<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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, 2001

                                       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: 000-28220

                                 MIGRATEC, INC.
        (Exact Name of Small Business Issuer as specified in its Charter)


               DELAWARE                                       65-0125664
     (State or Other Jurisdiction of                        (I.R.S. Employer
     Incorporation or Organization)                        Identification No.)


          11494 LUNA ROAD, SUITE 100, FARMERS BRANCH, TEXAS 75234-9421
                    (Address of Principal Executive Offices)


                                 (972) 969-0300
                (Issuer's Telephone Number, Including Area Code)


         Check whether the issuer (1) has 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 [ ]


         The number of shares outstanding of each of the issuer's classes of
common equity as of August 6, 2001:


<Table>
<Caption>
              Title of Class                                Number of Shares Outstanding
<S>                                                         <C>
   Common Stock, $0.001 par value per share                          111,487,135
</Table>



    Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X]



<PAGE>   2




                                      INDEX
<Table>
<Caption>
PART I - FINANCIAL INFORMATION                                                                            Page
                                                                                                          ----
<S>                                                                                                       <C>
         ITEM 1.  FINANCIAL STATEMENTS                                                                       1

                  Consolidated Condensed Balance Sheets at June 30, 2001 (unaudited),                        1
                  and December 31, 2000

                  Consolidated Condensed Statements of  Operations for the three months                      2
                  ended  June 30, 2001 and 2000 and the six months ended June 30, 2001
                  and 2000 (unaudited)

                  Consolidated Condensed Statements of Cash Flows for the six months                         3
                  ended June 30, 2001 and 2000 (unaudited)

                  Notes to Consolidated Condensed Financial Statements (unaudited)                           4

         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                                         14
                  CONDITION AND RESULTS OF OPERATIONS

PART II - OTHER INFORMATION                                                                                 22

         ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                                                  22

         ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                           23
</Table>




                                        i
<PAGE>   3




PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                          MIGRATEC, INC. AND SUBSIDIARY
                      CONSOLIDATED CONDENSED BALANCE SHEETS

<Table>
<Caption>
                                                                              JUNE 30, 2001   DECEMBER 31, 2000
                                                                              --------------  -----------------
                                                                               (UNAUDITED)
<S>                                                                           <C>               <C>
ASSETS
CURRENT ASSETS
         Cash                                                                 $      631,750    $      242,254
         Accounts receivable                                                              --            15,000
         Other current assets                                                         45,091            77,313
                                                                              --------------    --------------
                Total current assets                                                 676,841           334,567

PROPERTY AND EQUIPMENT, NET                                                          174,939           153,768

OTHER ASSETS
         Capitalized software costs, net of amortization of $86,019
              and  $64,917, in 2001 and 2000, respectively                             6,003            27,106
         Deferred financing costs                                                    154,252                --
         Other assets                                                                  7,756             7,756
                                                                              --------------    --------------
                Total other assets                                                   168,011            34,862
                                                                              --------------    --------------

                Total Assets                                                  $    1,019,791    $      523,197
                                                                              ==============    ==============

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
         Current portion of long-term debt and notes payable                  $      439,906    $      574,643
         Accounts payable                                                            466,629           297,778
         Accrued expenses                                                            530,426           179,345
         Deferred income                                                                 867            55,500
         Obligation under capital lease                                                1,422             1,159
                                                                              --------------    --------------
                Total current liabilities                                          1,439,250         1,108,425


LONG-TERM LIABILITIES
         Long-term portion of notes payable                                        2,515,082         3,769,880
         Long-term portion of obligation under capital lease                           3,420             4,203
                                                                              --------------    --------------
                Total long-term liabilities                                        2,518,502         3,774,083
                                                                              --------------    --------------
                Total Liabilities                                                  3,957,752         4,882,508

MINORITY INTEREST                                                                     (3,752)           (3,752)

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
         Preferred stock 50,000,000 shares authorized; $0.001 par
              value; none issued or outstanding
         Common stock 200,000,000 shares authorized; $0.001 par value;
              118,293,976 and 91,353,074 shares issued at June 30, 2001
              and December 31, 2000, respectively                                    118,294            91,353
         Additional paid-in capital                                               25,430,733        20,989,692
         Subscription receivable                                                     (67,769)               --
         Deferred stock compensation                                              (1,110,938)       (1,827,396)
         Treasury stock, at cost (9,864,449 shares in 2001 and 2000)              (1,777,891)       (1,777,891)
         Accumulated deficit                                                     (25,526,638)      (21,831,317)
                                                                              --------------    --------------
                Total stockholders' deficit                                       (2,934,209)       (4,355,559)
                                                                              --------------    --------------
                Total Liabilities and Stockholders' Deficit                   $    1,019,791    $      523,197
                                                                              ==============    ==============
</Table>

        The accompanying notes are an integral part of these consolidated
                              financial statements.



                                        1
<PAGE>   4




                          MIGRATEC, INC. AND SUBSIDIARY
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<Table>
<Caption>
                                                             THREE MONTHS ENDED JUNE 30,           Six Months Ended June 30,
                                                       ----------------------------------      ----------------------------------
                                                            2001                2000                2001                2000
                                                       --------------      --------------      --------------      --------------
<S>                                                    <C>                 <C>                 <C>                 <C>
REVENUES
    Consulting services                                $       35,000            $     --      $      128,333             $    --
    Software maintenance fees                                     650               3,000               1,300               6,000
                                                       --------------      --------------      --------------      --------------
          Total Revenues                                       35,650               3,000             129,633               6,000
                                                       --------------      --------------      --------------      --------------

COSTS AND EXPENSES
    Cost of revenues                                            6,683                  --               6,683                  --
    Selling and marketing                                     320,522             280,383             776,757             365,675
    Research and development                                  418,611             645,937             949,708           1,150,981
    General and administrative                              1,085,018             820,405           1,991,297           1,876,699
                                                       --------------      --------------      --------------      --------------
          Total costs and expenses                          1,830,834           1,746,725           3,724,445           3,393,355
                                                       --------------      --------------      --------------      --------------

LOSS FROM OPERATIONS                                       (1,795,184)         (1,743,725)         (3,594,812)         (3,387,355)
    Other income (expense)
        Interest and financing expense                        (29,317)         (1,259,191)           (101,215)         (3,846,662)
        Other income, net                                         121              27,933                 706              33,944
                                                       --------------      --------------      --------------      --------------
          Total other income (expense)                        (29,196)         (1,231,258)           (100,509)         (3,812,718)
                                                       --------------      --------------      --------------      --------------

          Net loss                                     $   (1,824,380)         (2,974,983)     $   (3,695,321)         (7,200,073)
                                                       ==============      ==============      ==============      ==============

NET LOSS PER COMMON SHARE (BASIC AND DILUTED)          $        (0.02)     $        (0.04)     $        (0.04)     $        (0.09)
                                                       ==============      ==============      ==============      ==============

WEIGHTED AVERAGE COMMON SHARES
     ISSUED AND OUTSTANDING (BASIC AND
     DILUTED)                                              98,095,728          79,922,566          92,951,533          77,394,364
                                                       ==============      ==============      ==============      ==============
</Table>


        The accompanying notes are an integral part of these consolidated
                              financial statements.



                                       2
<PAGE>   5



                          MIGRATEC, INC. AND SUBSIDIARY
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<Table>
<Caption>
                                                                                       SIX MONTHS ENDED JUNE 30,
                                                                                   --------------------------------
                                                                                       2001               2000
                                                                                   -------------      -------------
<S>                                                                                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
         Net loss                                                                  $  (3,695,321)     $  (7,200,073)
         Adjustments to reconcile net loss to net cash (used by)
           operating activities:
              Depreciation and amortization                                               65,091             86,486
              Deferred stock compensation                                                386,458            704,896
              Warrants issued for consulting services                                     17,000                 --
              Interest expense associated with beneficial
                conversion feature of convertible debt                                        --          3,750,000
              Financing fees                                                              40,000                 --
              Warrants issued for financing fees                                          24,736              1,015
              Amortization of discount on notes payable                                       --             20,797
              Change in assets and liabilities:
                 (Increase) decrease in accounts receivables                              15,000             60,700
                 (Increase) decrease in other current assets                              32,222           (155,214)
                 (Increase) decrease in other assets                                          --             13,792
                 (Increase) decrease in deferred financing costs                        (154,252)            30,000
                 Increase (decrease) in accounts payable                                 168,851            (65,477)
                 Increase (decrease) in accrued expenses                                 351,081            104,177
                 Increase (decrease) in deferred income                                  (54,633)            94,000
                                                                                   -------------      -------------
         Net cash (used by) operating activities                                      (2,803,767)        (2,554,901)

CASH FLOWS FROM INVESTING ACTIVITIES:
         Purchases of property and equipment                                             (65,159)          (160,579)
         Retirement of property and equipment                                                 --             11,783
                                                                                   -------------      -------------
         Net cash (used in) investing activities                                         (65,159)          (148,796)

CASH FLOWS FROM FINANCING ACTIVITIES:
         Proceeds from notes payable                                                     450,000          3,750,000
         Proceeds from issuance of common stock                                        3,398,477          2,044,272
         Payments under obligation of capital lease                                         (520)            (5,526)
         Repayment of notes payable                                                     (589,535)          (824,121)
                                                                                   -------------      -------------
         Net cash provided by financing activities                                     3,258,422          4,964,625
                                                                                   -------------      -------------
         Net increase (decrease) in cash                                                 389,496          2,260,928

Cash - beginning                                                                         242,254              1,417
                                                                                   -------------      -------------
Cash - ending                                                                      $     631,750      $   2,262,345
                                                                                   =============      =============
SUPPLEMENTAL DISCLOSURES:
         Interest paid                                                             $      15,407      $      89,183
                                                                                   =============      =============
SUPPLEMENTAL DISCLOSURE OF NON-CASH
    INVESTING AND FINANCING ACTIVITIES:
         Issuance of stock upon conversion of debt to equity                       $   1,250,000     $           --
                                                                                   =============      =============
</Table>


        The accompanying notes are an integral part of these consolidated
                              financial statements.




                                       3
<PAGE>   6



                          MIGRATEC, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2001
                                   (Unaudited)

NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

MigraTEC, Inc., a Delaware corporation, is a developer and provider of software
technology and expertise that automates the process of upgrading or migrating
software, enabling it to operate on increasingly advanced operating and hardware
systems.

During 1999, MigraTEC redirected its strategic focus from selling software
products aimed at Y2K solutions to developing proprietary technology designed to
automate a significant amount of the manual upgrade or migration process from
32-bit to 64-bit operating systems and associated hardware. The majority of
MigraTEC's efforts in 2001 and 2000 were related to research and development
activities.

MigraTEC provides migration services and consulting to customers. MigraTEC also
intends to license, on a line of code basis, its software solutions to "end
users" for their own internal migration projects, and to systems integrators and
large services providers to perform outsourced projects for their own customers.

MigraTEC is the parent of a majority owned foreign subsidiary, One Up Computer
Services, Ltd. ("One Up, Ltd."), incorporated under the laws of the Province of
Ontario, Canada. One Up, Ltd. ceased its operations in 1997. At December 31,
1999, a reserve was provided for all of the assets of One Up, Ltd. in the amount
of $36,808, which MigraTEC does not expect to be realizable. Liabilities of One
Up, Ltd. in the amount of $45,736 will remain until the obligations are
resolved.

