<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 SEPTEMBER 30, 1999.

                                        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)


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


3208 COMMANDER DRIVE, CARROLLTON, TEXAS                    75006
---------------------------------------                    -----
(Address of principal executive offices)                (Zip Code)


                                 (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 November 1, 1999: 3,184,440. Shares of
non-voting common stock outstanding on November 1, 1999: 112,492.

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


<PAGE>   2



                                   AXCESS INC.

                                      INDEX

<TABLE>
<CAPTION>

                                                                                                              Page
                                                                                                             Number
                                                                                                             ------

<S>                                                                                                         <C>
PART I.           FINANCIAL INFORMATION

         Item 1.  Condensed Financial Statements:

                  Condensed Balance Sheets at September 30, 1999
                  And December 31, 1998 (Unaudited)..............................................................1

                  Condensed Statements of Operations for the Three And Nine
                  Months ended September 30, 1999 and 1998 (Unaudited)...........................................3

                  Condensed Statements of Cash Flows for the Nine Months
                  ended September 30, 1999 and 1998 (Unaudited)..................................................4

                  Notes to Condensed Financial Statements (Unaudited)............................................5

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

PART II.  OTHER INFORMATION

         Item 2.  Changes in Securities.........................................................................16

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

SIGNATURES......................................................................................................21
</TABLE>

<PAGE>   3



PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                   AXCESS INC.
                            CONDENSED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                     September 30,     December 31,
                                                         1999               1998
                                                     -------------     -------------
                                  ASSETS

<S>                                                  <C>               <C>
Current assets:
  Cash and cash equivalents ....................     $      81,124     $   1,575,429
  Note receivable from stockholder .............                --         1,030,624
  Accounts receivable - trade ..................           223,558            30,987
  Inventory ....................................         1,007,346           256,216
  Prepaid expenses and other ...................           755,678           160,087
                                                     -------------     -------------
             Total current assets ..............         2,067,706         3,053,343

  Net assets of discontinued operations ........            57,716         3,186,253
  Property, plant and equipment, net ...........           620,531           574,499
  Long term note receivable - stockholder ......         3,902,375                --
  Purchased technologies, net ..................         6,243,524         1,714,449
  Deferred license fee and other assets ........                --           542,804
                                                     -------------     -------------
          Total assets .........................     $  12,891,852     $   9,071,348
                                                     =============     =============


                   LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Convertible notes payable to stockholders ....     $   1,053,508     $   1,966,900
  Notes payable ................................           590,700            90,882
  Dividends payable ............................           522,411           481,339
  Accounts payable .............................           662,378           466,940
  Other accrued liabilities ....................           823,013         1,985,002
                                                     -------------     -------------
           Total current liabilities ...........         3,652,010         4,991,063

Note payable - long term .......................                --           535,205
Notes payable to stockholders ..................         6,931,868         1,470,000
                                                     -------------     -------------
          Total liabilities ....................     $  10,583,878     $   6,996,268
                                                     -------------     -------------
</TABLE>


                                                                     (Continued)

      See accompanying notes to unaudited condensed financial statements.


                                        1

<PAGE>   4
                                   AXCESS INC.
                            CONDENSED BALANCE SHEETS
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                                            September 30,      December 31,
                                                                                1999                1998
                                                                            -------------      -------------
<S>                                                                         <C>                <C>
Stockholders' equity:
    Convertible preferred stock:
    7,000,000 shares authorized in 1999 and 1998

    Series A: $26.00 stated value; 57,692
    shares outstanding in 1999 and 1998 ...............................     $   1,500,000      $   1,500,000

    Series B: $28.40 stated value; 52,817
    shares outstanding in 1999 and 1998 ...............................         1,500,000          1,500,000

    Series C: $30.20 stated value; 35,427
    shares outstanding in 1999 and 1998 ...............................         1,069,880          1,069,880

    Series I: $10,000.00 stated value; 635
    shares outstanding in 1999 and 623 in 1998 ........................         6,350,000          6,230,000

    Series J: $10,000.00 stated value; 1,747
    shares outstanding in 1999 and 1,688 in 1998 ......................        17,475,000         16,880,000

    Series 1999: $10,000 stated value; 125 shares
    outstanding in 1999 and none in 1998 ..............................         1,250,000                 --

    Common stock, $.01 par value, 12,000,000 shares
    authorized; 3,179,368 shares issued and outstanding
    in 1999 and 2,479,368 in 1998 .....................................            31,794             28,794

    Non-voting convertible common stock, $.01 par value,
    112,500 shares authorized; 112,492 shares issued and
    outstanding in 1999 and 1998, convertible into common
    stock on a one share for one share basis ..........................             1,125              1,125

    Additional paid-in capital ........................................        60,344,858         58,515,848
    Accumulated deficit ...............................................       (87,214,683)       (83,650,567)
                                                                            -------------      -------------

    Total stockholders' equity ........................................         2,307,974          2,075,080
                                                                            -------------      -------------

    Total liabilities and stockholders' equity ........................     $  12,891,852      $   9,071,348
                                                                            =============      =============
</TABLE>


       See accompanying notes to unaudited condensed financial statements.

