<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-Q
              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
                                       OR
             [ ] Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                 For the Transition Period from       to
                         Commission File Number 0-22370
                          CHECKMATE ELECTRONICS, INC.
             (Exact name of Registrant as specified in its charter)
 
<TABLE>
<S>                                            <C>
                   Georgia                                      88-0117097
                  (State of                                  (I.R.S. Employer
               Incorporation)                               Identification No.
</TABLE>
 
                   1003 Mansell Road, Roswell, Georgia 30076
          (Address of principal executive offices, including zip code)
                                 (770) 594-6000
              (Registrant's telephone number, including area code)
 
                            ------------------------
 
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve 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__
 
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
 
<TABLE>
<CAPTION>
              CLASS                     OUTSTANDING AT MAY 4, 1998
----------------------------------  ----------------------------------
<S>                                 <C>
   Common Stock, $.01 par value              5,420,188 shares
</TABLE>
 
                                  Page 1 of 14
                          Index of Exhibits on Page 14
 
                                       1
<PAGE>
                          CHECKMATE ELECTRONICS, INC.
 
                         QUARTERLY REPORT ON FORM 10-Q
 
                      FOR THE QUARTER ENDED MARCH 31, 1998
 
                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                        PAGE
PART 1. FINANCIAL INFORMATION                                                          NUMBER
                                                                                    -------------
<S>           <C>                                                                   <C>
Item 1        Condensed Consolidated Financial Statements (Unaudited):............
 
              Condensed Consolidated Balance Sheets--March 31, 1998 and December
                31, 1997..........................................................            3
 
              Condensed Consolidated Statements of Operations--Three Months Ended
                March 31, 1998 and 1997...........................................            4
 
              Condensed Consolidated Statements of Cash Flows--Three Months Ended
                March 31, 1998 and 1997...........................................            5
 
              Notes to Condensed Consolidated Financial Statements................            6
 
Item 2        Management's Discussion and Analysis of Financial Condition and
                Results of Operations.............................................            8
 
Item 3        Quantitative and Qualitative Disclosure About Market Risk...........           10
 
<CAPTION>
<S>           <C>                                                                   <C>
PART II. OTHER INFORMATION
 
Item 6        Exhibits and Reports on Form 8-K....................................           12
 
SIGNATURES........................................................................           13
 
INDEX OF EXHIBITS.................................................................           14
</TABLE>
 
                                       2
<PAGE>
                         PART I. FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS
 
                          CHECKMATE ELECTRONICS, INC.
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
 
             (IN THOUSANDS OF US DOLLARS EXCEPT PER SHARE AMOUNTS)
 
<TABLE>
<CAPTION>
                                                                                        MARCH 31,     DECEMBER 31,
                                                                                           1998           1997
                                                                                      --------------  ------------
<S>                                                                                   <C>             <C>
                                                                                       (UNAUDITED)       (NOTE)
                                       ASSETS
Current assets:
  Cash and cash equivalents.........................................................    $    3,163     $      269
  Investments.......................................................................         3,560          3,572
  Accounts receivable, net..........................................................        10,688         11,048
  Inventories.......................................................................        11,213         11,271
  Deferred tax asset and refundable income taxes....................................         1,781          1,798
  Prepaid expenses..................................................................           717            136
                                                                                           -------    ------------
    Total current assets............................................................        31,122         28,094
 
Property and equipment..............................................................        10,571         10,120
Accumulated depreciation and amortization...........................................        (4,646)        (4,201)
                                                                                           -------    ------------
                                                                                             5,925          5,919
  Other assets......................................................................         3,611          3,238
                                                                                           -------    ------------
  Total assets......................................................................    $   40,658     $   37,251
                                                                                           -------    ------------
                                                                                           -------    ------------
                        LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable..................................................................    $    3,828     $    2,372
  Accrued liabilities...............................................................         2,897          1,725
  Deferred revenue..................................................................         1,589          1,188
  Current portion of long-term obligations..........................................           162            162
                                                                                           -------    ------------
    Total current liabilities.......................................................         8,476          5,447
 