The accompanying unaudited consolidated condensed financial statements reflect,
in the opinion of management, all adjustments (consisting only of normal,
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows of MigraTEC. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to rules and regulations promulgated by the Securities and
Exchange Commission (the "Commission"). These statements should be read together
with the audited financial statements and notes thereto for the years ended
December 31, 2000 and 1999, included in MigraTEC's Form 10-KSB for the fiscal
year ended December 31, 2000 on file with the Commission. The results of
operations for the interim periods shown herein are not necessarily indicative
of the results to be expected for any future interim period or for the entire
year.

PRINCIPLES OF CONSOLIDATION

The consolidated condensed financial statements include the accounts of MigraTEC
and One Up, Ltd., collectively referred to as "the Company." Intercompany
transactions and balances have been eliminated in consolidation.

INDUSTRY SEGMENT

The Company operates in a single industry segment, the developing and providing
of software technology that automates the process of upgrading or migrating
software.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, less accumulated depreciation and
amortization. The Company provides for depreciation on a straight-line basis
over the estimated useful life of three to five years for the related assets.
Leasehold improvements are amortized over the life of the improvements or the
lease term if shorter on a straight-line basis.

Major repairs or replacements of property and equipment are capitalized.
Maintenance, repairs and minor replacements are expensed as incurred.




                                       4
<PAGE>   7




                          MIGRATEC, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2001
                                   (Unaudited)


NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (continued)

CAPITALIZED SOFTWARE

The cost of purchased software is capitalized and amortized on a straight-line
basis over the estimated useful life of three years. Amortization expense in the
first six months of 2001 and 2000 was $21,103 and $15,000, respectively.

DEFFERED FINANCING FEES

Costs associated with the private equity line discussed in Note 4 have been
capitalized and will be charged against the proceeds from the Company's private
equity line of credit.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments include accounts receivable and accounts
payable, for which the carrying amounts approximate fair value. Based on
prevailing interest rates, management believes that the fair value of notes
payable approximates book value.

COSTS OF SOFTWARE DEVELOPED FOR SALE

The Company expenses or capitalizes development costs of software to be sold in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 86,
"Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise
Marketed." These development costs are expensed as incurred until technological
feasibility has been established, at which time such costs are capitalized until
the product is available for general release to customers.

INCOME TAXES

The provision for income taxes is based on pretax income as reported for
financial statement purposes. Deferred income taxes are provided in accordance
with the liability method of accounting for income taxes to recognize the tax
effects of temporary differences between financial statement and income tax
accounting. Valuation allowances are established when necessary to reduce tax
assets to the amount more likely than not to be realized.

The Company has incurred net operating losses for federal income tax purposes
and it is uncertain as to whether the Company will generate future taxable
income during the carry-forward period. Accordingly, the Company's net current
and non-current deferred tax assets have been fully reserved at June 30, 2001
and December 31, 2000.

REVENUE RECOGNITION

The Company's revenues consist of software license revenues, consulting services
revenues and software maintenance and support revenues.

Revenues are recognized in accordance with American Institute of Certified
Public Accountant's Statement of Position 97-2 "Software Revenue Recognition."

The Company licenses software under license agreements. License fee revenues are
recognized when an agreement is in force, the product has been delivered, the
license fee is fixed or determinable, no significant production modification or
customization of the software is required and collectibility is reasonably
assured. Total fees under multiple element arrangements are allocated to
individual elements based on vendor-specific objective evidence of fair value,
principally determined on values when sold separately. License fee revenue for
certain application development and data access tools is recognized upon direct
shipment to the end user. If collectibility is not considered probable, revenue
is recognized when the fee is collected.

Software maintenance and support revenues are recognized ratably over the term
of the related agreements, which in most cases is one year. Revenues from
consulting services under time and materials contracts and for training are
recognized as services are performed. Revenues in 2000 include revenue related
to the Company's contract with Dell. This contract is a multiple elements
agreement for which revenue is recognized pro rata over the contract term.




                                       5
<PAGE>   8




                          MIGRATEC, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2001
                                   (Unaudited)


NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (continued)

CASH EQUIVALENTS

Cash equivalents include time deposits, certificates of deposits, and all highly
liquid debt instruments with original maturities of three months or less when
purchased.

LOSS PER SHARE

Basic earnings per share is computed only on the weighted average number of
common shares outstanding during the respective periods, and the dilutive effect
of stock options and warrants is excluded. Diluted earnings per share is
computed to show the dilutive effect, if any, of stock options and warrants
using the treasury stock method based on the average market price of the stock
during the respective periods.

The effect of stock options and warrants that aggregated 23,234,900 and
26,029,708 shares as of June 30, 2001 and 2000, respectively, would be
anti-dilutive due to the Company's losses in 2001 and 2000 and, accordingly, are
not included in the computation of diluted earnings per share for the respective
periods.

If the convertible secured promissory notes discussed in Note 3 are converted,
an additional 20,000,000 shares of the Company's common stock would be
outstanding as of June 30, 2001.

USE OF ESTIMATES AND ASSUMPTIONS

Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities and the reported amounts of
revenues and expenses. Actual results could vary from estimates used.

STOCK-BASED COMPENSATION

The Company has elected to account for stock-based compensation to employees
using the intrinsic value method prescribed in Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
Interpretations. Accordingly, compensation for stock options is measured as the
excess, if any, of the fair market value of the Company's stock at the date of
the grant over the amount an employee must pay to acquire the stock. Such excess
is deferred and amortized as compensation expense over the respective vesting
periods, which are principally 36 months.

The Company accounts for stock-based awards issued to non-employees in
accordance with the fair value method of SFAS No. 123 and Emerging Issues Task
Force Issue No. 96-18. Accordingly, the Company measures the cost of such awards
based on the fair value of the options using the Black-Scholes method
option-pricing model.

NEW ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133
("SFAS 133"), "Accounting for Derivative Instruments and Hedging Activities."
SFAS 133 requires companies to record derivatives on the balance sheet as assets
or liabilities, measured at fair value. Gains or losses resulting from changes
in the values of those derivatives would be accounted for depending on the use
of the derivative and whether it qualifies for hedge accounting. SFAS 133 is
effective for fiscal years beginning after June 15, 2000. The adoption of SFAS
133 has not had a material effect on the Company's results of operations or
financial condition.

In June 2001, the Financial Accounting Standards Board issued SFAS No. 141,
Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets,
effective for fiscal years beginning after December 15, 2001. Under the new
rules, goodwill and intangible assets deemed to have indefinite lives will no
longer be amortized but will be subject to annual impairment tests in accordance
with the statements. Other intangible assets will continue to be amortized over
their useful lives. The Company does not anticipate that SFAS Nos. 141 and 142
will have a significant impact on the Company's financial statements when
adopted on January 1, 2002.




                                       6
<PAGE>   9



                          MIGRATEC, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2001
                                   (Unaudited)


NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (continued)

RECLASSIFICATIONS

Certain reclassifications have been made to prior year amounts to conform to the
current year presentation.

NOTE 2. GOING CONCERN UNCERTAINTY

The Company incurred a loss of $10,193,130 and used cash in operations of
$5,097,689 for the year ended December 31, 2000. In addition, at December 31,
2000 and June 30, 2001, the Company's current liabilities exceeded current
assets by $773,858 and $762,409, respectively, and the Company had a net
stockholders' deficit of $4,355,559 and $2,934,209, respectively. In the six
months ended June 30, 2001, the Company incurred a loss of $ 3,695,321 and used
cash in operations of $2,803,767. The Company's continued existence and plans
for future growth are dependent, in part, upon its ability to obtain the capital
necessary to operate, primarily through the issuance of additional debt or
equity, and on its ability to effectively penetrate the developing market for
migration software, services and related products. Management believes the
Company will successfully complete its plan to raise additional capital in 2001
and that funds will be available to meet the Company's obligations for at least
the next 12 months. If the Company is not able to obtain additional or
alternative funding, or generate sufficient revenues and cash flows in the near
term, the Company will be unable to continue as a going concern.

In January 2000 the Company raised $3,750,000 in a private financing (see Note
3). In the first six months of 2001, the Company raised an additional $1,427,500
in private equity transactions and has received $1,970,977 from the exercise of
options and warrants. In addition, the Company entered into a private equity
line of credit agreement on March 27, 2001, pursuant to which the Company can
draw down up to $20,000,000 over a 20 month period (see Note 4). The Company
plans to raise additional capital in 2001 to fund expanded sales and marketing
as well as development efforts and continued operations. There can be no
assurance that the Company will successfully raise additional funds sufficient
to finance its continued operations.

The financial statements do not include any adjustments to reflect the possible
effects on recoverability and classification of assets or classification of
liabilities which may result from the inability of the Company to continue as a
going concern.




                                       7
<PAGE>   10




                          MIGRATEC, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2001
                                   (Unaudited)


NOTE 3. NOTES PAYABLE

Notes payable at June 30, 2001 and December 31, 2000, include the following:


<Table>
<Caption>
                                                                                         JUNE 30, 2001     DECEMBER 31, 2000
                                                                                        ---------------    -----------------
<S>                                                                                     <C>                <C>
Note payable to Mercury Fund No. 1, Ltd. in the amount of $565,000, dated
December 1, 2000, with interest varying between 0% and 10%, due the earlier of
December 1, 2001 or upon the occurrence of a qualified financing transaction,
collateralized by all assets owned or thereafter acquired, subject to collateral
rights of notes dated December 4 and 28, 1998, January 4 and 27, 1999 and
January 25, 2000. Upon the occurrence of a qualified financing transaction, the
Company has the option to require the note holder to exercise warrants issued
with the convertible note dated January 25, 2000. This note was repaid in full
on June 22, 2001 upon the exercise of warrants to purchase 2,839,800 shares of
common stock as the exercise price consisted of conversion of this note plus
cash in the amount of $2,960.                                                                  $     --     $       565,000

Convertible note payable to Mercury Fund No. 1, Ltd. in the amount of
$1,775,000, dated January 25, 2000, without interest, due January 24, 2003,
collateralized by all assets owned or thereafter acquired, subject to collateral
rights of notes dated December 4 and 28, 1998 and January 4 and 27, 1999. A
portion of this note was converted into shares of common stock as more fully
described below.                                                                              1,275,000           1,775,000

Convertible note payable to MT Partners, L.P. in the amount of $1,975,000, dated
January 25, 2000, without interest, due January 24, 2003, collateralized by all
assets owned or thereafter acquired, subject to collateral rights of notes dated
December 4 and 28, 1998 and January 4 and 27, 1999. A portion of this note was
converted into shares of common stock as more fully described below.                          1,225,000           1,975,000

Notes payable to BEM Capital Partners, Inc. (assignee of MJ Capital Partners
III, L.P. as of January 2001) in the aggregate amount of $250,000, dated
December 4 and December 28, 1998 and January 4 and 27, 1999, bearing interest at
16% per annum, collateralized by all assets owned or thereafter acquired
Modified, extended and renewed February 1, 1999 bearing interest at 16% per
annum, repayable with monthly installments of principal and interest totaling
$31,000 with a final maturity of December 31, 1999. Modified, extended and
renewed October 31, 1999 bearing interest at 16% per annum, repayable with
monthly installments of principal and interest totaling $21,100 with a final
maturity of December 31, 2000. In connection with the October 31, 1999
modification, the note holder was issued two-year warrants to purchase 100,000
shares of common stock at $0.01 per share and 100,000 shares of common stock at
$0.20 per share. Modified, extended and renewed January 26, 2001, so as to
increase the outstanding loan amount to $250,000, bearing interest at 15% per
annum, interest only payable monthly until May 1, 2001. Thereafter payable with
monthly installments of principal and interest totaling $22,565 with a final
maturity of May 1, 2002. In connection with the January 26, 2001 modification,
the note holder was issued a one-year warrant to purchase 40,000 shares of
common stock at $0.01 per share. This warrant was exercised in March 2001.                      230,620                 958

</Table>



                                       8
<PAGE>   11



                          MIGRATEC, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2001
                                   (Unaudited)


NOTE 3. NOTES PAYABLE (continued)

<Table>
<Caption>
                                                                                          JUNE 30, 2001       DECEMBER 31, 2000
                                                                                          ---------------     -----------------
<S>                                                                                       <C>                 <C>
Note payable to The Glebe Group in the amount of $200,000, dated May 11, 2001,
bearing interest at 15% per annum, principal and interest originally due June
11, 2001, extended and renewed with a new maturity date of August 10, 2001. In
connection with this note, the note holder was issued a six-month warrant to
purchase 16,000 shares of common stock at $0.01 per share. This warrant is
unexercised as of June 30, 2001.
                                                                                                  200,000                   --

Note payable to a former employee in the amount of $68,250, dated March 3, 1998,
bearing interest at 14%, payable in monthly installments of $1,000,
due December 10, 2003.                                                                             24,368               28,565
                                                                                          ---------------      ---------------

Total outstanding                                                                               2,954,988            4,344,523
Less current portion                                                                             (439,906)            (574,643)
                                                                                          ---------------      ---------------
Long-term portion                                                                         $     2,515,082      $     3,769,880
                                                                                          ===============      ===============
</Table>



In the first quarter of 2000, the Company closed a private financing of the
Company by MT Partners, L.P., an affiliate of Cardinal Investment Company, Inc.,
and Mercury Fund No. 1, Ltd., an affiliate of Mercury Ventures, Ltd.
(collectively, the "Investors"). Since January 25, 2000, each of the Investors
has had a representative on the Company's board of directors.