                                        2

<PAGE>   5



                                   AXCESS INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                             Three Months Ended                  Nine Months Ended
                                                               September 30,                        September 30,
                                                       ------------------------------      ------------------------------
                                                          1999               1998              1999             1998
                                                       ------------      ------------      ------------      ------------


<S>                                                    <C>               <C>               <C>               <C>
Sales ............................................     $    422,749      $         --      $    545,953      $         --
Cost of sales ....................................          213,751                --           279,501                --
                                                       ------------      ------------      ------------      ------------

     Gross profit ................................          208,998                --           266,452                --
                                                       ------------      ------------      ------------      ------------

Expenses:
     Research and development ....................          526,895           550,000         1,167,488         2,250,000

     General and administrative ..................          725,486           881,133         2,151,637         2,111,631

     Selling and marketing .......................          723,994                --         1,937,149                --

     Depreciation and amortization ...............          219,443           278,638           489,626         1,045,576
                                                       ------------      ------------      ------------      ------------
        Total operating expenses .................        2,195,818         1,709,771         5,745,900         5,407,207
                                                       ------------      ------------      ------------      ------------

        Loss from operations .....................       (1,986,820)       (1,709,771)       (5,479,448)       (5,407,207)
                                                       ------------      ------------      ------------      ------------

Other income (expense):
     Interest income .............................           81,621            25,775           149,571            74,614

     Interest expense ............................         (235,119)         (144,239)         (394,480)         (525,009)

     Other .......................................           (1,167)           12,188         2,039,688            29,635
                                                       ------------      ------------      ------------      ------------

                Other income (expense), net ......         (154,665)         (106,276)        1,794,779          (420,760)
                                                       ------------      ------------      ------------      ------------

Loss from continuing operations ..................       (2,141,485)       (1,816,047)       (3,684,669)       (5,827,967)

Discontinued operations:
Loss from operations .............................               --        (1,899,663)               --        (3,893,520)
Gain (loss) on disposal ..........................               --          (750,000)        1,856,625          (750,000)
                                                       ------------      ------------      ------------      ------------

Gain (loss) from discontinued operations .........               --        (2,649,663)        1,856,625        (4,643,520)
                                                       ------------      ------------      ------------      ------------
            Net loss .............................       (2,141,485)       (4,465,710)       (1,828,044)      (10,471,487)
Preferred stock dividend requirement .............          595,578           413,715         1,736,072         1,037,273
                                                       ------------      ------------      ------------      ------------

                Net loss attributable to
                  common stock ...................     $ (2,737,063)     $ (4,879,425)     $ (3,564,116)     $(11,508,760)
                                                       ============      ============      ============      ============
Basic and diluted net loss per share
                 Continuing operations ...........     $      (0.83)     $      (0.85)     $      (1.67)     $      (2.67)
                 Discontinued operation ..........     $         --      $      (1.00)     $       0.57      $      (1.80)
                  Net loss .......................     $      (0.83)     $      (1.85)     $      (1.10)     $      (4.47)
Weighted average shares of common stock
     outstanding .................................        3,291,860         2,642,067         3,244,189         2,576,850
                                                       ============      ============      ============      ============
</TABLE>


      See accompanying notes to unaudited condensed financial statements.

                                        3

<PAGE>   6
                                   AXCESS INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                      Nine Months Ended
                                                                                         September 30,
                                                                                --------------------------------
                                                                                    1999               1998
                                                                                -------------      -------------
<S>                                                                             <C>                <C>
Cash flows from operating activities:
    Loss from continuing operations .......................................     $  (3,684,669)     $  (5,827,967)
    Adjustments to reconcile net loss to net cash used by
            operating activities:
          Depreciation and amortization ...................................           489,625          1,045,576
          Amortization of financing discount and issuance
            costs .........................................................            43,868            100,073
          Gain on sale of assets ..........................................        (2,033,024)                --
          Non-cash compensation ...........................................                --             50,000
          (Increase) decrease in:
              Accounts receivable .........................................           (15,956)                --
              Inventory ...................................................          (298,151)                --
              Prepaid expenses and other ..................................          (161,612)           (21,644)
              Other assets ................................................            10,061             11,263
           Increase (decrease) in:
              Accounts payable ............................................               206         (1,528,574)
              Accrued liabilities .........................................        (1,116,096)           365,158
                                                                                -------------      -------------
                      Net cash used in operating activities ...............        (6,765,748)        (5,806,115)
                                                                                -------------      -------------

Cash flows from investing activities:
    RFID technology purchase ..............................................                --         (1,089,249)
    Capital expenditures ..................................................           (93,743)          (224,164)
    Proceeds from sale of assets ..........................................           470,116                 --
                                                                                -------------      -------------
                      Net cash provided (used) by investing activities ....           376,373         (1,313,413)
                                                                                -------------      -------------

Cash flows from financing activities:
    Borrowings under financing agreements .................................         3,627,282          1,470,000
    Principal payments on financing agreements ............................          (418,546)        (2,605,527)
    Principal payments on notes receivable ................................           623,249                 --
    Net proceeds from issuance of preferred and common stock ..............                --          9,253,012
                                                                                -------------      -------------

                      Net cash provided by financing activities ...........         3,831,985          8,117,485
                                                                                -------------      -------------

                      Net cash provided (used) by discontinued
                           operations .....................................         1,063,085         (2,100,298)
                                                                                -------------      -------------

                      Net decrease in cash and cash equivalents ...........        (1,494,305)        (1,102,341)

Cash and cash equivalents, beginning of period ............................         1,575,429          1,102,341
                                                                                -------------      -------------
Cash and cash equivalents, end of period ..................................     $      81,124      $          --
                                                                                =============      =============

Supplemental information:
    Cash paid during the period for interest ..............................     $      27,459      $     119,309
                                                                                =============      =============
</TABLE>

    See accompanying notes to unaudited condensed financial statements.


                                        4

<PAGE>   7


                                   AXCESS INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


(1)      CONDENSED FINANCIAL STATEMENTS

         The accompanying unaudited condensed financial statements 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 financial statements and notes
         thereto included in the company's Form 10-KSB for the year ended
         December 31, 1998. Certain reclassifications have been made to the
         prior period amounts in order to present the 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
         September 30, 1999, results of operations for the three and nine month
         periods ended September 30, 1999 and 1998, and cash flows for the nine
         months ended September 30, 1999 and 1998 have been made. The results of
         operations for any given interim period are not necessarily indicative
         of the results for the entire year.

