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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.     )

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Filed by a Party other than the Registrant   o

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o   Definitive Proxy Statement

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Colorado MEDtech, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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FOR IMMEDIATE RELEASE:
May 13, 2003 NEWS
NASDAQ-CMED

COLORADO MEDTECH, INC. ANNOUNCES
THIRD QUARTER RESULTS

BOULDER, Colorado — Colorado MEDtech, Inc. (NASDAQ — CMED) today announced results for its third quarter ended March 31, 2003.

On January 24, 2003, the Company sold a majority of the assets of its Colorado operations. These assets generated all of the Company’s outsourcing services revenue and a portion of its medical products revenue. As a result of the sale, the Company is no longer in this business segment, and the amount of outsourcing services revenue and expenses in the current period is significantly lower than in prior periods. The Company’s business now includes only the operations of its CIVCO Medical Instruments Co., Inc. subsidiary.

Sales in the third quarter were $7,930,919 compared to $17,661,974 for the same period in the prior year. Loss from operations in the third quarter was $5,552,100 compared to a loss from operations of $1,896,766 in the same period of the prior year. The loss from operations includes a loss of $6,387,902 associated with the sale of the Colorado operations. Net loss for the quarter ended March 31, 2003 was $5,619,944, with a loss per share, on a diluted basis, of 42 cents per share. In the third quarter of the prior year, the Company had a net loss of $1,239,683 and a loss per share, on a diluted basis, of 9 cents.

Sales in the nine months ended March 31, 2003 were $36,608,020 compared to $52,369,635 for the same period in the prior year. Loss from operations in the nine months ended March 31, 2003 was $5,323,837 compared to $5,203,801 in the same period of the prior year. The loss from operations includes a loss of $6,387,902 associated with the sale of the Colorado operations. Net loss for the nine months ended March 31, 2003, was $5,439,727, with a loss per share, on a diluted basis, of 41 cents per share. In the same period of the prior year, the Company had a net loss of $3,203,850 and a loss per share, on a diluted basis, of 25 cents.

“We are pleased to have accomplished several steps toward the completion of the sale of Colorado MEDtech, and we continue to work to close the remaining open items,” said Stephen K. Onody, President and CEO.

Colorado MEDtech, Inc., through its CIVCO Medical Instruments Co., Inc. subsidiary, is a full service developer and manufacturer of medical devices and equipment for the ultrasound and minimally invasive OEM and end-user markets.

Conference Call

Colorado MEDtech will hold a conference call at 8:00 a.m. MST (10:00 a.m. EST) on Tuesday, May 13, 2003 to discuss its third quarter results. Interested parties may listen to the call by calling 800-240-5318. A replay of the call will be available until May 27, 2003 at 800-405-2236, passcode 537520#.

Forward-Looking Statements

The statements in this news release that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information. Forward-looking statements can be identified by the use of words such as “believes’’, “intends’’, “estimates”, “may”, “will’’, “should’’, “anticipated’’, “expected” or comparable terminology or by discussions of strategy. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. Such statements involve risks and uncertainties including, but not limited to, the risk that the Company may be unable to successfully complete the sale of the Company, the risk that our existing level of orders may not be indicative of the level or trend of future orders, the risk that we may not successfully complete the work encompassed by current or future orders, the risk that unforeseen technical or production difficulties may adversely impact project timing and financial performance, the risk of potential litigation and the risk that acquired companies cannot be successfully integrated with our existing operations. Should one or more of these risks, as well as others not known to us or not considered to be material at this time, materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those forecasted or expected. These factors are more fully described in the Company’s documents filed from time to time with the Securities and Exchange Commission. We disclaim any intention or obligation to update publicly or revise such statements whether as a result of new information, future events or otherwise.

Additional Information And Where To Find It

Colorado MEDtech, Inc. plans to mail a proxy statement to its shareholders containing information about the sale of the Company to an affiliate of KRG Capital Partners, LLC (the “Merger”). Investors and shareholders of Colorado MEDtech, Inc. are advised to read the proxy statement carefully when it becomes available because it will contain important information about the Merger, the persons soliciting proxies related to the Merger, their interests in the Merger, and related matters. Investors and shareholders may obtain free copies of the proxy statement (when available) and other documents filed by Colorado MEDtech at the Securities and Exchange Commission’s website at http://www.sec.gov. Free copies of the proxy statement will also be available from Colorado MEDtech by directing such requests to the attention of Mr. Peter J. Jensen, Secretary, Colorado MEDtech, Inc., 345 S. Francis St., Unit F, P.O. Box 819, Longmont, CO 80502-0819, telephone 303/651-2648.

Information Concerning Participants

Colorado MEDtech and its directors and executive officers may be deemed to be participants in the solicitation of proxies from Colorado MEDtech shareholders in favor of the Merger.