The Investors entered into a Note and Warrant Purchase Agreement with the
Company (the "Agreement") pursuant to which the Investors provided $3,750,000 of
private financing to the Company, evidenced by convertible secured promissory
notes of the Company.

The notes are convertible at any time, at the election of the Investors, into
shares of the Company's common stock, on the basis of one share of common stock
for each $0.125 in principal amount of the notes outstanding at the time of
conversion. The notes do not accrue interest.

The notes automatically convert into shares of common stock on the terms
described above, upon the earlier of either:

         o        The closing of a sale of the Company's common stock, preferred
                  stock or issuance of debt with equity features in one or more
                  transactions in which the Company receives aggregate proceeds
                  of at least $5,000,000; or

         o        The first trading day following a period of 90 consecutive
                  trading days, during which the closing sale price of the
                  Company's common stock has been in excess of $1.25.

Pursuant to the Agreement, the Company issued to the Investors warrants to
purchase up to an aggregate of 6,000,000 shares of common stock. All of such
warrants are exercisable for a period of five years from the date of issuance
and have an exercise price of $0.20 per share. The notes and the associated
warrants contain conversion features considered to be "beneficial" because the
conversion prices were below the market price of the common stock at the date of
issuance. As a result, the Company recorded $2,500,000 and $1,250,000 of
interest expense during the quarters ended March 31, 2000 and June 30, 2000,
respectively, in accordance with Emerging Issues Task Force Pronouncement Number
98-5, "Accounting for Convertible Securities with Beneficial Conversion Features
or Contingently Adjustable Conversion Ratios." In the first six months of 2001,
Mercury Fund No. 1, Ltd. and MT Partners, L.P. converted $500,000 and $750,000,
respectively, of these notes into an aggregate of 10,000,000 shares of common
stock and exercised all of their warrants to purchase an aggregate of 6,000,000
shares of common stock at an exercise price of $0.20 per share.




                                       9
<PAGE>   12



                          MIGRATEC, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2001
                                   (Unaudited)


NOTE 3. NOTES PAYABLE (continued)

In connection with this private financing, the Investors, the Company and
certain stockholders executed a Shareholders' Agreement which requires approval
of at least 70% of the Company's Board of Directors for any of the following
corporate actions:

         1.       permitting authorization of additional series or classes of
                  shares of any capital stock resulting in dilution greater than
                  10% when compared to the fully diluted common stock equivalent
                  position of the Company as of January 25, 2000;

         2.       disposing of all or substantially all of the properties or
                  assets of the Company;

         3.       merging where such transaction involves greater than 20% of
                  the Company's market capitalization;

         4.       voluntarily dissolving, liquidating or partially liquidating
                  the Company;

         5.       incurring additional debt in excess of $250,000;

         6.       incurring any single capital expenditure in excess of
                  $150,000;

         7.       declaring or paying any dividend with respect to any capital
                  stock of the Company;

         8.       purchasing any capital stock of the Company;

         9.       amending the employment contracts or making material changes
                  to the compensation or severance amounts of certain officers
                  of the Company;

         10.      amending, altering or repealing the Company's Certificate of
                  Incorporation or Bylaws; or

         11.      entering into contracts with any affiliate of the Company.

Additionally, the Shareholders' Agreement restricts transfers of the Company's
common stock and provides the Investors with a right of first refusal for
private transfers of shares of the Company's common stock.

NOTE 4. CAPITAL STOCK, WARRANTS AND OPTIONS

CAPITAL STRUCTURE

The Company is authorized to issue 200,000,000 shares of common stock, $0.001
par value per share, of which approximately 118,293,976 and 91,353,074 shares
were issued, inclusive of treasury stock, at June 30, 2001 and December 31,
2000, respectively. The Company is also authorized to issue up to 50,000,000
shares of preferred stock, none of which are issued and outstanding.

ISSUANCES OF COMMON STOCK

Private Placements

During the first six months of 2001, the Company completed private placements of
6,593,451 shares of unregistered common stock with a weighted average price per
share of $0.2165.

Private Equity Line

On March 27, 2001, the Company and Ironhead Investments Inc. ("Ironhead")
entered into a Common Stock Purchase Agreement (the "Stock Purchase Agreement")
establishing a private equity line of credit. Ironhead has committed to purchase
from the Company up to $20,000,000 of common stock up to a maximum of 30,000,000
shares of common stock over a twenty-month period. The number of shares issuable
by the Company and the price per share to be paid by Ironhead are dependent upon
a defined trading volume of the Company's common stock and a defined average
trading price (net of a 6% discount). The Company has reserved 30,000,000 shares
of common stock to be issued under the equity line of credit. As of June 30,
2001, the Company has not sold any shares of common stock under the Stock
Purchase Agreement.



                                       10
<PAGE>   13



                          MIGRATEC, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2001
                                   (Unaudited)


NOTE 4. CAPITAL STOCK, WARRANTS AND OPTIONS (continued)

In connection with the equity line of credit, Ironhead and GKN Securities
("GKN") were issued five-year warrants to purchase an aggregate of 650,000
shares of the Company's common stock at an exercise price of $0.42 per share.
The Company engaged GKN as a sales agent to facilitate this transaction. GKN
will also receive a 5% placement fee for each draw under the equity line of
credit.

The Company is prevented from issuing shares to Ironhead to the extent Ironhead
would beneficially own more than 9.9% of the then outstanding common stock. Any
resale of shares by Ironhead would reduce the number of shares beneficially
owned by Ironhead and would enable the Company to issue additional shares to
Ironhead without violating this condition.

Conversion Of Debt To Equity

During the first six months of 2001, the Company issued 10,000,000 shares of
common stock at $0.125 per share from conversion of convertible debt aggregating
$1,250,000 in accordance with the provisions of the convertible debt agreement
dated January 25, 2000.

Exercise Of Options And Warrants

During the first six months of 2001, the Company issued 10,347,451 shares of
common stock upon exercise of options and warrants yielding proceeds of
$1,970,977.

Financing fees of $18,976 were recorded in connection with the issuance of a
one-year warrant to purchase 40,000 shares of common stock at $0.01 per share.
This warrant was issued as a condition of the modification of a note payable in
January 2001 and was exercised in March 2001.

In January 2001, the Company agreed to modify the exercise price for 2,000,000
options expiring May 13, 2001, previously issued to EAI Partners, Inc. ("EAI").
The Company recorded financing fees of $40,000 in connection with the
modification.

Financing fees of $5,760 were recorded in connection with the issuance of a
six-month warrant to purchase 16,000 shares of common stock at $0.01 per share.
This warrant was issued as a condition for the extension of a note payable in
May 2001. This warrant has not been exercised.

STOCK OPTIONS GRANTED TO DIRECTORS, OFFICERS AND EMPLOYEES

During the first six months of 2001, certain directors, officers and employees
were granted options to purchase common stock of the Company pursuant to the
MigraTEC, Inc. Long-Term Incentive Plan. The terms of such grants are summarized
below:

<Table>
<Caption>
                                                                          Option Price
                                                                    -------------------------
                                                Number of
                                                Underlying          Weighted
                   Range of Exercise Prices       Shares             Average            Total
                   ------------------------     ----------          --------            -----
<S>                                             <C>                 <C>                 <C>
                  Granted at market value
                     Non-employees
                          $0.38                     50,000          $   0.38         $ 19,000
                     Employees
                          $0.31 to $0.4844       2,309,568          $ 0.3735         $862,697
</Table>





                                      11
<PAGE>   14




                          MIGRATEC, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2001
                                   (Unaudited)


NOTE 4. CAPITAL STOCK, WARRANTS AND OPTIONS (continued)

In 2000, the Company recorded deferred stock compensation of $2,975,000 for the
difference between the exercise price and the market value of the Company's
common stock underlying certain options granted. This amount is being amortized
over the vesting period of the individual options, which vesting periods vary
from immediate to three years. During the second quarter of 2001, as a result of
individuals no longer being employed by the Company, deferred stock compensation
in the aggregate amount of $330,000 was forfeited. The amount forfeited is
reflected as reduction of deferred stock compensation and additional paid-in
capital. Stock compensation expense charged to operations was $386,458 and
$704,896 for the first six months of 2001 and 2000, respectively.

TOTAL OPTIONS AND WARRANTS OUTSTANDING

At June 30, 2001, the Company had options and warrants outstanding for the
purchase of shares of common stock as follows:

<Table>
<S>                                                                          <C>
                      Warrants                                               2,206,400
                      Stock Options:
                        Non-employees                                        2,300,000
                        Directors, Officers and Employees                   18,728,500
                                                                         --------------
                      Total                                                 23,234,900
                                                                         ==============
</Table>


All of the warrants and non-employee stock options are vested and exercisable as
of June 30, 2001.

NOTE 5. RELATED PARTY TRANSACTIONS

Mr. Kevin Howe, Chairman, and Mr. Drew Johnson joined the Company's board of
directors in January 2000 as representatives of Mercury Fund No. 1, Ltd.
("Mercury") and MT Partners, L.P. ("MT Partners"), respectively, in connection
with the initial tranche of funding of a three-stage $3,750,000 investment in
the Company, completed May 1, 2000. The notes related to the funding are
convertible at any time, at the election of Mercury and MT Partners, on the
basis of one share of common stock for each $0.125 in principal amount of the
notes outstanding at the time of conversion. The notes do not accrue interest.
In connection with the notes, Mercury and MT Partners were issued warrants to
purchase 2,839,800 and 3,160,200 shares of common stock, respectively. As of
June 30, 2001, Mercury had converted $500,000 of its convertible promissory note
into 4,000,000 shares of common stock, exercised warrants to purchase 2,839,800
shares of common stock and sold 1,625,000 shares of common stock. MT Partners
had converted $750,000 of its convertible promissory note into 6,000,000 shares
of common stock, exercised warrants to purchase 3,160,200 shares of common stock
and sold 4,234,500 shares of common stock. As a result of this investment, at
June 30, 2001, Mercury and MT Partners each hold convertible promissory notes
convertible into an aggregate of up to 10,200,000, and 9,800,000 shares of the
Company's common stock, respectively.

