<PAGE>   1

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

 X     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
----   EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998.

                                       OR

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

                         Commission File Number: 0-11933

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

<TABLE>

                       DELAWARE                                                          85-0294536
                       --------                                                          ----------
<S>                                                                        <C>
(State or other jurisdiction of incorporation or organization)             (I.R.S. Employer Identification No.)


         3208 COMMANDER DRIVE, CARROLLTON, TEXAS                                         75006
         ---------------------------------------                                         -----

         (Address of principal executive offices)                                      (Zip Code)
</TABLE>


                                 (972) 407-6080
                                 --------------
              (Registrant's telephone number, including area code)



              (Former name, former address and former fiscal year,
                         if changed since last report)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X     No
                                                             ---      ---
                      APPLICABLE ONLY TO CORPORATE ISSUERS

Shares of common stock outstanding on August 1, 1998: 2,479,368. Shares of
non-voting common stock outstanding on August 1, 1998: 112,492.

Transitional Small Business Disclosure Format (Check One);  Yes      No  X
                                                                ---     ---


<PAGE>   2


                                   AXCESS INC.

                                      INDEX


<TABLE>
<CAPTION>

                                                                                                            Page
                                                                                                           Number
                                                                                                           ------
PART I.       FINANCIAL INFORMATION
<S>           <C>                                                                                           <C>
              Item 1. Condensed Consolidated Financial Statements:

                      Condensed Consolidated Balance Sheets at June 30, 1998 (Unaudited)
                      and December 31, 1997..................................................................1

                      Condensed Consolidated Statements of Operations (Unaudited) for the Three
                      and Six months ended June 30, 1998 and 1997............................................3

                      Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six
                      Months ended June 30, 1998 and 1997....................................................4

                      Notes to Condensed Consolidated Financial Statements (Unaudited).......................6

              Item 2. Management's Discussion and Analysis of Financial Condition
                      and Results of Operations..............................................................8

PART II.      OTHER INFORMATION


              Item 2. Changes in Securities.................................................................13

              Item 6. Exhibits and Reports on Form 8-K......................................................14


SIGNATURES..................................................................................................18
</TABLE>



<PAGE>   3



PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                          AXCESS INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                 June 30,      December 31,
                                                                   1998            1997
                                                               -----------     -----------
<S>                                                            <C>             <C>        
                                     ASSETS
Current assets:
  Cash and cash equivalents ..............................     $   804,758     $ 1,687,178
  Note receivable from stockholder .......................       1,152,961       1,158,684
  Accounts receivable - trade, less allowance for doubtful
    accounts of $436,849 in 1998 and $380,911 in 1997 ....       2,172,512       1,864,270
  Inventory ..............................................       4,563,684       5,244,116
  Prepaid expenses and other .............................         123,223         180,218
                                                               -----------     -----------
          Total current assets ...........................       8,817,138      10,134,466
                                                               -----------     -----------

Property, plant & equipment, net .........................       2,912,088       2,974,725
Goodwill, net ............................................          49,455          90,473
Deferred license fee, net ................................         799,322       1,400,000
Other assets .............................................          34,161          85,748
                                                               -----------     -----------

          Total assets ...................................     $12,612,164     $14,685,412
                                                               ===========     ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Notes payable to stockholders ..........................     $ 2,976,029     $ 2,931,821
  Notes payable ..........................................         592,767       3,942,495
  Accounts payable .......................................       1,014,239       1,789,321
  Capital lease obligations, current .....................         215,845         807,935
  Other accrued liabilities ..............................       2,659,045       2,089,793
                                                               -----------     -----------
           Total current liabilities .....................       7,457,925      11,561,365

Capital lease obligations, noncurrent ....................         604,315         114,845
Note payable - long term .................................       2,005,205         535,205
Other ....................................................          42,242           4,694
                                                               -----------     -----------

          Total liabilities ..............................     $10,109,687     $12,216,109
                                                               -----------     -----------
</TABLE>

                                                                     (Continued)

           See accompanying notes to unaudited condensed consolidated
                             financial statements.

                                      - 1 -

<PAGE>   4


                          AXCESS INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                    June 30,        December 31,
                                                                                     1998               1997
                                                                                  ------------      ------------
<S>                                                                             <C>                <C>   
Stockholders' equity:

Convertible preferred stock:

          7,000,000 shares authorized in 1998 and 1997

          Series A: $26.00 stated value; 57,692
            shares outstanding in 1998 and 1997 .............................     $  1,500,000      $  1,500,000

          Series B: $28.40 stated value; 52,817
            shares outstanding in 1998 and 1997 .............................        1,500,000         1,500,000

          Series C: $30.20 stated value; 35,427
            shares outstanding in 1998 and 1997 .............................        1,069,880         1,069,880

          Series G: $10,000.00 stated value; 995
            shares outstanding in 1998 and 789.735 in 1997 ..................        9,950,000         7,897,353

          Series H: $10,000.00 stated value; 396
            shares outstanding in 1998 and none in 1997 .....................        3,960,000              --

Common stock, $.01 par value, 6,250,000 shares authorized in 1998 and
          2,837,500 in 1997; 2,479,368 shares issued
          and outstanding in 1998 and 2,331,748 in 1997 .....................           24,794            23,318

Non-voting convertible common stock, $.01 par value, 112,500 shares 
          authorized in 1998 and 1997; 112,492 shares issued and outstanding 
          in 1998 and 1997. Convertible into common stock on a one share 
          for one share basis ...............................................            1,125             1,125

Additional paid-in capital ..................................................       57,817,102        57,168,716
Accumulated deficit .........................................................      (73,320,424)      (66,691,089)
                                                                                  ------------      ------------

                     Total stockholders' equity .............................        2,502,477         2,469,303
                                                                                  ------------      ------------

                     Total liabilities and stockholders' equity .............     $ 12,612,164      $ 14,685,412
                                                                                  ============      ============
</TABLE>



           See accompanying notes to unaudited condensed consolidated
                             financial statements.


                                      - 2 -

<PAGE>   5


                          AXCESS INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                         Three Months Ended               Six Months Ended
                                                             June 30,                        June 30,
                                                  ----------------------------      ----------------------------
                                                     1998             1997             1998              1997
                                                  -----------      -----------      -----------      -----------

<S>                                               <C>              <C>              <C>              <C>        
Sales .......................................     $ 3,413,458      $ 2,591,537      $ 5,701,485      $ 7,181,324
Cost of sales ...............................       2,014,204        1,394,433        3,442,179        4,057,005
                                                  -----------      -----------      -----------      -----------

     Gross profit ...........................       1,399,254        1,197,104        2,259,306        3,124,319
                                                  -----------      -----------      -----------      -----------

Expenses:
     Research and development ...............       1,443,705          670,658        3,020,488        1,423,909
     General and administrative .............       1,385,602        1,412,856        2,714,668        2,415,357
     Selling and marketing ..................       1,076,063        1,316,365        2,155,397        2,784,954
                                                  -----------      -----------      -----------      -----------
        Total operating expenses ............       3,905,370        3,399,879        7,890,553        6,624,220
                                                  -----------      -----------      -----------      -----------