         The company has reclassified its September 30, 1998, condensed
         financial statements to present the imaging business and Lasertechnics
         Marking Corporation ("LMC") as discontinued operations ( Note 2).

(2)      DISCONTINUED OPERATION

         On October 21, 1998, the company's Board of Directors approved a plan
         to exit the imaging business as part of the strategy to redeploy and
         refocus the company's resources on its core RFID asset, vehicle and
         personnel tracking business. The sale of the assets of the imaging
         business was completed on December 15, 1998. The company reported a
         sales price of $500,000 and recorded a loss of $1,095,920 on the
         disposal in 1998. The remaining $57,716 of net assets of the
         discontinued imaging business are valued at net realizable value as of
         September 30, 1999. For the nine months ended September 30, 1999 and
         1998, the company recorded the following operating results of the
         imaging business. (There is no related income tax benefit or expense):

<TABLE>
<CAPTION>

                                                       Nine Months                       Nine Months
                                                         Ended                             Ended
                                                   September 30, 1999               September 30, 1998
                                                   ------------------               ------------------
<S>                                                <C>                              <C>
Sales                                              $               --               $        1,911,018
Costs and expenses                                                 --                        3,443,887
                                                   ------------------               ------------------
Loss from discontinued operation                   $               --               $       (1,532,869)
                                                   ==================               ==================

Loss per diluted common share                      $               --               $            (0.61)
</TABLE>


         On April 30, 1999, the company completed the sale of its LMC subsidiary
         to affiliates of Amphion Capital Management ("Amphion"). The company's
         rights and interests in DataGlyph (TM) and the technology under
         development with XL Vision, Inc. were also included in the sale. The
         company received $0.5 million in cash, $2.0 million in debt
         cancellation, a $4.0 million note receivable due March 2002 (or 2004
         under certain conditions), a $0.5 million demand note receivable and a
         warrant to purchase equity in the Amphion-controlled enterprise to
         which Amphion transferred these

                                        5

<PAGE>   8
                                   AXCESS INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

         businesses and assets with an exercise price of $2.50 per share,
         representing approximately 8% of that enterprise. If LMC is
         subsequently sold prior to April 2001 by the Amphion-controlled
         enterprise, the company has the option to exchange its warrant for
         twenty percent of the excess profits (as defined in the acquisition
         agreements) from any such sale. The company realized a gain of
         $3,900,734 from the disposition of LMC and the technology assets in the
         quarter ended June 30, 1999. Of the gain, $1,856,625 resulted from the
         sale of LMC and was, therefore, reported as a gain from discontinued
         operations. The remainder of the total gain, $2,044,109, was
         attributable to the sale of the technology assets and was included in
         the results of continuing operations. At September 30, 1999, there was
         no balance remaining in net assets of discontinued operations
         pertaining to LMC.

         For the nine months ended September 30, 1999 and 1998, the company
         recorded the following results of LMC, which have been reclassified to
         "loss from discontinued operations" for all periods presented. (There
         is no related income tax benefit or expense).

<TABLE>
<CAPTION>

                                                            Nine Months                      Nine Months
                                                               Ended                            Ended
                                                         September 30, 1999                September 30, 1998
                                                         ------------------                ------------------
<S>                                                      <C>                               <C>
Sales                                                    $               --                $        3,790,467
Costs and expenses                                                       --                         4,251,455
                                                         ------------------                ------------------
Loss from operations                                                                                 (460,988)
Gain on disposal                                                  1,856,625                                --
                                                         ------------------                ------------------
Gain (loss) from discontinued operation                  $        1,856,625                $         (460,988)

Gain (loss) per diluted common share                     $             0.57                $            (0.18)
</TABLE>


(3)      ACQUISITION OF PRISM VIDEO ASSETS

         On July 28, 1999, the company acquired substantially all of the assets,
         including the network video technology, of Prism Video, Inc. ("Prism"),
         a privately-held corporation unaffiliated with the company. Prism is
         engaged in the design, manufacture and marketing of video security
         technology and video storage products.




                                        6

<PAGE>   9


                                   AXCESS INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

<TABLE>

<S>                                                                                      <C>
         The purchase price, which is subject to adjustment in accordance with
         the terms of the purchase agreement, consisted of:

         Non-interest bearing note payable, due December 31, 2002
         discounted at 10%.........................................................      $  3,100,725

         125 shares of Series 1999 preferred stock, $10,000 per share stated
         value, convertible into 500,000 shares of common stock at a
         conversion price of $2.50 per share.......................................         1,250,000

         Warrant to purchase 500,000 shares of common stock at $2.50
         per share.................................................................         1,035,000

         Assumption of specific liabilities........................................           227,005
                                                                                         ------------

         Total purchase price......................................................      $  5,612,730
                                                                                         ============
</TABLE>

         The note payable has a face amount of $4,000,000 and is secured by the
         company's $3,902,375 note receivable from Amphion Ventures, L.P. In
         addition, the shares of common stock which Prism may acquire upon
         conversion of preferred stock or by exercise of the warrant are subject
         to a three-year lockup from the date of the closing, which may be
         reduced to two years upon the occurrence of certain events. The warrant
         is exercisable on or before July 28, 2004. Prism has agreed not to
         convert the preferred stock or exercise the warrant until the company
         obtains stockholder approval to issue the common stock. The company
         intends to submit this proposal at its 2000 annual meeting of
         stockholders.

         The purchase price has been allocated to the assets and liabilities
         acquired based on preliminary estimates of fair value as follows:

<TABLE>


<S>                                                                                           <C>
                           Accounts receivable......................................          $    176,615

                           Inventory................................................               452,979

                           Purchased technology.....................................             4,869,005

                           Other assets, net........................................               114,131
                                                                                              ------------

                           Total purchase price.....................................          $  5,612,730
                                                                                              ============
</TABLE>

         The purchased technology consists of proprietary digital video
         compression technology used in security video and CCTV products as well
         as the related U.S. and international patent rights. The purchase
         technology is being amortized over an average life of 5 years.