In December 2000, Mercury loaned the Company $565,000 with an interest rate that
varies between 0% and 10%. This note was repaid in full on June 22, 2001 upon
the exercise of warrants to purchase 2,839,800 shares of common stock as the
exercise price consisted of conversion of this note plus cash in the amount of
$2,960.




                                       12
<PAGE>   15



                          MIGRATEC, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2001
                                   (Unaudited)


NOTE 6. COMMITMENTS AND CONTINGENCIES

On April 12, 2000, the Company executed a non-cancelable operating lease for its
office facility for a term of 39 months beginning May 1, 2000. This lease was
modified on November 16, 2000 to increase leased space and extend the term of
the lease through February 2004. The modified lease provides for a monthly base
rent of $16,977 until August 2001 and $18,720 thereafter. The original lease
term included three months of free rent, with the first rental payment due
August 1, 2000. At the end of the lease term, the Company has the right to renew
the lease for an additional 60 months at the then prevailing rental rates. The
following is a summary of future base rents as of June 30, 2001.

<Table>
<Caption>
                         Year ending December 31,                  Amount
<S>                                                                <C>
                                   2001                        $    108,834
                                   2002                             224,640
                                   2003                             224,640
                                   2004                              37,440
                                                               -------------
                                                               $    595,554
                                                               =============
</Table>


NOTE 7. SUBSEQUENT EVENTS

Subsequent to June 30, 2001, the Company completed a private placement of
150,000 shares of unregistered common stock at $.38 per share. Additionally the
Company issued 7,083 shares of common stock upon exercise of options and
warrants yielding proceeds of $1,558.

Pursuant to the Company's option agreement with EAI, an aggregate of 2,000,000
option shares remain exercisable at June 30, 2001 at the greater of (i) $0.20 or
(ii) 50% of the previous five-day average closing bid price per share of the
Company's common stock for the five business days immediately prior to exercise.
Such option expires November 13, 2001. On July 12, 2001, the Company agreed to
modify the exercise price for these options to $0.22 per share in exchange for
immediate exercise. The Company agreed to payment terms of three equal
installments of $100,000 due July 12, 2001, August 10, 2001 and September 9,
2001. A final payment of $140,000 is due October 9, 2001. As a result of this
option modification, the Company will record a financing fee expense of
approximately $44,000 in the third quarter of 2001.

In connection with the Stock Purchase Agreement discussed in Note 4, the Company
issued 1,195,800 shares of common stock at a weighted average price per share of
$0.4333, yielding proceeds of $491,273 net of commissions and escrow costs.

On July 30, 2001, the Company revised an agreement dated February 23, 2001 to
sell 3,800,000 shares of unregistered common stock at $0.20 per share. The sale
is to be completed in three tranches with 1,250,000 shares sold on each of July
31, 2001 and August 31, 2001 and the balance of 1,300,000 shares sold on October
15, 2001. The first tranch of 1,250,000 shares was completed on July 31, 2001.



                                       13
<PAGE>   16



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

SECOND QUARTER ENDED JUNE 30, 2001

OTHER THAN HISTORICAL AND FACTUAL STATEMENTS, THE MATTERS AND ITEMS DISCUSSED IN
THIS QUARTERLY REPORT ON FORM 10-QSB ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE
RISKS AND UNCERTAINTIES. ACTUAL RESULTS OF MIGRATEC, INC. AND OUR SUBSIDIARY
(COLLECTIVELY REFERRED TO HEREIN AS "MIGRATEC" OR THE "COMPANY") MAY DIFFER
MATERIALLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. CERTAIN
FACTORS THAT COULD CONTRIBUTE TO THESE DIFFERENCES ARE DISCUSSED THROUGHOUT THIS
REPORT AND ARE SUMMARIZED IN THE SECTION ENTITLED "FORWARD-LOOKING STATEMENTS".

GENERAL

         The following is a discussion and analysis of the consolidated
financial condition and results of operations of the Company for the three
months ended June 30, 2001 and 2000 and the six months ended June 30, 2001 and
2000, respectively. It should be read in conjunction with the interim
consolidated financial statements of the Company and notes thereto included
elsewhere in this report and the Company's Annual Report on Form 10-KSB for the
year ended December 31, 2000.

         Management believes that the net loss for the quarter ended June 30,
2001 was due primarily to the fact that the Company's expenses associated with
continued development efforts and growing sales and marketing efforts
significantly exceeded the Company's revenues. Management expects that this will
continue for the remainder of 2001.

         With respect to development, the Company's development requirements
decreased overall by approximately forty-percent during the second quarter of
2001 and in May, the Company reduced its development staff and resources
proportionately. This decrease is due primarily to the Company's completion of
the majority of the development on its 64Express(TM) product line (which
automates the migration of software from 32-bit to 64-bit environments) in the
second half of 2000. The remaining development efforts relating to 64Express(TM)
focus on enhancing functionality and fine-tuning the performance of the product
line. The Company initially released its second major product line, 32Direct(TM)
(which facilitates the migration of software from one 32-bit environment to
another, i.e. platform to platform), in the beginning of the second quarter of
2001. Both 64Express(TM) and 32Direct(TM) are available for sale today. However,
the Company's development focus continues to be on the 32Direct(TM) product
line, researching and adding new migration paths as market demand warrants. The
Company is also researching other potential uses for its core technology to
determine the feasibility of customizing this technology and creating additional
software products.

         The demand for MigraTEC's flagship 64Express(TM) migration products and
services largely depends on the successful market introduction and acceptance of
Intel Corporation's 64-bit chips, the first generation of which is known as
Itanium. Intel announced the future availability of Itanium in late May 2001 and
as a result, many hardware original equipment manufacturers (OEMs), such as
Dell, Compaq and Hewlett-Packard, revealed plans to ship products incorporating
the Itanium technology in the third quarter of this year. Additionally, Compaq
recently announced its plans to phase out use of the 64-bit Alpha technology in
favor of Itanium. Management believes that this announcement strengthens
Itanium's bid to be the frontrunner in the 64-bit computing revolution. However,
due to a slowing economy and the extremely modest promotion of Itanium-based
technology to date by Intel, market demand for technology and services that
facilitate the use of Itanium, such as MigraTEC's 64Express(TM) product line,
has been slow to develop and is expected to remain so through the end of 2001.

         Additional factors contribute to the delayed market demand for the
Company's 64Express(TM) products and related services. First, while management
believes that Intel's initial shipments of Itanium will go to tier two
independent software vendors (ISVs) who will then begin the process of making
their software 64-bit compliant, tier two vendors are generally focused on the
release of Microsoft's Windows 64-bit server operating system to trigger their
conversion. Introduction of Microsoft's 64-bit operating system is not expected
until the first quarter of 2002. Management believes that the larger OEMs will
start advertising Itanium related systems heavily once the Windows 64-bit
operating system is available and that market demand for MigraTEC's products and
services will increase at that time. Second, while management believes that
corporate America owns a significant majority (approximately 90%) of the code
eligible for migration to the new 64-bit technology using the Company's
migration products and services, management also believes



                                       14
<PAGE>   17



that many businesses will wait to adopt the new 64-bit technology until Intel's
second generation 64-bit chip, known as McKinley, becomes available. The
introduction of McKinley is currently scheduled for the second quarter of 2002,
thereby delaying the demand for MigraTEC's 64Express(TM) products and services
accordingly.

         Given this market outlook, the Company is focused on working with OEMs
to identify ISVs adopting the 64-bit technology now and assisting those ISVs
with their migrations. In an effort to help OEMs put initiatives in place to
meet market demands, MigraTEC has completed a series of proof of concept
projects with leading OEMs whereby their engineers tested the Company's
migration products while performing sample software migrations. The primary
objectives of these projects were to (i) demonstrate the capability of
MigraTEC's technology, (ii) quantify the performance improvement and value added
of the Company's technology, and (iii) build support for creating associations
between MigraTEC and the leading OEMs. Each of the projects has been deemed a
success as the average productivity enhancement for an engineer that
participated in a project was well in excess of 700%. The Company is also
working to position its migration technology, both 64-bit and cross platform, in
such a manner that the professional service organizations engaged to perform the
majority of software migrations (32-bit to 32-bit and/or 32-bit to 64-bit) will
utilize MigraTEC's automated migration products as opposed to performing such
migrations manually.

         Additionally, in light of the success of the proof of concept projects
conducted to date and the anticipated growing market demand for migration
assistance, efforts are well underway to reach agreements with various OEMs and
tier one ISVs to provide group-wide licenses for use of all of MigraTEC's
migration technology.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO THREE MONTHS ENDED JUNE 30, 2000

Revenues

         The Company's revenues consist of consulting services revenues and
software maintenance and support revenues. For the second quarter ended June 30,
2001, the Company's revenues increased to $35,650, as compared to $3,000 for the
second quarter ended June 30, 2000. Revenues in the second quarter of 2001
consisted of $35,000 and $650 from consulting services and software maintenance
fees, respectively, whereas, in the second quarter of 2000 revenues consisted
entirely of software maintenance fees in the aggregate amount of $3,000 from the
sale of the Company's Y2K product, which product is no longer sold or marketed.
Consulting services revenue in the second quarter of 2001 consisted of $30,000
of revenues from an additional consulting contract with Dell Products, L.P. and
$5,000 of revenues from a consulting contract with Unisys Corporation. The
balance of revenues in the second quarter of 2001 resulted from deferred
software maintenance fees associated with 2000 sales.

Costs And Expenses

         The Company's total costs and expenses increased 5% to $1,830,834
during the second quarter of 2001, as compared to $1,746,725 for the second
quarter of 2000.

         The majority of the Company's costs and expenses are related to
compensation costs. The Company's operating expenses were higher in the second
quarter of 2001 as compared to the second quarter of 2000 because the Company
employed an average of 39 individuals during the second quarter of 2001, as
compared to an average of 38 individuals in the second quarter of 2000.

         Costs of revenues during the second quarter of 2001 were $6,683, as
compared to $0 for 2000. In 2001, the Company completed two consulting services
engagements, whereas in 2000 the Company had no such engagements.

         Selling and marketing expenses increased 14% to $320,522 during the
second quarter of 2001, as compared to $280,383 for the second quarter of 2000.
This increase is a result of the Company aggressively marketing its software
migration technology with advertising and promotional activities in media and
trade show formats.

         Research and development expenses decreased 35% to $418,611 during the
second quarter of 2001, as compared to $645,937 for the second quarter of 2000.
This decrease is due primarily to the Company's initial migration products
becoming more fully developed. In future periods the Company will continue to
incur research and development expenses in order to expand the Company's current
product line and to continue to develop new products.



                                       15
<PAGE>   18



         General and administrative expenses increased 32% to $1,085,018 during
the second quarter of 2001, as compared to $820,405 for the second quarter of
2000. Between the second quarter of 2001 and 2000, general and administrative
expenses varied as follows:

         o        In the second quarter of 2001, the Company hired individuals
                  and incurred infra-structure costs to establish a migration
                  group and a software solutions group for the purpose of
                  providing consulting services to customers. The costs
                  associated with these two groups consisted primarily of salary
                  and benefit expenses which aggregated $230,314. No such costs
                  were incurred in 2000.

         o        Insurance costs increased $36,513 in 2001, as compared to
                  2000.

         o        Legal and accounting expenses decreased $62,051 in 2001, as
                  compared to 2000.

