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 September 30, 2003

                                       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 000-26165


                            IQ POWER TECHNOLOGY INC.
        (Exact name of small business issuer as specified in its charter)


             CANADA                                   NOT APPLICABLE
   (Jurisdiction of incorporation)          (I.R.S. Employer Identification No.)


                                  Erlenhof Park
                              Inselkammer Strasse 4
                          D-82008 Unterhaching, Germany
                    (Address of principal executive offices)

                               + 49 89 614 483 10
                           (Issuer's telephone number)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                         if changed since last report)

     Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 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 No

     The  number  of  outstanding  common  shares,  without  par  value,  of the
registrant at November 13, 2003 was 25,675,746.

     Transitional Small Business Disclosure Format (check one): Yes ; No


<PAGE>


Item 1.  Financial Statements

iQ POWER TECHNOLOGY INC.
(a development stage company)
Consolidated Balance Sheets
(Expressed in United States Dollars; all amounts in thousands, except per share
data)
(Unaudited)
<TABLE>
============================================================================================

                                                          September 30,       December 31,
                                                                   2003               2002
--------------------------------------------------------------------------------------------
<S>                                                                <C>                 <C>
ASSETS

  Current Assets
    Cash and cash equivalents                                      420                 331
    Receivable from related parties                                 40                  77
    Other receivables                                              104                 100
    Prepaids and deposits                                          358                  39
    Other current assets                                           251                 120
--------------------------------------------------------------------------------------------
  Total current assets                                           1,173                 667

  Non-current Assets
    Equipment, net                                                 408                 448
--------------------------------------------------------------------------------------------
  Total non-current assets                                         408                 448

TOTAL ASSETS                                                     1,581               1,115
============================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

  LIABILITIES
    Current liabilities
      Short-term debt/bank overdraft                               174                  16
      Accounts payable                                             796                 537
      Accrued payroll and employees benefits                       196                  82
      Advances                                                       -                  32
      Other/Accrued liabilities                                    106                 148
--------------------------------------------------------------------------------------------
    Total current liabilities                                    1,272                 815

--------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                                1,272                 815

  SHAREHOLDERS' EQUITY
    Authorized:
      An unlimited number of common shares of no par value
    Issued and outstanding:
         20,348,227 common shares at December 31, 2002
         25,042,178 common shares at September 30, 2003         12,202              10,576
    Capital surplus/Additional paid-in                           2,046               1,571
    Accumulated other comprehensive (loss) income                 (874)               (446)
    Accumulated deficit, during development stage
      (after loss allocation to silent partners)               (13,065)            (11,401)
--------------------------------------------------------------------------------------------
  TOTAL SHAREHOLDERS' EQUITY                                       309                 300

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                       1,581               1,115
============================================================================================
</TABLE>

          See accompanying notes to consolidated financial statements.



                                       1
<PAGE>

iQ POWER TECHNOLOGY INC.
(a development stage company)
Consolidated Statements of Income/(Loss) and Comprehensive Income/(Loss)
(Expressed in United States Dollars; all amounts in thousands, except per share
data)
(Unaudited)

<TABLE>
====================================================================================================================================

                                                 Cumulative from
                                               date of inception             Three months ended            Nine months ended
                                                to September 30,                  September 30,                September 30,
                                                            2003             2003          2002            2003         2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                <C>            <C>            <C>         <C>
SALES AND OTHER REVENUE                                      182                -             -               -            -

------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
   Research and development expenses

     Personnel (incl. stock based compensation)            4,368              152            18             684         233
     Laboratory                                            1,735               64            71             214         197
     Office & Travel                                         618                5            11              20          40
     Consulting services                                     637                -             -              10          25
     Professional fees                                       880                6             -              20          36
------------------------------------------------------------------------------------------------------------------------------------
   Total Research & Development expenses                   8,238              227           100            948          531

   Marketing and general & administrative expenses
     Personnel (incl. stock based compensation)            1,835               33             3            458           61
     Financing                                               585                1             1              9            3
     Office & Travel                                         714               33            17             93           67
     Consulting services                                     677               13            44             74           92
     Professional fees                                     1,130              100            39            256          165
     Management fees                                         306               18            18             54           54
     Marketing activities                                    403               17            21             78           82
     Investor relations                                      924               18            18             76          143
     Research memberships                                    100                -             -              -            -
     Provision for investment                                150                -             -              -            -
     Other                                                   197                3             2              7            6
------------------------------------------------------------------------------------------------------------------------------------
   Total Marketing and G&A expenses                        7,021              236           163          1,105          673

------------------------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES                                  15,259              463           263          2,053         1,204

     Interest expense                                        182                4             -              9             1

------------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES                                            15,441              467           263          2,062         1,205

     Interest and other income                              (149)               -             -              -            (1)
     (Gain)/loss on foreign exchange                      (1,021)             (66)           27           (398)         (280)

INCOME/(LOSS) BEFORE INCOME TAX                          (14,089)            (401)         (290)        (1,664)         (924)

     Income tax                                                -                -             -              -             -

NET INCOME/(LOSS)                                        (14,089)            (401)         (290)        (1,664)         (924)
====================================================================================================================================

     Other comprehensive income (loss)                      (874)            (330)           25           (428)         (261)

COMPREHENSIVE INCOME/(LOSS)                              (14,963)            (731)         (265)        (2,092)       (1,185)
====================================================================================================================================

     Basic and diluted loss per share, on net loss         (1.49)           (0.02)        (0.02)         (0.07)        (0.05)

     Basic and diluted weighted average
       number of shares outstanding                    9,439,419       24,490,500    18,733,474     22,433,046    17,749,432
====================================================================================================================================
</TABLE>

          See accompanying notes to consolidated financial statements.



                                       2
<PAGE>


iQ POWER TECHNOLOGY INC.
(a development stage company)
Consolidated Statements of Shareholders' Equity (Deficit)
(Expressed in United States Dollars; all amounts in thousands, except per share
data)
(Unaudited)
<TABLE>
====================================================================================================================================

                                                              Accumulated        Accumulated                                  Total
                                           Common shares       Additional              Other                          Shareholders'
                                     ----------------------       Paid-In      Comprehensive       Accumulated               Equity
                                     Shares        Amount         Capital      Income (Loss)           Deficit            (Deficit)
                                     ----------------------  --------------  -------------------  ----------------  ----------------

<S>                                      <C>      <C>         <C>              <C>                 <C>                <C>
Balance at December 31, 1991             40       $    60     $         -      $           -       $       (1)        $          59
Issue of shares                                                                                                                   -
Net loss                                                                                                   (9)                   (9)
------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1992             40            60               -                  -              (10)                   50
Issue of shares                                                                                                                   -
Net loss                                                                                                   (7)                   (7)
------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1993             40            60               -                  -              (17)                   43
Issue of shares                                                                                                                   -
Net loss                                                                                                 (193)                 (193)
Allocation of loss to atypical
  shares                                                                                                   37                    37
------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1994             40            60               -                  -             (173)                 (113)
Issue of shares                                                                                                                   -
Net loss                                                                                                 (341)                 (341)
Allocation of loss to atypical
  shares                                                                        `                         379                   379
------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1995             40            60               -                  -             (135)                  (75)
Issue of shares                                                                                                                   -
Net loss                                                                                                 (496)                 (496)
Allocation of loss to atypical
 shares                                                                                                   139                   139
------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1996             40            60               -                  -             (492)                 (432)
Issue of shares                                                                                                                   -
Net loss                                                                                                 (597)                 (597)
Allocation of loss to atypical
 shares                                                                                                   312                   312
------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1997             40            60               -                  -             (777)                 (717)
Issue of shares                                                                                                                   -
Net loss                                                                                               (1,027)               (1,027)
Allocation of loss to atypical
 shares                                                                                                   228                   228
Other comprehensive (loss) -                                                                                                      -
  foreign currency translation
  adjustments                                                                            (94)                                   (94)
------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998             40            60               -                (94)          (1,576)               (1,610)
Reorganization of capital on
  reverse acquisition             5,119,960
Deemed issuance of shares on
  acquisition of iQ Power
  Technology Inc.                 4,471,770         5,495                                                                     5,495
Stock based compensation                                               396                                                      396
Exercise of warrants                139,850           349                                                                       349
Net loss                                                                                               (2,157)               (2,157)
Other comprehensive (loss) -
  foreign currency translation
  adjustments                                                                            176                                    176
------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999      9,731,620         5,904              396                82           (3,733)                2,649
Net loss                                  -             -                -                 -           (2,359)               (2,359)
Other comprehensive (loss) -
  foreign currency translation
  adjustments                             -             -                -               (98)               -                   (98)
Exercise of options                  15,000            37                -                 -                -                    37
Stock based compensation                  -             -               10                 -                -                    10
------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000      9,746,620         5,941              406               (16)          (6,092)                  239
Net loss                                  -             -                -                 -           (3,754)               (3,754)
Other comprehensive (loss) -
  foreign currency translation
  adjustments                             -             -                -                42                -                    42
Issue of shares                   5,203,004         2,132                -                 -                -                 2,132
Stock based compensation                                             1,444                                                    1,444
Exercise of options               1,002,500           501                -                 -                -                   501
------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2001     15,952,124       $ 8,574     $      1,850     $          26       $   (9,846)        $         604
Net loss                                  -             -                -                 -           (1,555)               (1,555)
Other comprehensive (loss) -
  foreign currency translation
  adjustments                             -             -                               (472)               -                  (472)
Issue of shares                   4,376,103         1,992                -                 -                -                 1,992
Stock based compensation                                              (279)                                                    (279)
Exercise of options                  20,000            10                -                 -                -                    10
------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2002     20,348,227       $10,576     $      1,571     $        (446)      $  (11,401)        $         300
Net loss                                  -             -                -                 -           (1,664)               (1,664)
Other comprehensive (loss) -
  foreign currency translation
  adjustments                             -             -                               (428)               -                  (428)
Issue of shares                   3,134,677           972                -                 -                -                   972
Stock based compensation                                               475                                                      475
Exercise of warrants                989,285           426                -                 -                -                   426
Exercise of options                 569,989           228                -                 -                -                   228
------------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 2003    25,042,178       $ 2,202     $      2,046     $         (87)      $  (13,065)        $         309
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

          See accompanying notes to consolidated financial statements.



                                       3
<PAGE>


iQ POWER TECHNOLOGY INC.
(a development stage company)
Consolidated Statements of Cash Flows
(Expressed in United States Dollars; all amounts in thousands)
(Unaudited)
<TABLE>
=====================================================================================================

                                               Cumulative from       Nine months       Nine months
                                             date of inception             ended             ended
                                              to September 30,     September 30,     September 30,
                                                          2003              2003              2002
-----------------------------------------------------------------------------------------------------
<S>                                                   <C>                <C>                 <C>
OPERATING ACTIVITIES
  Net loss                                            (14,089)           (1,664)             (924)
  Items not affecting cash
    Depreciation and amortization                         450                72                79
    Stock based compensation                            2,302               648              (279)
  Changes in non-cash working capital
    (Increase) decrease in other receivable               (64)               46                23
    (Increase) decrease in prepaids and deposits         (351)             (315)             (100)
    Increase (decrease) in accounts payable               688               195               (81)
    Increase (decrease) in accrued liabilities            375                48               (98)
    (Increase) decrease in other assets                  (217)             (113)              (38)
-----------------------------------------------------------------------------------------------------
                                                      (10,906)           (1,083)           (1,418)

  INVESTING ACTIVITY
    Additions to property, plant and equipment           (804)               (7)              (39)
-----------------------------------------------------------------------------------------------------

  FINANCING ACTIVITIES
    Increase of bank overdraft                            164               150               55
    Increase (decrease) in due to shareholder             138                 -                -
    Advances received from external parties               300               (28)               4
    Cash acquired on business combination               4,718                 -                -
    Advances from subsidiary                              581                 -                -
    Issue of capital stock                              6,241             1,471            1,467
    Issuance of atypical shares                         1,025                 -                -
-----------------------------------------------------------------------------------------------------
                                                       13,167             1,593            1,526

  (DECREASE) INCREASE IN CASH AND
    CASH EQUIVALENTS                                    1,457               503              69

   EFFECT OF FOREIGN EXCHANGE MOVEMENT                 (1,037)             (414)           (262)

   CASH AND CASH EQUIVALENTS,
    BEGINNING OF PERIOD                                     -               331             451
-----------------------------------------------------------------------------------------------------

  CASH AND CASH EQUIVALENTS,
    END OF PERIOD                                         420               420             258
=====================================================================================================

          See accompanying notes to consolidated financial statements.