Long-term obligations, less current portion.........................................             2             41
Deferred income taxes...............................................................         1,924          1,924
Shareholders' equity:
  Common stock, $.01 par value......................................................            54             54
  Additional paid-in capital........................................................        24,687         24,687
  Retained earnings.................................................................         5,515          5,098
                                                                                           -------    ------------
    Total shareholders' equity......................................................        30,256         29,839
                                                                                           -------    ------------
Total liabilities and shareholders' equity..........................................    $   40,658     $   37,251
                                                                                           -------    ------------
                                                                                           -------    ------------
</TABLE>
 
------------------------
 
Note: The condensed consolidated balance sheet at December 31, 1997 has been
derived from the audited financial statements of the Company at that date but
does not include all of the information required by generally accepted
accounting principles for complete financial statements.
 
See notes to condensed consolidated financial statements.
 
                                       3
<PAGE>
                          CHECKMATE ELECTRONICS, INC.
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
             (UNAUDITED, IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
 
<TABLE>
<CAPTION>
                                                                                                THREE MONTHS ENDED
                                                                                                    MARCH 31,
                                                                                               --------------------
<S>                                                                                            <C>        <C>
                                                                                                 1998       1997
                                                                                               ---------  ---------
Net revenues.................................................................................  $   9,641  $   9,506
Cost of goods sold...........................................................................      5,584      5,513
                                                                                               ---------  ---------
Gross profit.................................................................................      4,057      3,993
Operating expenses:
Selling, general and administrative..........................................................      2,829      2,675
Research and development.....................................................................        355        234
Depreciation and amortization................................................................        270        168
                                                                                               ---------  ---------
                                                                                                   3,454      3,077
                                                                                               ---------  ---------
Operating income.............................................................................        603        916
Interest income, net.........................................................................         47         85
                                                                                               ---------  ---------
Income before income taxes...................................................................        650      1,001
Income taxes.................................................................................        234        340
                                                                                               ---------  ---------
Net income...................................................................................        416  $     661
                                                                                               ---------  ---------
                                                                                               ---------  ---------
Basic earnings per share.....................................................................  $    0.08  $    0.13
                                                                                               ---------  ---------
                                                                                               ---------  ---------
Weighted average basic shares outstanding....................................................      5,417      5,258
                                                                                               ---------  ---------
                                                                                               ---------  ---------
Diluted earnings per share...................................................................  $    0.08  $    0.12
                                                                                               ---------  ---------
                                                                                               ---------  ---------
Weighted average diluted shares outstanding..................................................      5,448      5,697
                                                                                               ---------  ---------
                                                                                               ---------  ---------
</TABLE>
 
           See notes to condensed consolidated financial statements.
 
                                       4
<PAGE>
                          CHECKMATE ELECTRONICS, INC.
 
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                           (UNAUDITED, IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                                     THREE MONTHS
                                                                                                        ENDED
                                                                                                      MARCH 31,
                                                                                                 --------------------
<S>                                                                                              <C>        <C>
                                                                                                   1998       1997
                                                                                                 ---------  ---------
OPERATING ACTIVITIES
Net income.....................................................................................  $     416  $     661
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization..................................................................        655        412
Accretion of marketable securities discount....................................................          2        (62)
Deferred income taxes
Changes in operating assets and liabilities:
Accounts receivable............................................................................        359     (2,337)
Inventories....................................................................................         59     (1,523)
Prepaid expenses...............................................................................       (581)       767
Refundable income taxes........................................................................         17     --
Accounts payable and accrued liabilities.......................................................      2,629      1,942
Deferred revenue...............................................................................        401        135
                                                                                                 ---------  ---------
Net cash provided by (used in) operating activities............................................      3,957         (5)
 
INVESTING ACTIVITIES
Purchases of property and equipment............................................................       (452)      (472)
Deferred development costs.....................................................................       (581)      (271)
Purchases of investments.......................................................................     (3,545)    --
Proceeds from sales of investments.............................................................      3,600        975
Other..........................................................................................        (46)      (246)
                                                                                                 ---------  ---------
Net cash used in investing activities..........................................................     (1,024)       (14)
 