        Loss from operations ................      (2,506,116)      (2,202,775)      (5,631,247)      (3,499,901)
                                                  -----------      -----------      -----------      -----------

Other income (expense):
     Interest income ........................          20,109            3,183           55,894           14,318
     Interest expense .......................        (167,836)        (718,727)        (461,647)        (889,976)
     Other ..................................         (29,626)         (11,307)          31,223            4,922
                                                  -----------      -----------      -----------      -----------
                Other expense, net ..........        (177,353)        (726,851)        (374,530)        (870,736)
                                                  -----------      -----------      -----------      -----------

                 Net loss ...................      (2,683,469)      (2,929,626)      (6,005,777)      (4,370,637)

Preferred stock dividend requirements .......        (342,031)        (164,907)        (623,558)        (354,122)
                                                  -----------      -----------      -----------      -----------
                 Net loss applicable to
                   common stock .............     $(3,025,500)     $(3,094,533)     $(6,629,335)     $(4,724,759)
                                                  ===========      ===========      ===========      ===========
Basic and diluted net loss per share ........     $     (1.17)     $     (1.41)     $     (2.63)     $     (2.22)
                                                  ===========      ===========      ===========      ===========
                 Weighted average shares of
                   common stock outstanding .       2,591,725        2,194,162        2,518,391        2,132,761
                                                  ===========      ===========      ===========      ===========
</TABLE>


           See accompanying notes to unaudited condensed consolidated
                             financial statements.


                                      - 3 -

<PAGE>   6




                          AXCESS INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                         Six  Months Ended
                                                                              June 30,
                                                                    ----------------------------
                                                                        1998            1997
                                                                    -----------      -----------
<S>                                                                 <C>              <C>         
Cash flows from operating activities:
    Net loss ..................................................     $(6,005,777)     $(4,370,637)
       Adjustments to reconcile net loss to net cash used by
            operating activities:
          Depreciation and amortization .......................         289,663          349,232
          Provision for losses on accounts receivable .........          55,938            7,727
          Provision for product warranty reserve ..............         115,268          203,342
          Amortization of financing discount, issuance costs
            and other non-cash interest .......................         100,074          640,259
          Accrued interest on convertible debentures ..........            --             86,178
          Non-cash compensation ...............................          50,000           40,000
          (Increase) decrease in:
              Accounts receivable, net ........................        (364,180)        (801,801)
              Inventory .......................................         680,432          557,350
              Prepaid expenses and other ......................          32,611          401,412
              Other assets ....................................         676,649           62,842
           Increase (decrease) in:
              Accounts payable ................................        (775,082)       1,274,480
              Accrued liabilities .............................        (132,027)        (999,176)
                                                                    -----------      -----------
                  Net cash used in operating activities .......      (5,276,431)      (2,548,792)

Cash flows from investing activities:
    Capital expenditures ......................................        (186,008)        (214,535)
                                                                    -----------      -----------

Cash flows from financing activities:
    Borrowings under financing agreements .....................       1,470,000        1,833,000
    Principal payments on financing agreements ................      (3,305,520)         (75,292)
    Proceeds from issuance of convertible debentures ..........            --            500,000
    Redemption of convertible debentures ......................            --           (600,000)
    Redemption of convertible preferred .......................            --           (400,000)
    Principal payments on capital lease obligations ...........        (102,620)        (129,618)
    Net proceeds from issuance of preferred and common stock ..       6,518,159          525,957
                                                                    -----------      -----------
                  Net cash provided by financing activities....       4,580,019        1,654,047

                  Net decrease in cash and cash equivalents....        (882,420)      (1,109,280)

Cash and cash equivalents, beginning of period ................       1,687,178        1,598,744
                                                                    -----------      -----------
Cash and cash equivalents, end of period ......................     $   804,758      $   489,464
                                                                    ===========      ===========
</TABLE>

                                                                     (Continued)

           See accompanying notes to unaudited condensed consolidated
                             financial statements.

                                      - 4 -

<PAGE>   7




                          AXCESS INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                Six  Months Ended
                                                                                     June 30,
                                                                               ---------------------
                                                                                  1998         1997
                                                                                  ----         ----
<S>                                                                            <C>            <C>    
Supplemental information:
Cash paid during the period for interest .................................     $  76,363     121,508
                                                                               =========     =======

Conversions to stock:
   Debentures, net of unamortized discount and expenses ..................     $    --       337,667
   Accrued interest ......................................................     $    --       136,397
                                                                               =========     =======

Conversion feature of debentures issued ..................................     $    --       150,000
                                                                               =========     =======

Convertible preferred stock accretion ....................................     $    --       149,497
                                                                               =========     =======

Restricted common stock issued in connection with
   Xerox settlement ......................................................     $ 526,500        --
                                                                               =========     =======

Conversion feature, detachable warrants and restricted common stock issued
   in connection with notes payable
   to stockholders .......................................................     $ 100,074     498,576
                                                                               =========     =======
</TABLE>


           See accompanying notes to unaudited condensed consolidated
                             financial statements.

                                      - 5 -

<PAGE>   8

                          AXCESS INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

(1)      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

         These unaudited condensed consolidated financial statements of AXCESS
         Inc. ("AXCESS") (formerly Lasertechnics, Inc.) and its majority and
         wholly-owned subsidiaries, Sandia Imaging Systems Corporation
         ("Sandia"), Sandia Imaging Systems Europe SA ("Sandia Europe") and
         Lasertechnics Marking Corporation ("LMC") (unless otherwise indicated,
         "AXCESS", "Sandia", "Sandia Europe" and "LMC" are hereinafter
         collectively referred to as the "Company"), for the quarter ended June
         30, 1998, have been prepared in accordance with generally accepted
         accounting principles for interim financial reporting. Accordingly,
         they do not include all of the information and footnotes required by
         generally accepted accounting principles for complete financial
         statements and should be read in conjunction with the audited
         consolidated financial statements and notes thereto included in the
         Company's Form 10-KSB, as amended, for the year ended December 31,
         1997. All significant intercompany balances and transactions have been
         eliminated in consolidation. Certain reclassifications have been made
         to the prior period amounts in order to present the consolidated
         financial position and results of operations on a consistent basis. In
         the opinion of management, all adjustments, consisting of only normal
         recurring adjustments, necessary to present fairly the financial
         position at June 30, 1998, results of operations for the three and six
         month periods ended June 30, 1998 and 1997, and changes in cash flows
         for the six months ended June 30, 1998 and 1997 have been made. The
         results of operations for any given three month period are not
         necessarily indicative of the results for an entire year.

         The Company has restated its condensed consolidated financial
         statements for the three months ended June 30, 1997, to conform its
         accounting for beneficial conversion features related to the issuance
         of convertible debentures in October 1995 and March 1996, and
         convertible preferred stock issued in July 1996 to the Financial
         Accounting Standard Board's Emerging Issues Task Force Topic No. D-60
         issued in March 1997 ("Topic No. D-60"). Topic No. D-60 requires that
         the intrinsic value of beneficial conversion features of convertible
         debt securities should be recognized as interest expense over the
         period from issuance to the first date that conversions can occur.
         Previously, the Company was amortizing the estimated fair value of the
         beneficial conversion feature to interest expense over the life of the
         convertible debentures. Topic No. D-60 further states that the
         intrinsic value of beneficial conversion features of convertible
         preferred stock should be treated as a return to the preferred
         stockholder over the period from issuance to the first date that
         conversion can occur. The Company had not previously assigned a value
         to the beneficial conversion feature of its Series D Convertible
         Preferred Stock. As a result of this restatement, interest expense for
         the six months ended June 30, 1997, was increased by approximately
         $497,000, or $0.23 per share.