         In prior periods, the Company issued options to purchase shares of
common stock to directors, officers and employees, some of which have exercise
prices equal to less than the fair market value at the date of grant. The
aggregate excess of the fair market value as compared to the exercise price at
the date of grant was deferred and is being amortized as compensation expense
over the respective vesting periods. The amount amortized as compensation
expense in the second quarter of 2001 was $180,937, as compared to $257,723 for
the second quarter of 2000. This compensation expense was allocated $160,937,
$10,000 and $10,000 to general and administrative, selling and marketing, and
research and development costs, respectively, in the second quarter of 2001,
whereas, in the second quarter of 2000, such compensation expense was allocated
$213,973, $43,750 and $0 to general and administrative, selling and marketing,
and research and development costs, respectively.

Interest and Financing Expenses

         The Company's interest and financing expenses decreased to $29,317
during the second quarter of 2001, as compared to $1,259,191 for the second
quarter of 2000. Interest expense decreased to $23,557 during the second quarter
of 2001, as compared to $1,259,191 for the second quarter of 2000. During the
second quarter ended June 30, 2000, the Company recorded $1,250,000 of interest
expense in accordance with EITF 98-5, "Accounting for Convertible Securities
with Beneficial Conversion Features or Contingently Adjustable Conversion
Ratios." The expense recorded relates to the convertible secured promissory
notes payable and related warrants issued with a conversion price below the
market price of the Company's common stock at the date of issuance. No similar
expense was incurred during the second quarter ended June 2001.

         Financing fees increased to $5,760 during the second quarter of 2001,
as compared to $0 for the second quarter of 2000, due to additional working
capital requirements in 2001.

Other Income

         Other income in the second quarter of 2001 decreased to $121, as
compared to $27,933 in the second quarter of 2000. In 2000, the Company was able
to invest in short-term interest-bearing investments using funds received from
the private financing of $3,750,000 received in the first and second quarters of
2000, whereas, no such investments were made in the second quarter of 2001.

Provision For Income Taxes

         As a result of operating losses for 2001 and 2000, MigraTEC did not
incur a federal income tax obligation for the second quarter ended June 30,
2001. No tax benefit was recorded during the second quarter of 2001 due to the
uncertainty that sufficient taxable income will be generated during the carry
forward period to realize the benefit of the net deferred tax asset. The carry
forward period will expire in 2016.

Net Loss

         For the second quarter ended June 30, 2001, MigraTEC incurred a net
loss of $1,824,380, or $0.02 per share, as compared to a net loss of $2,974,983,
or $0.04 per share, for the second quarter ended June 30, 2000.



                                       16
<PAGE>   19



SIX MONTHS ENDED JUNE 30, 2001, COMPARED TO SIX MONTHS ENDED JUNE 30, 2000

Revenues

         The Company's revenues consist of consulting services revenues and
software maintenance and support revenues. For the first six months ended June
30, 2001, the Company's revenues increased to $129,633, as compared to $6,000
for the first six months ended June 30, 2000. Revenues in the first six months
of 2001 consisted of $128,333 and $1,300 from consulting services and software
maintenance fees, respectively, whereas, in the first six months of 2000
revenues consisted entirely of software maintenance fees in the aggregate amount
of $6,000 from the sale of the Company's Y2K product, which product is no longer
sold or marketed. Consulting services revenue in the first six months of 2001
consisted of $108,333 of revenues from the Company's consulting contracts with
Dell Products, L.P. and a total $20,000 of revenues from its consulting
contracts with Labtec, Inc. and Unisys Corporation. The balance of revenues in
the first six months of 2001 resulted from deferred software maintenance fees
associated with 2000 sales.

Costs And Expenses

         The Company's total costs and expenses increased 10% to $3,724,445
during the first six months of 2001, as compared to $3,393,355 for the first six
months of 2000.

         The majority of the Company's costs and expenses are related to
compensation costs. The Company's operating expenses were higher in the first
six months of 2001 as compared to the first six months of 2000 because the
Company employed an average of 41 individuals during the first six months of
2001, as compared to an average of 35 individuals in the first six months of
2000.

         Costs of revenues during the first six months of 2001 were $6,683, as
compared to $0 for 2000. In 2001, the Company completed three consulting
services engagements, whereas in 2000 the Company had no such engagements.

         Selling and marketing expenses increased 112% to $776,757 during the
first six months of 2001, as compared to $365,675 for the first six months of
2000. This increase is a result of the Company aggressively marketing its
software migration technology with advertising and promotional activities in
media and trade show formats.

         Research and development expenses decreased 17% to $949,708 during the
first six months of 2001, as compared to $1,150,981 for the first six months of
2000. This decrease is due primarily to the Company's initial migration products
becoming more fully developed. In future periods the Company will continue to
incur research and development expenses in order expand the Company's current
product line and to continue to develop new products.

         General and administrative expenses increased 6% to $1,991,297 during
the first six months of 2001, as compared to $1,876,699 for the first six months
of 2000. Between the first six months of 2001 and 2000, general and
administrative expenses varied as follows:

         o        In the first six months of 2001, the Company hired individuals
                  and incurred infra-structure costs to establish a migration
                  group and a software solutions group for the purpose of
                  providing consulting services to customers. The costs
                  associated with these two groups consisted primarily of salary
                  and benefit expenses which aggregated $387,363. No such costs
                  were incurred in 2000.

         o        Insurance costs increased $79,537 in 2001, as compared to
                  2000.

         o        Costs associated with the Company's 401(k) plan increased
                  $7,936 in 2001, as compared to 2000, as a result of the
                  Company changing plan administrators.

         o        Legal and accounting expenses decreased $63,676 in 2001, as
                  compared to 2000.

         In prior periods, the Company issued options to purchase shares of
common stock to directors, officers and employees, some of which have exercise
prices equal to less than the fair market value at the date of grant. The
aggregate excess of the fair market value as compared to the exercise price at
the date of grant was deferred and is being amortized as compensation expense
over the respective vesting periods. The amount amortized as compensation
expense in the first six months of 2001 was $386,458, as compared to $704,896
for the first six months of 2000. This compensation expense was allocated
$321,875, $44,583 and $20,000 to general and administrative, selling and
marketing, and research and development costs, respectively, in the first six
months of 2001, whereas, in the first six months of 2000, such



                                       17
<PAGE>   20



compensation expense was allocated $641,979, $62,917 and $0 to general and
administrative, selling and marketing, and research and development costs,
respectively.

Interest and Financing Expenses

         The Company's interest and financing expenses decreased to $101,215
during the first six months of 2001, as compared to $3,846,662 for the first six
months of 2000. Interest expense decreased to $36,479 during the first six
months of 2001, as compared to $3,815,647 for the first six months of 2000.
During the first six months ended June 30, 2000, the Company recorded $3,750,000
of interest expense in accordance with EITF 98-5, "Accounting for Convertible
Securities with Beneficial Conversion Features or Contingently Adjustable
Conversion Ratios." The expense recorded relates to the convertible secured
promissory notes payable and related warrants issued with a conversion price
below the market price of the Company's common stock at the date of issuance. No
similar expense was incurred during the first six months ended June 30, 2001.

         Financing fees increased to $64,736 during the first six months of
2001, as compared to $31,015 for the first six months of 2000, due to additional
working capital requirements in 2001.

Other Income

         Other income in the first six months of 2001 decreased to $706, as
compared to $33,944 in the first six months of 2000. In 2000, the Company was
able to invest in short-term interest-bearing investments using funds received
from the private financing of $3,750,000 received in the first six months of
2000, whereas, no such investments were made during the first six months of
2001.

Provision For Income Taxes

         As a result of operating losses for 2001 and 2000, MigraTEC did not
incur a federal income tax obligation for the first six months ended June 30,
2001. No tax benefit was recorded during 2001 due to the uncertainty that
sufficient taxable income will be generated during the carry forward period to
realize the benefit of the net deferred tax asset. The carry forward period will
expire in 2016.

Net Loss

         For the first six months ended June 30, 2001, MigraTEC incurred a net
loss of $3,695,321, or $0.04 per share, as compared to a net loss of $7,200,073,
or $0.09 per share, for the first six months ended June 30, 2000.

LIQUIDITY AND CAPITAL RESOURCES

         Net cash used for operating activities was $2,803,767 for the six
months ended June 30, 2001 as compared to $2,554,901 for the six months ended
June 30, 2000, which resulted from the operating loss, decreased by net changes
in assets and liabilities and non-cash expenses and income of $891,554 in 2001
and $4,645,172 in 2000.

         As of June 30, 2001, MigraTEC had a net working capital deficit of
$762,409, as compared to a net working capital deficit of $773,858 at December
31, 2000.

         As of June 30, 2001, MigraTEC had cash of $631,750 and $0 in
outstanding accounts receivable, compared to cash of $242,254 and $15,000 in
outstanding accounts receivable at December 31, 2000.

         As of June 30, 2001, MigraTEC's outstanding obligations under notes
payable totaled $2,954,988 as compared to $4,344,523 at December 31, 2000. The
Company's outstanding obligations under notes payable as of June 30, 2001 and
December 31, 2000 are summarized below.



                                       18
<PAGE>   21



<Table>
<Caption>
                                Notes Payable                                              June 30, 2001       December 31, 2000
                                -------------                                             ----------------     -----------------
<S>                                                                                       <C>                  <C>
Note payable to Mercury Fund No. 1, Ltd. in the amount of $565,000, dated
December 1, 2000, with interest varying between 0% and 10%, due the earlier of
December 1, 2001 or upon the occurrence of a qualified financing transaction,
collateralized by all assets owned or thereafter acquired, subject to collateral
rights of notes dated December 4 and 28, 1998, January 4 and 27, 1999 and
January 25, 2000. This note was repaid in full on June 22, 2001 upon the
exercise of warrants to purchase 2,839,800 shares of common stock as the
exercise price consisted of conversion of this note plus cash in the amount
of $2,960.                                                                                $          --       $      565,000

Convertible note payable to Mercury Fund No. 1, Ltd. in the amount of
$1,775,000, dated January 25, 2000, without interest, due January 24, 2003,
collateralized by all assets owned or thereafter acquired, subject to collateral
rights of notes dated December 4 and 28, 1998 and January 4 and 27, 1999. Such
note is convertible at any time on the basis of one share of common stock for
each $0.125 in principal amount of the note outstanding at the time of
conversion. The note automatically converts into shares of common stock upon the
earlier of either the closing of a sale of the Company's common stock, preferred
stock or issuance of debt with equity features in one or more related
transactions in which the Company receives aggregate proceeds of at least
$5,000,000, or the first trading day following a period of 90 consecutive
trading days, during which the closing sale price of the Company's common stock
has been in excess of $1.25. In connection with this note, Mercury was issued
warrants to purchase 2,839,800 shares of common stock. As of June 30, 2001,
Mercury had converted $500,000 of this note into 4,000,000 shares of common
stock and exercised all of its warrants.                                                      1,275,000            1,775,000

Convertible note payable to MT Partners, L.P. in the amount of $1,975,000, dated
January 25, 2000, without interest, due January 24, 2003, collateralized by all
assets owned or thereafter acquired, subject to collateral rights of notes dated
December 4 and 28, 1998 and January 4 and 27, 1999. Such note is convertible at
any time on the basis of one share of common stock for each $0.125 in principal
amount of the note outstanding at the time of conversion. The note automatically
converts into shares of common stock upon the earlier of either the closing of a
sale of the Company's common stock, preferred stock or issuance of debt with
equity features in one or more related transactions in which the Company
receives aggregate proceeds of at least $5,000,000, or the first trading day
following a period of 90 consecutive trading days, during which the closing sale
price of the Company's common stock has been in excess of $1.25. In connection
with this note, MT Partners was issued warrants to purchase 3,160,200 shares of
common stock. As of June 30, 2001, MT Partners had converted $750,000 of this
note into 6,000,000 shares of common stock and exercised all of its warrants.                 1,225,000            1,975,000
</Table>