FINANCING ACTIVITIES
Payments of debt and capital leases............................................................        (39)       (43)
Proceeds from issuance of common stock.........................................................     --            694
                                                                                                 ---------  ---------
Net cash provided by (used in) financing activities............................................        (39)       651
                                                                                                 ---------  ---------
Net increase in cash and cash equivalents......................................................      2,894        632
Cash and cash equivalents at beginning of period...............................................        269      2,204
                                                                                                 ---------  ---------
Cash and cash equivalents at end of period.....................................................  $   3,163  $   2,836
                                                                                                 ---------  ---------
                                                                                                 ---------  ---------
</TABLE>
 
           See notes to condensed consolidated financial statements.
 
                                       5
<PAGE>
                          CHECKMATE ELECTRONICS, INC.
 
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
                                  (UNAUDITED)
 
                                 MARCH 31, 1998
 
1. BASIS OF PRESENTATION
 
    The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. These statements should be read in conjunction with the Company's
audited financial statements included in the Company's 1997 Annual Report.
Operating results for the three months ended March 31, 1998 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1998 or any interim period.
 
2. INVENTORIES
 
    Inventories are summarized by class as follows (in thousands):
 
<TABLE>
<CAPTION>
                                                                   MARCH 31
                                                                     1998        DECEMBER 31
                                                                  (UNAUDITED)       1997
                                                                 -------------  -------------
<S>                                                              <C>            <C>
Finished goods.................................................  $       2,692  $       3,267
Work in process................................................          1,081            829
Raw materials and supplies.....................................          7,440          7,175
                                                                 -------------  -------------
                                                                 $      11,213  $      11,271
                                                                 -------------  -------------
                                                                 -------------  -------------
</TABLE>
 
3. NET INCOME PER SHARE
 
    Net income per share on a basic and diluted basis as required by Statement
No. 128 is calculated as follows (in thousands, except per share amounts):
 
<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED
                                                                            MARCH 31,
                                                                      ----------------------
<S>                                                                   <C>         <C>
                                                                         1998        1997
                                                                      ----------  ----------
Net income..........................................................  $      416  $      661
                                                                      ----------  ----------
                                                                      ----------  ----------
Calculation of weighted average shares
  outstanding plus assumed conversions:
    Weighted average basic shares outstanding.......................       5,417       5,258
    Effect of dilutive employee stock options.......................          31         439
                                                                      ----------  ----------
    Weighted average diluted shares outstanding.....................       5,448       5,697
                                                                      ----------  ----------
                                                                      ----------  ----------
Basic net income per share..........................................  $     0.08  $     0.13
                                                                      ----------  ----------
                                                                      ----------  ----------
Diluted net income per share........................................  $     0.08  $     0.12
                                                                      ----------  ----------
                                                                      ----------  ----------
</TABLE>
 
                                       6
<PAGE>
                          CHECKMATE ELECTRONICS, INC.
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
                                 MARCH 31, 1998
 
4. COMBINATION AGREEMENT WITH INTERNATIONAL VERIFACT INC.
 
    On January 16, 1998, the Company entered into a definitive agreement (the
"Combination Agreement") to combine with International Verifact Inc. ("IVI"), a
company engaged in a business similar to that of Checkmate. The parties intend
for the combination to be accounted for on a pooling of interest basis. Under
the terms of the Combination Agreement, IVI shareholders will receive, for each
IVI common share, either one share of common stock of the newly formed combined
company, IVI Checkmate Corp., or one exchangeable share of IVI which can be
exchanged for a share of IVI Checkmate Corp. common stock in the future.
Checkmate shareholders will receive 1.2775 shares of IVI Checkmate Corp. common
stock for each Checkmate common share. Closing of the transaction is expected to
occur in June 1998, subject to shareholder approvals, Ontario Court approval and
customary closing conditions.
 