(2)      EARNINGS PER SHARE

         The Company adopted the provisions of Statement of Financial Accounting
         Standards No. 128 ("SFAS 128"), Earnings Per Share, in the fourth
         quarter of 1997, which requires companies to present basic earnings per
         share and diluted earnings per share. Basic earnings per share is
         computed by dividing income available to common stockholders by the
         weighted average number of common shares outstanding during the period.
         Diluted earnings per share reflects the potential dilution that could
         occur if securities or other contracts to issue common stock were
         exercised or converted into common stock. The Company restated its June
         30, 1997, per share calculations for the respective periods to reflect
         the retroactive adoption of SFAS 128.


                                      - 6 -

<PAGE>   9


                          AXCESS INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


(3)      COMPREHENSIVE INCOME

         In June 1997, Statement of Financial Accounting Standards No. 130
         ("SFAS 130"), Reporting Comprehensive Income, was issued. SFAS 130
         establishes standards for reporting and displaying comprehensive income
         and its components in an annual financial statement that is displayed
         with the same prominence as other financial statements.
         Reclassification of financial statements for earlier periods is
         required if provided for comparative purposes. The statement also
         requires the accumulated balance of other comprehensive income to be
         displayed separately from retained earnings and additional
         paid-in-capital in the equity section of the statement of financial
         position. SFAS No. 130 is effective for fiscal years beginning after
         December 31, 1997. The adoption of this statement has no effect on the
         Company for the quarters ended June 30, 1998 and 1997.

(4)      ISSUANCE OF COMMON STOCK

         During the quarter ended June 30, 1998, a total of 12,500 shares of
         AXCESS common stock were issued in connection with a stock compensation
         arrangement.

(5)      ISSUANCE OF PREFERRED STOCK AND FINANCING COMMITMENT

         During quarter ended June 30, 1998, Amphion Ventures L.P. purchased 236
         shares of the Company's Series H Convertible Preferred Stock at its
         stated value of $10,000 per share for a total aggregate purchase price
         of $2,360,000. The purchase price was payable primarily by the delivery
         of unconditional promissory notes payable to the Company by Amphion
         Ventures L.P., the balance of which was $1,138,000 as of June 30, 1998.

(6)      CONTINGENCIES

         The Company is involved in various claims and legal actions arising in
         the ordinary course of business. In the opinion of management of the
         Company, the ultimate disposition of these matters will not have a
         material effect on the accompanying condensed consolidated financial
         statements.




                                      - 7 -

<PAGE>   10


                          AXCESS INC. AND SUBSIDIARIES


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

Results of Operations

Three Months Ended June 30, 1998 Compared to Three Months Ended June 30, 1997

Separate Business Units. The summarized financial data of LMC and Sandia as of
and for the three-month period ended June 30, 1998, as presented below, do not
necessarily reflect the financial position or results of operations of LMC and
Sandia if the two entities had no ownership or management relationships.

<TABLE>
<CAPTION>

                                           Imaging          Marking         Consolidated
                                          (Sandia)           (LMC)            (AXCESS)
THREE MONTHS ENDED JUNE 30, 1998        (Unaudited)       (Unaudited)       (Unaudited)
--------------------------------        -----------       -----------       -----------

<S>                                     <C>                 <C>               <C>      
Sales .............................     $ 1,178,603         2,234,855         3,413,458
Cost of sales .....................         675,598         1,338,606         2,014,204
                                        -----------       -----------       -----------
     Gross profit .................     $   503,005           896,249         1,399,254
                                        -----------       -----------       -----------
     Gross margin % ...............              43%               40%               41%
                                        -----------       -----------       -----------

Operating Expenses:
     Research and development .....     $ 1,116,240           327,465         1,443,705
     General and administrative ...       1,013,394           372,208         1,385,602
     Selling and marketing ........         780,999           295,064         1,076,063
                                        -----------       -----------       -----------
         Total operating expenses .       2,910,633           994,737         3,905,370
                                        -----------       -----------       -----------

         Loss from operations .....      (2,407,628)          (98,488)       (2,506,116)

Other expense, net ................        (147,355)          (29,998)         (177,353)
                                        -----------       -----------       -----------
Net loss before preferred dividends     $(2,554,983)         (128,486)       (2,683,469)
                                        ===========       ===========       ===========

THREE MONTHS ENDED JUNE 30, 1997
--------------------------------

Sales .............................     $   996,571         1,594,966         2,591,537
Cost of sales .....................         439,848           954,585         1,394,433
                                        -----------       -----------       -----------
     Gross profit .................     $   556,723           640,381         1,197,104
                                        -----------       -----------       -----------
     Gross margin % ...............              56%               40%               46%
                                        -----------       -----------       -----------

Operating Expenses:
     Research and development .....     $   391,222           279,436           670,658
     General and administrative ...         997,483           415,373         1,412,856
     Selling and marketing ........         947,143           369,222         1,316,365
                                        -----------       -----------       -----------
         Total operating expenses .       2,335,848         1,064,031         3,399,879
                                        -----------       -----------       -----------

         Loss from operations .....      (1,779,125)         (423,650)       (2,202,775)

Other expense, net ................        (683,893)          (42,958)         (726,851)
                                        -----------       -----------       -----------
Net loss before preferred dividends     $(2,463,018)         (466,608)       (2,929,626)
                                        ===========       ===========       ===========
</TABLE>


                                      - 8 -

<PAGE>   11



                          AXCESS INC. AND SUBSIDIARIES


Consolidated sales for the three months ended June 30, 1998 were $3,413,458,
representing an increase of $821,921 or 32% from the three months ended June 30,
1997. Imaging segment sales increased $182,032 or 18% from the same period last
year primarily due to significant printer sales to a major customer in the
second quarter of 1998. Marking segment sales increased $639,889 or 40% from the
same period last year due to a significant after market service order. The
Company's ability to improve future sales may be affected by the volatility of
market demand, timing of large governmental and state agency contracts,
competition and technological innovations.

Consolidated cost of sales for the three months ended June 30, 1998 was
$2,014,204, representing an increase of $619,771 or 44% from the three months
ended June 30, 1997. The increase was primarily attributable to the increase in
sales. Gross margin as a percentage of sales decreased in the second quarter of
1998 to 41% from 46% in the same period in 1997. The decrease in gross margin
for the three months ended June 30, 1998 was primarily due to high printer
margins in the same period of 1997 for the imaging segment of the Company's
business.

Consolidated research and development expenses were $1,443,705 representing an
increase of $773,047 or a 115% increase over the three months ended June 30,
1997. The increase was due to the expenditure of approximately $790,000 for new
product development costs associated with the Technology Development Agreement
with XL Vision, Inc., a Safeguard Scientifics partnership company.