(4)      NOTE PAYABLE

         In September 1998, the company acquired the RFID based intellectual
         property assets of ASGI, Inc. and Nauta, Inc. In connection with this
         transaction, the company executed a one-year promissory

                                        7

<PAGE>   10
                                   AXCESS INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

         note in the amount of $685,000 which bears interest at the prime rate.
         As of September 30, 1999, the company was past due on its payment
         obligations under the note, which constitutes a default under the terms
         of the note. The balance of the note payable was $73,508 as of
         September 30, 1999. The noteholders have the right to accelerate
         payments on the note, but have neither done so nor indicated any intent
         to do so. However, there can be no assurance that the noteholders will
         not assert their rights under the note agreement.

         On September 30, 1999, the company signed a 10% convertible note
         maturing September 30, 2002, under which the company could borrow up to
         $6,000,000 from Amphion. The note holder may convert all or any portion
         of the indebtedness into Series 1999 Non-Voting Preferred Stock of the
         company (Note 6). Initial note borrowings totaling $3,787,275 were used
         to refinance a series of demand notes, including accrued interest owed
         to Amphion. In consideration for the financing arrangement, the company
         issued at closing a warrant to acquire 180,362 shares of the company's
         Non-Voting Common Stock at a rate of $2.10 per share. The company may
         be required to issue additional warrants covering up to an aggregate of
         533,923 shares of Non-Voting Common Stock based on the outstanding
         balance of the convertible notes on each of the first two anniversary
         dates. The outstanding warrant was valued at $422,011 and recorded as
         prepaid interest which will be amortized over 12 months.

(5)      CONTINGENCIES

         On February 28, 1996, an investor group filed suit against the company.
         This lawsuit arose out of the company's refusal to recognize the
         investor group's attempt to exercise an option to purchase 70,000
         shares of common stock at $9.00 per share. The option had been granted
         to the company's former President and CEO who attempted to transfer his
         option to an investor group on the last day of the option term in
         September 1995. On that same day, the investor group attempted to
         exercise the option. The company refused to recognize the attempted
         transfer of the option to the investor group on the primary grounds
         that the option was granted personally to the company's former
         President and CEO and the company believed that it was not transferable
         to third parties. The lawsuit sought monetary damages that the investor
         group alleged to be not less than $2,800,000. In March 1999, the
         parties agreed to the principal terms under which the lawsuit would be
         settled and dismissed, with prejudice. Under a settlement reached in
         the third quarter of 1999, the company paid out $925,000 to the
         investor group with an additional $700,000 payable in 2000. The company
         had fully accrued the settlement costs as of June 30, 1999.

         The company is involved in other various claims and legal actions
         arising in the ordinary course of business. Estimated legal and
         litigation costs are reflected in the accompanying financial
         statements. In the opinion of management of the company, the ultimate
         disposition of these matters will not have a material effect on the
         accompanying condensed financial statements.

(6)      PREFERRED STOCK

         As part of the Prism purchase, the company issued 125 shares of Series
         1999 Voting Preferred Stock. Each share has a $10,000 stated value and
         is convertible to Common Stock at $2.50 per common share. Dividends
         accrue at 8% per year and can be paid with additional shares at the
         company's option.

                                        8

<PAGE>   11


                                   AXCESS INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

         The company's Series 1999 Non-Voting Preferred Stock has a $10,000 per
         share stated value and is convertible to Non-Voting Common Stock at
         $2.10 per share. Dividends accrue at 8% per year and can be paid, at
         the company's option, with additional shares of Series 1999 Non-Voting
         Preferred Stock.

(7)      RECENT ACCOUNTING PRONOUNCEMENT

         In June 1998, "Statement of Financial Accounting Standards No. 133,
         Accounting for Derivative Instruments and Hedging Activities" ("SFAS
         133") was issued. SFAS 133 establishes accounting and reporting
         standards for derivative instruments, including certain derivative
         instruments embedded in other contracts (collectively referred to as
         "derivatives") and for hedging activities. It requires that all
         derivatives be recognized as either assets or liabilities at fair
         value. The accounting for gains and losses from changes in the fair
         value of a derivative depends on the intended use of the derivative and
         its resulting classification as one of three designated types of hedges
         or as a non-hedging instrument. SFAS 133 is effective for all fiscal
         quarters of fiscal years beginning after June 15, 2000. The adoption of
         this statement is not expected to have a material impact on the
         company's financial statements and related disclosures.



                                        9

<PAGE>   12


                                   AXCESS INC.

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

         In September 1998, the company acquired its active Radio Frequency
Identification (RFID) technology. The company determined this technology to be
its primary and core strategic focus, based on market demand, market size,
product differentiation, competitive environment and other factors.

         On October 21, 1998, the company's Board of Directors approved a plan
to exit the imaging business formerly operated by its Sandia subsidiary as part
of the company's strategy to redeploy and refocus the company's resources on its
core RFID asset, vehicle and personnel tracking business. The sale of the
imaging business was completed on December 15, 1998. The company reported a
sales price of $500,000 and recorded a loss of $1,095,920 on the disposal in
1998.

         In March 1999, the company entered into a definitive agreement to sell
its Lasertechnics Marking Corporation ("LMC") subsidiary to affiliates of
Amphion Capital Management, a major stockholder of the company. The company's
rights and interests in DataGlyph(TM) and the technology under development with
XL Vision, Inc. were also included in the sale. On April 30, 1999, the company
completed the sale and received $0.5 million in cash, $2.0 million in debt
cancellation, a $4.0 million note receivable due March 2002 (or 2004 under
certain conditions), a $0.5 million demand note receivable and a warrant to
purchase equity in the Amphion-controlled enterprise to which Amphion
transferred these businesses and assets with an exercise price of $2.50 per
share, representing approximately 8% of that enterprise. If LMC is sold by the
Amphion-controlled enterprise prior to April 2001, the company has the option to
exchange its warrant for twenty percent of the excess profits (as defined in the
acquisition agreement) from any such sale. The gain from the disposition of LMC
and the technology assets totaled approximately $3.9 million and was recorded in
the quarter ended June 30, 1999.

