##### Table of Contents



FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended                      December 31, 2001

Commission file number                     0-10691

|                                                      
|------------------------------------------------------
|CHECK TECHNOLOGY CORPORATION                          
|                                                      
|(Exact name of registrant as specified in its charter)

|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|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)                       

|                                                                                
|--------------------------------------------------------------------------------
|(952) 939-9000                                                                  
|                                                                                
|Registrants telephone number, including area code                              
|                                                                                
|Not Applicable                                                                  
|                                                                                
|Former name, former address and former fiscal year, if changed since last report



| |                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter 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 IN BALLOT BOX       No OPEN IN BALLOT BOX



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



| |                                                                                  
| | ---------------------------------------------------------------------------------
| | As of February 11, 2002, there were 6,161,298 shares outstanding of Common Stock.

1



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TABLE OF CONTENTS



|                                                                                              |  |                                                                                                 |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                                                                
|Financial Statements (Unaudited)                                                             
|                                                                                              |  | Condensed consolidated balance sheets  December 31, 2001 and September 30, 2001               
|                                                                                              |  | Condensed consolidated statements of operations  Three months ended December 31, 2001 and 2000
|                                                                                              |  | Condensed consolidated statements of cash flows  Three months ended December 31, 2001 and 2000
|                                                                                              |  | Condensed notes to consolidated financial statements  December 31, 2001                       
|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 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  December 31, 2001 and September 30, 2001               
|                                                                                             
|                                                                                              | Condensed consolidated statements of operations  Three months ended December 31, 2001
and 2000
|                                                                                             
|                                                                                              | Condensed consolidated statements of cash flows  Three months ended December 31, 2001 and 2000
|                                                                                             
|                                                                                              | Condensed notes to consolidated financial statements  December 31, 2001                       
|                                                                                             
|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 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)

|                       |                                                                                                                                                |                                   |            |              |            |   |               |            |           | 
|---------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ---------- | ------------ | ---------- | - | ------------- | ---------- | --------- | 
|                       |                                                                                                                                                |                                   |            | December 31, |            |   | September 30, |           
|                       |                                                                                                                                                |                                   |            | 2001         |            |   | 2001          |           
|                       |                                                                                                                                                |                                   |            |              |            |   |               |           
|ASSETS                 |                                                                                                                                                |                                   |            |              |            |   |               |           
|                      
|CURRENT ASSETS         |                                                                                                                                                |                                   |            |              |            |   |               |           
|                       | Cash and cash equivalents                                                                                                                      |                                   | $          | 1,030,954    |            |   | $             | 591,536    |          
|                       | Short-term investments                                                                                                                         |                                   |            | 72,480       |            |   |               |           |          
|                       | Accounts receivable, less allowance for doubtful
accounts of $277,893 and $51,749 as of December 31,
2001 and September 30, 2001, respectively |                                   |            | 16,263,250   |            |   |               | 10,129,470 |          
|                      
|                       | Inventory:                                                                                                                                     |                                   |            |              |            |   |               |            |          
|                       |                                                                                                                                                | Raw materials and component parts |            |              | 14,256,351 |   |               |            | 7,519,015 | 
|                       |                                                                                                                                                | Work-in-progress                  |            |              | 989,502    |   |               |            | 317,800   | 
|                       |                                                                                                                                                | Finished goods                    |            |              | 6,853,815  |   |               |            | 3,998,855 | 
|                       |                                                                                                                                                |                                   |            |              |            |   |              
|                       |                                                                                                                                                |                                   | 22,099,668 |              |            |   | 11,835,670    |           
|                       |                                                                                                                                                |                                   |            |              |            |   |              
|                      
|                       | Deferred income taxes                                                                                                                          |                                   |            | 897,762      |            |   |               | 842,851    |          
|                       | Other current assets                                                                                                                           |                                   |            | 970,116      |            |   |               | 1,349,280  |          
|                       |                                                                                                                                                |                                   |            |              |            |   |              
|TOTAL CURRENT ASSETS   |                                                                                                                                                |                                   | 41,334,230 |              |            |   | 24,748,807    |           
|                       |                                                                                                                                                |                                   |            |              |            |   |              
|                      
|EQUIPMENT AND FIXTURES |                                                                                                                                                |                                   |            |              |            |   |               |           
|                       | Machinery and equipment                                                                                                                        |                                   |            | 26,960,444   |            |   |               | 2,192,448  |          
|                       | Furniture and fixtures                                                                                                                         |                                   |            | 4,016,330    |            |   |               | 2,440,243  |          
|                       | Leasehold improvements                                                                                                                         |                                   |            | 7,737,629    |            |   |               | 309,932    |          
|                       |                                                                                                                                                |                                   |            |              |            |   |              
|                       |                                                                                                                                                |                                   | 38,714,403 |              |            |   | 4,942,623     |           
|                       | Less accumulated depreciation and amortization                                                                                                 |                                   |            | 34,621,258   |            |   |               | 3,904,814  |          
|                       |                                                                                                                                                |                                   |            |              |            |   |              
|                       |                                                                                                                                                |                                   | 4,093,145  |              |            |   | 1,037,809     |           
|                       |                                                                                                                                                |                                   |            |              |            |   |              
|                      
|TOTAL ASSETS           |                                                                                                                                                | $                                 | 45,427,375 |              |            | $ | 25,786,616    |           
|                       |                                                                                                                                                |                                   |            |              |            |   |              

See condensed notes to consolidated financial statements.