Supplemental schedule of non-cash and financing activities (in thousands USD):
------------------------------------------------------------------------------

   Shares issued
     to agents for finder's fees                                             94             116
      for external stock based compensation                                  61              90
</TABLE>




                                       4

<PAGE>


iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
For the Quarter Ended September 30, 2003
(Expressed in United States dollars; tabular amounts in thousands,
except share and per share data)
--------------------------------------------------------------------------------


1.   NATURE OF OPERATIONS

     iQ Power  Technology  Inc. ("iQ Power") was  incorporated  under the Canada
     Business  Corporations Act on September 20, 1994.  Effective June 17, 1999,
     iQ Power  completed  a  business  combination  with iQ  Battery  Research &
     Development  GmbH  ("iQ  Battery").   The  business  combination  has  been
     accounted for as a reverse  acquisition with iQ Battery being identified as
     the acquirer. Although iQ Battery is deemed to be the acquiring corporation
     for financial  accounting  and reporting  purposes,  the legal status of iQ
     Power as the surviving  corporation does not change.  Herein after iQ Power
     and its subsidiary are referred to as "the Company".

     iQ  Battery,  established  in 1991,  is  conducting  research  and  product
     development  in  the  area  of  intelligent   performance-improved  battery
     systems.  The Company's  first product is an  intelligent  car battery,  in
     which  electronics,  microprocessors  and software  manage the energy.  The
     know-how is based on a patent acquired from the founding shareholders of iQ
     Battery.

     Patents have been granted for Germany,  thirteen other European  countries,
     and for the United States of America.  International  patents  applications
     have been filed in nine additional  countries.  iQ Battery's legal domicile
     is  Chemnitz,  Germany,  and it  maintains  a  branch  near  Munich,  where
     management has its offices.  The Company  intends to grant licenses for its
     technologies to the automotive and related industries in the future.


2.   CONTINUING OPERATIONS

     These  financial  statements  have been prepared on a going concern  basis,
     which  contemplates  the  realization  of assets  and the  satisfaction  of
     liabilities  in the normal  course of  business.  The Company has  incurred
     cumulative losses since inception and as of September 30, 2003, the Company
     on a consolidated  basis has a negative working capital position due to the
     significant  liabilities  of  its  Germany  subsidiary,   iQ  Battery.  The
     Company's  ability to continue  as a going  concern is  dependent  upon the
     ability of the Company to attain  future  profitable  operations  and/or to
     obtain  the  necessary  financing  to meet its  obligations  and  repay its
     liabilities  arising from normal business  operations when they become due.
     The  financial  statements  do not include any  adjustments  to reflect the
     possible future effects on the  recoverability and classification of assets
     or the amounts and  classification  of liabilities that may result from the
     outcome of this uncertainty.

     In 1999, the Company raised  approximately  $4,875,000,  net of commissions
     and costs of issue,  through  the  issuance of  2,200,000  shares of common
     stock pursuant to a  Registration  Statement on Form SB-1. In May 2001, the
     Company  completed a private  placement of 3,000,000 common shares at $0.25
     per share for proceeds of $750,000.  In September 2001, a private placement
     of 333,333  common  shares at $0.75 per share for  proceeds of $250,000 was
     also  completed.  In  the  fourth  quarter  of  2001,  the  Company  raised
     additional  funds through the private  placement of 1,019,344  units of the
     Company  at  US$0.70  per unit for  proceeds  of  $713,541,  with each unit
     consisting  of one common  share of the  Company  and one  non-transferable
     warrant  exercisable  for a period  of six  months  following  closing  and
     entitling the holder to purchase one additional common share of the Company
     for US$1.00 (see note 5(e) for more details on the warrants).

     In January  2002,  the  Company  raised an  additional  $617,500  in equity
     capital  through the private  placement of 950,000  units of the Company at
     US$0.65  per unit,  each such unit  consisting  of one common  share of the
     Company and one non-transferable warrant exercisable for a period of twelve
     months  following   closing  and  entitling  the  holder  to  purchase  one
     additional  common  share of the Company  for  US$0.85.  In June 2002,  the
     Company raised an additional $750,000 in equity capital through the private
     placement of 1,500,000  units of the Company at US$0.50 per unit, each such
     unit consisting of one common share of the Company and one non-transferable
     warrant  exercisable  for a period of twelve months  following  closing and
     entitling the holder to purchase one additional common share of the Company
     for  US$0.65.  In  November  and  December  2002,  the  Company  raised  an
     additional



                                       5

<PAGE>

iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
For the Quarter Ended September 30, 2003
(Expressed in United States dollars; tabular amounts in thousands,
except share and per share data)
--------------------------------------------------------------------------------


2.   CONTINUING OPERATIONS (Continued)

     $550,500 in equity capital through the private placement of 1,572,853 units
     of the Company at US$0.35 per unit, each such unit consisting of one common
     share of the Company and one  non-transferable  warrant  exercisable  for a
     period of twelve  months  following  closing  and  entitling  the holder to
     purchase one additional common share of the Company for US$0.45.

     In  February  2003,  the  Company  raised an  additional  $52,500 in equity
     capital  through the private  placement of 150,000  units of the Company at
     US$0.35  per unit,  each such unit  consisting  of one common  share of the
     Company and one non-transferable warrant exercisable for a period of twelve
     months  following   closing  and  entitling  the  holder  to  purchase  one
     additional common share of the Company for US$0.45.

     From  February   through  June  2003,  the  Company  raised  an  additional
     US$820,300 in capital  through the private  placement of 2,563,437 units of
     the Company at US$0.32 per unit,  each such unit  consisting  of one common
     share of the Company and one  non-transferable  warrant  exercisable  for a
     period of twelve  months  following  closing  and  entitling  the holder to
     purchase one additional common share of the Company for US$0.42.

     The subscribers to all private placements were non-U.S. persons outside the
     United States of America.

     The Company has used the proceeds to fund  research and  development  of iQ
     Battery's   technology,   to  expand  the  Company's  marketing  and  sales
     activities,  to  fund  the  proposed  acquisition  of  certain  assets  and
     technology  employed by a US-based battery  manufacturer in the manufacture
     of specialized  automotive and storage  batteries,  and for general working
     capital.  Additional  funds are  necessary to allow the Company to complete
     its product  development and marketing plan.  Additional  financing will be
     required and there is no assurance  that the Company will be able to secure
     additional  financing or that such financing will be on terms beneficial to
     the existing shareholders.

     The Company has signed  agreements to jointly develop its applications with
     large  corporations.  Such  alliances  involve the  utilization  of certain
     aspects of the Company's technology.  The ability of the Company to succeed
     in these  alliances  is  dependent  upon the  Company's  ability  to obtain
     additional  financing.  The  Company has been active in its search for such
     financing.  Management believes that the Company will be able to obtain the
     necessary financing.

     As of  September  30,  2003,  the  Company's  current  financial  condition
     requires  the  infusion  of  additional  capital in order to  continue  its
     current  operations.  If the  Company  is unable to obtain  the  additional
     financing,  the  Company  will  be  unable  to  meet  all of its  financial
     obligations.  There is no assurance that the Company will be able to secure
     additional  financing or that such financing will be on terms beneficial to
     the existing shareholders.


3.   BASIS OF PRESENTATION

     The  unaudited  financial  statements  included  herein have been  prepared
     pursuant  to the rules  and  regulations  of the  Securities  and  Exchange
     Commission  for reporting on Form 10-Q.  Certain  information  and footnote
     disclosures   normally  included  in  financial   statements   prepared  in
     accordance  with  accounting  principles  generally  accepted in the United
     States of America have been condensed or omitted pursuant to such rules and
     regulations.  The  statements  should  be  read  in  conjunction  with  the
     accounting policies and notes to consolidated financial statements included
     in the Company's 2002 Annual Report on Form 10-K.



                                       6
<PAGE>

iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
For the Quarter Ended September 30, 2003
(Expressed in United States dollars; tabular amounts in thousands,
except share and per share data)
--------------------------------------------------------------------------------


     In  the  opinion  of  management,  the  financial  statements  reflect  all
     adjustments  necessary  for a fair  statement  of the  operations  for  the
     interim periods presented.


4.   SHARE CAPITAL

       Authorized
           An unlimited number of common shares
       Issued and outstanding

<TABLE>
                                                                              Number of
                                                                          Common shares               Amount ($ 000)
                                                                          -------------               ---------------
      <S>                                                                  <C>                        <C>
       Balance, January 1, 1998 (iQ Power)                                     787,896                           493
       Private placement, issued cash                                         1,483,874                          927
       --------------------------------------------------------------------------------------------------------------
       Balance, December 31, 1998                                            2,271,770                         1,420

       Shares issued for cash                                                 2,200,000                        5,500
       Issue costs                                                                    -                        (653)
       --------------------------------------------------------------------------------------------------------------
       Balance, June 17, 1999                                                 4,471,770                        6,267
       Adjustment for
       reverse acquisition on June 17, 1999                                           -                      (6,207)
       --------------------------------------------------------------------------------------------------------------
                                                                              4,471,770                           60

       Issued to effect the reverse acquisition                               5,120,000                        5,495
       Warrants exercised during the year                                       139,850                          349
       --------------------------------------------------------------------------------------------------------------
       Balance, December 31, 1999                                             9,731,620                        5,904

       Options exercised during the year                                         15,000                           37
       --------------------------------------------------------------------------------------------------------------
       Balance, December 31, 2000                                             9,746,620                        5,941

       Private placements, issued for cash (incl. Finder's Fees)              4,597,944                        1,714
       Shares issued for conversion of debt                                     400,000                          200
       Shares issued for external stock based compensation                      205,060                          218
       Options exercised during the year                                      1,002,500                          501
       --------------------------------------------------------------------------------------------------------------
       Balance, December 31, 2001                                            15,952,124                        8,574

       Private placements, issued for cash (incl. Finder's Fees)              4,225,853                    1,881
       Shares issued for external stock based compensation                      150,250                          111
       Options exercised during the year                                         20,000                           10
       --------------------------------------------------------------------------------------------------------------
       Balance, December 31, 2002                                            20,348,227                       10,576

       Private placements, issued for cash (incl. Finder's Fees)                              2,996,479                    910
       Shares issued for stock based compensation                               138,198                           61
       Warrants exercised during the year                                       989,285                          427
       Options exercised during the year                                        569,989                          228
       --------------------------------------------------------------------------------------------------------------
       Balance, September 30, 2003                                           25,042,178                       12,202
</TABLE>


     On April 10, 2000,  the  company's  board of directors  declared a 2.5 to 1
     reverse  stock  split of the  company's  common  stock.  In  addition,  the
     authorized  shares of common stock issued and  outstanding  were  decreased
     from  24,366,550 to 9,746,620  shares.  All references in the  consolidated
     financial statements to shares and related prices,  weighted average number
     of shares,  per share  amounts,  and stock plan data have been  adjusted to
     reflect the reverse split.

     (a)  Stock options

          The  Company  has  established  a Stock  Option  Plan  for  employees,
          officers,  directors,  consultants,  and  advisors.  The  Company  has
          reserved  4,714,000  common shares for issuance under the Stock Option
          Plan. In the second quarter of 2003, 140,000 shares were issued on the
          exercise of stock options  granted under the stock option plan. In the
          third quarter of 2003,  429,989  shares were issued on the exercise of
          stock options granted under the stock option plan. Options granted for
          issuance under the Stock Option Plan  generally are not  transferable,
          and the exercise price of stock options must be at least equal to 100%
          of the fair  market  value  of the  common  shares  on the date of the
          grant.



                                       7
<PAGE>

iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
For the Quarter Ended September 30, 2003
(Expressed in United States dollars; tabular amounts in thousands,
except share and per share data)
--------------------------------------------------------------------------------


4.   SHARE CAPITAL (Continued)

          The Stock Option Plan may be administered by the Board of Directors or
          a committee of the Board (the "Committee").  The Board of Directors or
          the  Committee,  as the case may be,  has the power to  determine  the
          terms of any options granted thereunder, including the exercise price,
          the number of shares  subject to the  option,  and the  exercisability
          thereof.  The term of an option  granted under the Plan may not exceed
          ten years.  The specific  terms of each option grant shall be approved
          by the Board of Directors or the Committee.