Consolidated general and administrative expenses for the three months ended 
June 30, 1998, were $1,385,602, representing a decrease of $27,254 or 2% from 
the three months ended June 30, 1997.

Consolidated selling and marketing expenses for the three months ended June 30,
1998, were $1,076,063, representing a decrease of $240,302 or 18% from the three
months ended June 30, 1997. Imaging segment's net decrease was approximately
$166,000, which was primarily attributable to lower DataGlyph(TM) license fees,
marketing expenses, and customer service costs. Marking segment's net decrease
of approximately $74,000 was due to reductions in expenses associated with
travel and commissions.

Other expense, consisting primarily of interest expense, for the three months
ended June 30, 1998 was $177,353 compared to $726,851 for the same period in
1997. Total interest expense was $167,836 in 1998 compared to $718,727 in 1997
for a decrease of $550,891 or 77%. The interest expense for the 1997 period
included charges of approximately $550,000 from amortizations of convertible
debt discounts.

The consolidated net loss applicable to common stock for the three months ended
June 30, 1998 was $3,025,500 compared to the $3,094,533 loss incurred in the
same period of 1997 for a decrease of $69,033 or 2%. Higher sales resulted in
higher gross profits of approximately $200,000. As stated above, interest
expense decreased approximately $550,000. These improvements were offset by the
$700,000 of research and development costs associated with the Technology
Development Agreement with XL Vision, Inc. and a higher preferred dividend
requirement due to the increase in outstanding convertible preferred stock.


                                      - 9 -

<PAGE>   12


                          AXCESS INC. AND SUBSIDIARIES

SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997

<TABLE>
<CAPTION>

                                           Imaging          Marking         Consolidated
                                          (Sandia)           (LMC)            (AXCESS)
SIX MONTHS ENDED JUNE 30, 1998          (Unaudited)       (Unaudited)       (Unaudited)
------------------------------          -----------       -----------       -----------

<S>                                     <C>                 <C>               <C>      
Sales .............................     $ 1,911,018         3,790,467         5,701,485
Cost of sales .....................       1,033,655         2,408,524         3,442,179
                                        -----------       -----------       -----------
     Gross profit .................     $   877,363         1,381,943         2,259,306
                                        -----------       -----------       -----------
     Gross margin % ...............              46%               36%               40%
                                        -----------       -----------       -----------

Operating Expenses:
Research and development ..........     $ 2,520,940           499,548         3,020,488
General and administrative ........       1,997,436           717,232         2,714,668
Selling and marketing .............       1,589,292           566,105         2,155,397
                                        -----------       -----------       -----------
         Total operating expenses .       6,107,668         1,782,885         7,890,553
                                        -----------       -----------       -----------

         Loss from operations .....      (5,230,305)         (400,942)       (5,631,247)
                                        -----------       -----------       -----------

Other expense, net ................        (314,484)          (60,046)         (374,530)
                                        -----------       -----------       -----------
Net loss before preferred 
     dividends.....................     $(5,544,789)         (460,988)       (6,005,777)
                                        ===========       ===========       ===========

SIX MONTHS ENDED JUNE 30, 1997
------------------------------

Sales .............................     $ 3,479,063         3,702,261         7,181,324
Cost of sales .....................       1,945,892         2,111,113         4,057,005
                                        -----------       -----------       -----------
     Gross profit .................     $ 1,533,171         1,591,148         3,124,319
                                        -----------       -----------       -----------
     Gross margin % ...............              44%               43%               44%
                                        -----------       -----------       -----------

Operating Expenses:
Research and development ..........     $   899,127           524,782         1,423,909
General and administrative ........       1,612,984           802,373         2,415,357
Selling and marketing .............       2,086,274           698,680         2,784,954
                                        -----------       -----------       -----------
         Total operating expenses .       4,598,385         2,025,835         6,624,220
                                        -----------       -----------       -----------

         Loss from operations .....      (3,065,214)         (434,687)       (3,499,901)
                                        -----------       -----------       -----------

Other expense, net ................        (765,729)         (105,007)         (870,736)
                                        -----------       -----------       -----------
Net loss before preferred dividends     $(3,830,943)         (539,694)       (4,370,637)
                                        ===========       ===========       ===========
</TABLE>


                                     - 10 -

<PAGE>   13



                          AXCESS INC. AND SUBSIDIARIES

Consolidated sales for the six months ended June 30, 1998 were $5,701,485,
representing a decrease of $1,479,839 or a 21% decrease from the six months
ended June 30, 1997. Imaging segment sales decreased $1,568,045 or a 45%
decrease from the same period last year primarily due to significant printer
sales to three major customers in the six months ended June 30, 1997, and fewer
printer sales to major customers in the first six months of 1998. Marking
segment sales increased $88,206 or a 2% increase from the same period last year
due to a significant after market service order. The Company's ability to
improve future sales may be affected by the volatility of market demand, timing
of large governmental and state agency contracts, competition and technological
innovations.

Consolidated cost of sales for the six months ended June 30, 1998 was
$3,442,179, representing a decrease of $614,826 or a 15% decrease from the first
six months of 1997. The decrease was primarily attributable to the decrease in
sales. Gross margin as a percentage of sales decreased in the first six months
of 1998 to 40% from 44% in the same period in 1997. The decrease in gross margin
for the six months ended June 30, 1998 was due to increased product costs and
warranty expense in the marking segment of the Company's business, primarily
during the first quarter of 1998.

Consolidated research and development expenses were $3,020,488 representing an
increase of $1,596,579 or a 112% increase over the first six months of 1997. The
increase was due to the expenditure of approximately $1,700,000 for new product
development costs associated with the Technology Development Agreement with XL
Vision, Inc., a Safeguard Scientifics partnership company.

Consolidated general and administrative expenses for the six months ended 
June 30, 1998, were $2,714,668, representing an increase of $299,311 or a 12%
increase over the six months ended June 30, 1997. This increase was primarily
due to costs associated with the liquidation of the "Sandia Europe" subsidiary
plus legal and other costs due to the special shareholders meeting held on 
March 31, 1998.

Consolidated selling and marketing expenses for the three months ended June 30,
1998, were $2,155,397, representing a decrease of $629,557 or a 23% decrease
from the six months ended June 30, 1997. Imaging segment's net decrease was
approximately $496,982 primarily because of lower DataGlyph(TM) license fees and
marketing expenses, lower commissions due to lower sales and lower customer
service costs. Marking segment's net decrease of $132,575 was essentially due to
reductions in commissions, training and travel expenses.

Other expense, consisting primarily of interest expense, for the three months
ended June 30, 1998 was $374,530 compared to $870,736 for the same period in
1997. Total interest expense was $461,647 in 1998 compared to $889,976 in 1997
for a decrease of $428,329 or 48%. The interest expense for the 1997 period
included a charge of approximately $500,000 for amortization of convertible debt
discounts.