3



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CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

|                                           |                                                                                                 |   |            |              |   |   |               |            |   | 
|------------------------------------------ | ----------------------------------------------------------------------------------------------- | - | ---------- | ------------ | - | - | ------------- | ---------- | - | 
|                                           |                                                                                                 |   |            | December 31, |   |   | September 30, |           
|                                           |                                                                                                 |   |            | 2001         |   |   | 2001          |           
|                                           |                                                                                                 |   |            |              |   |   |               |           
|LIABILITIES AND SHAREHOLDERS EQUITY       |                                                                                                 |   |            |              |   |   |               |           
|                                          
|CURRENT LIABILITIES                        |                                                                                                 |   |            |              |   |   |               |           
|                                           | Accounts payable                                                                                |   | $          | 5,633,038    |   |   | $             | 4,143,228  |  
|                                           | Accrued expenses                                                                                |   |            | 2,518,846    |   |   |               | 1,763,739  |  
|                                           | Income taxes payable                                                                            |   |            | 447,271      |   |   |               | 248,132    |  
|                                           | Current portion of bank note payable                                                            |   |            | 2,018,157    |   |   |               | 595,000    |  
|                                           | Deferred revenue                                                                                |   |            | 2,981,358    |   |   |               | 1,053,893  |  
|                                           | Warranty reserves                                                                               |   |            | 650,729      |   |   |               |           |  
|                                           |                                                                                                 |   |            |              |   |   |              
|TOTAL CURRENT LIABILITIES                  |                                                                                                 |   | 14,249,399 |              |   |   | 7,803,992     |           
|                                          
|                                           | Long-term portion of bank note payable                                                          |   |            | 12,750,000   |   |   |               |           |  
|                                           |                                                                                                 |   |            |              |   |   |              
|                                          
|TOTAL LIABILITIES                          |                                                                                                 |   | 26,999,399 |              |   |   | 7,803,992     |           
|                                           |                                                                                                 |   |            |              |   |   |              
|SHAREHOLDERS EQUITY                       |                                                                                                 |   |            |              |   |   |               |           
|                                           | Common stock  par value $.10 per share  authorized
25,000,000 shares; issued and outstanding: |   |            |              |   |   |               |            |  
|                                           | 6,161,298 and 6,161,138 as of December 31,
2001 and September 30, 2001, respectively            |   |            | 616,130      |   |   |               | 616,114    |  
|                                           | Additional paid-in capital                                                                      |   |            | 17,011,242   |   |   |               | 17,010,008 |  
|                                           | Accumulated other comprehensive loss                                                            |   |            | (2,055,028   | ) |   |               | (2,089,483 | )
|                                           | Retained earnings                                                                               |   |            | 2,855,632    |   |   |               | 2,445,985  |  
|                                           |                                                                                                 |   |            |              |   |   |              
|TOTAL SHAREHOLDERS EQUITY                 |                                                                                                 |   | 18,427,976 |              |   |   | 17,982,624    |           
|                                           |                                                                                                 |   |            |              |   |   |              
|                                          
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |                                                                                                 | $ | 45,427,375 |              |   | $ | 25,786,616    |           
|                                           |                                                                                                 |   |            |              |   |   |              

See condensed notes to consolidated financial statements.

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CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

|                                                                                                   |                                     |   |                            |           |  |      |            |           | 
|-------------------------------------------------------------------------------------------------- | ----------------------------------- | - | -------------------------- | --------- |  | ---- | ---------- | --------- | 
|                                                                                                   |                                     |   | For the Three Months Ended |          
|                                                                                                   |                                     |   | December 31,               |          
|                                                                                                   |                                     |   |                            |          
|                                                                                                   |                                     |   | 2001                       |           |  | 2000 |           
|                                                                                                   |                                     |   |                            |           |  |      |           
|Sales:                                                                                             |                                     |   |                            |           |  |      |            |          
|                                                                                                   | Printing equipment                  |   | $                          | 6,437,923 |  |      | $          | 7,503,611 | 
|                                                                                                   | Maintenance, spares and supplies    |   |                            | 5,339,619 |  |      |            | 3,442,242 | 
|                                                                                                   |                                     |   |                            |           |  |      |           
|NET SALES                                                                                          |                                     |   | 11,777,542                 |           |  |      | 10,945,853 |          
|                                                                                                  
|Costs and Expenses:                                                                                |                                     |   |                            |           |  |      |            |          
|                                                                                                   | Cost of sales                       |   |                            | 6,149,261 |  |      |            | 5,894,261 | 
|                                                                                                   | Selling, general and administrative |   |                            | 3,813,035 |  |      |            | 3,737,082 | 
|                                                                                                   | Research and development            |   |                            | 742,419   |  |      |            | 655,870   | 
|                                                                                                   |                                     |   |                            |           |  |      |           
|                                                                                                   |                                     |   | 10,704,715                 |           |  |      | 10,287,213 |          
|                                                                                                   |                                     |   |                            |           |  |      |           
|                                                                                                  
|INCOME FROM SYSTEM SALES AND SERVICE                                                               |                                     |   | 1,072,827                  |           |  |      | 658,640    |          
|                                                                                                  
|Interest expense                                                                                   |                                     |   | 40,893                     |           |  |      | 1,625      |          
|Interest income                                                                                    |                                     |   | (4,091                     | )         |  |      | (15,787    | )        
|Net
realized exchange loss                                                                         |                                     |   | 79,384                     |           |  |      | 80,168     |          
|Net
unrealized exchange gain                                                                       |                                     |   | (25,120                    | )         |  |      | (129,873   | )        
|                                                                                                   |                                     |   |                            |           |  |      |           
|INCOME
BEFORE INCOME TAXES                                                                         |                                     |   | 981,761                    |           |  |      | 722,507    |          
|                                                                                                  
|Income
tax expense                                                                                 |                                     |   | 343,000                    |           |  |      | 211,948    |          
|                                                                                                   |                                     |   |                            |           |  |      |           
|                                                                                                  
|NET INCOME                                                                                         |                                     | $ | 638,761                    |           |  | $    | 510,559    |          
|                                                                                                   |                                     |   |                            |           |  |      |           
|                                                                                                  
|Basic and diluted earnings per common share                                                        |                                     | $ | 0.10                       |           |  | $    | 0.08       |          
|                                                                                                  
|Weighted average number of shares outstanding during the period                                    |                                     |   | 6,159,619                  |           |  |      | 6,179,388  |          
|                                                                                                  
|Weighted average number of shares
and equivalents outstanding during the period, assuming dilution |                                     |   | 6,297,250                  |           |  |      | 6,241,524  |          