          SFAS No. 123,  issued in October  1995,  requires  the use of the fair
          value based method of accounting for stock options. Under this method,
          compensation  cost is  measured at the grant date as the fair value of
          the options granted and is recognized over the exercise period. During
          the years ended December 31, 2002 and 2001, the Company issued options
          to individuals  other than  employees and directors,  which under SFAS
          No. 123 are recognised as share-based  compensation  rateably over the
          vesting period. SFAS No. 123, however,  allows the Company to continue
          to measure the  compensation  cost of employee  and  director  related
          stock options in  accordance  with APB 25. The Company has adopted the
          disclosure-only provision of SFAS No. 123 and SFAS No. 148, Accounting
          for  Stock-Based   Compensation  -  Transition  and  Disclosure  -  an
          Amendment of FASB Statement No. 123.

          On June 12, 2000, the Board of Directors  decreased the exercise price
          for the Stock Option Plan; from $2.50 to $1.50 for all options granted
          under and  outside of the plan.  On  January  16,  2001,  the Board of
          Directors  decreased  again the  exercise  price for the Stock  Option
          Plans from $1.50 to $0.50 for all options granted under and outside of
          the plan.  On January 18, 2002,  the Board of Directors  decreased the
          exercise price of the 1,415,000 options granted under the Plan on June
          28, 2001, from $1.37 to $1.00. On June 6, 2003, the Board of Directors
          reset the  exercise  price of all  options  granted  under the Plan to
          $0.40  per  share,  a  premium  to the  current  market  price  of the
          Company's shares at the time of the repricing.

          Due to the changes,  all the options which were granted under the plan
          prior to the  change in  exercise  price will be  accounted  for using
          variable plan accounting  under APB 25. Variable  accounting  requires
          that the intrinsic value, being the excess of the current market price
          at the end of each reporting period in excess of the exercise price of
          the repriced options, be expensed as non-cash stock based compensation
          expense, until such time as the repriced options are exercised, expire
          or are otherwise forfeited. Any increase in the intrinsic value of the
          repriced options will decrease reported  earnings,  and any subsequent
          decreases in value will increase reported earnings.  For those options
          which were granted outside of the plan prior to the change in exercise
          price, the Company  recognizes  additional  compensation  cost for the
          excess of the fair value of the modified options issued over the value
          of the original option at the date of the  modification.  According to
          APB 25 the Company  recorded no stock based  compensation in the first
          quarter of 2003. In the second quarter 2003, US$493,000 of stock based
          compensation was recognized in the financial statements.  In the third
          quarter 2003, a reversal of stock based  compensation in the amount of
          US$18,000 was recognized in the financial statements.

          The following table  illustrates the effect on net earnings (loss) and
          net  earnings  (loss) per share if the  Company  had  applied the fair
          value recognition  provisions of SFAS No. 123 to stock-based  employee
          compensation. All amounts below are in $000's except per share data.



                                       8
<PAGE>

iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
For the Quarter Ended September 30, 2003
(Expressed in United States dollars; tabular amounts in thousands,
except share and per share data)
--------------------------------------------------------------------------------


4.   SHARE CAPITAL (Continued)

<TABLE>
                                                   3 months ended    9 months ended    3 months ended    9 months ended
                                                    September 30,     September 30,     September 30,     September 30,
                                                             2003              2003              2002              2002
                                                   --------------    --------------    --------------    --------------
     <S>                                            <C>               <C>               <C>               <C>
      Net loss
      As reported                                       $   (401)      $   (1,664)        $  (290)         $   (924)
      Add (Deduct): Total stock-based employee
        compensation expense determined
        under fair value based method for all
        awards net of related tax effects               $    (18)      $      425         $  (170)         $   (299)
      -----------------------------------------------------------------------------------------------------------------
      Pro forma net loss                                $   (419)      $   (1,189)        $  (460)         $ (1,223)



      Loss per share (basic and diluted)
        As reported                                     $  (0.02)      $    (0.07)        $  (0.02)        $  (0.05)
        SFAS No. 123 pro forma                          $      -       $     0.02         $      -         $  (0.02)
      -----------------------------------------------------------------------------------------------------------------
      Pro forma net loss                                $  (0.02)      $    (0.05)        $  (0.02)        $  (0.07)

</TABLE>


          The weighted average fair value,  calculated  using the  Black-Scholes
          option  pricing model value of options  granted under the stock option
          plan during the nine  months  ended  September  30, 2002 was $0.66 per
          share.  The fair value of these  options was  estimated at the date of
          grant using a weighted  average  volatility  factor of 85%, a dividend
          yield of 0%, a weighted  average expected life of the stock options of
          3 years,  and a risk free  interest  rate of 3.43%.  For the three and
          nine months ended September 30, 2003, no stock options were granted to
          employees.


     (b)  Incentive Share Plan

          In July 2001,  the Company  instituted  an  Incentive  Plan  reserving
          shares for issue to officers,  directors, and employees of the Company
          and its subsidiary as an incentive. The number of shares set aside for
          issue under the incentive  share plan is 2,500,000  common shares.  No
          incentive shares have been granted under this plan as of September 30,
          2003.

          The incentive plan will be accounted for as a fixed stock compensation
          plan in accordance with Accounting  Principles Board (APB) Opinion No.
          25.

     (c)  Loss per share

          Losses per share  calculations  give  effect to the  reverse  takeover
          described in Note 1.

     (d)  iQ share capital

          The  registered  capital of iQ Battery is EURO 51,129,  which is fully
          paid. All equity  securities  were acquired by iQ Power as part of the
          business combination.



                                       9
<PAGE>

iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
For the Quarter Ended September 30, 2003
(Expressed in United States dollars; tabular amounts in thousands,
except share and per share data)
--------------------------------------------------------------------------------


4.   SHARE CAPITAL (Continued)

     (e)  Issuance of shares due to private placements

          In November 2002, the Company  announced  another private placement of
          up to 1,715,000 units of the Company at $0.35 per unit for proceeds of
          $600,000, with each unit consisting of one common share of the Company
          and one  non-transferable  warrant  exercisable for a period of twelve
          months  following  closing and  entitling  the holder to purchase  one
          additional common share of the Company for US$0.45.  Thereof 1,572,853
          units for  proceeds of $550,500  were issued in November  and December
          2002.  Additional 150,000 units for proceeds of $52,500 were issued in
          February 2003. The subscribers to the private  placement were non-U.S.
          persons  outside the United States in reliance upon an exemption  from
          registration  under  Regulation S of the  Securities  Act of 1933,  as
          amended.  The  Company  incurred  finder's  fees to  non-U.S.  persons
          outside the United States, in connection with the offering  consisting
          of 107,142  common  shares.  The cost of the  finder's  fee was netted
          against the proceeds  obtained from the  financing.  The finder's fees
          were paid out in February 2003. The shares were issued  pursuant to an
          exemption  from  registration  available  under  Regulation  S of  the
          Securities  Act.  In the third  quarter  of 2003,  364,285  shares for
          proceeds of $164,000  were issued on the  exercise of warrants  out of
          this private placement.

          The combined fair value of the attached warrants as of the date of the
          private  placement  was  approximately  $235,000.  The fair  value was
          calculated  using  the  Black-Scholes   option-pricing   model.  These
          warrants  were  offered in the private  placement in order to increase
          investor  interest,  align the interest of prospective  investors with
          shareholders, and potentially allow them to invest in the Company at a
          future date.

          From  February  through June 2003,  the Company  raised  US$820,300 in
          capital  through  the  private  placement  of  2,563,437  units of the
          Company at US$0.32 per unit,  each such unit  consisting of one common
          share of the Company and one non-transferable  warrant exercisable for
          a period of twelve months  following  closing and entitling the holder
          to purchase  one  additional  common share of the Company for US$0.42.
          The subscribers to the private placement were non-U.S. persons outside
          the United  States in reliance  upon an  exemption  from  registration
          under  Regulation S of the  Securities  Act of 1933,  as amended.  The
          Company incurred finder's fees to non-U.S.  persons outside the United
          States,  in connection with the offering  consisting of 175,900 common
          shares  at a  deemed  price  of  US$0.32  per  share.  The cost of the
          finder's  fee was  netted  against  the  proceeds  obtained  from  the
          financing.  The finder's  fees were paid out in June 2003.  The shares
          were issued pursuant to an exemption from registration available under
          Regulation  S of the  Securities  Act.  In the third  quarter of 2003,
          625,000 shares for proceeds of $262,500 were issued on the exercise of
          warrants out of this private placement.

          The combined fair value of the attached warrants as of the date of the
          private  placement  was  approximately  $505,000.  The fair  value was
          calculated  using  the  Black-Scholes   option-pricing   model.  These
          warrants  were  offered in the private  placement in order to increase
          investor  interest,  align the interest of prospective  investors with
          shareholders, and potentially allow them to invest in the Company at a
          future date.

     (f)  Issuance of shares due to consulting agreements

          In August 2002, the Company entered into a Financial  Public Relations
          Adviser Consulting Agreement with Joerg Schweizer,  a non-U.S.  person
          outside the United States. The Company agreed to pay Joerg Schweizer a
          consulting fee in the amount of EUR 5,000  (approximately  $5,300) per
          month  for such  services.  Of the  consulting  fee,  EUR 2,000 is due
          monthly  while the  remaining  EUR 3,000 is payable  by issuing  Joerg
          Schweizer common shares,  issuable on a quarterly basis. The agreement
          had an initial term of 12 months ending June 30, 2003, continuing on a
          monthly basis  thereafter  until  terminated  by either  party.  As of
          September 30, 2003, the agreement has not been terminated. The Company
          has issued Joerg Schweizer 90,100 common shares under the agreement.



                                       10
<PAGE>

iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
For the Quarter Ended September 30, 2003
(Expressed in United States dollars; tabular amounts in thousands,
except share and per share data)
--------------------------------------------------------------------------------


4.   SHARE CAPITAL (Continued)

          In August 2002, the Company entered into a Media Relations  Consulting
          Agreement with Andreas Gloetzl,  a non-U.S.  person outside the United
          States.  The  agreement  had an initial term of August 1, 2002 through
          March 15, 2003. The Company agreed to pay Andreas Gloetzl a consulting
          fee in the amount of $33,800 by issuing Andreas Gloetzl common shares,
          issuable as follows:  The first  issuance of 25,000  shares in October
          2002,  additional 20,000 shares in December 2002, the last installment
          of 20,000 shares in March 2003. As of March 31, 2003,  the Company had
          issued  Andreas  Gloetzl all 65,000 common shares under the agreement.
          The agreement was not extended.

          In  November  2002,  the  Company  entered  into a Officer  Engagement
          Agreement with Marco Graf von Matuschka,  our Chief Financial Officer.
          The Company agreed to pay Marco Graf von Matuschka a consulting fee in
          the amount of $3,000 per month for such  services.  Of the  consulting
          fee,  one half  was  payable  by  issuing  3,333  common  shares.  The
          agreement  had an initial term ending  March 31, 2003,  renewable on a
          quarterly basis thereafter.  As of September 30, 2003, the Company had
          issued Marco Graf von  Matuschka  all 24,998  common  shares under the
          agreement.  Marco Graf von Matuschka  resigned as the Chief  Financial
          Officer of the Company  effective  on June 30, 2003,  having  provided
          notice of his intention to do so on May 16, 2003.


5.   RELATED PARTY TRANSACTIONS

     Related  party  transactions  not  disclosed  elsewhere  in  the  financial
     statements comprised:

     (a)  Management  fees for the three  months  ended  September  30,  2003 of
          $18.000  (2002  -  $18,000)  were  paid  to a  company  with a  common
          director.

     The Company has entered into the following contractual arrangements:

     (b)  employment  agreement  with two directors of the Company to occupy the
          position of President and Chief Executive Officer and  Vice-President,
          Research and  Development  and Technical  Advisor.  Under the terms of
          these  agreements  the  Company is  obligated  to pay these  employees
          $9,000 and $8,000  per month,  respectively,  for a term of five years
          commencing August 31, 1998;

     (c)  iQ Battery acquired patents and know-how  improving the current output
          of a chargeable battery at low outside temperatures and the registered
          design  "iQ"  based  on a  contract  dated  March  15,  1995  from two
          shareholders,  one  of  which  is  a  director  of  the  Company.  The
          intangibles  purchased  relate to a German  patent,  an  international
          patent  application as well as the registered design "iQ". The Company
          and the  shareholders  agreed that the  shareholders  would receive DM
          400,000 (approximately  $235,000) from future income. Any amounts paid
          will be charged to operations as a current  expense.  No other amounts
          are due as the Company has not  realized  any  applicable  revenues or
          royalties.