                                       7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS
 
    THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS SUBJECT TO THE
SAFE HARBOR CREATED BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THE
WORDS "MAY," "WOULD," "COULD," "WILL," "EXPECT," "ESTIMATE," "ANTICIPATE,"
"BELIEVE," "INTENDS," "PLANS" AND SIMILAR EXPRESSIONS AND VARIATIONS THEREOF ARE
INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. MANAGEMENT CAUTIONS THAT THESE
STATEMENTS REPRESENT PROJECTIONS AND ESTIMATES OF FUTURE PERFORMANCE AND INVOLVE
CERTAIN RISKS AND UNCERTAINTIES. CHECKMATE'S ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A
RESULT OF CERTAIN FACTORS INCLUDING, WITHOUT LIMITATION, CHECKMATE'S HEAVY
RELIANCE ON CHECK READERS IN ITS PRODUCT MIX; DEPENDENCE BY CHECKMATE ON LIMITED
SUPPLIERS AND MANUFACTURERS OF COMPONENT PARTS OF ITS PRODUCTS; RAPID AND
SIGNIFICANT TECHNOLOGICAL DEVELOPMENTS THAT COULD DELAY THE INTRODUCTION OF
IMPROVEMENTS IN EXISTING PRODUCTS OR OF NEW PRODUCTS; ANY DEPENDENCIES ON ANY
PROPRIETARY TECHNOLOGIES (WHICH MAY BE INDEPENDENTLY DEVELOPED BY COMPETITORS);
DEPENDENCE ON A SMALL NUMBER OF LARGE RETAIL AND BANK CUSTOMERS; POTENTIAL
FLUCTUATION IN FINANCIAL RESULTS AS A RESULT OF ANY INABILITY TO MAKE SALES TO
LARGE CUSTOMERS AS WELL AS THE VOLUME AND TIMING OF BOOKINGS RECEIVED DURING A
QUARTER AND VARIATIONS IN SALES MIX; COMPETITION FROM EXISTING COMPANIES AS WELL
AS NEW MARKET ENTRANTS; DEPENDENCE ON KEY PERSONNEL; SUCCESSFUL COMPLETION OF
THE IVI TRANSACTION; INTEGRATION OF THE COMPANIES; AND OTHER RISK FACTORS
DISCUSSED FROM TIME TO TIME IN CHECKMATE'S SEC FILINGS AND OTHER ANNOUNCEMENTS.
 
RESULTS OF OPERATIONS--THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE
  MONTHS ENDED MARCH 31, 1997
 
    The following table sets forth certain items derived from the Company's
statements of operations:
<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED MARCH 31
                                                            ------------------------------------------
<S>                                                         <C>        <C>        <C>        <C>
                                                                    1998                  1997
                                                            --------------------  --------------------
 
<CAPTION>
                                                                (UNAUDITED)           (UNAUDITED)
                                                             AMOUNT        %       AMOUNT        %
                                                            ---------  ---------  ---------  ---------
<S>                                                         <C>        <C>        <C>        <C>
Net revenues:
Check readers.............................................  $   3,495       36.2% $   4,114       43.3%
Debit/credit card terminals...............................      4,377       45.4      4,228       44.5
Combination units.........................................        136        1.4        321        3.4
Signature capture devices.................................        574        6.0        205        2.2
Service and other.........................................      1,059       11.0        638        6.6
                                                            ---------        ---  ---------        ---
Net revenues..............................................      9,641      100.0      9,506      100.0
Cost of goods sold........................................      5,584       57.9      5,513       58.0
                                                            ---------        ---  ---------        ---
Gross profit..............................................      4,057       42.1      3,993       42.0
Operating expenses:
  Selling, general and administrative.....................      2,829       29.3      2,675       28.1
  Research and development................................        355        3.7        234        2.5
  Depreciation and amortization...........................        270        2.8        168        1.8
                                                            ---------        ---  ---------        ---
Total operating expenses..................................      3,454       35.8      3,077       32.4
                                                            ---------        ---  ---------        ---
Operating income..........................................        603        6.3        916        9.6
Interest income, net......................................         47        0.4         85        0.9
                                                            ---------        ---  ---------        ---
Income before income taxes................................        650        6.7      1,001       10.5
Provision for income taxes................................        234        2.4        340        3.5
                                                            ---------        ---  ---------        ---
Net income................................................  $     416        4.3% $     661        7.0%
                                                            ---------        ---  ---------        ---
                                                            ---------        ---  ---------        ---
</TABLE>
 
                                       8
<PAGE>
    Any trends that may be derived from the above tables are not necessarily
indicative of the Company's future operations.
 