See condensed notes to consolidated financial statements.

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CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

|                                                                                |                                       |   |                            |             |   |      |            |            |  
|------------------------------------------------------------------------------- | ------------------------------------- | - | -------------------------- | ----------- | - | ---- | ---------- | ---------- | -
|                                                                                |                                       |   | For the Three Months Ended |            
|                                                                                |                                       |   | December 31,               |            
|                                                                                |                                       |   |                            |            
|                                                                                |                                       |   | 2001                       |             |   | 2000 |           
|                                                                                |                                       |   |                            |             |   |      |           
|OPERATING ACTIVITIES                                                            |                                       |   |                            |             |   |      |            |           
|Net income                                                                      |                                       | $ | 638,761                    |             |   | $    | 510,559    |           
|Adjustments to reconcile net income to net cash
(used in) operating activities: |                                       |   |                            |             |   |      |            |           
|                                                                                | Depreciation and amortization         |   |                            | 101,711     |   |      |            | 88,445     |  
|                                                                                | Forgiveness of executive officer note |   |                            |            |   |      |            | 56,250     |  
|                                                                                | Other                                 |   |                            | 6,254       |   |      |            | 22,847     |  
|Changes in operating assets and liabilities:                                    |                                       |   |                            |             |   |      |            |           
|                                                                                | Accounts receivable, net              |   |                            | (6,163,977  | ) |      |            | (2,044,223 | )
|                                                                                | Inventory                             |   |                            | (10,374,176 | ) |      |            | (1,458,498 | )
|                                                                                | Other current assets                  |   |                            | 347,144     |   |      |            | 60,532     |  
|                                                                                | Accounts payable and accrued expenses |   |                            | 2,447,405   |   |      |            | 1,018,654  |  
|                                                                                | Deferred revenue                      |   |                            | 1,928,076   |   |      |            | (86,645    | )
|                                                                                | Warranty reserves                     |   |                            | 650,729     |   |      |            |           |  
|                                                                                |                                       |   |                            |             |   |     
|NET CASH (USED IN) OPERATING ACTIVITIES                                         |                                       |   | (10,418,073                | )           |   |      | (1,832,079 | )         
|                                                                               
|INVESTING ACTIVITIES                                                            |                                       |   |                            |             |   |      |            |           
|Purchase of equipment and fixtures                                              |                                       |   | (3,184,795                 | )           |   |      | (105,057   | )         
|Proceeds
from sale of equipment                                                 |                                       |   | 28,103                     |             |   |      |           |           
|Purchase of short-term investments                                              |                                       |   | (70,164                    | )           |   |      | (66,382    | )         
|                                                                                |                                       |   |                            |             |   |     
|NET CASH (USED IN) INVESTING ACTIVITIES                                         |                                       |   | (3,226,856                 | )           |   |      | (171,439   | )         
|                                                                               
|FINANCING ACTIVITIES                                                            |                                       |   |                            |             |   |      |            |           
|Issuance of common stock                                                        |                                       |   | 23,299                     |             |   |      | 18,191     |           
|Cancellation
of restricted stock                                                |                                       |   | (22,050                    | )           |   |      | (47,338    | )         
|Repayment of bank line of credit, net                                           |                                       |   | (595,000                   | )           |   |      |           |           
|Bank note borrowing                                                             |                                       |   | 14,768,157                 |             |   |      |           |           
|                                                                                |                                       |   |                            |             |   |     
|NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                             |                                       |   | 14,174,406                 |             |   |      | (29,147    | )         
|                                                                               
|EFFECT OF EXCHANGE RATE CHANGES ON CASH                                         |                                       |   | (90,059                    | )           |   |      | 16,359     |           
|                                                                                |                                       |   |                            |             |   |     
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                |                                       |   | 439,418                    |             |   |      | (2,016,306 | )         
|                                                                               
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                  |                                       |   | 591,536                    |             |   |      | 3,043,754  |           
|                                                                                |                                       |   |                            |             |   |     
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                        |                                       | $ | 1,030,954                  |             |   | $    | 1,027,448  |           
|                                                                                |                                       |   |                            |             |   |     
|Supplemental Schedule                                                           |                                       |   |                            |             |   |      |            |           
|                                                                               
|Forgiveness of executive officer note                                           |                                       | $ |                           |             |   | $    | 56,250     |           