     (d)  As of September 30, 2003, the Company has  receivables of US$40,000 in
          connection with loan agreements with three shareholders,  two of which
          are directors of the Company. These loans date from prior years.



                                       11
<PAGE>

iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
For the Quarter Ended September 30, 2003
(Expressed in United States dollars; tabular amounts in thousands,
except share and per share data)
--------------------------------------------------------------------------------


6.   SEGMENT DISCLOSURES

     The  Company  is  currently   marketing  and  developing  its   proprietary
     technology.  In  accordance  with SFAS No. 131 the  Company  considers  its
     business to consist of one reportable  operating  segment.  The majority of
     the Company's significant physical assets are located in Germany.


7.   RECENT TRANSACTIONS

     In September 2002, the Company  announced that it had entered into a letter
     of intent for the  acquisition  of the  business and assets of Gel Electric
     Technologies,  Inc. (Gel) headquartered in Los Angeles, California, USA. In
     the course of this  agreement iQ Power made a prepayment of $150,000 to Gel
     during the fiscal  year end 2002.  In January  2003,  the  Company  paid an
     additional  $75,000 to Gel in connection with the above mentioned letter of
     intent for the  acquisition  of the  business  and  assets of Gel.  Gel was
     obligated to reimburse the prepayments by notice of iQ Power.  For the year
     ended December 31, 2002, the Company reserved US$150,000 of the prepayments
     as provision for investment  due to the weak financial  position of Gel and
     the  likelihood  that Gel may be  unable to  reimburse  the  prepayment  on
     demand.   Notwithstanding   these   reservations   (which   deal  with  the
     collectability of the funds advanced rather than the acquisition of the Gel
     technology and assets) the Company continued to consider the acquisition of
     the Gel technology and assets in a manner  appropriate to the international
     business model currently being discussed by the Company.

     In the third quarter of 2003, an additional  US$236,000 was  contributed in
     connection with the possible  acquisition of specific  tangible assets from
     Gel. In light of the ongoing  discussions,  the  Company  will  continue to
     review  all  advances  in support of the  possible  acquisition  of the Gel
     technology  and other assets at the earlier of the end of the  negotiations
     or the current  financial  year to determine  their  appropriate  financial
     value to the Company.

     In  September  2003,  iQ  Battery  issued  EUR  150,000  (equal to  approx.
     US$174,000)  of  convertible  debt due on  September  30, 2004 to a private
     individual.  The debt maintains an annual fixed interest rate of 12% and is
     due in  full,  along  with the  full  principal  balance  of the  debt,  on
     September 30, 2004. The debt is convertible,  at the lender's option,  into
     shares of iQ  Power's  common  stock at a price and date  specified  in the
     original agreement.


8.   SUBSEQUENT EVENT

     Subsequent  events not  discussed  elsewhere  in the  financial  statements
     include:

     In  October  2003,  iQ  Battery   issued  EUR  120,000  (equal  to  approx.
     US$139,000)  of  convertible  debt due on  September  30, 2004 to a private
     individual.  The debt maintains an annual fixed interest rate of 12% and is
     due in  full,  along  with the  full  principal  balance  of the  debt,  on
     September 30, 2004. The debt is convertible,  at the lender's option,  into
     shares of iQ  Power's  common  stock at a price and date  specified  in the
     original agreement.



                                       12
<PAGE>

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

Certain   statements  in  this  Quarterly  Report  on  Form  10-QSB   constitute
forward-looking  statements  within the meaning of Section 21E of the Securities
Exchange Act of 1934. Such forward-looking  statements involve known and unknown
risks,  uncertainties  and other  factors  that may cause  the  actual  results,
performance or achievements of iQ Power  Technology Inc. and its subsidiary,  iQ
Battery  Research  and  Development  GmbH   (hereinafter  "iQ  Germany"  or  "iQ
Battery"),  (hereinafter  collectively,  referred  to as  "iQ  Power"  and  "the
Company"),  or developments in the Company's industry, to differ materially from
the anticipated  results,  performance or  achievements  expressed or implied by
such forward-looking  statements.  Such factors include, but are not limited to:
the Company's limited operating history;  risks related to delays in developing,
marketing and commercializing the Company's  batteries;  lengthy development and
sales  cycles  related to the  commercialization  of battery  technologies;  the
Company's  dependence  upon  a  relative   concentration  of  customers  in  the
automotive  and battery  manufacturing  industries;  competition  in the battery
industry and competing battery technologies;  risk related to the development of
the Company's battery  technologies and acceptance by the automotive and battery
manufacturing industries; risks of technological change that may be inconsistent
with the Company's  technologies  or the may render its  technologies  obsolete;
dependence  on  selected  vertical  markets  within the  automotive  and battery
manufacturing industries;  general economic risks that may affect the demand for
automotive   batteries;   the  Company's   reliance  on  third-party   marketing
relationships  and suppliers;  the Company's ability to protect its intellectual
property rights;  risks related to the Company's  proposed  acquisitions and the
other risks and uncertainties  described under "Business - Risk Factors" in Part
I of the  Company's  Annual  Report on Form 10-KSB filed with the United  States
Securities and Exchange Commission on April 16, 2003.

The  Registrant  cautions  readers  not to  place  undue  reliance  on any  such
forward-looking  statements,  which  speak  only  as  of  the  date  made.  Such
forward-looking  statements  are  based  on the  beliefs  and  estimates  of the
Registrant's  management  as well  as on  assumptions  made  by and  information
currently available to the Registrant at the time such statements were made. The
Registrant  disclaims any obligation  subsequently to revise any forward-looking
statements to reflect events or circumstances  after the date of such statements
or to reflect the occurrence of anticipated or unanticipated events.

The financial  statements of iQ Power  Technologies  Inc. (the  "Company" or the
"Registrant")  are stated in U.S.  dollars and are prepared in  accordance  with
United States generally accepted accounting  principles (US GAAP). The following
management  discussion  and analysis is qualified in its entirety by, and should
be read in conjunction  with, the  consolidated  financial  statements and notes
thereto, included elsewhere in this quarterly report.

Overview

The Company is an early stage company which was organized in 1991 to develop and
commercialize  batteries  and  electric  power  technology  for  the  automotive
industry and other industries. Since that date, it has been engaged primarily in
research and product development  efforts.  The Company has not derived revenues
from operations.

The Company's  primary  product is a "smart"  automotive  starter  battery,  the
MagiQTM  battery,  which  combines  several  proprietary  features  designed  to
optimize automotive starter battery  efficiency.  During the first half of 2003,
the Company  delivered a limited  number of its  MagiQTM  batteries  for a pilot
program  as the  first  step  in the  Company's  plan to  commercialize  MagiQTM
batteries.  In addition,  the Company  delivered a limited  amount of electronic
devices  to car  manufacturers  for  testing  purposes.  All tests had  positive
results, and met or exceeded the technical  specification of the products.  As a
result of that,  all parties  agreed to continue or expand the testing  program.
The Company  produced a limited  production run of MagiQTM  batteries during the
fourth  quarter of 2003 for testing and marketing  purposes.  The batteries from
this production run are already pre-reserved by car manufacturers and automotive
suppliers  for  validation  and   verification   in  their   respective   system
environments.  The  Company  decided to postpone  its initial  plans to commence
commercial  production  of MagiQTM  batteries in 2003 until  adequate  financing
would be available.



                                       13
<PAGE>

The Company had a working capital deficit of approximately  $99,000 at September
30,  2003,  and will need to raise  additional  financing  for  working  capital
purposes and to meet its on-going  obligations  during the fourth  quarter 2003.
The Company  anticipates that future revenues,  if any, will be derived from the
sale of MagiQTM batteries, electronic devices based on the Company's proprietary
knowhow and licensing of its  technologies.  The Company does not  anticipate it
will generate any revenues from the sale of its products until the first half of
2004,  assuming that it can raise the funding  necessary to commence  commercial
production of its MagiQTM batteries.  See "Need for Additional  Capital," below.
The Company  currently  has no service or licensing  agreements in place and the
Company does not  anticipate  that it will receive any  material  revenues  from
service or license arrangements during 2003.

The  Company  has  incurred  substantial  losses  to date,  and  there can be no
assurance that the Company will attain any particular  level of revenues or that
the Company will achieve profitability.

The Company  believes that its historic  spending  levels are not  indicative of
future  spending  levels  because  it is in a period  in which it will  increase
spending on product  research  and  development,  marketing,  staffing and other
general  operating  expenses.  For  these  reasons,  the  Company  believes  its
expenses,  losses,  and deficit  accumulated  during the development  stage will
increase significantly before it generates material revenues.

Commercialization Strategy

The Company has  undertaken a  significant  amount of research  and  development
efforts over the past years,  and has built  specialized  knowhow in the area of
electrical energy storage.  Particularly in the automotive industry, the Company
has participated in numerous joint development tasks with various organizations.
The  Company  plans  to enter  into  additional  joint  research  and  marketing
agreements and to use industry  networks as a platform to establish  itself as a
development partner. As a result of such co-development  activities, the Company
expects  to  also  secure  contracts  for  the  delivery  of  its  products  and
technologies.  Currently,  the  initial  demand  in the  Company's  products  is
expected to be outsourced to manufacturing partners. Assuming adequate financing
is available, the Company plans to pursue opportunities to built its own battery
manufacturing facility, which would permit the Company to control the production
process and obtain  supplier  status in the automotive  industry.  The Company's
facility is not  anticipated  to have the capacity to fulfil the demand of major
groups of the  automotive  industry on an  international  or global  scale.  The
Company anticipates it will enter into licensing  arrangements for expanded mass
production of its products with international manufacturing partners.

Besides the automotive  industry,  other  industries show similar demands in the
Company's technical solutions.

In order to respond to such demand for storage batteries used in the telecom and
other industries,  the Company entered into a letter of intent in September 2002
to acquire  all of the assets of Gel  Electric  Technologies,  Inc.  ("Gel"),  a
company  engaged in the business of  manufacturing  specialized  automotive  and
storage  batteries that use sealed VRLA  gelled-electrolyte  (GEL),  sealed VRLA
starved-electrolyte  (AGM), and sealed lead acid flooded (WET) technologies.  In
connection with the letter of intent, the Company made an advance of $150,000 to
Gel during  2002 and an  additional  advance of $75,000 in January  2003.  These
advances  were  payable by Gel upon  demand of the  Company.  For the year ended
December 31, 2002,  the Company  reserved  $150,000 of the advances as provision
for investment due to the weak financial position of Gel and the likelihood that
Gel would be unable to repay the advance on demand.

Notwithstanding  these  reservations  (which deal with the collectability of the
funds  advanced to Gel rather than the  acquisition  of the Gel  technology  and
assets),  the Company and Gel  continued  to  negotiate  the terms of a possible
acquisition of the Gel technology and assets. The parties elected not to proceed
under the  letter of  intent.  In early  2003,  a secured  creditor  of Gel took
possession of the Gel operating  assets,  including  its  production  equipment,
after default by Gel under its debt obligations to the secured  creditor.  These
assets  were  transferred  to  GE  Industries   Corporation  together  with  the
obligation  to repay the  Company's  advances to Gel of $225,000.  GE Industries
continued to operate the business



                                       14
<PAGE>

previously carried on by Gel pending  conclusion of the negotiations  between GE
Industries  and  the  Company  for  the   acquisition  of  the  Gel  assets  and
intellectual  property by the Company.  Through  September 30, 2003, the Company
advanced  $236,000 to GE Industries  and associated  parties in connection  with
their ongoing  negotiations.  All funds  advanced to Gel and GE  Industries  are
evidenced by promissory notes.