The consolidated net loss applicable to common stock for the six months ended
June 30, 1998 was $6,629,335 compared to the $4,724,759 loss incurred in the
same period of 1997 for an increase of $1,904,576 or 40%. Lower sales resulted
in lower gross profits of approximately $865,000. Research and development costs
increased approximately $1,600,000, most of which was attributable to the
Technology Development Agreement with XL Vision, Inc. The preferred dividend
requirement increased approximately $269,000 due to the increase in outstanding
convertible preferred stock. These increases were partially offset by lower
interest expenses.


                                     - 11 -

<PAGE>   14


                          AXCESS INC. AND SUBSIDIARIES

LIQUIDITY AND CAPITAL RESOURCES

Since its inception the Company has utilized the proceeds from a number of
public and private sales of its equity and debt securities and the exercise of
options and warrants to meet its working capital requirements.

Cash and cash equivalents decreased $882,420 at June 30, 1998 compared to
December 31, 1997. Financing activities generated net cash of $4,580,019
principally from borrowings under financing agreements and the sale of preferred
stock. Operating activities used net cash of $5,276,431 principally to support
the loss before dividends of $6,005,777 plus decreases in accounts payable and
accrued liabilities. Capital expenditures amounted to $186,008 compared to
$214,535 for the same period in 1997.

The Company's future working capital requirements will depend upon many factors,
including the extent and timing of the Company's product sales, the Company's
operating results and the status of competitive products. In addition, if the
Company elects to continue to develop the document reader, digital camera and
dithering technology that it has a right to acquire from XL Vision, Inc. ("XLV")
under the terms of the Intellectual Property Transfer Agreement by and between
the Company and XLV, the Company will be obligated to pay XLV $2,900,000.
Although the Company's actual working capital needs depend upon numerous
factors, including actual expenditures and revenues generated from its
operations as compared to its business plan, the Company does not anticipate
that its existing working capital resources and revenues from operations will be
adequate to satisfy its working capital requirements for the remainder of the
year. The Company received more than $6 million of new financing, in the form of
convertible preferred stock purchases, from an existing institutional investor
(See Note 5 to Notes to Unaudited Condensed Consolidated Financial Statements
included herein) during the first six months of 1998. This same institutional
investor has continued to provide funding sufficient to meet the Company's needs
through the date of this filing and has indicated its willingness to continue to
do so for the foreseeable future. However there can be no assurances that such
funding will continue to be available on terms satisfactory to the Company, or
on any terms.

In 1983, the City of Albuquerque, New Mexico issued 8% tax-exempt industrial
development revenue bonds in connection with a 25-year capital lease of LMC's
headquarters facility. The principal amount outstanding as of June 30, 1998 was
approximately $780,000. Pursuant to its agreement with the City of Albuquerque,
AXCESS is required to maintain a current ratio of at least 1 to 1. At June 30,
1998, AXCESS' current ratio was 1.18 to 1 which is in compliance with the lease
terms.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

The Company occasionally makes forward-looking statements concerning its plans,
goals, product and service offerings, and anticipated financial performance.
These forward-looking statements may generally be identified by introductions
such as "outlook" for an upcoming period of time, or words and phrases such as
"should", "expect", "hope", "plans", "projected", "believes", "forward-looking"
(or variants of those words and phrases) or similar language indicating the
expression of an opinion or view concerning the future.

These forward-looking statements are subject to risks and uncertainties based on
a number of factors and actual results or events may differ materially from
those anticipated by such forward-looking statements. These factors include, but
are not limited to: the ability to raise capital; the growth rate of the
Company's revenue and market share; the consummation of new, and the
non-termination of, existing relationships with customers and suppliers; the
Company's ability to effectively manage its business functions while



                                     - 12 -

<PAGE>   15



                          AXCESS INC. AND SUBSIDIARIES

growing the Company's business in a rapidly changing environment; the ability of
the Company to adapt and expand its services in such an environment; the
effective and efficient development of new products; and the quality of the
Company's plans and strategies, and the ability of the Company to execute such
plans and strategies.

In addition, forward-looking statements concerning the Company's expected
revenue or earnings levels are subject to many additional uncertainties
applicable to competitors generally and to general economic conditions over
which the Company has no control. The Company does not plan to generally
publicly update prior forward-looking statements for unanticipated events or
otherwise and, accordingly, prior forward-looking statements should not be
considered to be "fresh" simply because the Company has not made additional
comments on those forward-looking statements. See "Cautionary Statements" in the
Company's Form 10-KSB for the period ended December 31, 1997.

Shares Eligible for Future Sale; Convertible Securities and Warrants

Future sales of common stock in the public market by existing stockholders,
warrant holders and holders of convertible securities subsequent to the date
hereof could adversely affect the market price of AXCESS' common stock. At 
June 30, 1998, an aggregate of approximately 1,706,855 shares of Common Stock 
were freely tradable without restriction under the Securities Act of 1933 (the
"Securities Act"). In addition, up to 772,513 shares were eligible for resale in
accordance with the manner of sale and volume limitations of Rule 144
promulgated under the Securities Act.

As of June 30, 1998, there were 57,692, 52,817 and 35,427 shares of Series A, B
and C convertible preferred stock outstanding, respectively. Each share of
Series A, B and C convertible preferred stock is convertible at any time, at the
option of the holder, into one share of common stock. As of June 30, 1998, there
were 995 and 396 shares of Series G and Series H convertible preferred stock
outstanding, respectively. Each share of Series G and H convertible preferred
stock has a stated value of $10,000 per share. Shares of the Series G
convertible preferred stock are convertible at any time, at the option of the
holder, into common stock based upon a conversion price of $10.00 per share.
Shares of the Series H convertible preferred stock are convertible at any time,
at the option of the holder, into non-voting common stock based on a conversion
price of $10.00 per share.

A note payable, in the principal amount of $535,205 with final maturity of
January 15, 2000, will become convertible anytime after January 15, 1999 at a
conversion price of $5.00 per share.

There are currently 355,004 warrants outstanding to acquire the same number of
shares of common stock. AXCESS has reserved approximately 500,000 shares of
Common Stock for issuance upon the exercise of outstanding convertible
securities and warrants. AXCESS has also reserved approximately 1,050,000 shares
of Common Stock for issuance to key employees, officers, directors and
consultants pursuant to the Company's benefit plans.


                                     - 13 -

<PAGE>   16



                          AXCESS INC. AND SUBSIDIARIES

                           PART II. OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES.

During the second quarter of 1998, the Company issued unregistered securities in
connection with each of the transactions described below.

The issuance of preferred stock, common stock and warrants were exempt from the
registration requirements of the Securities Act of 1933, as amended, by virtue
of Section 4(2) thereof as a transaction not involving a public offering and an
appropriate restrictive legend was affixed to the certificates and warrants.

Amphion Ventures L.P. purchased 236 shares of Series H Convertible Preferred
Stock (the "Series H Preferred Stock") during the three month period ended 
June 30, 1998, for an aggregate purchase price of $2,360,000. The purchase price
was payable primarily by the delivery of unconditional promissory notes payable
to the Company by Amphion Ventures L.P., the balance of which was $1,138,000 as
of June 30, 1998.