         On July 28, 1999, the company completed its acquisition of
substantially all of the assets of Prism Video, inc. The purchase price for the
assets included a note payable to Prism in the amount of $4,000,000, 125 shares
of a new series of 8% convertible preferred stock and a warrant to acquire
500,000 shares of the company's common stock. The company will satisfy its
obligations under the purchase note through an assignment to Prism of the
principal payments due the company under its $3,902,375 note receivable from
Amphion Ventures L.P., which was issued to the company as partial consideration
for the sale of its LMC subsidiary and certain unrelated technology assets. The
preferred stock has a stated value of $10,000 per share and is convertible into
500,000 shares of common stock at a conversion price of $2.50 per share. The
exercise price of the warrant is $2.50. Under the terms of the purchase
agreement, the common stock to be acquired by Prism upon conversion of the
preferred stock or exercise of the warrant is subject to a three-year lockup
from the date of closing, which may be reduced to two years upon the occurrent
of certain events. Further, Prism has agreed not to convert the preferred stock
or exercise the warrant until the company obtains stockholder approval to issue
the common stock issuable upon either the conversion or exercise thereof, as the
case may be.

         The company's September 30, 1998 financial statements have been
reclassified to account for the imaging business and LMC as discontinued
operations.


                                       10

<PAGE>   13


                                   AXCESS INC.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1998

         Sales and Gross Profit. Sales applicable to the company's discontinued
operations are not included in the company's sales for any period presented in
the company's results of operations.

         Although the RFID technology acquired in September 1998 had been in
development and use for some time, significant modifications and enhancements
were necessary for its successful commercialization, manufacture and
distribution in volume. Consequently, the company reported no sales or gross
profit in the three months ended September 30, 1998. The July 28, 1999
acquisition of Prims Video's assets increased the company's offering of products
available for sale and provided the company with existing sales channels in the
security industry. Orders accepted during the period were realized as sales when
the systems were manufactured and shipped to the customer.

         Sales for the three months ended September 30, 1999 were $422,749, on
which a gross profit of $208,998 was realized.

         Operating Expenses. Operating expenses were $2,195,818 for the three
months ended September 30, 1999 and $1,709,771 for the three months ended
September 30, 1998. The increase was due to selling and marketing expenses for
the company's digital video and RFID technology. In September 1999, the company
reduced employee headcount by approximately twenty percent to eliminate
overlapping duties resulting from the Prism acquisition.

         Corporate general and administrative expenses were $725,486 for the
three months ended September 30, 1999 and $881,133 for the three months ended
September 30, 1998. With the disposition of the company's imaging and marking
businesses, the general and administrative costs necessary to manage a single
business with only domestic locations has been reduced.

         Research and development expenses for the three months ended September
30, 1999 of $526,895 were incurred in connection with the development of digital
video and RFID products. For the three months ended September 30, 1998, research
and development expenses were $550,000 and were incurred in connection with new
product development costs associated with the Technology Development Agreement
with XL Vision, Inc.

         Selling and marketing expenses for the three months ended September 30,
1999, were $723,994. For the three months ended September 30, 1998, there were
no selling and marketing expenses related to continuing operations.

         Other expenses, net was $154,665 for the three months ended September
30, 1999, compared to $106,276 for the three months ended September 30, 1998.
Interest income was $55,846 higher during the three months ended September 30,
1999, compared to the three months ended September 30, 1998, as a result of the
increased balance in notes receivable from a stockholder of the company. The
increase in notes receivable from stockholder occurred as a result of the April
30, 1999, sale of the company's LMC subsidiary and the technology assets under
development. Interest expense was $90,880 higher in the three months ended
September 30, 1999 compared to the three months ended September 30, 1998,
reflecting an increase in the outstanding balance of notes payable in 1999.


                                       11

<PAGE>   14


                                   AXCESS INC.

         Loss from Continuing Operations was $2,141,485 for the three months
ended September 30, 1999, compared to a loss of $1,816,047 for the same period
in 1998.

         Loss from Discontinued Operations was $2,649,663 for the three months
ended September 30, 1998. The loss in 1998 consisted of the loss from the
operations of LMC and the imaging business. See Note 2 in Notes to Condensed
Financial Statements.

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1998

         Sales and Gross Profit. Sales applicable to the company's discontinued
operations are not included in the company's sales for any period presented in
the company's results of operations.

         Although the RFID technology acquired in September 1998 was under
development and use for some time, significant modifications and enhancements
were necessary for its successful commercialization, manufacture and
distribution in volume. Consequently, the company reported no sales or gross
profit in the nine months ended September 30, 1998. The July 28, 1999,
acquisition of assets from Prism Video increased the company's offerings of
products available for sale and provided the company with existing sales
channels in the security industry. Orders accepted during the period were
realized as sales when the systems were manufactured and shipped to the
customer.

         Sales for the nine months ended September 30, 1999 were $545,953, on
which a gross profit of $266,452 was realized.

         Operating Expenses. Operating expenses were $5,745,900 for the nine
months ended September 30, 1999, and $5,407,207 for the nine months ended
September 30, 1998. In September 1999, the company reduced employee headcount by
approximately twenty percent to eliminate overlapping duties resulting from the
Prism Video acquisition.

         Corporate general and administrative expenses were $2,151,637 for the
nine months ended September 30, 1999, and $2,111,631 for the nine months ended
September 30, 1998.