    Net revenues increased 1.4% in the three months ended March 31, 1998 as
compared to the same period in 1997. The increase in net revenues was
experienced primarily in sales of debit/credit card terminals, signature capture
devices and service offerings. Check reader and combination unit revenues
decreased slightly in the quarter.
 
    Cost of goods sold as a percentage of net revenues was 57.9% in the three
months ended March 31, 1998, compared to 58.0% in the three months ended March
31, 1997. The overall percentage was consistent between periods, despite
fluctuations in the gross margin by product. Generally, material costs were
lower in the 1998 period, but this decrease was offset by an increase in
amortization of deferred development costs, resulting in a consistent gross
margin percentage between periods. The Company anticipates that cost of goods
sold as a percentage of net revenues will be affected in the future by changes
in product mix, selling prices and unit costs among other factors.
 
    Selling, general and administrative expenses increased 5.8% over the first
quarter of 1997. As a percentage of net revenues, selling, general and
administrative expenses increased to 29.3% in the three months ended March 31,
1998 from 28.1% in the comparable period in 1997. The increases are due
primarily to higher personnel and related costs in sales and engineering as a
result of increased hiring designed to accelerate new product development and
our overall sales effort.
 
    Product development expenditures include research and development expense
and capitalized software development costs and consist primarily of labor. A
summary of product development efforts is as follows (in thousands):
 
<TABLE>
<CAPTION>
                                                                                THREE MONTHS ENDED
                                                                                    MARCH 31,
                                                                               --------------------
<S>                                                                            <C>        <C>
                                                                                 1998       1997
                                                                               ---------  ---------
Gross product development expenditures.......................................  $     936  $     523
Capitalized software development costs.......................................       (581)      (289)
                                                                               ---------  ---------
Research and development expense.............................................        355        234
Amortization of previously capitalized costs.................................        181        108
                                                                               ---------  ---------
Total expense................................................................  $     536  $     342
                                                                               ---------  ---------
                                                                               ---------  ---------
Product development as a percent of net revenues:
  Gross expenditures.........................................................        9.7%       5.5%
  Research and development expense...........................................        3.7%       2.5%
  Total expense..............................................................        5.6%       3.6%
</TABLE>
 
    Gross product development expense increased by $413,000 or 79.0% and net
research and development expense increased by $121,000 or 51.7% in the three
months ended March 31, 1998. The increase in the dollar amount of product
development expenditures resulted from the Company's continuing efforts to
remain at the forefront of payment automation technology. Checkmate announced
several new product introductions during 1997, and plans to introduce several
additional products during 1998. The Company expects to continue to increase
product development expenditures for the foreseeable future as the Company is
dedicated to developing new products and enhancing its existing products.
 
    Depreciation and amortization expenses increased by 60.6% three months ended
March 31, 1998 due primarily to capital expenditures associated with the
expansion of facilities in April 1997 and upgrades of computer software and
equipment.
 
    Interest income, net decreased 43.9% in the three months ended March 31,
1998 due to lower average investment balances outstanding.
 
                                       9
<PAGE>
    The effective tax rate was 36.0% and 34.0% in three months ended March 31,
1998 and 1997, respectively. The increase in the effective tax rate in 1998 was
due primarily to a higher effective state tax rate caused by the addition of
several states to which the Company must pay income taxes.
 