Critical Accounting Policies

Financial   Reporting  Release  (FRR)  No.  60,   "Cautionary  Advice  Regarding
Disclosure  About  Critical  Accounting  Policies,"  requires  all  companies to
include a  discussion  of critical  accounting  policies or methods  used in the
preparation  of  financial  statements.  The  discussion  and  analysis  of  the
Company's  financial  condition  and  results of  operations  are based upon its
consolidated  financial statements,  which have been prepared in accordance with
accounting  principles  generally accepted in the United States. The preparation
of these  financial  statements  requires  the  Company  to make  estimates  and
judgments that affect the reported  amount of assets and  liabilities,  revenues
and expenses, and related disclosure of contingent assets and liabilities at the
date of its financial statements. Actual results may differ from these estimates
under different assumptions or conditions.

Critical  accounting  policies  are  defined  as those  that are  reflective  of
significant  judgments and  uncertainties,  and potentially result in materially
different  results under different  assumptions  and conditions.  The accounting
policy  which  the  Company  believes  are the  most  critical  to aid in  fully
understanding and evaluating its reported  financial results include stock based
compensation.

In accordance with the provisions of the Financial  Accounting Standards Board's
("FASB")  Statement of  Accounting  Standard  ("SFAS") No. 123,  Accounting  for
Stock-Based  Compensation,  the  Company  has  elected to follow the  Accounting
Principles  Board's Opinion No. 25, Accounting for Stock Issued to Employees and
the related  interpretations  ("APB 25") in  accounting  for its employee  stock
based compensation plans. Due to changes in the exercise price for Stock Options
granted  under the Stock Option Plan,  those options will be accounted for using
variable plan accounting under APB 25.

Under APB 25, if the exercise  price of employee  stock  options  issued under a
fixed plan equals or exceeds the fair value of the underlying  stock on the date
of grant, no compensation  expense is recognized (see Note 4(a)).  Stock options
granted to  non-employees  result in the  recognition  of expenses upon the fair
value of such stock options as prescribed  under SFAS No. 123. Due to changes in
the exercise price for certain Stock Option granted under the Stock Option Plan,
those options will be accounted for using variable plan accounting under APB 25.
Variable  accounting  requires that the intrinsic value, being the excess of the
current  market  price at the end of each  reporting  period  in  excess  of the
exercise  price of the  repriced  options,  be expensed as non-cash  stock based
compensation  expense,  until such time as the repriced  options are  exercised,
expire or are otherwise  forfeited.  Any increase in the intrinsic  value of the
repriced options will decrease reported earnings,  and any subsequent  decreases
in value will increase reported  earnings.  For those options which were granted
outside  of the  plan  prior  to the  change  in  exercise  price,  the  Company
recognizes additional  compensation cost for the excess of the fair value of the
modified options issued over the value of the original option at the date of the
modification.

The Company's  accounting for stock options is significant because of the effect
the compensation  expense has on the Company's results. As the Company begins to
produce  their  product in the future and begins to earn revenue on sales of the
product,  the compensation  expense  associated with the Company's stock options
will have a significant effect on its ability to incur positive net results.

Related Party Transactions

Financial  Reporting Release (FRR) No. 61, "Effects of transactions with related
and certain  other  parties,"  requires all companies to include a discussion of
all material transactions with related and certain other parties to the Company.
As discussed in Note 5 of the financial statements.



                                       15
<PAGE>

The  Company's  Results of Operations  for the Three Months Ended  September 30,
2003 Compared to the Three Months Ended September 30, 2002

Revenues.  No revenues  were  recorded in either the three  month  period  ended
September 30, 2003 or the three month period ended September 30, 2002.

Total Operating  Expenses.  The Company had total operating expenses of $463,000
for the three month period ended  September  30, 2003,  compared to $263,000 for
the same period in 2002.  Total  operating  expenses  for the three month period
ended September 30, 2003 included research and development  expenses of $227,000
($100,000  - 2002) and  marketing  and general  and  administrative  expenses of
$236,000  ($163,000 - 2002).  Total operating  expenses increased by $200,000 or
76% for the three month period ended  September  30, 2003,  compared to the same
period in 2002. The primary factors contributing to increased operating expenses
were the  difference  in the reversal of the non-cash  stock-based  compensation
expense in the third quarter 2003 compared to 2002,  and increased  professional
fees in connection  with the proposed  acquisition of Gel. The overall effect of
the  non-cash  stock-based  compensation  accounted  for an expense  increase of
$152,000 in the three month period  ended  September  30, 2003,  compared to the
same period in 2002 (see, note 4(a)).

Research and Development  Expenses.  Research and development  expenses in total
were $227,000 for the three months ended September 30, 2003 compared to $100,000
for the same period in 2002,  an increase  of  $127,000  or 127%.  Research  and
development  personnel  costs  increased by $134,000  from $18,000 for the third
quarter  in 2002 to  $152,000  for the third  quarter in 2003.  The  stock-based
compensation  effect  accounted for $126,000 of the total  increase in personnel
related  expenses.  Laboratory  expenses  related to  research  and  development
decreased from $71,000 for the three months ended  September 30, 2002 to $64,000
for the comparable  period in 2003, a decrease of 10%.  Research and development
office & travel  expenses  decreased  from  $11,000 for the three  month  period
ending  September  30, 2002 to $5,000 for the same  period in 2003.  The Company
incurred  professional  fees  associated with research and development of $6,000
which were due to the Company's  participation in the PEIT-Project;  the Company
had not incurred any professional fees in the third quarter of 2002.

Marketing  and General and  Administration  Expenses.  The  expenses  related to
marketing  and general and  administration  increased  to $236,000 for the three
month period ended September 30, 2003 from $163,000 for the same period in 2002,
an increase of $73,000 or 45%.  Personnel related expenses  increased by $30,000
to $33,000 for the three month period ended  September  30, 2003 from $3,000 for
the same period in 2002. The stock-based  compensation effect (a higher reversal
in Q3 2002,  than in Q3 2003)  accounted  for  $27,000 of the total  increase in
personnel  related  expenses.  Professional  fees  increased to $100,000 for the
third quarter in 2003,  compared to $39,000 for the third quarter in 2002 due to
the Company's  increased expenses for the negotiations and due diligence related
to the proposed Gel transaction and a payment of credited director's fees to the
six directors of the Company.  Office & travel expenses increased to $33,000 for
the third  quarter  2003,  compared to $17,000 for the same period in 2002.  The
increase  related to the  proposed  Gel  transaction.  Expenses  for  consulting
services decreased from $44,000 for the third quarter in 2002 to $13,000 for the
same  period in 2003.  In the third  quarter of 2002 the  Company  had  employed
external resources for strategic consulting. Other expenses related to marketing
and general and administration for the quarter ended September 30, 2003 included
marketing  activities  at  $17,000  ($21,000  - third  quarter  2002);  investor
relations at $18,000 ($18,000 - third quarter 2002);  management fees at $18,000
($18,000 - third quarter 2002); and all other expenses at $4,000 ($3,000 - third
quarter 2002).

The Company anticipates that the level of expenditures  related to its marketing
and general and administration  expenses will increase during the fourth quarter
2003 and in 2004.  The  Company  produced  a limited  production  run of MagiQTM
batteries during the fourth quarter of 2003 for testing and marketing  purposes.
It plans to  increase  marketing  efforts to  introduce  and  commercialize  the
MagiQTM battery and its other technologies. The Company also expects to increase
its efforts to enter into service and licensing  arrangements  to  commercialize
its MagiQTM battery and its related energy management technologies.



                                       16
<PAGE>

Expenses  for  general  and  administration  are  expected  to  increase  due to
restructuring activities for expansion and financing.

Net Loss. The Company incurred a net loss of $401,000 or $0.02 per share for the
third  quarter of 2003,  compared  to a net loss of  $290,000 or $0.02 per share
during the same period in 2002. The Company  incurred a gain on foreign exchange
of $66,000 for the three months period ended  September 30, 2003,  compared to a
loss on foreign exchange of $27,000 for the same period in 2002.

The Company's Results of Operations for the Nine months Ended September 30, 2003
Compared to the Nine months Ended September 30, 2002

Revenues.  No  revenues  were  recorded  in either the nine month  period  ended
September  30, 2003 or the nine month  period  ended  September  30,  2002.  The
Company  delivered  a limited  number of its  MagiQTM  batteries  to  automobile
manufacturers  and industry  suppliers  for a pilot program as the first step in
the Company's  plan to  commercialize  MagiQTM  batteries.  The Company does not
anticipate  that it will  generate  any  significant  revenues  from the sale of
MagiQTM batteries until it successfully  introduces MagiQTM batteries to a broad
commercial market or one or more car manufacturers  install MagiQTM batteries as
original  manufacturer  equipment  in their  vehicles,  assuming the Company can
raise sufficient financing to commercialize its MagiQTM batteries.

Total Operating Expenses. The Company had total operating expenses of $2,053,000
for the nine month period ended  September 30, 2003,  compared to $1,204,000 for
the same period in 2002.  Total  operating  expenses  for the nine month  period
ended September 30, 2003 included research and development  expenses of $948,000
($531,000  - 2002) and  marketing  and general  and  administrative  expenses of
$1,105,000  ($673,000 - 2002). Total operating expenses increased by $849,000 or
71% for the nine month period  ended  September  30, 2003,  compared to the same
period in 2002. The primary factors contributing to increased operating expenses
were the non-cash stock-based compensation expense in the second quarter 2003, a
reversal of non-cash stock-based  compensation expenses in the nine month period
ended  September  30,  2002,  and the  strengthening  of the Euro  versus the US
dollar. The overall effect of the non-cash  stock-based  compensation  accounted
for an expense increase of $754,000 (see, Note 4(a)).

Research and Development  Expenses.  Research and development  expenses in total
were $948,000 for the nine months ended  September 30, 2003 compared to $531,000
for the same  period in 2002,  an increase  of  $417,000  or 79%.  Research  and
development  personnel  costs  increased by $451,000  from $233,000 for the nine
month period ended  September  30, 2002 to $684,000 for the same period of 2003.
Stock-based  compensation  accounted  for  $374,000  of the  total  increase  in
personnel  related  expenses;  an additional  increase of $67,000 was due to the
exchange  rate  difference  of the Euro versus the US dollar in the two periods.
Laboratory expenses related to research and development  increased from $197,000
for the nine months  ended  September  30, 2002 to $214,000  for the  comparable
period in 2003 which also was due to the exchange  rate  difference  of the Euro
versus  the US dollar in the two  compared  periods.  Research  and  development
office & travel expenses decreased from $40,000 for the nine month period ending
September 30, 2002 to $20,000 for the same period in 2003.  Consulting  services
decreased  from $25,000 for the nine month period  ending  September 30, 2002 to
$10,000 for the same period in 2003,  as the Company had  incurred  expenses for
consulting  services related to its quality assurance  certification  process in
the first  quarter of 2002.  The Company's  professional  fees  associated  with
research  and  development  decreased  to $20,000 in the nine month period ended
September 30, 2003, compared to $36,000 in the same period of 2002.

Without  taking  the  stock-based   compensation   into  account,   the  Company
anticipates  that research and  development  expenses will be slightly higher in
2003 as it  continues  development  of its  BEM-Battery  Energy  Manager(R)  and
SEM-Smart  Energy  Manager(R)  technologies.  This  anticipation  depends on the
Company's  ability to raise further  financial means in order to fund its plans.
See "Plan of Operation."



                                       17
<PAGE>


Marketing  and General and  Administration  Expenses.  The  expenses  related to
marketing and general and  administration  increased to $1,105,000  for the nine
month period ended September 30, 2003 from $673,000 for the same period in 2002,
an increase of $432,000 or 64%. Personnel related expenses increased $397,000 to
$458,000 for the nine month period ended September 30, 2003 from $61,000 for the
same period in 2002. The stock-based compensation effect (a reversal in 2002, an
expense in 2003)  accounted  for  $368,000 of the total  increase  in  personnel
related  expenses.  Professional  fees increased to $256,000 for the nine months
ended  September 30, 2003,  compared to $165,000 for the same period of 2002 due
to the  Company's  increased  expenses for the  negotiations  and due  diligence
related to the proposed Gel acquisition.  Office & travel expenses  increased to
$93,000 for the first three  quarters in 2003,  compared to $67,000 for the same
period in 2002, which also related to the increased  activity in connection with
the proposed Gel  acquisition.  Consulting  fees decreased by $18,000 to $74,000
for the nine months ended  September 30, 2003,  from $92,000 for the nine months
ended  September  30, 2002, as the Company had employed  external  resources for
strategic  consulting in the third quarter of 2002.  Investor relations expenses
decreased to $76,000 for the nine months ended September 30, 2003, from $143,000
for the same period in 2002,  a decrease of $67,000.  This  decrease in investor
relations  expense  resulted  from  the  restructuring  of  investor   relations
agreements  in mid 2002.  Other  expenses  related to marketing  and general and
administration for the nine months ended September 30, 2003 included  management
fees at $54,000  ($54,000 - 2002);  decreased  marketing  activities  at $78,000
($82,000 - 2002) and all other expenses at $16,000 ($9,000 - 2002).