See condensed notes to consolidated financial statements.

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CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 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, 2001.

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 per share:

|             |                                                                                               |  |                            |           |  |      |   |           | 
|------------ | --------------------------------------------------------------------------------------------- |  | -------------------------- | --------- |  | ---- | - | --------- | 
|             |                                                                                               |  | For the Three Months Ended |          
|             |                                                                                               |  | December 31,               |          
|             |                                                                                               |  |                            |          
|             |                                                                                               |  | 2001                       |           |  | 2000 |  
|             |                                                                                               |  |                            |           |  |      |  
|Numerator:   |                                                                                               |  |                            |           |  |      |   |          
|             | Net income                                                                                    |  | $                          | 638,761   |  |      | $ | 510,559   | 
|             |                                                                                               |  |                            |           |  |      |  
|             | Numerator for basic and diluted earnings
per share  income applicable to
common shareholders |  | $                          | 638,761   |  |      | $ | 510,559   | 
|            
|Denominator: |                                                                                               |  |                            |           |  |      |   |          
|             | Denominator for basic earnings per share,
weighted average shares                             |  |                            | 6,159,619 |  |      |   | 6,179,388 | 
|            
|             | Dilutive potential common shares, employee
stock options                                      |  |                            | 137,631   |  |      |   | 62,136    | 
|             |                                                                                               |  |                            |           |  |      |  
|            
|             | Denominator for diluted earnings per share,
adjusted weighted average shares                  |  |                            | 6,297,250 |  |      |   | 6,241,524 | 
|            
|             | Earnings per common share                                                                     |  | $                          | 0.10      |  |      | $ | 0.08      | 
|            
|             | Earnings per common share,
assuming dilution                                                  |  |                            | 0.10      |  |      |   | 0.08      | 

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CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 31, 2001

NOTE C  Comprehensive Income

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

|                                        |  |                            |         |  |      |   |         | 
|--------------------------------------- |  | -------------------------- | ------- |  | ---- | - | ------- | 
|                                        |  | For the Three Months Ended |        
|                                        |  | December 31,               |        
|                                        |  |                            |        
|                                        |  | 2001                       |         |  | 2000 |  
|                                        |  |                            |         |  |      |  
|Net income                              |  | $                          | 638,761 |  |      | $ | 510,559 | 
|                                       
|Foreign currency translation adjustment |  |                            | 34,455  |  |      |   | 166,500 | 
|                                        |  |                            |         |  |      |  
|Comprehensive income                    |  | $                          | 673,216 |  |      | $ | 677,059 | 
|                                        |  |                            |         |  |      |  

NOTE D  Acquisition of Delphax Systems

On December 20, 2001, the Company and its newly organized Ontario subsidiary named Check Technology Canada Ltd.
acquired substantially all of the North American business assets of Delphax Systems, a Massachusetts general
partnership and Delphax Systems, Inc., a Delaware corporation (collectively, Delphax). Delphax is located in
suburban Toronto, Ontario and is engaged in the development, manufacture and distribution of print engines, print
management software and a range of digital printing systems incorporating Delphaxs proprietary electron-beam
imaging technology. Delphax is the supplier of the print engines used in a number of the Companys products.

The purchase price consisted of approximately $15.8 million in cash
plus the assumption of approximately $3.2 million of liabilities. The property acquired included Delphaxs fixed assets, inventory, accounts receivable, contract
rights, various intangible assets and intellectual property. The Company intends to continue to use the
purchased assets in substantially the same manner as used by Delphax. The Company anticipates that some
efficiencies can be achieved in integrating the two companies, and,
as a result, has established a $400,000
liability for restructuring. A specific restructuring plan has not yet been finalized.

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CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 31, 2001

NOTE D  Acquisition of Delphax Systems (Continued)

The following unaudited pro forma combined summary statements of operations information for the three-month
periods ended December 31, 2001 and 2000 was prepared in accordance with Statement of Financial Accounting
Standards No. 141, Business Combinations and Statement of Financial Accounting Standards No. 142, Goodwill and
Other Intangible Assets and assumes the acquisition had occurred at the beginning of the periods presented. The
following pro forma data reflects adjustments for interest expense in
both periods, and the three months ended December 31, 2000 includes
an expense of approximately $13.1 million for inventory reserves and
an expense of approximately $2.0 million for write-down of equipment
and fixtures. The unaudited pro forma
financial information is provided for informational purposes only and does not purport to be indicative of future
results of the Company.