Information regarding the participants is included in Colorado MEDtech’s Proxy Statement for its Annual Meeting of Shareholders filed with the Securities and Exchange Commission on October 11, 2002, and its preliminary Proxy Statement for its Special Meeting of Shareholders filed with the Securities and Exchange Commission on April 11, 2003. This document is available free of charge at the SEC’s website at http://www.sec.gov and from Colorado MEDtech.

CONTACTS:

Colorado MEDtech, Inc.
Stephen K. Onody, President and CEO
Gregory A. Gould, CFO
Website: www.cmed.com Telephone:
Fax:
Email: 303.530.2660
303.581.1010
cmedinfo@cmed.com

- MORE -

COLORADO MEDTECH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

			March 31, 2003			June 30, 2002
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	5,732,456		$	6,366,303
	Short-term investments			—			993,319
	Accounts receivable, net			3,125,390			9,644,164
	Unbilled receivables			—			169,438
	Inventories			2,279,295			5,781,665
	Investment in HEI common stock			1,910,000			—
	Note receivable from HEI			1,692,600			—
	Income taxes receivable			697,958			3,589,907
	Deferred income taxes			3,623,434			1,557,803
	Prepaid expenses and other			275,409			824,563
		Total current assets		19,336,542			28,927,162
NON-CURRENT ASSETS:
	Property and equipment, net			4,424,051			5,700,043
	Goodwill and other intangibles, net			6,035,233			5,876,785
	Land held for sale			500,000			500,000
	Deferred income taxes			524,782			1,227,143
	Other assets			181,649			302,726
		Total non-current assets		11,665,715			13,606,697
TOTAL ASSETS			$	31,002,257		$	42,533,859
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
	Accounts payable		$	1,226,031		$	4,878,784
	Accrued product service costs			16,000			376,907
	Accrued salaries and wages			706,132			1,989,815
	Other accrued expenses			1,336,851			1,435,222
	Customer deposits and deferred revenue			645,094			1,733,746
	Capital lease obligation			—			33,503
		Total liabilities		3,930,108			10,447,977
SHAREHOLDERS’ EQUITY:
	Preferred stock, no par value; 5,000,000 shares authorized; none issued Common Stock, no par value, 25,000,000 shares authorized; 13,257,459 and 13,168,783 issued and outstanding at December 31, 2002 and June 30, 2002, respectively			16,884,349			16,718,092
	Accumulated other comprehensive loss			—			(7,432	)
	Notes receivable – related parties			(447,494	)		(699,799	)
	Retained earnings			10,635,294			16,075,021
		Total shareholders’ equity		27,072,149			32,085,882
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			$	31,002,257		$	42,533,859

COLORADO MEDTECH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTH PERIODS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED)

			Three Months Ended						Nine Months Ended
			March 31,						March 31,
			2003			2002			2003			2002
NET REVENUE:
	Outsourcing Services		$	494,957		$	6,958,751		$	7,717,255		$	20,240,585
	Medical Products			7,435,962			10,703,223			28,890,765			32,129,050
	Total net revenue			7,930,919			17,661,974			36,608,020			52,369,635
COST OF PRODUCTS AND SERVICES:
	Outsourcing Services			395,998			6,736,328			8,215,630			19,022,564
	Medical Products			3,705,117			6,306,957			16,574,027			19,005,446
	Total cost of products and services			4,101,115			13,043,285			24,789,657			38,028,010
GROSS PROFIT				3,829,804			4,618,689			11,818,363			14,341,625
COSTS AND EXPENSES:
	Research and development			358,881			879,414			1,306,201			2,747,020
	Marketing and selling			411,972			940,181			2,303,777			2,894,220
	Operating, general and administrative(1),			721,530			3,409,733			6,148,512			11,550,549
	Other operating expenses			501,619			1,286,127			995,808			2,353,637
	Loss on sale of Colorado operations			6,387,902			—			6,387,902			—
		Total operating expenses		9,381,904			6,515,455			17,142,200			19,545,426
LOSS FROM OPERATIONS				(5,552,100	)		(1,896,766	)		(5,323,837	)		(5,203,801	)
OTHER INCOME (EXPENSE), net				(1,513,844	)		45,083			(1,442,890	)		180,951
LOSS BEFORE INCOME TAXES				(7,065,944	)		(1,851,683	)		(6,766,727	)		(5,022,850	)
INCOME TAX BENEFIT				(1,446,000	)		(612,000	)		(1,327,000	)		(1,819,000	)
NET LOSS			$	(5,619,944	)	$	(1,239,683	)	$	(5,439,727	)	$	(3,203,850	)
NET INCOME (LOSS) PER SHARE
	Basic and diluted		$	(.42	)	$	(.09	)	$	(.41	)	$	(.25	)
WEIGHTED AVERAGE SHARES OUTSTANDING
	Basic and diluted			13,257,003			13,114,961			13,198,082			13,015,833