================================================================================
                                  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, 2001

                                       OR

|_|  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

     For    the     transition     period    from     ___________________   to
     ______________________.

                        Commission file number 000-26165


                            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.)

                     Suite 708-A, 1111 West Hastings Street
                       Vancouver, British Columbia V6E 2J3
                                 (604) 669-3132
                          (Address and telephone number
                         of principal executive offices)

                                  Erlenhof Park
                              Inselkammer Strasse 4
                          D-82008 Unterhaching, Germany
(Address of principal place of business or intended principal place of business)

                                 (604) 669-3132
                           (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_X_ No___

         The number of outstanding common shares, without par value, of the
registrant at September 30, 2001 was 14,494,186.

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


<PAGE>





                               IQ POWER TECHNOLOGY

                            INDEX TO THE FORM 10-QSB
                For the quarterly period ended September 30, 2001


<TABLE>
<S>                             <C>                                                           <C>
                                                                                              Page

Part I - Financial Information

         ITEM 1.    Financial Statements

              iQ Power Technology Inc.

              Unaudited Consolidated Balance Sheet............................................1

              Unaudited Consolidated Statement of Loss and Comprehensive Loss.................2

              Unaudited Consolidated Statement of Shareholders' Equity (Deficit)..............3

              Unaudited Consolidated Statement of Cash Flow...................................4

              Notes to the Unaudited Consolidated Financial Statements........................5

         Item 2.    Management's Discussion..................................................12

Part II - Other Information

         Item 1.    Legal Proceedings........................................................19

         Item 2.    Changes in Securities and use of Proceeds................................19

         Item 3.    Defaults Upon Senior Securities..........................................19

         Item 4.    Submission of Matters to a Vote of Security Holders......................19

         Item 5.    Other Information........................................................20

         Item 6.    Exhibits and Reports on Form 8-K.........................................21

         Signatures..........................................................................25

</TABLE>

                                        i

<PAGE>




Part I - Financial Information

         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,
                                                                           2001             2000
------------------------------------------------------------------------------------------------
<S>                                                                 <C>                <C>
ASSETS
    Current Assets
      Cash and cash equivalents                                        362                183
      Receivable from original shareholders                             70                 54
      Other receivables                                                122                138
      Prepaids and deposits                                             50                 76
      Other current assets                                              85                  -
    --------------------------------------------------------------------------------------------
    Total current assets                                               689                451

    Non-current Assets
      Equipment, net                                                   344                374
    --------------------------------------------------------------------------------------------
    Total non-current assets                                           344                374

TOTAL ASSETS                                                         1,033                825
------------------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
    LIABILITIES
      Current liabilities
        Accounts payable                                               341                191
        Loans payable due to shareholder                               120                 66
        Accrued payroll and employees benefits                          32                 66
        Accrued liabilities                                            204                263
      ------------------------------------------------------------------------------------------
      Total current liabilities                                        697                586
    --------------------------------------------------------------------------------------------
    TOTAL LIABILITIES                                                  697                586

    SHAREHOLDERS' EQUITY
      Authorized:
        An unlimited number of common shares of no par value
      Issued and outstanding:
        9,746,620 common shares at December 31, 2000
        14,494,186 common shares at September 30, 2001               7,646              5,941
      Capital surplus/Additional paid-in                             2,033                406
      Accumulated other comprehensive (loss) income                    (21)               (16)
      Accumulated deficit, during development stage
        (after loss allocation to silent partners)                  (9,322)            (6,092)
    --------------------------------------------------------------------------------------------
    TOTAL SHAREHOLDERS' EQUITY                                         336                239

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                           1,033                825
------------------------------------------------------------------------------------------------
</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>
===================================================================================================================================

<S>                                                      <C>                       <C>                             <C>
                                                   Cumulative from
                                                 date of inception           Three months ended              Nine months ended
                                                   to September 30,                September 30,                 September 30,
                                                            2001              2001          2000            2001            2000
-------------------------------------------------------------------   -----------------------------    ----------------------------
   Sales and other revenue                                   182               -             -                 -              -
-------------------------------------------------------------------   -----------------------------    ----------------------------
   EXPENSES
     Research and development expenses
       Personnel                                           2,334               115           163             442            443
       Laboratory                                          1,178                80            61             215            229
       Office                                                512                14            43              46            158
       Consulting services                                   600                 0            10               1             31
       Professional fees                                     800                11            12              37             59
     --------------------------------------------------------------   -----------------------------    ----------------------------
     Total Research & Development expenses                 5,424               220           289             741            920