Unaudited Pro Forma
Combined Summary Statements of Operations

|                                                   |  |                                 |            |  |      |   |             |  
|-------------------------------------------------- |  | ------------------------------- | ---------- |  | ---- | - | ----------- | -
|                                                   |  | Three Months Ended December 31, |           
|                                                   |  |                                 |           
|                                                   |  | 2001                            |            |  | 2000 |  
|                                                   |  |                                 |            |  |      |  
|Net sales                                          |  | $                               | 17,461,798 |  |      | $ | 19,165,853  |  
|                                                  
|Net income (loss)                                  |  |                                 | 270,684    |  |      |   | (11,617,654 | )
|                                                  
|Basic
and diluted earnings (loss) per common share |  |                                 | 0.04       |  |      |   | (1.89       | )
|                                                  

NOTE E  Credit Agreement

Effective December 20, 2001, the Company entered into a bank credit agreement, secured by substantially all the
assets of the Company, expiring December 19, 2004. The credit agreement is comprised of two credit facilities:
(i) term loans and (ii) revolving loans, including letters of credit. The term loan portion of the credit
facility was advanced as a single borrowing on December 20, 2001
in the amount of $4.0 million, also outstanding as
of December 31, 2001. No amount repaid or prepaid on any term loan may be borrowed again. The Company may
borrow on a revolving loan basis up to the lesser of (i) the revolving credit commitment in effect at such time
and (ii) the borrowing base as then determined and computed. The
revolving credit commitment (currently $15.0 million) is subject to a
commitment fee of 0.5% per annum on the unused portion of the commitment. As of December 31, 2001, revolving
loans outstanding were $10.8 million. Term loans and revolving loans, at the Companys election, may be
outstanding as base rate loans or Eurodollar loans, provided that
$3.0 million of the principal amount of
the revolving loans will remain outstanding at a fixed rate of 7.35%
per annum.

Principal payments on the term loans are due in installments of $250,000 on the last day of each March, June,
September and December in each year commencing with June 30, 2002. Term loan principal and interest balance not
paid sooner by scheduled installment or prepayment is due and payable on December 19, 2004. Similarly, the
revolving credit commitment will be permanently reduced by $250,000 on the last day of each March, June,
September and December in each year commencing with June 30, 2002.

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CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 31, 2001

NOTE E  Credit Agreement (Continued)

Outstanding base rate loans accrue interest at the banks prime rate plus 0.5%. Outstanding
Eurodollar loans accrue interest at adjusted LIBOR plus 3%. As of December 31, 2001, the entire
balance of the Companys borrowings was outstanding as base rate loans at a rate of 5.25%, and the Company was in
compliance with all covenants.

NOTE F  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%. In May of fiscal 2000, 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 recognized the fair market value of
the stock award of $225,000 over the extension period, which concluded in the third quarter of fiscal 2001. As a
result, no expense was incurred in the first quarter of fiscal 2002, and $56,250 was recognized as compensation
expense related to the stock award in the first quarter of fiscal
2001. Over the life of the loan, total principal payments were
$54,671.

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CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 31, 2001

NOTE G  Closure of the Companys Australian Subsidiary

In February 2001, the Company committed to a plan to close its subsidiary in Australia, developed a formal exit
plan to cease operations effective September 30, 2001, and communicated the plan to all 14 full- and part-time
employees of the subsidiary. 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. At the commitment date, exit costs were estimated at $115,000, comprised solely of termination benefits,
which were included with selling, general and administrative expenses in the Consolidated Statements of Operation and
with accrued expenses in the Consolidated Balance Sheets. Customer service and transition
issues delayed the office closing until the first quarter of fiscal 2002. As a result of this delay and
refinement of closing cost estimates, an additional charge of $100,000 was recorded in the fourth quarter of
fiscal 2001, bringing the total one-time charge to $215,000. As of December 31, 2001, operations of the
subsidiary had ceased and all employees have been terminated. Activity through December 31, 2001 was as follows:

|                                     |  |                   |         |  |               |            |         |         |  |   |         |   |  |                   |           |   |         |         |         |                   |           |   |          |   |  |   |   | 
|------------------------------------ |  | ----------------- | ------- |  | ------------- | ---------- | ------- | ------- |  | - | ------- | - |  | ----------------- | --------- | - | ------- | ------- | ------- | ----------------- | --------- | - | -------- | - |  | - | - | 
|                                     |  |                   |         |  |               | Additional |         |         |  |   |         |   |  |                   |           |   |         |         |         |                   |           |   |          |   |  |   |  
|                                     |  | Initial           |         |  | Fiscal 2001   |            |         | Charges |  |   |         |   |  |                   | Remaining |   |         | Charges |         |                   | Remaining |  
|                                     |  | Reserve           |         |  | Restructuring |            |         | Against |  |   | Asset   |   |  | Reserve           |           |   | Against |         |         | Reserve           |          
|                                     |  | Feburary 19, 2001 |         |  | Charges       |            |         | Reserve |  |   | Reserve |   |  | Septemer 30, 2001 |           |   | Reserve |         |         | December 31, 2001 |          
|                                     |  |                   |         |  |               |            |         |         |  |   |         |   |  |                   |           |   |         |         |         |                   |          
|                                    
|Severance                            |  | $                 | 115,000 |  |               | $          | 56,000  |         |  | $ | (22,000 | ) |  | $                 |          |   |         | $       | 149,000 |                   |           | $ | (149,000 | ) |  | $ |  | 
|Lease termination
and other
expenses |  |                   |        |  |               |            | 28,000  |         |  |   |        |   |  |                   |          |   |         |         | 28,000  |                   |           |   | (28,000  | ) |  |   |  | 
|Loss on disposal
of fixed assets     |  |                   |        |  |               |            | 16,000  |         |  |   |        |   |  |                   | (16,000   | ) |         |         |        |                   |           |   |         |   |  |   |  | 
|                                     |  |                   |         |  |               |            |         |         |  |   |         |   |  |                   |           |   |         |         |         |                   |          
|                                     |  | $                 | 115,000 |  |               | $          | 100,000 |         |  | $ | (22,000 | ) |  | $                 | (16,000   | ) |         | $       | 177,000 |                   |           | $ | (177,000 | ) |  | $ |  | 
|                                     |  |                   |         |  |               |            |         |         |  |   |         |   |  |                   |           |   |         |         |         |                   |          