The Company  postponed its plans to  commercialize  its MagiQTM battery in 2003,
due to limited financial  resources.  The Company produced a limited  production
run of  MagiQTM  batteries  during the fourth  quarter of 2003 for  testing  and
marketing  purposes.  The  Company  anticipates  that the level of  expenditures
related to its marketing and general and  administration  expenses will increase
in future periods, assuming adequate financing is available to commercialize its
MagiQTM batteries and its related energy management  technologies.  Expenditures
related to general and  administration  are  expected to increase if the Company
successfully  completes  a  financing  transaction   (compensation  for  related
transaction costs and professional fees).

Net Loss.  The Company  incurred a net loss of $1,664,000 or $0.07 per share for
the nine month  period  ended  September  30,  2003,  compared  to a net loss of
$924,000 or $0.05 per share during the same period in 2002. The Company incurred
a gain on  foreign  exchange  of  $398,000  for the  nine  months  period  ended
September 30, 2003,  compared to a gain on foreign  exchange of $280,000 for the
same period in 2002.

The Company  anticipates that it will continue to incur losses in future periods
until the Company is able to successfully  commercialize its MagiQTM battery and
energy management technologies.  There can be no assurance that the Company will
have  sufficient  capital  to  commercialize  its  MagiQTM  battery  and  energy
management  technologies or that such products will be commercially  successful.
The Company  produced a limited  production run of MagiQTM  batteries during the
fourth quarter of 2003 for testing and marketing  purposes.  The MagiQTM battery
is being manufactured by a third-party manufacturer for limited sales in Europe,
and the Company  does not expect to commence  commercial  production  of MagiQTM
batteries until 2004, assuming adequate financing is available.  There can be no
assurance that the Company will be able to complete additional financings,  or -
if completed - that those will be at favorable terms for the Company.  There can
be no assurance that the Company's  efforts to commercialize the MagiQTM battery
will be  successful or that it will not  experience  delays in  introducing  its
products to the market.

Liquidity and Capital Resources

Since inception, the Company has financed its operations primarily through sales
of its equity securities.  From inception to September 30, 2003, the Company had
raised  approximately  $13,200,000 (net of issuance costs) from the sale of such
securities.  As of September 30, 2003, the Company had cash and cash equivalents
of  $420,000,  compared to $331,000,  at December  31,  2002.  The Company had a
working capital deficit of $99,000 at September 30, 2003,  compared to a working
capital  deficit of $148,000 at December  31,  2002.  In light of the  Company's
working  capital  position and  prospects at December  31,



                                       18
<PAGE>

2002, the Company's  auditors  expressed  substantial doubt about the ability of
the Company to continue as a going concern.  The Company's financial  statements
are prepared  using  United  States  generally  accepted  accounting  principles
applicable to a going  concern,  and do not reflect  adjustments to the carrying
value of assets  and  liabilities,  the  reported  expenses  and  balance  sheet
classifications  that would be  necessary  if the  appropriateness  of the going
concern assumption were not appropriate. Such adjustments could be material.

In November  2002,  the Company  announced  another  private  placement of up to
1,715,000 units of the Company at $0.35 per unit for proceeds of $600,000,  with
each unit consisting of one common share of the Company and one non-transferable
warrant  exercisable  for a  period  of  twelve  months  following  closing  and
entitling the holder to purchase one additional  common share of the Company for
$0.45.  Thereof 1,572,853 units for proceeds of $550,500 were issued in November
and December 2002.  Additional 150,000 units for proceeds of $52,500 were issued
in February 2003. The subscribers to the private placement were non-U.S. persons
outside the United States in reliance upon an exemption from registration  under
Regulation S of the  Securities  Act of 1933, as amended.  The Company  incurred
finder's fees to non-U.S.  persons outside the United States, in connection with
the offering  consisting of 107,142 common shares.  The cost of the finder's fee
was netted against the proceeds  obtained from the financing.  The finder's fees
were paid out in February 2003.

In February  through June 2003, the Company raised  $820,300 in capital  through
the private  placement of 2,563,437 units of the Company at $0.32 per unit, each
such unit consisting of one common share of the Company and one non-transferable
warrant  exercisable  for a  period  of  twelve  months  following  closing  and
entitling the holder to purchase one additional  common share of the Company for
$0.42.  The subscribers to the private  placement were non-U.S.  persons outside
the  United  States  in  reliance  upon an  exemption  from  registration  under
Regulation  S of the  Securities  Act of 1933,  as  amended.  The  Company  paid
finder's fees to non-U.S.  persons outside the United States, in connection with
the offering  consisting of 175,900 common shares at a deemed price of $0.32 per
share.

During the nine month period ended  September  30,  2003,  the Company  received
proceeds  of  approximately  $246,000  from the  exercise of warrants to acquire
989,285 common shares and approximately $228,000 from the exercise of options to
acquire 569,989 common shares.

In September 2003, iQ Battery issued EUR 150,000 (equal to approx.  $174,000) of
convertible  debt due on September  30, 2004 to a private  individual.  The debt
maintains an annual fixed  interest  rate of 12% and is due in full,  along with
the full  principal  balance of the debt,  on September  30,  2004.  The debt is
convertible, at the lender's option, into shares of iQ Power's common stock at a
price of EUR0.48  (equal to approx.  $0.55) and date  specified  in the original
agreement. The subscribers to the convertible debt were non-U.S. persons outside
the  United  States  in  reliance  upon an  exemption  from  registration  under
Regulation S of the Securities Act of 1933, as amended.

Subsequent  to  September  30,  2003,  iQ Battery  issued EUR 120,000  (equal to
approx.  $139,000) of  convertible  debt due on September  30, 2004 to a private
individual.  The debt  maintains an annual fixed interest rate of 12% and is due
in full,  along with the full  principal  balance of the debt,  on September 30,
2004. The debt is convertible, at the lender's option, into shares of iQ Power's
common stock at a price and date specified in the original agreement.

The Company has no further  commitments for credit facilities,  revolving credit
agreements or lines of credit that could provide additional working capital. The
Company  currently  has no  external  sources  of  capital  and  there can be no
assurance  that the Company will be able to raise  sufficient  financing to meet
its capital requirements on acceptable terms or in a timely manner, if at all.

The Company  anticipates that the level of spending will increase  significantly
in future  periods as the  Company  undertakes  marketing  and sales  activities
related to the commercialization of the iQ technology.



                                       19
<PAGE>

In  addition,  the  Company  anticipates  that its  general  and  administrative
expenses  will also  significantly  increase  as a result  of the  growth in its
commercialization,  research,  development,  testing  and  business  development
programs.  The Company  expects its  expenditures on research and development to
continue on the current  level.  The actual levels of research and  development,
administrative and general,  and marketing corporate  expenditures are dependent
on the cash resources available to the Company.

The Company  anticipates  that it will require an additional  financing of up to
$1,000,000 to meet its on-going short term and long term obligations during 2003
and to fund its plan of operation. See "Plan of Operation." The Company plans to
finance its capital needs  principally  from the net proceeds of its  securities
offerings and interest thereon and, to the extent available, lines of credit. In
addition,  the  Company  expects  to  generate  revenues  from the  sales of its
products.

The Company is considering the possible  acquisition of the remaining assets and
technologies  of Gel. The Company is also  evaluating  possible plans to build a
battery  production  facility in Germany and currently has letters of intent for
government subsidies and credit financing for building the facility. The Company
currently does not have  sufficient  cash or working capital to pursue either of
these  opportunities,  and the Company  would be  required  to raise  additional
financing  on  acceptable  terms to  complete  the  acquisition  of  assets  and
technologies from Gel and/or to build a manufacturing facility.

Obligations and Commitments

iQ Germany is obligated to pay to Horst Dieter Braun,  that  company's  founding
President  and Peter Braun,  our  President,  DM 400,000 in  connection  with iQ
Germany's  acquisition  of the iQ  technology  and other  intellectual  property
rights.  This obligation is equivalent to approximately  EUR205,000  ($235,000).
The amount is payable only out of (and only to the extent of) the gross  profits
of iQ Germany,  if any. The Company presently  believes that it has no financial
obligation to either Horst Dieter Braun or Peter Braun in  connection  with this
agreement.

In August 2002, the Company entered into a Financial  Public  Relations  Adviser
Consulting Agreement with Joerg Schweizer, a non-U.S.  person outside the United
States.  The Company agreed to pay Mr.  Schweizer a consulting fee in the amount
of EUR 5,000  (approximately  $5,300) per month for such services,  of which EUR
2,000 is  payable in cash and EUR 3,000 is  payable  by  issuing  Mr.  Schweizer
common  shares on a quarterly  basis.  The  agreement  had an initial term of 12
months  ending June 30, 2003,  continuing on a monthly  basis  thereafter  until
terminated by either party. As of September 30, 2003, the agreement has not been
terminated.  The Company has issued Joerg  Schweizer  90,100 common shares under
the agreement.

In November 2002, the Company entered into a Officer  Engagement  Agreement with
Marco Graf von Matuschka, our Chief Financial Officer. The Company agreed to pay
Marco Graf von Matuschka a consulting  fee in the amount of $3,000 per month for
such  services,  of which  $1,500 is  payable  in cash and  $1,500 is payable by
issuing Marco Graf von  Matuschka  common  shares.  The agreement had an initial
term ending March 31, 2003,  renewable on a quarterly  basis  thereafter.  As of
September  30,  2003,  the Company had issued  Marco Graf von  Matuschka  24,998
common  shares under the  agreement.  On May 16, 1998,  Marco Graf von Matuschka
resigned as the Chief  Financial  Officer of the Company  effective  on June 30,
2003,  but continued to serve as Head of Finance and  Controlling  of iQ Battery
Research & Development GmbH, the Company's German subsidiary.

The Company's  capital  requirements  depend on several  factors,  including the
success and  progress of its product  development  programs,  the  resources  it
devotes to  developing  its products,  the extent to which its products  achieve
market  acceptance,  and other factors.  The Company in the past has, and in the
future expects to, devote  substantial  cash and other resources to research and
development  efforts.  The Company  will also require  additional  capital if it
completes the acquisition of assets and/or  technologies  from Gel or undertakes
to build or acquire a battery manufacturing facility.  There can be no assurance
that  sufficient  capital will be available for either of these  transactions or
that either of these transactions will be completed.



                                       20
<PAGE>


In addition,  the Company may not be able to  adequately  predict the amount and
timing of its future cash requirements in light of the unpredictable  demand, if
any,  for its  MagiQTM  battery  and the  status  of its  plans  related  to the
acquisition of certain assets and technologies of Gel, plans related to building
a battery manufacturing facility in Germany, and plans related to its continuing
development of its BEM-Battery Energy Manager(R) and SEM-Smart Energy Manager(R)
technologies.

The Company will consider  collaborative  research and development  arrangements
with strategic  partners and additional public or private  financing  (including
the  issuance  of  additional  equity  securities)  to  fund  all or a part of a
particular  program in the future.  There can be no  assurance  that  additional
funding will be available or, if  available,  that it will be available on terms
acceptable to the Company. If adequate funds are not available,  the Company may
have  to  reduce  substantially  or  eliminate  expenditures  for  research  and
development,  testing,  production  and marketing of its proposed  products,  or
obtain funds through  arrangements  with  strategic  partners that require it to
relinquish  rights  to some of its  technologies  or  products.  There can be no
assurance  that the Company  will be able to raise  additional  cash if its cash
resources are exhausted.  The Company's ability to arrange such financing in the
future will depend in part upon the prevailing capital market conditions as well
as its business performance.

Plan of Operation

The Company  completed  development of the MagiQTM  battery and during the first
half  of 2003  started  initial  pilot  production  for  testing  by  automobile
manufacturers  and industry  suppliers.  The Company also refined contracts with
all  suppliers  necessary  to provide  the  components  that meet the  Company's
production and quality requirements at negotiated fixed costs.