Each share of Series H Preferred Stock is convertible in whole or in part at any
time at the option of the holder into shares of non-voting common stock of the
Company equal to the quotient of (i) the aggregate original Series H Preferred
Stock issue price of the shares ($10,000/share) being divided by (ii) the
conversion price, which is currently $10.00 and is subject to adjustment from
time to time. Although the Company's non-voting common stock may be converted to
common stock at any time by a holder thereof, Amphion Ventures has agreed not to
convert any shares of non-voting common stock to common stock until the Company
has issued 500,000 shares of common stock to XL Vision, Inc. under the terms of
the Technology Development Agreement by and between the Company and XL Vision,
Inc. unless Amphion Ventures receives the prior written consent of the Company.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

   A.  EXHIBITS
<TABLE>

        <S>     <C>
        3.1     --Certificate of Incorporation of the Company. Incorporated
                  herein by reference to Exhibit 3.1 to the Company's
                  Registration Statement on Form S-1 (Registration 
                  No. 2-80946).

        3.2     --By-laws of AXCESS. Incorporated herein by reference to
                  Exhibit 3.2 to the Company's Registration Statement on 
                  Form S-1 (Registration No. 2-80946).

        3.3     --First Amendment to Certificate of Incorporation of AXCESS
                  dated June 6, 1986. Incorporated herein by reference to
                  Exhibit 3.3 to the Company's Annual Report on Form 10-KSB for
                  the year ended December 31, 1987.

        3.4     --Second Amendment to Certificate of Incorporation of AXCESS,
                  dated May 27, 1987. Incorporated herein by reference to
                  Exhibit 3.4 to the Company's Annual Report on Form 10-KSB for
                  the year ended December 31, 1987.

        3.5     --Third Amendment to Certificate of Incorporation of AXCESS,
                  dated November 11, 1994. Incorporated herein by reference to
                  Exhibit 4.4 to the Company's Registration Statement on 
                  Form S-3 (Registration No. 333-10665).
</TABLE>


                                     - 14 -

<PAGE>   17


<TABLE>

       <S>       <C>

        3.6     --Fourth Amendment to Certificate of Incorporation of AXCESS,
                  dated July 28, 1995. Incorporated herein by reference to
                  Exhibit 4.5 to the Company's Registration Statement on 
                  Form S-3 (Registration No. 333-10665).

        3.7     --Fifth Amendment to Certificate of Incorporation of AXCESS,
                  dated June 17, 1996. Incorporated herein by reference to
                  Exhibit 4.6 to the Company's Registration Statement on 
                  Form S-3 (Registration No. 333-10665).

        3.8     --Sixth Amendment to Certificate of Incorporation of AXCESS
                  dated March 31, 1998. Incorporated herein by reference to
                  Exhibit 99.1 to the Company's Report on Form 8-K dated 
                  April 13, 1998.

        3.9     --Seventh Amendment to Certificate of Incorporation of AXCESS
                  dated March 31, 1998. Incorporated herein by reference to
                  Exhibit 99.2 to the Company's Report on Form 8-K dated 
                  April 13, 1998.

        3.10    --Eighth Amendment to Certificate of Incorporation of AXCESS
                  dated April 9, 1998. Incorporated herein by reference to
                  Exhibit 99.3 to the Company's Report on Form 8-K dated 
                  April 13, 1998.

        4.1     --Certificate of Designation of the Company's Series A, B and
                  C Preferred Stock, dated December 27, 1995. Incorporated
                  herein by reference to Exhibit 4.7 to the Company's
                  Registration Statement on Form S-3 (Registration 
                  No. 333-10665).

        4.2     --Certificate of Designation of the Company's Series G
                  Preferred Stock. Incorporated herein by reference to Exhibit
                  4.5 to the Company's Annual Report on Form 10-KSB for the year
                  ended December 31, 1997.

        4.3     --Certificate of Designation of the Company's Series H
                  Preferred Stock. Incorporated herein by reference to Exhibit
                  4.3 to the Company's Quarterly Report on Form 10-QSB for the
                  three month period ended March 31, 1998.

        10.1    --License agreement, dated June 30, 1988, between the Company
                  and Patlex Corporation. Incorporated herein by reference to
                  Exhibit 10.17 to the Company's Annual Report on Form 10-KSB
                  for the year ended December 31, 1988.

        10.2    --1991 Incentive Stock Option Plan, dated August 14, 1991.
                  Incorporated herein by reference to Exhibit 10.10 to
                  Lasertechnics' Annual Report on Form 10-KSB for the year ended
                  December 31, 1991.

        10.3    --Purchase Agreement between Sandia Europe and Jean-Luc
                  Poutchnine, Alain Quilleau and Philippe Bonnevie, dated 
                  March 4, 1994. Incorporated herein by reference to 
                  Exhibit 10.15 to the Company's Annual Report on Form 10-KSB 
                  for the year ended December 31, 1994.

        10.4    --Letter confirming sale of shares of AXCESS Common Stock to
                  Singapore Precision Industries PTE LTD, dated May 12, 1994.
                  Incorporated herein by reference to Exhibit 10.16 to the
                  Company's Annual Report on Form 10-KSB for the year ended
                  December 31, 1994.

        10.5    --Advisory and investment banking services agreement between
                  AXCESS and Wolfensohn International, Inc., dated May 19, 1993.
                  Incorporated herein by reference
</TABLE>

                                     - 15 -

<PAGE>   18


<TABLE>

       <S>       <C>
                  to Exhibit 10.18 to the Company's Annual Report on Form 10-KSB
                  for the year ended December 31, 1994.

        10.6    --Purchase of Common Stock and Convertible Note Agreement
                  between the Company and J.P. Morgan Investment Corporation,
                  dated July 8, 1994. Incorporated herein by reference to
                  Exhibit 10.19 to the Company's Annual Report on Form 10-KSB
                  for the year ended December 31, 1994.

        10.7    --OEM License Agreement between Sandia and Xerox Corporation,
                  dated January 6, 1995. Incorporated herein by reference to
                  Exhibit 10.20 to the Company's Annual Report on Form 10-KSB
                  for the year ended December 31, 1994.

        10.8    --Demand Promissory Note issued to J.P. Morgan Investment
                  Corporation, dated December 19, 1994. Incorporated herein by
                  reference to Exhibit 10.21 to the Company's Annual Report on
                  Form 10-KSB for the year ended December 31, 1994.

        10.9    --Demand Promissory Note issued to J.P. Morgan Investment
                  Corporation, dated December 31, 1994. Incorporated herein by
                  reference to Exhibit 10.22 to the Company's Annual Report on
                  Form 10-KSB for the year ended December 31, 1994.

        10.10   --Amendment to the OEM License Agreement between Sandia and
                  Xerox Corporation, dated December 27, 1996. Incorporated by
                  reference to Exhibit 10.12 to the Company's Annual Report on
                  Form 10-KSB for the year ended December 31, 1996.

        10.11   --Demand Promissory Note issued to Wolfensohn Associates L.P.,
                  dated March 27, 1997. Incorporated by reference to Exhibit
                  10.13 to the Company's Quarterly Report on Form 10-QSB for the
                  period ended September 30, 1997.

        10.12   --Warrant to purchase shares of the Company's Common Stock
                  issued to Wolfensohn Associates L.P., dated March 27, 1997.
                  Incorporated by reference to Exhibit 10.14 to the Company's
                  Quarterly Report on Form 10-QSB for the period ended 
                  September 30, 1997.