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CHECK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 31, 2001

NOTE H  Accounting for Derivative Instruments and Hedging Activities

As of October 1, 2000, the Company adopted Statement of Financial Accounting Standards Number 133, Accounting for
Derivative Instruments and Hedging Activities (SFAS 133). SFAS 133 requires companies to account for derivatives
and hedging activities, including the following two elements: (i) all derivatives are measured at fair value and
recognized in the balance sheets as assets or liabilities, and (ii) derivatives meeting certain criteria could be
specifically designated as a hedge. The adoption of this Statement had no impact on the Companys operating
results or financial position.

NOTE I  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 was
effective for the Company in the fourth quarter of fiscal 2001 and had no material impact on the Companys
operations or financial position.

NOTE J  Business Combinations and Goodwill and Other Intangible Assets

On June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No.
141, Business Combinations (SFAS 141) and Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets (SFAS 142). SFAS 141 eliminates the pooling-of-interests method of accounting for business
combinations, clarifies the criteria for recognizing intangible assets separately from goodwill and is effective
for business combinations completed subsequent to June 30, 2001. Under SFAS 142, goodwill and indefinite lived
intangible assets are no longer amortized but are reviewed at least annually for impairment. Separable
intangible assets not deemed to have an indefinite life will continue to be amortized over their useful lives,
but with no maximum life. The amortization provisions of SFAS 142 apply immediately to goodwill and intangible
assets acquired after June 30, 2001 and is required to be adopted for all prior acquisitions in years beginning
after October 1, 2002, our fiscal 2003. SFAS 141 has been applied in accounting for the acquisition of Delphax
described above in NOTE D. The Company believes SFAS 142 will have no material effect on the Companys results
of operations or financial position.

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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 printing systems and related equipment, and (ii) maintenance
contracts, spare parts, supplies and consumable items. For the three-month period ended December 31, 2001 (first
quarter of fiscal 2002), net revenue was $11.8 million, up 8% from $10.9 million for the three-month period ended
December 31, 2000 (first quarter of fiscal 2001). Revenue from the sale of printing equipment was $6.4 million
for the first quarter of fiscal 2002, down 14% from $7.5 million for the same period in fiscal 2001. The
Companys printing systems primarily consist of the
Imaggia product line, the Checktronic and
Foliotronic product lines, our legacy products, and the PS MICR systems product
line (manufactured by Océ Printing Systems GmbH and sold on a
private label basis as the PS75 MICR and PS155
MICR). The decline in revenue from
printing equipment was primarily due to individually modest declines in each of the three product lines
worldwide. Printing equipment revenue for the first quarter of fiscal
2002 included (i) $5.2 million
from the sale of the Companys Imaggia product line, a decrease of 5% from the $5.5 million the comparable
year-ago period, (ii) $828,000 from sales of legacy products, down from year-ago sales of
$1.2 million, and (iii) $366,000 from the sale of the Companys PS MICR systems product line, down from prior year
first quarter sales of $773,000.

For the first quarter of fiscal 2002, revenue from maintenance contracts, spare parts, supplies and consumable
items increased 55%, compared with the same period a year ago, from $3.4 million to $5.3 million. The increase
between quarters was due primarily to increases in domestic revenues from maintenance contracts, spare parts,
supplies and consumable items on a substantially higher installed base of Imaggia systems and sales of
approximately $899,000 to Delphax customers. For both these reasons, the Company expects
domestic revenue from maintenance contracts, spare parts, supplies and consumable items to continue in fiscal
2002 at levels higher than in fiscal 2001.

The Companys gross margin percentage for the first quarter of fiscal 2002 was 48%, compared with 46% for the
first quarter of fiscal 2001. Approximately half of the increase in
the gross margin percentage was
due to improved margins on some equipment options in the first
quarter of fiscal 2002, and approximately half was due to sales to
Delphax customers. However, in
general for fiscal 2002, the Company anticipates that its gross margin percentage will be somewhat lower than for
fiscal 2001 due to the shift in sales mix as revenues from maintenance contracts, spare parts, supplies and
consumable items are expected to comprise a larger portion of total revenues in fiscal 2002.