         Research and development expenses for the nine months ended September
30, 1999, of $1,167,488 were incurred in connection of the development of
digital video and RFID products. For the nine months ended September 30, 1998,
research and development expenses were $2,250,000 and were incurred in
connection with new product development costs associated with the Technology
Development Agreement with XL Vision, Inc.

         Selling and marketing expenses for the nine months ended September 30,
1999, were $1,937,149. No selling and marketing expenses were incurred during
the nine months ended September 30, 1998, because the company's continuing
operations were not initiated until September 1998.

         Other income (expense), net was $1,794,779 and $(420,760) for the nine
months ended September 30, 1999 and 1998. The gain of $2,044,109 on the sale of
the company's rights and interests in DataGlyph(TM) and the technology under
development with XL Vision, Inc. was recorded during the nine months ended
September 30, 1999. Interest income was $74,957 higher during the nine months
ended September 30, 1999, compared to the nine months ended September 30, 1998,
as a result of the increased balance in notes

                                       12

<PAGE>   15


                                   AXCESS INC.

receivable from a stockholder of the company. Interest expense was $130,529
lower in the nine months ended September 30, 1999 compared to the nine months
ended September 30, 1998, reflecting the reduction in the outstanding balance of
notes payable in 1999. The increase in notes receivable from stockholder and
reduction in notes payable during 1999 occurred as a result of the April 30,
1999 sale of the company's LMC subsidiary and the technology assets under
development.

         Loss from Continuing Operations was $3,684,669 for the nine months
ended September 30, 1999, compared to a loss of $5,827,967 for the same period
in 1998. The $2,039,688 gain from the sale of the technology assets, as well as
the reduced operating expenses were the primary reasons for the reduced loss
reported for the nine months ended September 30, 1999, compared to the loss
reported for the nine months ended September 30, 1998.

         Gain (Loss) from Discontinued Operations was $1,856,625 for the nine
months ended September 30, 1999, and $(4,643,520) for the nine months ended
September 30, 1998. The gain in 1999 reflects the disposal of LMC, while the
loss in 1998 consists of the loss from the operations of LMC and the imaging
business. See Note 2 in Notes to Condensed Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

         Since inception, the company has utilized the proceeds from a number of
public and private sales of its equity securities, the exercise of options and
warrants and, more recently, convertible debt and short-term bridge loans from
stockholders to meet its working capital needs.

         The company's ongoing business continues to generate operating losses
in 1999, as the company is continuing its development and enhancement activities
related to the RFID technology and had not yet shipped a significant volume of
RFID systems. The company's future working capital requirements will depend upon
many factors, including:

         o        The ability of the company to efficiently and effectively
                  integrate the video technology acquired from Prism with the
                  company's existing RFID technology to create and market new
                  products;

         o        The extent and timing of the company's existing video and RFID
                  product sales;

         o        The company's operating results; and

         o        The status of competitive products.

         The company anticipates that its existing working capital resources,
together with those acquired from Prism, will be inadequate to satisfy its
funding requirements in 1999. The company is continuing discussions with a
number of existing and potential corporate, strategic and institutional
investors. The company's actual funding needs will depend on numerous factors,
including actual expenditures and revenues generated from its operations
compared to its business plan. The company's actual funding needs will also
depend on the successful development and commercialization of the existing RFID
systems and the ability of the company to utilize the technology acquired from
Prism to successfully enhance and extend its product line, and other
unanticipated expenditures, none of which can be predicted with certainty. There
can be no assurance that the company will acquire the additional funding it
needs to fully pursue its business objectives, or that the company will be able
to successfully capitalize on the video technology acquired from Prism. If

                                       13

<PAGE>   16


                                   AXCESS INC.

the company's losses continue, the company may have to obtain sufficient funds
to meet its cash requirements through strategic or other financial transactions
with compatible entities having the resources to support its programs, the sale
of securities or other financing arrangements, or it will be required to curtail
its programs or seek a merger partner. Any additional funding may be on terms
that are unfavorable to the company or disadvantageous to existing stockholders.
In addition, no assurance may be given that the company will be successful in
raising additional funds or entering into business alliances.

YEAR 2000 COMPLIANCE

         The company's management recognizes the need to ensure that its
operations and relationships with vendors, customers and other third parties
will not be adversely impacted by the Year 2000 issue. The Year 2000 problem is
a result of computer programs being written using two digits rather than four to
define the applicable year. Based on its assessment, the company determined a
portion of its software and certain hardware will require modification or
replacement so that those systems will properly utilize dates beyond December
31, 1999. The company's assessment indicated that its significant information
technology systems would not be affected.

         The company has also established a program to review its product line
of RFID systems and identify date-sensitive inventory and the level of Year 2000
compliance of its video and RFID systems. This program is to ensure that
customers receive systems that are Year 2000 compliant, or at a minimum, are
made aware of systems that are not compliant. The company also depends on the
systems of its suppliers, manufacturers and customers. Consequently, the company
is in the process of receiving adequate assurances from its suppliers,
manufacturers and customers that those systems and the components on which the
company relies are or will be Year 2000 compliant before the end of 1999.

         To the extent possible, the company will develop and implement
contingency plans designed to allow continued operations in the event of failure
of the company's or third party systems to be Year 2000 compliant. These
contingency plans have substantially been completed, and are expected to be
completed and implemented by the end of 1999.

         Management of the company believes it has an effective program in place
to resolve the Year 2000 issue in a timely manner. The company does not believe
the costs related to the Year 2000 program will be material to its financial
position or results of operation. Since the video and RFID based software and
hardware were recently developed and were developed with Year 2000 compliance
awareness, Year 2000 compliance is less significant to the company's business
than is the case for other businesses.

         Management expects to complete its program without incurring any
significant incremental expenditures utilizing internal resources. However, the
company has not yet completed all necessary phases of the Year 2000 program.
Further, the failure of the company or third parties upon which the company
relies to identify Year 2000 issues and successfully and timely resolve them
could then have a material adverse impact on the operations of the company.