        10.13   --Note Purchase Agreement dated June 25, 1997, by and among
                  AXCESS, J.P. Morgan Investment Corporation and Wolfensohn
                  Associates L.P. Incorporated by reference to Exhibit 10.15 to
                  the Company's Quarterly Report on Form 10-QSB for the period
                  ended September 30, 1997.

        10.14   --Intellectual Property Transfer Agreement dated January 8,
                  1998, by and between XL Vision, Inc. and Sandia Imaging
                  Systems Corporation. Incorporated herein by reference to
                  Exhibit 10.15 to the Company's Annual Report on Form 10-KSB
                  for the year ended December 31, 1997.

        10.15   --Amendment to Notes and Note Purchase Agreement dated
                  December 31, 1997, by and among the Company, Antiope Partners
                  L.L.C. and J.P. Morgan Investment Corporation. Incorporated
                  herein by reference to Exhibit 10.16 to the Company's Annual
                  Report on Form 10-KSB, as amended, for the year ended 
                  December 31, 1997.

        10.16   --Series G Preferred stock Purchase Agreement dated December
                  29, 1997, by and between the Company and Amphion Ventures L.P.
                  Incorporated herein by reference to Exhibit 10.17 to the
                  Company's Annual Report on Form 10-KSB, as amended, for the
                  year ended December 31, 1997.
</TABLE>


                                     - 16 -

<PAGE>   19


<TABLE>

       <S>       <C>
        10.17   --Pledge Agreement dated August 18, 1997, by and among the
                  Company, Antiope Partners L.L.C. and J.P. Morgan Investment
                  Corporation. Incorporated herein by reference to Exhibit 10.18
                  to the Company's Annual Report on Form 10-KSB, as amended, in
                  the year ended December 31, 1997.

        10.18   --Preferred Stock Exchange Agreement dated January 8, 1998, by
                  and among the Company, Antiope Partners L.L.C. and H.T.
                  Ardinger. Incorporated herein by reference to Exhibit 10.19 to
                  the Company's Annual Report on Form 10-KSB, as amended, in the
                  year ended December 31, 1997.

        10.19   --Form of Warrant to purchase shares of the Company's Common
                  Stock issued to Antiope Partners L.L.C. and Amphion Ventures
                  L.P. Incorporated herein by reference to Exhibit 10.20 to the
                  Company's Annual Report on Form 10-KSB, as amended, in the
                  year ended December 31, 1997.

        10.20   --Settlement Agreement dated as of April 21, 1998, by and
                  between the Company and Xerox Corporation. Incorporated herein
                  by reference to Exhibit 10.21 to the Company's Annual Report
                  on Form 10-KSB, as amended, in the year ended December 31,
                  1997.

        10.21   --Series H Preferred stock Purchase Agreement dated March 27,
                  1998, by and between the Company and Amphion Ventures L.P.
                  Incorporated herein by reference to Exhibit 10.21 to the
                  Company's Quarterly Report on Form 10-QSB for the three month
                  period ended March 31, 1998.

        10.22   --Form of Promissory Note executed by Amphion Ventures L.P.
                  payable to the Company. Incorporated herein by reference to
                  Exhibit 10.22 to the Company's Quarterly Report on Form 10-QSB
                  for the three month period ended March 31, 1998.

        10.23   --Promissory Note executed by the Company payable to Amphion
                  Ventures L.P. Incorporated herein by reference to Exhibit
                  10.23 to the Company's Quarterly Report on Form 10-QSB for the
                  three month period ended March 31, 1998.

        27      --Financial Data Schedule.*
</TABLE>

----------------
*Filed herewith.


     B.       REPORTS ON FORM 8-K

              None.


                                     - 17 -

<PAGE>   20



                                   SIGNATURES

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


                                   AXCESS, INC.


Date: August 13, 1998              By: /s/ Danny G. Hair
                                   --------------------------------------------
                                       Danny G. Hair, Executive Vice President, 
                                       Chief Financial Officer and Secretary 
                                   (Principal Accounting and Financial Officer)


                                     - 18 -

<PAGE>   21



                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

     EXHIBIT
      NUMBER            DESCRIPTION
      ------            -----------
       <S>       <C>
        3.1     --Certificate of Incorporation of the Company. Incorporated
                  herein by reference to Exhibit 3.1 to the Company's
                  Registration Statement on Form S-1 (Registration 
                  No. 2-80946).

        3.2     --By-laws of AXCESS. Incorporated herein by reference to
                  Exhibit 3.2 to the Company's Registration Statement on 
                  Form S-1 (Registration No. 2-80946).

        3.3     --First Amendment to Certificate of Incorporation of AXCESS
                  dated June 6, 1986. Incorporated herein by reference to
                  Exhibit 3.3 to the Company's Annual Report on Form 10-KSB for
                  the year ended December 31, 1987.

        3.4     --Second Amendment to Certificate of Incorporation of AXCESS,
                  dated May 27, 1987. Incorporated herein by reference to
                  Exhibit 3.4 to the Company's Annual Report on Form 10-KSB for
                  the year ended December 31, 1987.

        3.5     --Third Amendment to Certificate of Incorporation of AXCESS,
                  dated November 11, 1994. Incorporated herein by reference to
                  Exhibit 4.4 to the Company's Registration Statement on 
                  Form S-3 (Registration No. 333-10665).

        3.6     --Fourth Amendment to Certificate of Incorporation of AXCESS,
                  dated July 28, 1995. Incorporated herein by reference to
                  Exhibit 4.5 to the Company's Registration Statement on 
                  Form S-3 (Registration No. 333-10665).

        3.7     --Fifth Amendment to Certificate of Incorporation of AXCESS,
                  dated June 17, 1996. Incorporated herein by reference to
                  Exhibit 4.6 to the Company's Registration Statement on 
                  Form S-3 (Registration No. 333-10665).

        3.8     --Sixth Amendment to Certificate of Incorporation of AXCESS
                  dated March 31, 1998. Incorporated herein by reference to
                  Exhibit 99.1 to the Company's Report on Form 8-K dated 
                  April 13, 1998.

        3.9     --Seventh Amendment to Certificate of Incorporation of AXCESS
                  dated March 31, 1998. Incorporated herein by reference to
                  Exhibit 99.2 to the Company's Report on Form 8-K dated 
                  April 13, 1998.

        3.10    --Eighth Amendment to Certificate of Incorporation of AXCESS
                  dated April 9, 1998. Incorporated herein by reference to
                  Exhibit 99.3 to the Company's Report on Form 8-K dated 
                  April 13, 1998.

        4.1     --Certificate of Designation of the Company's Series A, B and
                  C Preferred Stock, dated December 27, 1995. Incorporated
                  herein by reference to Exhibit 4.7 to the Company's
                  Registration Statement on Form S-3 (Registration 
                  No. 333-10665).