    As a result of the above factors, net income decreased by 37.0% in the three
months ended March 31, 1998. Basic earnings per share was $0.08 in 1998 compared
to $0.13 in 1997. Diluted earnings per share was $0.08 in 1998 compared to $0.12
in 1997. The weighted average diluted shares outstanding for the quarter
decreased 4.4% from 1997 to 1998 due to a lower market price for the Company's
common stock, which resulted in fewer stock options being considered common
stock equivalents in the computation of the weighted average diluted shares
outstanding.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    Net cash provided by (used in) operating activities was $3,957,000 in the
three months ended March 31, 1998 and $(5,000) in the three months ended March
31, 1997. The net cash provided by operating activities in the 1998 period
resulted from the net income reported for the period, increased by depreciation
and amortization, a 3.3% decrease in accounts receivable, a 57.3% increase in
accounts payable and deferred revenues, partially offset by a 427.2% increase in
prepaid expenses. The net cash used in operating activities in 1997 included
sources of net cash from net income reported for the period, increased by
depreciation and amortization and a 52.7% increase in accounts payable, accrued
liabilities and deferred revenues, offset by a 27.6% increase in accounts
receivable and a 19.4% increase in inventories. The Company experiences normal
fluctuations in its accounts receivable balance, including days outstanding, due
to a variety of factors, including the Company's overall sales performance when
compared to prior periods, the timing of shipments to its customers and
individual customer negotiated terms of sale. The rate of inventory turnover
experienced by the Company also is dependent upon a variety of factors,
including anticipated inventory requirements to fulfill current and future
customer orders in a timely manner, individual customer negotiated contracts of
sale and the availability of key components used in the manufacturing process.
Increases in these accounts during 1998 and 1997 have been caused by anticipated
increases in sales volumes and by new product introductions. The Company
anticipates that fluctuations in these accounts will continue in the future.
 
    Net cash used in investing activities was $1,024,000 in the three months
ended March 31, 1998 and $14,000 in the three months ended March 31, 1997.
Purchases of property and equipment and additions to deferred development costs
and other noncurrent assets were $1,079,000 and $989,000 in the three months
ended March 31, 1998 and 1997, respectively. These uses of net cash were offset
by net proceeds from the sale of investments of $55,000 in 1998 and $975,000 in
1997.
 
    Net cash provided by (used in) financing activities was $(39,000) in the
three months ended March 31, 1998 and $651,000 in the three months ended March
31, 1997. The change in net cash provided by (used in) financing activities was
due to the exercise of stock options in 1997, primarily by the estate of a
former employee. No stock option exercises occurred in the 1998 period.
 
    The Company's working capital position was $22,646,000 at March 31, 1998 and
$22,647,000 at December 31, 1997. The Company had no commitments for material
capital expenditures as of March 31, 1998. During the remainder of 1998, the
Company anticipates that it will spend approximately $4,000,000 for capital
expenditures, including additions to deferred development costs. The Company
believes that its working capital position at March 31, 1998, together with
anticipated future cash flows from operations and the borrowing available under
its revolving credit agreement, are sufficient to meet the Company's operating
needs, including possible increases in accounts receivable and inventories,
along with planned capital expenditures for at least the next twelve to eighteen
months.
 
    The Company's operating results have fluctuated on a quarterly basis in the
past and may vary significantly in future periods due to a variety of factors.
These factors include, but are not limited to, the timing of orders from and
shipments to major customers, the timing of new product introductions by the
 
                                       10
<PAGE>
Company and its competitors, variations in the Company's product mix and
component costs, and competitive pricing pressures. Due primarily to the above
factors, the results of any particular quarter may not be indicative of the
results for the full year.
 
IMPACT OF YEAR 2000
 
    Checkmate's business and relationships with its customers depend
significantly on a number of computer software programs, internal operating
systems and connections to other networks, and the failure of any of these
programs, systems or networks to successfully address the Year 2000 data
rollover problem could have a material adverse effect on Checkmate's business,
financial condition and results of operations. Many installed computer software
and network processing systems currently accept only two-digit entries in the
date code field and may need to be upgraded or replaced in order to accurately
record and process information and transactions on and after January 1, 2000.
Checkmate believes that it has completed substantially all modifications of its
affected software programs and has minimal additional work required to finalize
these modifications. However, Checkmate is not certain as to whether the
computer software and business systems of its customers and suppliers are Year
2000 compliant. There can be no assurance that the failure or delay of
Checkmate's customers and suppliers in successfully addressing the Year 2000
issue or the costs involved in such process will not have a material adverse
effect on Checkmate's business, financial condition and results of operations.
 