The Company is currently  evaluating  production  options to enable it to expand
its production capacities,  including negotiating with battery manufacturers for
possible  manufacturing  arrangements  and exploring an  opportunity  to build a
manufacturing  facility  in the City of Hof,  Germany.  In  connection  with the
manufacturing  facility project, the Company has entered into a letter of intent
with the City of Hof,  Germany  to built a pilot  production  plant as part of a
planned  automotive  cluster,  and the Company  applied for government  funds in
April 2002,  and is currently  negotiating  with banks and  investment  firms to
raise financing for the project. The Company received letters of intent from two
German banks for financing a portion of the project, and will require additional
financing to pursue the opportunity to construct the manufacturing facility.

The Company is currently  considering  the possible of specific  tangible assets
from Gel, payable in part from the funds that the Company has advanced to Gel in
interim  financing.  During  fiscal  year  end  2003,  the  acquisition  of  Gel
Electronics  has been  restructured  to reflect an  acquisition of some of Gel's
tangible fixed assets, such as production  equipment,  which have now become the
legal property of a separate holding company.

The Company has delivered  smart  batteries  equipped with the iQ modules and an
additional  electronic  for data recording and storage for a project called PEIT
(Powertrain  Equipped with  Intelligent  Technology).  The  participants  in the
project  PEIT  (including  the  Company,   DaimlerChrysler   and  Knorr  Bremse)
integrated one vehicle with intelligent  Powertrain  X-by-wire  technology for a
simulated  testing  in  September  2002,  and are  currently  in the  process of
developing  a vehicle  for street  testing.  The  Company  is in the  process of
completing  the design of the Energy  managing  unit for the  project,  parts of
which have already been delivered. The Company's SEM Smart Energy Management(TM)
application   ("SEM"),   which  is  incorporated  in  the  Powertrain  X-by-wire
technology,  was  introduced  at the  International  Auto  Show  for  Trucks  in
Frankfurt by the Company and DaimlerChrysler in September 2000.

Since the first fiscal  quarter of 2000, the Company has been invited to present
its  technology  on  several  international  conferences  and to submit  several
technical papers. The Company continues to negotiate with battery manufacturers,
suppliers  to the  automotive  industry  and  automakers  regarding  the use and
purchase of its products and/or its technology.



                                       21
<PAGE>

The  Company's  plan  of  operations  for  the  next  twelve  months,   includes
undertaking the following activities:

Research and  Development.  Over the next twelve months,  the Company intends to
focus  on  the  following  R&D  activities:  :  refining  the  SEM-Smart  Energy
Management and BEM-Battery Energy Management  ("BEM")  technologies and designs,
continuous refinement to the MagiQTM battery technologies and design, completing
the design of the energy  management  technology for the intelligent  Powertrain
X-by-wire  technology  project,  participate in additinional  joint  development
programs,  completing development and implementation of continue state of charge
(SOC) and state of health (SOH) software,  completing  design and development of
products  related to the diagnosis of the power-net and  continuing  research in
the field of power line communication  with the DC-BUS  technology.  The Company
anticipates  that  it  will  spend  approximately  $1,100,000  on  research  and
development during the year ending December 31, 2003.

Production.  Over the next twelve  months,  the Company is planning to undertake
the  following  steps in the field of  production:  continue  production  of the
MagiQTM battery, evaluating mass production manufacturing alternatives,  subject
to  sufficient   financing   being   provided,   planning  and   constructing  a
manufacturing  facility in Germany,  evaluating quality management and assurance
programs of suppliers and workflows,  negotiating  joint  ventures,  partnership
agreements,   cooperation   agreements  or  similar   agreements   with  battery
manufacturers;   developing  a  program  to  continuously   improve   production
processes,  optimize cost structure and improve product  quality;  and implement
adequate  software  tools  for  production  planning  and  scheduling  (PPS) and
enterprise  resource  planning (ERP).  The Company does not expect to report any
production  related  expenses in the fiscal year 2003.  Expenses are expected to
increase  significantly  with the  beginning of 2004,  if the Company is able to
raise financing to commence the commercial production of its MagiQTM batteries.

Marketing.  Marketing activities for the following twelve months are expected to
include: increase marketing efforts related to the MagiQTM battery system to its
key account  customers,  such as automobile  manufacturers,  original  equipment
manufacturers (OEM) customers and after market (AM) distributors;  marketing the
Company's  solutions  related to state of charge (SOC) and state of health (SOH)
status  indications  for  batteries to car  manufacturers  and Tier 1 suppliers;
marketing electronic devices,  software development and technical consulting for
the  diagnosis  of  the  power  net  to  OEM  customers,   marketing  customized
application  of  the  Company's  technology  for  energy  storage  (MagiQTM)  to
non-automotive industries and for other applications; and creating awareness and
end-user demand for the MagiQTM battery system and the Company's  technology for
energy management solutions (BEM, SEM). The Company has allocated  approximately
$100,000 during the year ending December 31, 2003 for marketing efforts.

Financing.  The Company  intends to  continue  to focus on  securing  additional
financing over the next twelve months.  These  financing  activities may include
debt  and/or  equity  financings,   possible  joint  venture   arrangements  and
governmental  loans and/or  grants.  Expenditures  for financing  activities may
increase substantially due to the condition of the current financial markets and
possible  changes to the  Company's  capital  requirements.  For the year ending
December 31, 2003, the Company has budgeted  approximately  $150,000 for capital
raising efforts.

Administrative  and General Operating . Over the next twelve months, the Company
is preparing to adjust its organizational  structure  according to the expansion
of the Company  and its  entities.  The  administrative  and  general  operating
budgets for the year ending December 31, 2003 are $1,150,000.

Need for Additional Capital

The Company  anticipates  that its total operating budget for fiscal year ending
December 31, 2003 will be approximately $2,500,000. During the nine month period
ended September 30, 2003, the Company used cash of  approximately  $1,083,000 in
operating activities. The Company had a working capital deficit of approximately
$99,000 at September  30,  2003.  The Company  anticipates  that it will require
additional  financing  of up to  $1,000,0000  during the fourth  quarter 2003 to
satisfy its working capital requirements through December 31, 2003.



                                       22
<PAGE>

In the event that the Company completes the acquisition of certain of the assets
and  technologies  of Gel,  its total  budget for the fiscal  year ended 2003 is
expected to increase significantly.

In  addition,  the  Company  will need to raise  additional  capital in the near
future to continue as a going concern.  See  "Liquidity  and Capital  Resources"
above.  The Company may experience  delays,  cost overruns,  additional  funding
needs for joint  ventures or other  unanticipated  events that will increase the
Company's need to raise additional financing. The Company cannot assure you that
it will be able to obtain  more  financing  or that,  if it does,  it will be on
favorable terms or on a timely basis.

If the Company is unable to raise additional  financing on acceptable  terms, it
may be required to take some or all of the following:

     o    reduce expenditures on research and development;
     o    reduce sales and marketing expenditures;
     o    reduce  general  and  administrative  expenses  through  lay  offs  or
          consolidation of its operations;
     o    suspend its  participation in pilot programs that are not economically
          profitable;
     o    sell assets, including licenses to its technologies;
     o    suspend  operations  of its  subsidiary  or its own  operations  until
          sufficient financing is available; or
     o    sell or wind up and liquidate its business.

Any of these  actions  may affect  the  Company's  ability to offer  competitive
products  or  compete  in  the  market.  The  Company's  inability  to  offer  a
competitive  product  or to  effectively  compete  will  affect  its  ability to
continue as a going concern.

Personnel

The Company expects  significant changes in its personnel strategy over the next
twelve  months.  Depending  on the  funding  of the  erection  of a fully  owned
production site in Germany,  the Company  expects to increase its workforce.  In
case the Company would  continue with the  acquisition of the assets of Gel, the
laborforce  would also increase.  If none of the aforesaid  activities  could be
funded,  the  Company's  personnel  strategy  is  to  reduce  its  research  and
development capabilities.  The Company may hire personnel in marketing and sales
once the commercial production of the MagiQTM battery is commenced.



                                       23
<PAGE>

Other Trends and Uncertainties

Foreign Currency Translation Risk

US dollars  forwarded to our German  subsidiary  are  translated  into Euros for
German  accounting  purposes as soon as the funds are used for their operations.
In the  consolidation  process these loans are  translated  back into US dollars
resulting  in  foreign   exchange  gains  or  losses  at  the  Company's  German
subsidiary. In the first three quarters of 2003, due to the strengthening of the
Euro  versus the US dollar,  the  Company  incurred  foreign  exchange  gains of
$398,000.  The Company  believes  its risk of foreign  currency  translation  is
limited to these  inter-company  transactions.  The Company  does not  currently
engage in hedging or other  activities  to control the risk of foreign  currency
translation, but may do so in the future, if conditions warrant.

Going Concern

The Company is still in the development stage and could fail before implementing
its  business  strategy.  The Company  may  continue to incur net losses for the
foreseeable  future and the  Company has  prepared  the  accompanying  financial
statements  assuming  that it will  continue as a going  concern.  The Company's
auditors have  expressed  uncertainty  as to the  Company's  ability to remain a
going concern.  Specifically, the ability of the Company to continue to fund the
operations  of iQ Germany on the current  level are in question.  In  connection
with our 2002 Annual Report on Form 10-K, the Company's  auditors have expressed
substantial  doubt as to the Company's  ability to continue as a going  concern.
See "Item 7. Financial  Statements -- Note 2." of the Company's Annual Report on
Form 10-KSB filed with the United States  Securities and Exchange  Commission on
April 16, 2003.

ITEM 3. Controls and Procedures

Evaluation of Disclosure Controls and Procedures.  The Company's Chief Executive
Officer and Chief  Financial  Officer have  evaluated the  effectiveness  of the
Company's  disclosure  controls and procedures (as such term is defined in Rules
13a-15 and 15d-15 under the  Securities  Exchange  Act of 1934,  as amended (the
"Exchange  Act")) as of the end of the period covered by this  quarterly  report
(the "Evaluation Date"). Based on such evaluation,  such officers have concluded
that,  as  of  the  Evaluation  Date,  the  Company's  disclosure  controls  and
procedures  are  effective  in  alerting  them on a  timely  basis  to  material
information relating to the Company required to be included in our reports filed
or submitted under the Exchange Act.

Changes in Internal  Controls over Financial  Reporting.  During the most recent
fiscal  quarter,  there have not been any  significant  changes in the Company's
internal  controls  over  financial  reporting  or in other  factors  that  have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.



                                       24
<PAGE>


Part II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As of September 30, 2003,  there is no material  litigation  pending against the
Company.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Sales of Unregistered Securities.

During the quarter ended  September 30, 2003,  the Company  issued the following
securities in reliance upon exemptions from the registration requirements of the
Securities Act of 1933, as amended.

As of September  30, 2003,  the Company had issued Joerg  Schweizer,  a non-U.S.
person  outside the United  States,  90,100  common  shares under the terms of a
Financial Public Relations Adviser Consulting Agreement.  The shares were issued
in  reliance  upon  an  exception  from  the  registration  requirement  of  the
Securities Act under Regulation S.

As of  September,  2003,  the Company  had issued  Marco Graf von  Matuschka,  a
non-U.S.  person outside the United States, 24,998 common shares under the terms
of an Officer Engagement  Agreement.  The shares were issued in reliance upon an
exception  from the  registration  requirement  of the  Securities Act available
under Regulation S.

In February  through June 2003, the Company raised $820,300  through the private
placement  of 2,563,437  units of the Company at $0.32 per unit,  each such unit
consisting of one common share of the Company and one  non-transferable  warrant
exercisable  for a period of twelve months  following  closing and entitling the
holder to purchase one  additional  common  share of the Company for $0.42.  The
subscribers to the private  placement were non-U.S.  persons  outside the United
States in reliance upon an exemption from registration under Regulation S of the
Securities Act of 1933, as amended. The Company paid a finder's fees to non-U.S.
persons  outside the United  States in  connection  with the  private  placement
consisting of 175,900  common  shares at a deemed price of $0.32 per share.  The
finder's  fee shares  were  issued in  September  2003.  The shares  were issued
pursuant to an exemption from  registration  available under Regulation S of the
Securities Act.