                                       19
<PAGE>   22



<Table>
<Caption>
                                Notes Payable                                              June 30, 2001       December 31, 2000
                                -------------                                             ----------------     -----------------
<S>                                                                                       <C>                  <C>
Notes payable to BEM Capital Partners, Inc. (assignee of MJ Capital Partners
III, L.P. as of January 2001) in the aggregate amount of $250,000, dated
December 4 and December 28, 1998 and January 4 and 27, 1999, bearing interest at
16% per annum, collateralized by all assets owned or thereafter acquired
Modified, extended and renewed February 1, 1999 bearing interest at 16% per
annum, repayable with monthly installments of principal and interest totaling
$31,000 with a final maturity of December 31, 1999. Modified, extended and
renewed October 31, 1999 bearing interest at 16% per annum, repayable with
monthly installments of principal and interest totaling $21,100 with a final
maturity of December 31, 2000. In connection with the October 31, 1999
modification, the note holder was issued two-year warrants to purchase 100,000
shares of common stock at $0.01 per share and 100,000 shares of common stock at
$0.20 per share. Modified, extended and renewed January 26, 2001, so as to
increase the outstanding loan amount to $250,000, bearing interest at 15% per
annum, interest only payable monthly until May 1, 2001. Thereafter payable with
monthly installments of principal and interest totaling $22,565 with a final
maturity of May 1, 2002. In connection with the January 26, 2001 modification,
the note holder was issued a one-year warrant to purchase 40,000 shares of
common stock at $0.01 per share. This warrant was exercised in March 2001.
                                                                                                   230,620                  958

Note payable to The Glebe Group in the amount of $200,000, dated May 11, 2001
bearing interest at 15% annum, principal and interest originally due June 11,
2001, extended and renewed with a new maturity date of August 10, 2001. In
connection with this note, the note holder was issued a six-month warrant to
purchase 16,000 shares of common stock at $0.01 per share. This warrant is
unexercised as of June 30, 2001.                                                                   200,000                   --

Note payable to a former employee in the amount of $68,250, dated March 3, 1998,
bearing interest at 14%, payable in monthly installments of $1,000,
due December 10, 2003                                                                               24,368               28,565
</Table>


         During the six months ended June 30, 2001, MigraTEC had net cash
provided by financing activities of $3,258,422 consisting of $3,398,477 in
connection with the issuance of common stock, and $450,000 in proceeds from the
short-term loans from BEM Capital Partners, Inc. and The Glebe Group, as
described above. The cash proceeds were offset by $590,055 expended for the
repayment of principal of notes payable and an obligation under a capital lease.
During the six months ended June 30, 2000, the Company had net cash provided by
financing activities of $4,964,625 consisting of $3,750,000 in proceeds from the
long-term loans from Mercury Fund No. 1, Ltd. and MT Partners, L.P., as
described above, and $2,044,272 in connection with the issuance of common stock.
The cash proceeds were offset by $829,647 expended for the repayment of
principal of notes payable and an obligation under a capital lease.

         On March 27, 2001, the Company and Ironhead Investments Inc. entered
into a Common Stock Purchase Agreement establishing a private equity line of
credit. Ironhead has committed to purchase from the Company up to $20,000,000 of
common stock up to a maximum of 30,000,000 shares of common stock over a
twenty-month period. The number of shares issuable by the Company and the price
per share to be paid by Ironhead are dependent upon a defined trading volume of
the Company's common stock and a defined average trading price (net of a 6%
discount). The Company has reserved 30,000,000 shares of common stock to be
issued under the equity line of credit. As of June 30, 2001, the Company has not
sold any shares of common stock under the Common Stock Purchase Agreement.

         In connection with the equity line of credit, Ironhead and GKN
Securities were issued five-year warrants to purchase an aggregate of 650,000
shares of the Company's common stock at an exercise price of $0.42 per share.
The Company engaged GKN as a sales agent to facilitate this transaction. GKN
will also receive a 5% placement fee for each draw under the equity line of
credit.



                                       20
<PAGE>   23



         The Company is prevented from issuing shares to Ironhead to the extent
Ironhead would beneficially own more than 9.9% of the then outstanding common
stock. Any resale of shares by Ironhead would reduce the number of shares
beneficially owned by Ironhead and would enable the Company to issue additional
shares to Ironhead without violating this condition.

         MigraTEC had substantial operating losses during the six months ended
June 30, 2001 and the prior three years. While MigraTEC has experienced certain
periods of profitability since inception, it has sustained substantial losses in
recent years. For the years ended December 31, 2000, 1999 and 1998, MigraTEC
incurred net losses of $10,193,130, $4,184,078 and $3,458,075, respectively. At
June 30, 2001, MigraTEC had an accumulated deficit of $25,526,638.

         MigraTEC plans to raise additional capital in 2001 to fund expanded
sales and marketing efforts and other normal operating costs. MigraTEC will need
substantial additional capital over the next 12 months to further develop and
aggressively market its new products and services. Results of operations in the
future will be influenced by numerous factors including, but not limited to:

         o        internal technological developments and those of MigraTEC's
                  technology and marketing associates, including Intel, IBM,
                  Dell, Compaq and Hewlett-Packard;

         o        the successful introduction and acceptance of the Intel(R)
                  Itanium(TM) 64-bit processor;

         o        rapid and wide-spread adoption of automated migration
                  technology;

         o        further development and protection of MigraTEC's proprietary
                  software products and services;

         o        expansion of MigraTEC's marketing program and market
                  acceptance of its products and services;

         o        capacity to further identify MigraTEC as a provider of
                  migration products;

         o        MigraTEC's ability to control increases in expenses associated
                  with sales growth and other costs;

         o        the availability of substantial additional funding; and

         o        MigraTEC's ability to attract and maintain a skilled and
                  cohesive management group.

         MigraTEC's continued existence and plans for future growth are
dependent, in part, upon its ability to obtain the capital necessary to operate,
primarily through the issuance of additional debt or equity, and on its ability
to effectively penetrate the developing market for migration software, services
and related products. If MigraTEC is not able to obtain additional or
alternative funding, or generate sufficient revenues and cash flows in the near
term, MigraTEC will be unable to continue as a going concern. As disclosed in
the report of independent auditors on the Company's financial statements for the
year ended December 31, 2000, the Company's recurring losses, negative cash flow
from operations and net capital deficiency raise substantial doubt about the
Company's ability to continue as a going concern. However, as a result of the
private equity line financing with Ironhead, management believes that funds will
be available to meet the Company's obligations for at least twelve months from
the date of the Company's most recent balance sheet. Based on the Company's
current cash reserves, in the event the Company is unable to obtain funding
through the private equity line or other sources, the Company may be forced to
significantly reduce or discontinue its current operations.

FORWARD LOOKING STATEMENTS

         All of the foregoing statements, other than statements of historical
fact, included in or incorporated by reference into this Form 10-QSB, are
forward-looking statements. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may," "will,"
"expect," "intend," "estimate," "anticipate," "plan," "such" or "believe." The
forward-looking statements included in this report are based on current
expectations that involve numerous risks and uncertainties. Assumptions relating
to the foregoing involve judgments with respect to, among other things, future
economic, competitive and market conditions and future business decisions, all
of which are difficult or impossible to predict accurately and many of which are
beyond the control of MigraTEC.



                                       21
<PAGE>   24




         Based upon changing conditions, should any one or more of these risks
or uncertainties materialize, or if underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Although management believes that the expectations reflected in such
forward-looking statements are accurate, no assurance can be given that such
expectations will occur. In light of the significant uncertainties inherent in
the forward-looking statements included in this report, the inclusion of such
information should not be regarded as a representation by MigraTEC, management
or any other person that the objectives of MigraTEC will be achieved.

         Key factors that could cause actual results to differ materially from
expectations, estimates of costs, projected results or anticipated results
include, but are not limited to, the following risks:

         o        MigraTEC may not be able to generate sufficient cash flows to
                  fund operations or to obtain additional financing on favorable
                  terms;

         o        MigraTEC may not be able to effectively penetrate its target
                  markets for migration products and sales;

         o        MigraTEC may not be able to successfully develop and/or
                  protect its technology;

         o        MigraTEC may not be able to effectively control increases in
                  expenses associated with sales growth and other costs;

         o        management may not be able to successfully implement the
                  Company's business plan and sales strategy;

         o        MigraTEC may not be able to attract and retain a skilled and
                  cohesive management group; and

         o        unfavorable changes in economic and industry conditions and
                  regulatory requirements may develop.

PART II - OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

         During the second quarter ended June 30, 2001, MigraTEC sold its
unregistered securities in the transactions described below.

         On April 2, 2001, MigraTEC issued 729,166 shares of its common stock at
a price pf $0.24 per share to one limited liability company. MigraTEC issued
such shares in a transaction not involving a public offering in reliance upon
the exemption set forth in Section 4(2) of the Securities Act.

         On April 4, 2001, MigraTEC issued 500,000 shares of its common stock at
a price of $0.20 per share to one individual. MigraTEC issued such shares in a
transaction not involving a public offering in reliance upon the exemption set
forth in Section 4(2) of the Securities Act.

         On April 11, 2001, MigraTEC issued 250,000 shares of its common stock
at a price of $0.20 per share to one individual. MigraTEC issued such shares in
a transaction not involving a public offering in reliance upon the exemption set
forth in Section 4(2) of the Securities Act.

         On April 12, 2001, MigraTEC issued 200,000 shares of its common stock
at a price of $0.20 per share to one individual. MigraTEC issued such shares in
a transaction not involving a public offering in reliance upon the exemption set
forth in Section 4(2) of the Securities Act.

         On May 4, 2001, MigraTEC issued 250,000 shares of its common stock at a
price of $0.20 per share to one corporation. MigraTEC issued such shares in a
transaction not involving a public offering in reliance upon the exemption set
forth in Section 4(2) of the Securities Act.

         On May 11, 2001, MigraTEC issued a six-month warrant to purchase 16,000
shares of common stock at an exercise price of $0.01 per share to one
corporation as part of a financing transaction. MigraTEC issued such securities
in a transaction not involving a public offering in reliance upon the exemption
set forth in Section 4(2) of the Securities Act.



                                       22
<PAGE>   25



         On May 15, 2001, MigraTEC issued 50,000 shares of its common stock at a
price of $0.25 per share to one individual. MigraTEC issued such shares in a
transaction not involving a public offering in reliance upon the exemption set
forth in Section 4(2) of the Securities Act.

         On May 18, 2001, MigraTEC issued 500,000 shares of its common stock at
a price of $0.20 per share to one limited liability company. MigraTEC issued
such shares in a transaction not involving a public offering in reliance upon
the exemption set forth in Section 4(2) of the Securities Act.

         On May 24, 2001, MigraTEC issued 350,000 shares of its common stock at
a price of $0.20 per share to three individuals and one corporation. MigraTEC
issued such shares in transactions not involving a public offering in reliance
upon the exemption set forth in Section 4(2) of the Securities Act.

         On June 1, 2001, MigraTEC issued 500,000 shares of its common stock at
a price of $0.20 per share to three individuals. MigraTEC issued such shares in
transactions not involving a public offering in reliance upon the exemption set
forth in Section 4(2) of the Securities Act.

         On June 6, 2001, MigraTEC issued 1,050,000 shares of its common stock
at a price of $0.20 per share to eight individuals, two limited liability
companies and one trust. MigraTEC issued such shares in transactions not
involving a public offering in reliance upon the exemption set forth in Section
4(2) of the Securities Act.