RISKS ASSOCIATED WITH THE PROPOSED COMBINATION WITH INTERNATIONAL VERIFACT INC.
 
    The Company and IVI entered into a definitive agreement to combine their
business operations on January 16, 1998. The consummation of this transaction is
subject to various conditions precedent, including approval by the shareholders
of both IVI and Checkmate, regulatory approval by the Securities and Exchange
Commission and certain Canadian agencies, as well as other traditional closing
conditions. There can be no assurance that these conditions will be met and that
the transaction will be consummated. The Company has devoted considerable time
and expense to the proposed transaction and will continue such efforts until
consummation. If the transaction is not consummated, there may be disputes
between IVI and Checkmate relating to the termination of the definitive
agreement which may result in litigation against the Company. In addition, the
definitive agreement provides that, if the agreement is terminated by a party
for certain reasons, the other party may be entitled to receive from the
terminating party a fee of $3,000,000. There can be no assurance that diversion
of management resources and expenses related to litigation or other contractual
obligations arising from a termination of the agreement will not have a material
adverse effect on the business, financial condition and results of operations of
the Company.
 
    The proposed transaction will result in the integration of IVI and
Checkmate, which have previously operated independently. The consolidation of
functions, the integration of departments, systems and procedures, and the
relocation of staff present significant management challenges. There can be no
assurance that such actions will be successfully accomplished as rapidly as
currently expected. Moreover, although one of the primary purposes of the
transaction is to realize direct cost savings and other operating efficiencies,
there can be no assurance of the extent to which any such cost savings and
efficiencies will be achieved. Failure to successfully integrate the operations
of IVI and Checkmate in a timely manner and to realize cost savings and other
operating efficiencies could have a material adverse effect on the financial
condition and results of operations of the combined company. In addition, such
integration may require the licensing or other transfer of proprietary or
currently licensed rights as well as the assumption of certain obligations by
and between the various parties. While management does not believe that, in the
circumstances, these requirements will give rise to tax consequences, it is
possible that they may give rise to tax consequences both immediately and on an
ongoing basis.
 
                                       11
<PAGE>
                           PART II. OTHER INFORMATION
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 
(a) Exhibits. The following exhibits are filed as part of this report:
 
<TABLE>
<CAPTION>
 EXHIBIT NO.                                                  DESCRIPTION
---------------  -----------------------------------------------------------------------------------------------------
<C>              <S>
         27.     Financial Data Schedule
</TABLE>
 
(b) Reports on Form 8-K. The Company filed a Current Report on Form 8-K on
    January 21, 1998 to announce a proposed transaction with International
    Verifact Inc. and to amend its Shareholder Rights Protection Plan
 
                                       12
<PAGE>
                                   SIGNATURES
 
    Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
 
<TABLE>
<S>                                            <C>
                                               CHECKMATE ELECTRONICS, INC.
                                                               (REGISTRANT)
 
Date: May 5, 1998                              /s/ Gregory A. Lewis
                                               --------------------------------------------
                                               Gregory A. Lewis
                                               President and Chief Operating Officer
                                               (Duly Authorized Officer)
 
Date: May 5, 1998                              /s/ John J. Neubert
                                               --------------------------------------------
                                               John J. Neubert
                                               Chief Financial Officer and
                                               Senior Vice President
                                               (Principal Financial Officer)
</TABLE>
 
                                       13
<PAGE>
                               INDEX OF EXHIBITS
 
<TABLE>
<CAPTION>
  EXHIBIT
    NO.      DESCRIPTION
-----------  ---------------------------------------------------------------------------------------------------------
<C>          <S>
        27   Financial Data Schedule
</TABLE>
 
                                       14