During the nine month period ended  September  30,  2003,  the Company  received
proceeds  of  approximately  $246,000  from the  exercise of warrants to acquire
989,285 common shares.  The shares were issued to non-U.S.  persons  outside the
United States in reliance upon an exemption from registration under Regulation S
of the Securities Act of 1933, as amended.

In September 2003, iQ Battery issued EUR 150,000 (equal to approx.  $174,000) of
convertible  debt due on September  30, 2004 to a private  individual.  The debt
maintains an annual fixed  interest  rate of 12% and is due in full,  along with
the full  principal  balance of the debt,  on September  30,  2004.  The debt is
convertible, at the lender's option, into shares of iQ Power's common stock at a
price and date  specified  in the original  agreement.  The  subscribers  to the
convertible  debt were  non-U.S.  persons  outside the United States in reliance
upon an exemption from registration  under Regulation S of the Securities Act of
1933, as amended.

Subsequent  to  September  30,  2003,  iQ Battery  issued EUR 120,000  (equal to
approx.  $139,000) of  convertible  debt due on September  30, 2004 to a private
individual.  The debt  maintains an annual fixed interest rate of 12% and is due
in full,  along with the full  principal  balance of the debt,  on September 30,
2004. The debt is convertible, at the lender's option, into shares of iQ Power's
common stock at a price and date specified in the original agreement. Additional
information  regarding the Company's issuance of unregistered  securities during
the past three fiscal years is contained in the Company's annual reports on Form
10-KSB for the years ended  December 31, 2002 and 2001 under "Item 5. Market for
Common  Equity



                                       25
<PAGE>


and Related Shareholder Matters - Recent Sale of Unregistered Securities" and in
the  Company's  quarterly  report on Form 10-QSB for the quarter ended March 31,
2003 under "Item 2. Changes in  Securities  and Use of Proceeds"  filed with the
United States  Securities and Exchange  Commission.  The  information  contained
under Item 5. "Market for Common Equity and Related Shareholder Matters - Recent
Sale of Unregistered  Securities" of the Company's  annual report on Form 10-KSB
for the year ended  December 31, 2001 and under "Item 2.  Changes in  Securities
and Use of Proceeds" of the  Company's  quarterly  report on Form 10-QSB for the
quarter ended March 31, 2003 is hereby incorporated by reference to this report.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The following Exhibits are filed as part of this report:

                                  EXHIBIT INDEX

 Exhibit
   No.         Description
 ---------     ------------
   2.1(1)      Certificate of Incorporation dated December 20, 1994, for 3099458
               Canada Inc.

   2.2(1)      Articles of  Incorporation  dated  December 21, 1994, for 3099458
               Canada Inc.

   2.3(1)      Certificate of Amendment dated May 9, 1997, together with Form 4,
               Articles of Amendment for iQ Power Technology Inc.

   2.4(1)      Certificate  of  Amendment  dated  March 31,  1998,  for iQ Power
               Technology Inc.

   2.5(1)      By-law  Number One  General  By-Law of iQ Power  Technology  Inc.
               dated December 31, 1997, as confirmed on June 30, 1998

   2.6(9)      Certificate  of  Amendment  dated  July  23,  2002  for iQ  Power
               Technology Inc.

   2.7(9)      Amendment  to  By-law  Number  One  General  By-Law  of iQ  Power
               Technology Inc. dated June 28, 2002

  10.1(1)      Management  Agreement  dated  January  1, 1997,  between  3099458
               Canada  Inc.  and Mayon  Management  Corp.  (previously  filed as
               Exhibit 6.5)

  10.2(1)      Consulting  Agreement  dated  August 25,  1998,  between iQ Power
               Technology Inc. and Mayon Management Corp.  (previously  filed as
               Exhibit 6.6)



                                       26
<PAGE>

 Exhibit
   No.         Description
 ---------     ------------
  10.3(1)      Employment  Agreement  dated August 31, 1998 with Dr.  Gunther C.
               Bauer (previously filed as Exhibit 6.7)

  10.4(1)      Employment  Agreement  dated  August 31, 1998 with Peter E. Braun
               (previously filed as Exhibit 6.8)

  10.5(1)      Form of  Confidentiality  Agreement  between iQ Power  Technology
               Inc.  and certain  Officers of the Company  (previously  filed as
               Exhibit 6.10)

  10.6(1)      Form  of iQ  Germany  Confidentiality  Agreement  (Translated  to
               English)(previously filed as Exhibit 6.13)

  10.7(1)      Form of iQ Germany  Employee  Confidentiality  and  Nondisclosure
               Agreement  (Translated  to  English)(previously  filed as Exhibit
               6.14)

  10.8(1)      Cooperation  Agreement  by and  between iQ Battery  Research  and
               Development  GmbH  and  BASF  Aktiengesellschaft  (Translated  to
               English)(previously filed as Exhibit 6.15)

  10.9(1)      Confidentiality  Agreement by and between iQ Battery Research and
               Development GmbH and Bayerische Motoren Werke dated July 29, 1997
               (Translated to English)(previously filed as Exhibit 6.16)

  10.10(1)     Mutual  Confidentiality  Agreement among iQ Battery  Research and
               Development  GmbH,  Akkumulatorenfabrik  Moll GmbH & Co.  KG, and
               Audi dated May 26, 1998 (Translated to English)(previously  filed
               as Exhibit 6.17)

  10.11(1)     Confidentiality   Agreement   between  iQ  Battery  Research  and
               Development  GmbH and  Mercedes  Benz  Aktiengessellschaft  dated
               March  21,  1997  (Translated  to  English)(previously  filed  as
               Exhibit 6.18)

  10.12(1)     Contract  Concerning  Industrial  Property Rights and Know How by
               and  between  Dieter  Braun  and Peter E.  Braun  and iQ  Battery
               Research and Development GmbH dated March 15, 1995 (Translated to
               English)(previously filed as Exhibit 6.22)

  10.13(1)     Supplementary  Contract  to the  Contract  concerning  Industrial
               Property  Rights and Know How by and between H. Dieter  Braun and
               Peter E. Braun and iQ Battery Research and Development GmbH dated
               August  16,  1996  (Translated  to  English)(previously  filed as
               Exhibit 6.23)

  10.14(1)     Extension of Contract  regarding  Industrial  Property Rights and
               Know How by and  between  Dieter  Braun  and  Peter  Braun and iQ
               Battery  Research and  Development  GmbH dated September 20, 1996
               (Translated to English)(previously filed as Exhibit 6.24)

  10.15(1)     Agreement (Debt Deferral) by and between iQ Battery  Research and
               Development  GmbH and Dieter Braun and Peter Braun dated December
               27,  1996  (Translated  to  English)(previously  filed as Exhibit
               6.27)

  10.16(1)     Agreement   (Debt  Deferral)  by  and  between  iQ  Research  and
               Development  GmbH and  Gunther  Bauer  dated  December  27,  1996
               (Translated to English)(previously filed as Exhibit 6.28)



                                       27
<PAGE>


 Exhibit
   No.         Description
 ---------     ------------
  10.17(1)     Waiver  among H. Dieter  Braun,  Peter E. Braun,  Gunther  Bauer,
               Karin  Wittkewitz and iQ Battery  Research and  Development  GmbH
               dated December 19, 1997 (Translated to English)(previously  filed
               as Exhibit 6.29)

  10.18(1)     Agreement by and between iQ Battery Research and Development GmbH
               and  Dieter   Braun  and  Peter  Braun  dated   October  9,  1998
               (Translated to English)(previously filed as Exhibit 6.30)

  10.19(1)     1998 Stock Option Plan (previously filed as Exhibit 6.31)

  10.20(1)     Form of Stock Option Agreement (previously filed as Exhibit 6.32)

  10.21(1)     Agreement Re Rights and Interests  dated  December 9, 1998 by and
               among the Company, H. Dieter Braun and Peter E. Braun (previously
               filed as Exhibit 6.34)

  10.22(1)     Trademark  Assignment  dated  December 9, 1998 by and between the
               Company and H. Dieter Braun (previously filed as Exhibit 6.35)

  10.23(1)     Patent  Assignment  dated  December  9, 1998 by and  between  the
               Company and H. Dieter Braun and Peter E. Braun  (previously filed
               as Exhibit 6.36)

  10.24(3)     Cooperation  Agreement  dated  October  19,  1999  between  Yamar
               Electronics  Ltd.  and iQ Battery  R&D  GmbH(previously  filed as
               Exhibit 6.40)

  10.25(4)     Agreement  of  Subordination  in Priority in  Association  with a
               Conditional  Waiver of Claim by and  between IQ Power  Technology
               Inc. and iQ Battery  Research and  Development  GmbH dated May 2,
               2001 (previously filed as Exhibit 6.49)

  10.26(5)     Amendment  No. 3 to iQ Power  Technology  1998 Stock  Option Plan
               (previously filed as Exhibit 6.50)

  10.27(5)     iQ Power  Technology  2001  Incentive Plan  (previously  filed as
               Exhibit 6.51)

  10.28(8)     European Investor  Relations  Consulting  Agreement  Supplemental
               Agreement # 1 by and between  the Company and  Magdalena  Finance
               Corp. dated September 1, 2001. (previously filed as Exhibit 6.57)

  10.29(10)    Amendment  No. 4 to iQ Power  Technology  1998 Stock  Option Plan
               (previously filed as Exhibit 6.61)



                                       28
<PAGE>


 Exhibit
   No.         Description
 ---------     ------------
  10.30(10)    Amendment  No.  1 to iQ  Power  Technology  2001  Incentive  Plan
               (previously filed as Exhibit 6.62)

  10.31(11)    Media  Relations  Consulting  Agreement  by and  between iQ Power
               Technology Inc. and Andreas Gloetzl  (previously filed as Exhibit
               6.63)

  10.32(11)    Financial Public Relations  Adviser  Consulting  Agreement by and
               between iQ Power  Technology Inc. and Jorg Schweizer  (previously
               filed as Exhibit 6.64)

  10.33(11)    Letter of Intent by and between iQ Power  Technology Inc. and Gel
               Electric Technologies, Inc. (previously filed as Exhibit 6.65)

  10.34(12)    Consulting  Agreement by and between iQ Power Technology Inc. and
               Marco Graf v. Matuschka


  31.1         Section 302  Certification of Chief Executive  Officer and acting
               Principal Financial Officer

  32.1         Section 906  Certification of Chief Executive  Officer and acting
               Principal Financial Officer

_____________________
(1)  Previously filed as an exhibit to the registrant's  registration  statement
     on Form SB-1 on December 10, 1998 (File No. 333-68649).
(2)  Previously filed as an exhibit to the registrant's  registration  statement
     on Form SB-1/A (Amendment No. 1) on March 18, 1998 (File No. 333-68649).
(3)  Previously  filed as an exhibit to the  registrant's  annual report on Form
     10-KSB for the year ended December 1, 1999.
(4)  Previously  filed as an exhibit to the  registrant's  annual report on Form
     10-KSB for the year ended December 31, 2000.
(5)  Previously filed as an exhibit to the registrant's  registration  statement
     on Form S-8 filed on July 25, 2001.
(6)  Previously filed as an exhibit to the registrant's quarterly report on Form
     10-QSB for the quarter ended June 30, 2001.
(7)  Previously filed as an exhibit to the registrant's quarterly report on Form
     10-QSB for the quarter ended September 30, 2001.
(8)  Previously  filed as an exhibit to the  registrant's  annual report on Form
     10-KSB for the year ended December 31, 2001.
(9)  Previously filed as an exhibit to the registrant's quarterly report on Form
     10-QSB for the quarter ended June 30, 2002.
(10) Previously filed as an exhibit to the registrant's  registration  statement
     on Form S-8 filed on November 8, 2002.
(11) Previously filed as an exhibit to the registrant's quarterly report on Form
     10-QSB for the quarter ended September 30, 2002.
(12) Previously  filed as an exhibit to the  registrant's  annual report on Form
     10-KSB for the year ended December 31, 2002.


(b)  Reports on Form 8-K.

     Form 8-K filed with the  Securities  and  Exchange  Commission  on June 12,
     2003.



                                       29
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, iQ Power Technology Inc. has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

November 13, 2003.

                                          iQ POWER TECHNOLOGY INC.


                                 By:      /s/ Peter E. Braun
                                     -------------------------------------------
                                          Peter E. Braun,
                                          President and Chief Executive Officer
                                          and acting Principal Financial Officer









                                       30