Selling, general and administrative expenses increased 2%, from $3.7 million for first quarter of fiscal 2001, to
$3.8 million for first quarter of fiscal 2002, and decreased slightly as a percentage of net sales, from 34% to
32% for the current fiscal quarter. Research and development expenses for the three months ended December 31,
2000 and 2001 were $656,000 and $742,000, respectively, higher by 13% year to year, but flat as a percentage of
net sales. The Company anticipates that its expense levels through the remainder of fiscal 2002 will be higher
than in fiscal 2001 due to the acquisition of Delphax, but lower as a percentage of net sales.

Net interest expense for the three months ended December 31, 2001, was $37,000, compared with net interest income
of $14,000 for the three months ended December 31, 2000 due to the Company borrowing to finance the acquisition
of Delphax, and, to a lesser extent, to fund increases in accounts
receivable and inventory in the first quarter of fiscal 2002.

For the three months ended December 31, 2001
and 2000, the Company realized net exchange losses of $79,000 and
$80,000, respectively. In the first quarter of fiscal 2002, a
realized exchange loss of $152,000 was incurred due to
recognition of accumulated unrealized exchange losses of the Australian subsidiary upon closure of the subsidiary
during the quarter. The Company incurs realized foreign exchange
gains and losses on currency conversion transactions. The Company experiences unrealized 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 of currency translation on the valuation of the intercompany accounts and certain assets of the subsidiaries, which
are denominated in U.S. dollars. Net unrealized exchange gains for the three months ended December 31, 2001 and

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2000 were $25,000 and $130,000, respectively, due to the weakening of the U.S. dollar against the currencies of
the Companys foreign subsidiaries. The Company anticipates that
it will continue to have transactional and translational foreign exchange gains or
losses 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 first quarter of fiscal 2002, income before income taxes was $982,000, compared with income before income
taxes for the first quarter of fiscal 2001 of $723,000. Income tax expense for the three-month periods ended
December 31, 2001 and 2000 was $343,000 and $212,000, respectively, reflecting effective tax rates of 35% and
29%, respectively. 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 first quarter of fiscal 2002 the Companys basic and diluted earnings were $0.10 per share, compared with
$0.08, basic and diluted, for the comparable prior year period. The improvement was primarily attributable to
the improved gross margin, partially offset by higher operating expenses, debt financing costs and a higher
effective tax rate.

In February 2001, the Company committed to close its subsidiary in Australia, developed a formal exit plan to
cease operations effective September 30, 2001, and communicated the plan to all 14 full- and part-time employees
of the subsidiary. 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. At the
commitment date, exit costs were estimated at $115,000. Customer service and transition issues delayed the
office closing until the first quarter of fiscal 2002. As a result of this delay and refinement of closing cost
estimates, an additional charge of $100,000 was recorded in the fourth quarter of fiscal 2001, bringing the total
one-time charge to $215,000. As of December 31, 2001, operations of the subsidiary had ceased and all employees
have been terminated. By taking this action, the Company anticipates eliminating annual operating expenses of
approximately $500,000, beginning in fiscal 2002, with no further loss of revenue from Pacific Rim customers as a
result of this change.

Market Risk

The Company has foreign subsidiaries located in Canada, England and France, does business in more than 50
countries and generates approximately 32% 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 these foreign markets.

The Companys net investment in its foreign subsidiaries was $6.4 million and $5.7 million at December 31, 2001
and September 30, 2001, 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 quarter ended December 31, 2001.

From time to time, the Company has entered into foreign exchange contracts as a hedge against specific foreign
currency receivables. In the first quarter of fiscal 2002, the Company did not enter into any foreign exchange
contracts and does not anticipate entering into any such contracts through the remainder of fiscal 2002.

Factors Affecting Results of Operations

The Companys revenues are subject to fluctuations which may be material.

In January 2000, the Company entered into a three-year equipment and service contract for its Imaggia system that
is valued at approximately $40.0 million. Equipment deliveries under the contract began in the second quarter of
fiscal 2000 and concluded in the third quarter of fiscal 2001. In the fourth quarter of fiscal 2001, the Company
executed a new contract with this customer, valued at approximately $19.5 million, approximately $11.5 million
for Imaggia systems and an estimated $8.0 million over the next three years for supplies and consumable items.
Under both

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contracts, the Company records document production systems and related equipment revenues with the
delivery of each component piece of equipment. The Company records revenues for maintenance, spare parts,
supplies and consumable items based on the monthly usage of these components. Revenues from this customer have
been significant, representing 57% and 32% of total revenues for fiscal 2001 and 2000, respectively. The Company
anticipates that revenues from this customer will also be significant in fiscal 2002, but to a lesser extent than
in fiscal 2001.

On December 20, 2001, the Company and its newly organized Ontario subsidiary named Check Technology Canada Ltd.
acquired substantially all of the North American business assets of Delphax Systems, a Massachusetts general
partnership and Delphax Systems, Inc., a Delaware corporation (collectively, Delphax). Delphax is located in
suburban Toronto, Ontario and is engaged in the development, manufacture and distribution of print engines, print
management software and a range of digital printing systems incorporating Delphaxs proprietary electron-beam
imaging technology. Delphax is the supplier of the print engines used
in a number of the Companys products. The Company anticipates
that the acquisition of Delphax will add incremental maintenance,
spares and supplies revenue of approximately $5.5 million and have a
positive earnings impact for the second quarter of fiscal 2002.
While the Company expects the acquisition to provide increased
revenue and incremental operating income in the future, there
can be no assurance that actual results will be as anticipated.