SHARES ELIGIBLE FOR FUTURE SALE; CONVERTIBLE SECURITIES AND WARRANTS

         Future sales of the company's 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 the
common stock. At September 30, 1999, an aggregate of approximately 1,700,000
shares of common stock were outstanding and freely tradable without restriction
under the Securities Act of 1933, as

                                       14

<PAGE>   17


                                   AXCESS INC.

amended. In addition, up to 717,000 shares were eligible for resale in
accordance with the manner of sale and volume limitations of Rule 144
promulgated under the Securities Act.

         Approximately 2,300,000 shares of common stock have been reserved for
issuance upon the exercise of outstanding convertible securities and warrants.
As of September 30, 1999, there were 57,692, 52,817, 35,427, 635, 1,727 and 125
shares of Series A, B, C, I, J and Series 1999 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. The conversion price for the Series I and Series J shares is $4.00
per share. The conversion price for the Series 1999 shares is $2.10 per share.

         There are also currently 1,264,793 warrants outstanding to acquire the
same number of shares of common stock, as well as $535,000 of indebtedness,
convertible into common stock at $5.00 per share and $3,787,275 of indebtedness,
convertible into Series 1999 Non-Voting Preferred Stock at $2.10 per share.

         In addition, approximately 1,050,000 shares of common stock have been
reserved for issuance to key employees, officers, directors and consultants
pursuant to the company's benefit plans. As of September 30, 1999, there were
1,026,592 options outstanding.

OTHER

         Inflation. Inflation has not had and is not expected to have a material
impact on the operations and financial condition of the company.

         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 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; the quality of the company's plans and
strategies; and the ability of the company to execute such plans and strategies.

         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.


                                       15

<PAGE>   18


                                   AXCESS INC.

                           PART II. OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES.

         During the third quarter of 1999, the company issued unregistered
securities in connection with the transactions described below. The issuances of
the convertible note, preferred 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.

         The holders of the company's Series A, B, and C Preferred Stock are
entitled to receive quarterly dividends on each such share held by the annual
rate of 10% of the original issue price of each such share payable in arrears,
when, as and if declared by the company's board of directors, in cash or
additional shares of preferred stock. On September 30, 1999, the company issued
20.5 shares of Series J Preferred Stock to the holders thereof as payment in
full for the $205,000 of accrued, but unpaid dividends on the Series A, B and C
Preferred Stock as of such date. The holders of the company's Series A, B and C
Preferred Stock elected to receive shares of the company's Series J Preferred
Stock in lieu of the cash dividend.

         In connection with the company's acquisition of substantially all of
the assets of Prism Video, Inc., the company issued 125 shares of its Series
1999 Convertible Preferred Stock to Prism Video, Inc., and a warrant to acquire
500,000 shares of the company's restricted common stock.

         In connection with obtaining a commitment from Amphion to provide
additional financing to the company, the company issued a note convertible into
shares of the company's Series 1999 Non-Voting Preferred Stock and a warrant to
acquire 180,362 shares of the company's Non-Voting Common Stock.



                                       16

<PAGE>   19


                                   AXCESS INC.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

         A.   EXHIBITS

              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 the company. 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 the
                     company dated June 9, 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 the
                     company 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 the
                     company, 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 the
                     company, 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 the
                     company, dated June 25, 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 the
                     company 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 the
                     company 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 the
                     company 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).




                                       17

<PAGE>   20


                                   AXCESS INC.

              4.2    --Certificate of Designation of the company's Series I
                     Preferred Stock. Incorporated herein by reference to
                     Exhibit 4.2 to the company's Annual Report on Form 10-KSB
                     for the year ended December 31, 1998.

              4.3    --Certificate of Designation of the company's Series J
                     Preferred Stock. Incorporated herein by reference to
                     Exhibit 4.3 to the company's Annual Report on Form 10-KSB
                     for the year ended December 31, 1998.

              4.4    --Certificate of Designation of the company's Series 1999
                     Preferred Stock dated July 28, 1999. Incorporated herein by
                     referenced to Exhibit 4.4 to the company's Report on Form
                     10-QSB for the period ended June 30, 1999.

              4.5    --Certificate of Designation of the company's Series 1999
                     Non-Voting Preferred Stock.*

              10.1   --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.

              10.2   --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.

              10.3   --Note Purchase Agreement dated June 25, 1997, by and
                     among the company, 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.

              10.4   --Amendment to Notes and Note Purchase Agreement dated
                     December 31, 1998, 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, 1998.

              10.5   --Preferred Stock Purchase Agreement dated October 21,
                     1998, by and between the company and Amphion Ventures L.P.
                     Incorporated herein by reference to Exhibit 10.8 to the
                     company's Annual Report on Form 10-KSB for the year ended
                     December 31, 1998.

              10.6   --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 for the
                     year ended December 31, 1998.

              10.7   --Note Payable Conversion Agreement dated December 31,
                     1998, by and between the company and Amphion Ventures L.P.
                     Incorporated herein by reference to Exhibit 10.12 to the
                     company's Annual Report on Form 10-KSB for the year ended
                     December 31, 1998.


                                       18

<PAGE>   21


                                  AXCESS INC.

              10.8   --Note Payable Conversion Agreement dated December 31,
                     1998, by and between the company and Antiope Partners
                     L.L.C. Incorporated herein by reference to Exhibit 10.13 to
                     the company's Annual Report on Form 10-KSB for the year
                     ended December 31, 1998.

              10.9   --Note Payable Conversion Agreement dated December 31,
                     1998, by and between the company and J.P. Morgan Investment
                     Corporation. Incorporated herein by reference to Exhibit
                     10.14 to the company's Annual Report on Form 10-KSB for the
                     year ended December 31, 1998.

