with 12,571 votes abstained.




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
March 31, 2001.

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##### Table of Contents






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 |  | May 7, 2001 |  | /s/ Jay A. Herman                                             
|     |  |             |  |                                                               
|     |  |             |  | Jay A. Herman
President and Chief Executive Officer           
|     |  |             |  |                                                               
|Date |  | May 7, 2001 |  | /s/ Robert M. Barniskis                                       
|     |  |             |  |                                                               
|     |  |             |  | Robert M. Barniskis
Vice President and Chief Financial Officer

15