The Companys PS MICR systems product line is marketed under an agreement with Océ Printing Systems GmbH for the
right to private label, sell and service the PS75 MICR product and other high-performance sheet-fed MICR and non-MICR
printing systems manufactured by Océ. The Company agreed to
purchase a minimum number of PS75 MICR units from Océ to
maintain the exclusive right to sell the PS75 MICR product.
The Company purchased less than the minimum, and as a result, the Company incurred a penalty and
forfeited certain rights of exclusivity. The Company plans to continue offering the PS MICR systems for sale, but
there is no assurance that significant sales will be made.

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 was from January 1, 1999 to January 1, 2002. The Company prepared for the introduction
of the Euro and 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
conversion on January 1, 2002 had no material impact on the Companys financial statements.

Revenue Recognition

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 was
effective for the Company in the fourth quarter of fiscal 2001 and had no material impact on the Companys
operations or financial position.

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Liquidity and Capital Resources

Working capital was $27.1 million at December 31, 2001, compared with $16.9 million at September 30, 2001. Of
the $10.2 million increase in working capital, approximately
$6.1 million was derived from the acquisition of
Delphax. The Companys inventory levels increased to $22.1 million at December 31, 2001, from $11.8 million at
September 30, 2001. Inventory acquired from Delphax comprised approximately $8.7 million of the increase.
Accounts receivable increased to $16.3 million at December 31, 2001, from $10.1 million at September 30, 2001,
with approximately $4.1 million of the increase due to the acquisition of Delphax, and the balance the result of
increased sales. Cash and short-term investments amounted to $1.1 million at December 31, 2001, compared with
$592,000 at September 30, 2001. The increase in cash and short-term investments was primarily due to the timing
of the bank note borrowing in connection with the acquisition of Delphax. Deferred revenue was $3.0 million at
December 31, 2001, compared with $1.1 million at September 30, 2001. This increase was principally due to the
timing of payment and deliveries under the equipment portion of the equipment contract described above and the
earning of the related deferred revenue.

The Company has undertaken no significant investing activities. No significant capital investment has been
undertaken or is planned, and at December 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.

To finance the acquisition of Delphax, effective December 20, 2001, the Company entered into a bank credit
agreement, secured by substantially all the assets of the Company, expiring December 19, 2004. . The credit
agreement is comprised of two credit facilities: (i) term loans and (ii) revolving loans, including letters of
credit. The term loan portion of the credit facility was advanced as a single borrowing on December 20, 2001 in
the amount of $4.0 million also outstanding as of December 31, 2001. No amount repaid or prepaid on any term loan
may be borrowed again. The Company may borrow on a revolving loan basis up to the lesser of (i) the revolving
credit commitment in effect at such time and (ii) the borrowing base as then determined and computed.
The revolving credit commitment (currently $15.0 million) is subject to a commitment fee of 0.5% per annum on the unused portion of the
commitment. As of December 31, 2001, revolving loans outstanding
were $10.8 million. Term loans and revolving
loans, at the Companys election, may be outstanding as base rate loans or Eurodollar loans, provided that
$3.0 million of the principal amount of the revolving loans will
remain outstanding at a fixed rate of 7.35% per annum.

Principal payments on the term loans are due in installments of $250,000 on the last day of each March, June,
September and December in each year commencing with June 30, 2002. Term loan principal and interest balance not
paid sooner by scheduled installment or prepayment is due and payable on December 19, 2004. Similarly, the
revolving credit commitment will be permanently reduced by $250,000 on the last day of each March, June,
September and December in each year commencing with June 30, 2002.

Outstanding base rate loans accrue interest at the banks prime rate plus 0.5%. Outstanding
Eurodollar loans accrue interest at adjusted LIBOR plus 3%. As of December 31, 2001, the entire
balance of the Companys borrowings was outstanding as base rate loans at a rate of 5.25%, and the Company was in
compliance with all covenants. The Company believes that its current financial arrangements and
anticipated level of internally generated funds will be sufficient to fund its working capital requirements
through fiscal 2002.

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.

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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.




PART II. OTHER INFORMATION




Item 6. Exhibits and Reports on Form 8-K

The Company did not file any reports on Form 8-K during the three months ended December 31, 2001.

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SIGNATURES

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



|     |  |                   |  |                                           
|---- |  | ----------------- |  | ------------------------------------------
|     |  |                   |  | CHECK TECHNOLOGY CORPORATION
Registrant   
|    
|    
|Date |  | February 14, 2002 |  | /s/ Jay A. Herman                         
|     |  |                   |  | Jay A. Herman                             
|     |  |                   |  | Chairman and Chief Executive Officer      
|    
|    
|Date |  | February 14, 2002 |  | /s/ Robert M. Barniskis                   
|     |  |                   |  | Robert M. Barniskis                       
|     |  |                   |  | Vice President and Chief Financial Officer

18