        4.2     --Certificate of Designation of the Company's Series G
                  Preferred Stock. Incorporated herein by reference to Exhibit
                  4.5 to the Company's Annual Report on Form 10-KSB for the year
                  ended December 31, 1997.
</TABLE>

<PAGE>   22

<TABLE>

       <S>       <C>
        4.3     --Certificate of Designation of the Company's Series H
                  Preferred Stock. Incorporated herein by reference to Exhibit
                  4.3 to the Company's Quarterly Report on Form 10-QSB for the
                  three month period ended March 31, 1998.

        10.1    --License agreement, dated June 30, 1988, between the Company
                  and Patlex Corporation. Incorporated herein by reference to
                  Exhibit 10.17 to the Company's Annual Report on Form 10-KSB
                  for the year ended December 31, 1988.

        10.2    --1991 Incentive Stock Option Plan, dated August 14, 1991.
                  Incorporated herein by reference to Exhibit 10.10 to
                  Lasertechnics' Annual Report on Form 10-KSB for the year ended
                  December 31, 1991.

        10.3    --Purchase Agreement between Sandia Europe and Jean-Luc
                  Poutchnine, Alain Quilleau and Philippe Bonnevie, dated 
                  March 4, 1994. Incorporated herein by reference to 
                  Exhibit 10.15 to the Company's Annual Report on 
                  Form 10-KSB for the year ended December 31, 1994.

        10.4    --Letter confirming sale of shares of AXCESS Common Stock to
                  Singapore Precision Industries PTE LTD, dated May 12, 1994.
                  Incorporated herein by reference to Exhibit 10.16 to the
                  Company's Annual Report on Form 10-KSB for the year ended
                  December 31, 1994.

        10.5    --Advisory and investment banking services agreement between
                  AXCESS and Wolfensohn International, Inc., dated May 19, 1993.
                  Incorporated herein by reference to Exhibit 10.18 to the 
                  Company's Annual Report on Form 10-KSB for the year ended 
                  December 31, 1994.

        10.6    --Purchase of Common Stock and Convertible Note Agreement
                  between the Company and J.P. Morgan Investment Corporation,
                  dated July 8, 1994. Incorporated herein by reference to
                  Exhibit 10.19 to the Company's Annual Report on Form 10-KSB
                  for the year ended December 31, 1994.

        10.7    --OEM License Agreement between Sandia and Xerox Corporation,
                  dated January 6, 1995. Incorporated herein by reference to
                  Exhibit 10.20 to the Company's Annual Report on Form 10-KSB
                  for the year ended December 31, 1994.

        10.8    --Demand Promissory Note issued to J.P. Morgan Investment
                  Corporation, dated December 19, 1994. Incorporated herein by
                  reference to Exhibit 10.21 to the Company's Annual Report on
                  Form 10-KSB for the year ended December 31, 1994.

        10.9    --Demand Promissory Note issued to J.P. Morgan Investment
                  Corporation, dated December 31, 1994. Incorporated herein by
                  reference to Exhibit 10.22 to the Company's Annual Report on
                  Form 10-KSB for the year ended December 31, 1994.

        10.10   --Amendment to the OEM License Agreement between Sandia and
                  Xerox Corporation, dated December 27, 1996. Incorporated by
                  reference to Exhibit 10.12 to the Company's Annual Report on
                  Form 10-KSB for the year ended December 31, 1996.

        10.11   --Demand Promissory Note issued to Wolfensohn Associates L.P.,
                  dated March 27, 1997. Incorporated by reference to Exhibit
                  10.13 to the Company's Quarterly Report on Form 10-QSB for the
                  period ended September 30, 1997.
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        10.12   --Warrant to purchase shares of the Company's Common Stock
                  issued to Wolfensohn Associates L.P., dated March 27, 1997.
                  Incorporated by reference to Exhibit 10.14 to the Company's
                  Quarterly Report on Form 10-QSB for the period ended 
                  September 30, 1997.

        10.13   --Note Purchase Agreement dated June 25, 1997, by and among
                  AXCESS, J.P. Morgan Investment Corporation and Wolfensohn
                  Associates L.P. Incorporated by reference to Exhibit 10.15 to
                  the Company's Quarterly Report on Form 10-QSB for the period
                  ended September 30, 1997.

        10.14   --Intellectual Property Transfer Agreement dated January 8,
                  1998, by and between XL Vision, Inc. and Sandia Imaging
                  Systems Corporation. Incorporated herein by reference to
                  Exhibit 10.15 to the Company's Annual Report on Form 10-KSB
                  for the year ended December 31, 1997.

        10.15   --Amendment to Notes and Note Purchase Agreement dated
                  December 31, 1997, by and among the Company, Antiope Partners
                  L.L.C. and J.P. Morgan Investment Corporation. Incorporated
                  herein by reference to Exhibit 10.16 to the Company's Annual
                  Report on Form 10-KSB, as amended, for the year ended 
                  December 31, 1997.

        10.16   --Series G Preferred stock Purchase Agreement dated December
                  29, 1997, by and between the Company and Amphion Ventures L.P.
                  Incorporated herein by reference to Exhibit 10.17 to the
                  Company's Annual Report on Form 10-KSB, as amended, for the
                  year ended December 31, 1997.

        10.17   --Pledge Agreement dated August 18, 1997, by and among the
                  Company, Antiope Partners L.L.C. and J.P. Morgan Investment
                  Corporation. Incorporated herein by reference to Exhibit 10.18
                  to the Company's Annual Report on Form 10-KSB, as amended, in
                  the year ended December 31, 1997.

        10.18   --Preferred Stock Exchange Agreement dated January 8, 1998, by
                  and among the Company, Antiope Partners L.L.C. and H.T.
                  Ardinger. Incorporated herein by reference to Exhibit 10.19 to
                  the Company's Annual Report on Form 10-KSB, as amended, in the
                  year ended December 31, 1997.

        10.19   --Form of Warrant to purchase shares of the Company's Common
                  Stock issued to Antiope Partners L.L.C. and Amphion Ventures
                  L.P. Incorporated herein by reference to Exhibit 10.20 to the
                  Company's Annual Report on Form 10-KSB, as amended, in the
                  year ended December 31, 1997.

        10.20   --Settlement Agreement dated as of April 21, 1998, by and
                  between the Company and Xerox Corporation. Incorporated herein
                  by reference to Exhibit 10.21 to the Company's Annual Report
                  on Form 10-KSB, as amended, in the year ended December 31,
                  1997.

        10.21   --Series H Preferred stock Purchase Agreement dated March 27,
                  1998, by and between the Company and Amphion Ventures L.P.
                  Incorporated herein by reference to Exhibit 10.21 to the
                  Company's Quarterly Report on Form 10-QSB for the three month
                  period ended March 31, 1998.

        10.22   --Form of Promissory Note executed by Amphion Ventures L.P.
                  payable to the Company. Incorporated herein by reference to
                  Exhibit 10.22 to the Company's Quarterly Report on Form 10-QSB
                  for the three month period ended March 31, 1998.
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        10.23   --Promissory Note executed by the Company payable to Amphion
                  Ventures L.P. Incorporated herein by reference to Exhibit
                  10.23 to the Company's Quarterly Report on Form 10-QSB for the
                  three month period ended March 31, 1998.

        27      --Financial Data Schedule.*

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        *   Filed herewith
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