         On June 12, 2001, MigraTEC issued 75,000 shares of its common stock at
a price of $0.20 per share to two individuals. MigraTEC issued such shares in
transactions not involving a public offering in reliance upon the exemption set
forth in Section 4(2) of the Securities Act.

         On June 14, 2001, MigraTEC issued 625,000 shares of its common stock at
a price of $0.20 per share to two individuals and a limited partnership.
MigraTEC issued such shares in transactions not involving a public offering in
reliance upon the exemption set forth in Section 4(2) of the Securities Act.

         On June 15, 2001, MigraTEC issued 125,000 shares of its common stock at
a price of $0.20 per share to one individual. MigraTEC issued such shares in
transactions not involving a public offering in reliance upon the exemption set
forth in Section 4(2) of the Securities Act.

         On June 19, 2001, MigraTEC issued 125,000 shares of its common stock at
a price of $0.20 per share to one individual. MigraTEC issued such shares in a
transaction not involving a public offering in reliance upon the exemption set
forth in Section 4(2) of the Securities Act.

         On June 29, 2001, MigraTEC issued 100,000 shares of its common stock at
a price of $0.20 per share to one individual. MigraTEC issued such shares in a
transaction not involving a public offering in reliance upon the exemption set
forth in Section 4(2) of the Securities Act.



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits: see exhibit table below.

         (b)      Reports of Form 8-K: no reports on Form 8-K were filed by the
                  Company during the second quarter ended June 30, 2001.



                                       23
<PAGE>   26



                                  EXHIBIT TABLE

Exhibit
Number        Description Of Document

3.1           Certificate of Incorporation (incorporated herein by reference to
              Exhibit 3.1 to MigraTEC's registration statement on Form SB-2
              filed August 31, 2000, File No. 333-44946).

3.2           Bylaws (incorporated herein by reference to Exhibit 3.2 to
              MigraTEC's registration statement on Form SB-2 filed August 31,
              2000, File No. 333-44946).

4.1           Form of Common Stock Certificate (incorporated herein by reference
              to Exhibit 4.1 to Post-Effective Amendment No. 1 to MigraTEC's
              registration statement on Form SB-2 filed November 13, 2000, File
              No. 333-44946).

10.1          Employment Agreement between MigraTEC and W. Curtis Overstreet
              dated, April 10, 1997 (incorporated herein by reference to Exhibit
              10.3 to Post-Effective Amendment No. 1 to MigraTEC's registration
              statement on Form SB-2 filed May 7, 1999, File No. 333-65093).

10.2          Employment Agreement between MigraTEC and Rick J. Johnson, dated
              July 1, 1997 (incorporated herein by reference to Exhibit 10.5 to
              Post-Effective Amendment No. 1 to MigraTEC's registration
              statement on Form SB-2 filed May 7, 1999, File No. 333-65093).

10.3          Stock Option Agreement between MigraTEC and EAI Partners, Inc.,
              dated as of August 6, 1999 (incorporated herein by reference to
              Exhibit 10.5 to Post-Effective Amendment No. 1 to MigraTEC's
              registration statement on Form SB-2 filed November 13, 2000, File
              No. 333-44946).

10.4          MigraTEC, Inc. Long-Term Incentive Plan, as amended and restated
              (incorporated herein by reference to Exhibit 99.1 to MigraTEC's
              Form S-8 filed November 6, 2000, File No. 333-49398).

10.5          Form of Stock Option Agreement pursuant to the MigraTEC, Inc.
              Long-Term Incentive Plan, as amended and restated (incorporated
              herein by reference to Exhibit 99.2 to MigraTEC's Form S-8 filed
              November 6, 2000, File No. 333-49398).

10.6          Warrant Agreement among MigraTEC, MT Partners, L.P. and Mercury
              Fund No. 1, Ltd., dated as of January 25, 2000 (incorporated
              herein by reference to Exhibit 10.9 to MigraTEC's Form 10-KSB for
              the year ended December 31, 1999 filed April 14, 2000, File No.
              000-28220).

10.7          Form of Warrant issued to MT Partners, L.P. and Mercury Fund No.
              1, Ltd. (incorporated herein by reference to Exhibit 4.2 to
              MigraTEC's Form 10-KSB for the year ended December 31, 1999 filed
              April 14, 2000, File No. 000-28220).

10.8          $1,975,000 Convertible Secured Promissory Note by MigraTEC in
              favor of MT Partners, L.P., dated as of January 25, 2000
              (incorporated herein by reference to Exhibit 10.10 to MigraTEC's
              Form 10-KSB for the year ended December 31, 1999 filed April 14,
              2000, File No. 000-28220).

10.9          $1,775,000 Convertible Secured Promissory Note by MigraTEC in
              favor of Mercury Fund No. 1, Ltd., dated as of January 25, 2000
              (incorporated herein by reference to Exhibit 10.11 to MigraTEC's
              Form 10-KSB for the year ended December 31, 1999 filed April 14,
              2000, File No. 000-28220).

10.10         Security Agreement among MigraTEC, MT Partners, L.P. and Mercury
              Fund No. 1, Ltd., dated as of January 25, 2000 (incorporated
              herein by reference to Exhibit 10.12 to MigraTEC's Form 10-KSB for
              the year ended December 31, 1999 filed April 14, 2000, File No.
              000-28220).

10.11         Shareholders Agreement among MigraTEC, MT Partners, L.P., Mercury
              Fund No. 1, Ltd. and certain stockholders, dated as of January 25,
              2000 (incorporated herein by reference to Exhibit 10.13 to
              MigraTEC's Form 10-KSB for the year ended December 31, 1999 filed
              April 14, 2000, File No. 000-28220).



                                       24
<PAGE>   27



10.12         Registration Rights Agreement among MigraTEC, MT Partners, L.P.
              and Mercury Fund No. 1, Ltd., dated as of January 25, 2000
              (incorporated herein by reference to Exhibit 10.14 to MigraTEC's
              Form 10-KSB for the year ended December 31, 1999 filed April 14,
              2000, File No. 000-28220).

10.13         Form of Director Indemnification Agreement between MigraTEC and
              each of Kevin C. Howe and Drew R. Johnson, dated as of January 25,
              2000 (incorporated herein by reference to Exhibit 10.15 to
              MigraTEC's Form 10-KSB for the year ended December 31, 1999 filed
              April 14, 2000, File No. 000-28220).

10.14         Amendment No. 1 to Convertible Secured Promissory Note by MigraTEC
              in favor of MT Partners, L.P., dated February 28, 2000
              (incorporated herein by reference to Exhibit 10.16 to MigraTEC's
              Form 10-KSB for the year ended December 31, 2000 filed March 22,
              2001, File No. 000-28220).

10.15         Amendment No. 1 to Convertible Secured Promissory Note by MigraTEC
              in favor of Mercury Fund No. 1, Ltd., dated February 28, 2000
              (incorporated herein by reference to Exhibit 10.17 to MigraTEC's
              Form 10-KSB for the year ended December 31, 2000 filed March 22,
              2001, File No. 000-28220).

10.16         Office Lease Agreement between MigraTEC and Charter Crown Plaza
              Partners, L.P., dated as of April 12, 2000 (incorporated herein by
              reference to Exhibit 10.16 to MigraTEC's Form 10-KSB for the year
              ended December 31, 1999 filed April 14, 2000, File No. 000-28220).

10.17         Amendment No. 2 to Convertible Secured Promissory Note by MigraTEC
              in favor of MT Partners, L.P., dated June 1, 2000 (incorporated
              herein by reference to Exhibit 10.19 to MigraTEC's Form 10-KSB for
              the year ended December 31, 2000 filed March 22, 2001, File No.
              000-28220).

10.18         Amendment No. 2 to Convertible Secured Promissory Note by MigraTEC
              in favor of Mercury Fund No. 1, Ltd., dated June 1, 2000
              (incorporated herein by reference to Exhibit 10.20 to MigraTEC's
              Form 10-KSB for the year ended December 31, 2000 filed March 22,
              2001, File No. 000-28220).

10.19         Lease Modification Agreement Number One between MigraTEC and
              Charter Crown Plaza Partners, L.P., dated November 16, 2000
              (incorporated herein by reference to Exhibit 10.21 to MigraTEC's
              Form 10-KSB for the year ended December 31, 2000 filed March 22,
              2001, File No. 000-28220).

10.20         $565,000 Promissory Note by MigraTEC in favor of Mercury Fund No.
              1, Ltd., dated as of December 1, 2000 (incorporated herein by
              reference to Exhibit 10.22 to MigraTEC's Form 10-KSB for the year
              ended December 31, 2000 filed March 22, 2001, File No. 000-28220).

10.21         Security Agreement between MigraTEC and Mercury Fund No. 1, Ltd.,
              dated as of December 1, 2000 (incorporated herein by reference to
              Exhibit 10.23 to MigraTEC's Form 10-KSB for the year ended
              December 31, 2000 filed March 22, 2001, File No. 000-28220).

10.22         Stock Option Amendment Agreement between MigraTEC and EAI
              Partners, Inc., dated January 2, 2001 (incorporated herein by
              reference to Exhibit 10.24 to MigraTEC's Form 10-KSB for the year
              ended December 31, 2000 filed March 22, 2001, File No. 000-28220).

10.23         Assignment and Assumption Agreement between MJ Capital Partners
              III, L.P. and BEM Capital Partners, L.P., dated January 26, 2001
              (incorporated herein by reference to Exhibit 10.26 to MigraTEC's
              Form 10-KSB for the year ended December 31, 2000 filed March 22,
              2001, File No. 000-28220).

10.24         Modification, Renewal and Extension of Note and Security Agreement
              between MigraTEC and BEM Capital Partners, Inc., dated January 26,
              2001 (incorporated herein by reference to Exhibit 10.25 to
              MigraTEC's Form 10-KSB for the year ended December 31, 2000 filed
              March 22, 2001, File No. 000-28220).

10.25         Common Stock Purchase Warrant for 40,000 shares of common stock
              issued to BEM Capital Partners, L.P. dated, January 31, 2001
              (incorporated herein by reference to Exhibit 10.27 to MigraTEC's
              Form 10-KSB for the year ended December 31, 2000 filed March 22,
              2001, File No. 000-28220).



                                       25
<PAGE>   28



10.26         Form of Stock Purchase Warrant issued to GKN Securities Corp. and
              its designees (incorporated herein by reference to Exhibit 10.28
              to MigraTEC's pre-effective registration statement on Form SB-2
              filed March 29, 2001, File No. 333-57830).

10.27         Stock Purchase Warrant for 325,000 shares of common stock issued
              to Ironhead Investments Inc. (incorporated herein by reference to
              Exhibit 10.29 to MigraTEC's pre-effective registration statement
              on Form SB-2 filed March 29, 2001, File No. 333-57830).

10.28         Common Stock Purchase Agreement between MigraTEC and Ironhead
              Investments Inc., dated as of March 27, 2001 (incorporated herein
              by reference to Exhibit 10.30 to MigraTEC's pre-effective
              registration statement on Form SB-2 filed March 29, 2001, File No.
              333-57830).

10.29         Escrow Agreement among MigraTEC, Ironhead Investments Inc. and
              Epstein Becker & Green, P.C., dated as of March 27, 2001
              (incorporated herein by reference to Exhibit 10.31 to MigraTEC's
              pre-effective registration statement on Form SB-2 filed March 29,
              2001, File No. 333-57830).

10.30         Registration Rights Agreement between MigraTEC and Ironhead
              Investments Inc., dated as of March 27, 2001 (incorporated herein
              by reference to Exhibit 10.32 to MigraTEC's pre-effective
              registration statement on Form SB-2 filed March 29, 2001, File No.
              333-57830).