              10.10  --Stock and Asset Purchase Agreement dated March 30, 1999,
                     by and between the company and Amphion Ventures L.P.
                     Incorporated herein by reference to Exhibit 10.15 to the
                     company's Annual Report on Form 10-KSB for the year ended
                     December 31, 1998.

              10.11  --Asset Purchase Agreement dated July 15, 1999, by and
                     between the company and Prism Video, Inc. Incorporated
                     herein by referenced to Exhibit 2.1 to the company's Report
                     on Form 8-K dated July 28, 1999.

              10.12  --Convertible Note Payable dated September 30, 1999,
                     executed by the company payable to Amphion Ventures L.P. in
                     the stated principal amount of up to $6,000,000.*

              10.13  --Form of Dividend Conversion Agreement by and between the
                     company and Amphion Ventures L.P. and Jackson Hole
                     Management Co.*

              10.14  --Registration Rights Agreement dated September 30, 1999,
                     by and between the company and Amphion Ventures L.P.*

              27.1   --Financial Data Schedule.*

              27.2   --Restated Financial Data Schedule.*

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




                                       19

<PAGE>   22




                                   AXCESS INC.

B.       REPORTS ON FORM 8-K

         A report on Form 8-K was filed by the company on August 12, 1999,
         reporting that the company had completed the acquisition of
         substantially all of the assets of Prism Video, Inc., on July 28, 1999.
         The assets acquired included all patents, trade secret rights,
         software, hardware, product designs and all other technical information
         necessary to design, manufacture and market security a video and CCTV
         products using digital video compression technology and remote
         telephone line video technology.

         An amended report on Form 8-K was filed by the company on October 8,
         1999, which included the financial statements of Prism Video, Inc., and
         the pro forma financial information required by Item 7 of Form 8-K.



                                       20

<PAGE>   23


                                   AXCESS INC.

                                   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: November 12, 1999           By: /s/ James R. Craig
                                      ------------------------------------------
                                      James R. Craig,
                                         Chief Financial Officer and Secretary
                                    (Principal Accounting and Financial Officer)



















                                       21

<PAGE>   24


                                   AXCESS INC.

                                  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 the company. 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 the
                  company dated June 9, 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 the
                  company 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 the
                  company, 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 the
                  company, 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 the
                  company, dated June 25, 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 the
                  company 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 the
                  company 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 the
                  company 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).
</TABLE>


<PAGE>   25


                                   AXCESS INC.

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<S>               <C>
     4.2          --Certificate of Designation of the company's Series I
                  Preferred Stock. Incorporated herein by reference to Exhibit
                  4.2 to the company's Annual Report on Form 10-KSB for the year
                  ended December 31, 1998.

     4.3          --Certificate of Designation of the company's Series J
                  Preferred Stock. Incorporated herein by reference to Exhibit
                  4.3 to the company's Annual Report on Form 10-KSB for the year
                  ended December 31, 1998.

     4.4          --Certificate of Designation of the company's Series 1999
                  Preferred Stock dated July 28, 1999. Incorporated herein by
                  referenced to Exhibit 4.4 to the company's Report on Form
                  10-QSB for the period ended June 30, 1999.

     4.5          --Certificate of Designation of the company's Series 1999
                  Non-Voting Preferred Stock.*

     10.1         --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.

     10.2         --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.

     10.3         --Note Purchase Agreement dated June 25, 1997, by and
                  among the company, 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.

     10.4         --Amendment to Notes and Note Purchase Agreement dated
                  December 31, 1998, 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, 1998.

     10.5         --Preferred Stock Purchase Agreement dated October 21, 1998,
                  by and between the company and Amphion Ventures L.P.
                  Incorporated herein by reference to Exhibit 10.8 to the
                  company's Annual Report on Form 10-KSB for the year ended
                  December 31, 1998.

     10.6         --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 for the year ended
                  December 31, 1998.

     10.7         --Note Payable Conversion Agreement dated December 31, 1998,
                  by and between the company and Amphion Ventures L.P.
                  Incorporated herein by reference to Exhibit 10.12 to the
                  company's Annual Report on Form 10-KSB for the year ended
                  December 31, 1998.

     10.8         --Note Payable Conversion Agreement dated December 31, 1998,
                  by and between the company and Antiope Partners L.L.C.
                  Incorporated herein by reference to Exhibit 10.13 to the
                  company's Annual Report on Form 10-KSB for the year ended
                  December 31, 1998.
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<PAGE>   26


                                  AXCESS INC.

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<S>               <C>
     10.9         --Note Payable Conversion Agreement dated December 31, 1998,
                  by and between the company and J.P. Morgan Investment
                  Corporation. Incorporated herein by reference to Exhibit 10.14
                  to the company's Annual Report on Form 10-KSB for the year
                  ended December 31, 1998.

     10.10        --Stock and Asset Purchase Agreement dated March 30, 1999, by
                  and between the company and Amphion Ventures L.P. Incorporated
                  herein by reference to Exhibit 10.15 to the company's Annual
                  Report on Form 10-KSB for the year ended December 31, 1998.

     10.11        --Asset Purchase Agreement dated July 15, 1999, by and between
                  the company and Prism Video, Inc. Incorporated herein by
                  referenced to Exhibit 2.1 to the company's Report on Form 8-K
                  dated July 28, 1999.

     10.12        --Convertible Note Payable dated September 30, 1999, executed
                  by the company payable to Amphion Ventures L.P. in the stated
                  principal amount of up to $6,000,000.*

     10.13        --Form of Dividend Conversion Agreement by and between the
                  company and Amphion Ventures L.P. and Jackson Hole Management
                  Co.*

     10.14        --Registration Rights Agreement dated September 30, 1999, by
                  and between the company and Amphion Ventures L.P.*

     27.1         --Financial Data Schedule.*

     27.2         --Restated Financial Data Schedule.*
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     * Filed herewith.