11.1          Statement re: Computations of Net Loss per Share (filed herewith).

24.1          Power of Attorney (included in the signature page of this Form
              10-QSB).



                                       26
<PAGE>   29



                                POWER OF ATTORNEY

         Each person whose signature appears below constitutes and appoints T.
Ulrich Brechbuhl his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign on his behalf individually and in each capacity
stated below any amendment to this Form 10-QSB, and to file the same, with all
exhibits thereto and other documents in connection therewith with the Securities
and Exchange Commission, granting unto said attorney-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agents and either of them, or
their substitutes, may lawfully do or cause to be done by virtue hereof.

                                   SIGNATURES

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

MIGRATEC, INC.

By:      /s/ T. Ulrich Brechbuhl                                 August 6, 2001
         --------------------------------------------
         T. Ulrich Brechbuhl
         President and Chief Financial Officer


         /s/ W. Curtis Overstreet                                August 6, 2001
         --------------------------------------------
         W. Curtis Overstreet
         Chief Executive Officer




                                       27
<PAGE>   30




                                  EXHIBIT INDEX

<Table>
<Caption>
Exhibit
Number        Description Of Document
------        -----------------------
<S>           <C>

3.1           Certificate of Incorporation (incorporated herein by reference to
              Exhibit 3.1 to MigraTEC's registration statement on Form SB-2
              filed August 31, 2000, File No. 333-44946).

3.2           Bylaws (incorporated herein by reference to Exhibit 3.2 to
              MigraTEC's registration statement on Form SB-2 filed August 31,
              2000, File No. 333-44946).

4.1           Form of Common Stock Certificate (incorporated herein by reference
              to Exhibit 4.1 to Post-Effective Amendment No. 1 to MigraTEC's
              registration statement on Form SB-2 filed November 13, 2000, File
              No. 333-44946).

10.1          Employment Agreement between MigraTEC and W. Curtis Overstreet
              dated, April 10, 1997 (incorporated herein by reference to Exhibit
              10.3 to Post-Effective Amendment No. 1 to MigraTEC's registration
              statement on Form SB-2 filed May 7, 1999, File No. 333-65093).

10.2          Employment Agreement between MigraTEC and Rick J. Johnson, dated
              July 1, 1997 (incorporated herein by reference to Exhibit 10.5 to
              Post-Effective Amendment No. 1 to MigraTEC's registration
              statement on Form SB-2 filed May 7, 1999, File No. 333-65093).

10.3          Stock Option Agreement between MigraTEC and EAI Partners, Inc.,
              dated as of August 6, 1999 (incorporated herein by reference to
              Exhibit 10.5 to Post-Effective Amendment No. 1 to MigraTEC's
              registration statement on Form SB-2 filed November 13, 2000, File
              No. 333-44946).

10.4          MigraTEC, Inc. Long-Term Incentive Plan, as amended and restated
              (incorporated herein by reference to Exhibit 99.1 to MigraTEC's
              Form S-8 filed November 6, 2000, File No. 333-49398).

10.5          Form of Stock Option Agreement pursuant to the MigraTEC, Inc.
              Long-Term Incentive Plan, as amended and restated (incorporated
              herein by reference to Exhibit 99.2 to MigraTEC's Form S-8 filed
              November 6, 2000, File No. 333-49398).

10.6          Warrant Agreement among MigraTEC, MT Partners, L.P. and Mercury
              Fund No. 1, Ltd., dated as of January 25, 2000 (incorporated
              herein by reference to Exhibit 10.9 to MigraTEC's Form 10-KSB for
              the year ended December 31, 1999 filed April 14, 2000, File No.
              000-28220).

10.7          Form of Warrant issued to MT Partners, L.P. and Mercury Fund No.
              1, Ltd. (incorporated herein by reference to Exhibit 4.2 to
              MigraTEC's Form 10-KSB for the year ended December 31, 1999 filed
              April 14, 2000, File No. 000-28220).

10.8          $1,975,000 Convertible Secured Promissory Note by MigraTEC in
              favor of MT Partners, L.P., dated as of January 25, 2000
              (incorporated herein by reference to Exhibit 10.10 to MigraTEC's
              Form 10-KSB for the year ended December 31, 1999 filed April 14,
              2000, File No. 000-28220).

10.9          $1,775,000 Convertible Secured Promissory Note by MigraTEC in
              favor of Mercury Fund No. 1, Ltd., dated as of January 25, 2000
              (incorporated herein by reference to Exhibit 10.11 to MigraTEC's
              Form 10-KSB for the year ended December 31, 1999 filed April 14,
              2000, File No. 000-28220).

10.10         Security Agreement among MigraTEC, MT Partners, L.P. and Mercury
              Fund No. 1, Ltd., dated as of January 25, 2000 (incorporated
              herein by reference to Exhibit 10.12 to MigraTEC's Form 10-KSB for
              the year ended December 31, 1999 filed April 14, 2000, File No.
              000-28220).

10.11         Shareholders Agreement among MigraTEC, MT Partners, L.P., Mercury
              Fund No. 1, Ltd. and certain stockholders, dated as of January 25,
              2000 (incorporated herein by reference to Exhibit 10.13 to
              MigraTEC's Form 10-KSB for the year ended December 31, 1999 filed
              April 14, 2000, File No. 000-28220).
</Table>



                                       28
<PAGE>   31



<Table>
<S>           <C>
10.12         Registration Rights Agreement among MigraTEC, MT Partners, L.P.
              and Mercury Fund No. 1, Ltd., dated as of January 25, 2000
              (incorporated herein by reference to Exhibit 10.14 to MigraTEC's
              Form 10-KSB for the year ended December 31, 1999 filed April 14,
              2000, File No. 000-28220).

10.13         Form of Director Indemnification Agreement between MigraTEC and
              each of Kevin C. Howe and Drew R. Johnson, dated as of January 25,
              2000 (incorporated herein by reference to Exhibit 10.15 to
              MigraTEC's Form 10-KSB for the year ended December 31, 1999 filed
              April 14, 2000, File No. 000-28220).

10.14         Amendment No. 1 to Convertible Secured Promissory Note by MigraTEC
              in favor of MT Partners, L.P., dated February 28, 2000
              (incorporated herein by reference to Exhibit 10.16 to MigraTEC's
              Form 10-KSB for the year ended December 31, 2000 filed March 22,
              2001, File No. 000-28220).

10.15         Amendment No. 1 to Convertible Secured Promissory Note by MigraTEC
              in favor of Mercury Fund No. 1, Ltd., dated February 28, 2000
              (incorporated herein by reference to Exhibit 10.17 to MigraTEC's
              Form 10-KSB for the year ended December 31, 2000 filed March 22,
              2001, File No. 000-28220).

10.16         Office Lease Agreement between MigraTEC and Charter Crown Plaza
              Partners, L.P., dated as of April 12, 2000 (incorporated herein by
              reference to Exhibit 10.16 to MigraTEC's Form 10-KSB for the year
              ended December 31, 1999 filed April 14, 2000, File No. 000-28220).

10.17         Amendment No. 2 to Convertible Secured Promissory Note by MigraTEC
              in favor of MT Partners, L.P., dated June 1, 2000 (incorporated
              herein by reference to Exhibit 10.19 to MigraTEC's Form 10-KSB for
              the year ended December 31, 2000 filed March 22, 2001, File No.
              000-28220).

10.18         Amendment No. 2 to Convertible Secured Promissory Note by MigraTEC
              in favor of Mercury Fund No. 1, Ltd., dated June 1, 2000
              (incorporated herein by reference to Exhibit 10.20 to MigraTEC's
              Form 10-KSB for the year ended December 31, 2000 filed March 22,
              2001, File No. 000-28220).

10.19         Lease Modification Agreement Number One between MigraTEC and
              Charter Crown Plaza Partners, L.P., dated November 16, 2000
              (incorporated herein by reference to Exhibit 10.21 to MigraTEC's
              Form 10-KSB for the year ended December 31, 2000 filed March 22,
              2001, File No. 000-28220).

10.20         $565,000 Promissory Note by MigraTEC in favor of Mercury Fund No.
              1, Ltd., dated as of December 1, 2000 (incorporated herein by
              reference to Exhibit 10.22 to MigraTEC's Form 10-KSB for the year
              ended December 31, 2000 filed March 22, 2001, File No. 000-28220).

10.21         Security Agreement between MigraTEC and Mercury Fund No. 1, Ltd.,
              dated as of December 1, 2000 (incorporated herein by reference to
              Exhibit 10.23 to MigraTEC's Form 10-KSB for the year ended
              December 31, 2000 filed March 22, 2001, File No. 000-28220).

10.22         Stock Option Amendment Agreement between MigraTEC and EAI
              Partners, Inc., dated January 2, 2001 (incorporated herein by
              reference to Exhibit 10.24 to MigraTEC's Form 10-KSB for the year
              ended December 31, 2000 filed March 22, 2001, File No. 000-28220).

10.23         Assignment and Assumption Agreement between MJ Capital Partners
              III, L.P. and BEM Capital Partners, L.P., dated January 26, 2001
              (incorporated herein by reference to Exhibit 10.26 to MigraTEC's
              Form 10-KSB for the year ended December 31, 2000 filed March 22,
              2001, File No. 000-28220).

10.24         Modification, Renewal and Extension of Note and Security Agreement
              between MigraTEC and BEM Capital Partners, Inc., dated January 26,
              2001 (incorporated herein by reference to Exhibit 10.25 to
              MigraTEC's Form 10-KSB for the year ended December 31, 2000 filed
              March 22, 2001, File No. 000-28220).

10.25         Common Stock Purchase Warrant for 40,000 shares of common stock
              issued to BEM Capital Partners, L.P. dated, January 31, 2001
              (incorporated herein by reference to Exhibit 10.27 to MigraTEC's
              Form 10-KSB for the year ended December 31, 2000 filed March 22,
              2001, File No. 000-28220).
</Table>




                                       29
<PAGE>   32



<Table>
<S>           <C>
10.26         Form of Stock Purchase Warrant issued to GKN Securities Corp. and
              its designees (incorporated herein by reference to Exhibit 10.28
              to MigraTEC's pre-effective registration statement on Form SB-2
              filed March 29, 2001, File No. 333-57830).

10.27         Stock Purchase Warrant for 325,000 shares of common stock issued
              to Ironhead Investments Inc. (incorporated herein by reference to
              Exhibit 10.29 to MigraTEC's pre-effective registration statement
              on Form SB-2 filed March 29, 2001, File No. 333-57830).

10.28         Common Stock Purchase Agreement between MigraTEC and Ironhead
              Investments Inc., dated as of March 27, 2001 (incorporated herein
              by reference to Exhibit 10.30 to MigraTEC's pre-effective
              registration statement on Form SB-2 filed March 29, 2001, File No.
              333-57830).

10.29         Escrow Agreement among MigraTEC, Ironhead Investments Inc. and
              Epstein Becker & Green, P.C., dated as of March 27, 2001
              (incorporated herein by reference to Exhibit 10.31 to MigraTEC's
              pre-effective registration statement on Form SB-2 filed March 29,
              2001, File No. 333-57830).

10.30         Registration Rights Agreement between MigraTEC and Ironhead
              Investments Inc., dated as of March 27, 2001 (incorporated herein
              by reference to Exhibit 10.32 to MigraTEC's pre-effective
              registration statement on Form SB-2 filed March 29, 2001, File No.
              333-57830).

11.1          Statement re: Computations of Net Loss per Share (filed herewith).

24.1          Power of Attorney (included in the signature page of this Form
              10-QSB).
</Table>



                                       30