     Marketing and general & administrative expenses
       Personnel                                             556                40            63             123            132
       Financing                                             279                 5            12               6             18
       Office                                                208                30            30              67             61
       Consulting services                                   396                16            72              71            119
       Professional fees                                     492                64            22             186             97
       Management fees                                       162                18            18              54             54
       Marketing activities                                  175                48            67              59            109
       Investor relations                                    464               113            32             230             99
       Research memberships                                  100                 -            50               -             50
       Travel                                                256                37            10              46             30
       Other                                                 177                11            23              16             53
     --------------------------------------------------------------   -----------------------------    ----------------------------
     Total Marketing and G&A expenses                      3,265               382           399             858            822

     Total operating expenses                              8,689               602           688           1,599          1,742

     Interest expense                                        165                 8             -              32              -
     Stock based compensation                              2,005              (702)            -           1,627             10
     --------------------------------------------------------------   -----------------------------    ----------------------------
   TOTAL EXPENSES                                         10,860               (92)          688           3,258          1,752

     Interest and other income                              (138)               (1)          (13)             (2)           (70)
     (Gain)/loss on foreign exchange                        (193)             (115)          (40)            (25)          (112)

   INCOME/(LOSS) BEFORE INCOME TAX                       (10,347)              208          (635)         (3,231)        (1,570)

     Income tax                                                -                 -             -               -              -

   NET INCOME/(LOSS)                                     (10,347)              208          (635)         (3,231)        (1,570)
-------------------------------------------------------------------   -----------------------------    ----------------------------
     Other comprehensive income (loss)
       Accumulated other comprehensive
       income (loss)                                         (21)              (95)          (74)             (5)          (171)

   COMPREHENSIVE INCOME/(LOSS)                           (10,368)              113          (709)         (3,236)        (1,741)
-------------------------------------------------------------------   -----------------------------    ----------------------------

   Basic and diluted earnings/(loss) per share             (1.55)             0.01         (0.07)          (0.28)         (0.16)

   Basic and diluted weighted average
     number of shares outstanding                      6,659,439        14,062,329     9,746,620      11,573,402      9,746,620
-------------------------------------------------------------------   -----------------------------    ----------------------------
</TABLE>



          See accompanying notes to consolidated financial statements.

                                       2
<PAGE>
iQ POWER TECHNOLOGY INC.
(a development stage company)
Consolidated Statements Shareholders' Equity (Deficit)
(Expressed in United States dollars; all amounts in thousands, except per share
data)
(Unaudited)
<TABLE>
==================================================================================================================
<S>                                      <C>              <C>              <C>           <C>               <C>
                                                                        Accumulated                        Total
                                      Common shares     Additional            Other                 Shareholders'
                                 -------------------       Paid-In    Comprehensive   Accumulated         Equity
                                    Shares   Amount        Capital    Income (Loss)       Deficit       (Deficit)
                                 ---------- -------- --------------------- ---------- -----------   ---------------
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,        19,731,620     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,        29,746,620     5,941            406           (16)          (6,092)            239
Net loss                                -         -              -             -           (3,231)         (3,231)
Other comprehensive (loss) -
  foreign currency translation
  adjustments                           -         -              -            (5)                -             (5)
Issue of shares                 3,770,066     1,216              -             -                 -          1,216
Stock based compensation                                     1,627                                          1,627
Exercise of options               977,500       489              -             -                 -            489
-------------------------------------------------------------------------------------------------------------------
Balance at September 30,       14,494,186    $7,646        $ 2,033         $ (21)         $ (9,323)      $    336
-------------------------------------------------------------------------------------------------------------------
</TABLE>
              See accompanying notes to consolidated financial statements.

                                       3
<PAGE>


<TABLE>
iQ POWER TECHNOLOGY INC.
(a development stage company)
Consolidated Statements of Cash Flows
(Expressed in United States dollars; all amounts in thousands
data)
(Unaudited)
===========================================================================================================
<S>                                                             <C>             <C>                <C>
                                                           Cumulative
                                                         from date of        Nine months       Nine months
                                                         inception to              ended             ended
                                                     to September 30,      September 30,     September 30,
                                                                 2001               2001              2000
-----------------------------------------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Net loss                                                  (10,347)            (3,231)           (1,570)
    Items not affecting cash
      Depreciation and amortization                               274                 68                63
      Stock based compensation                                  2,005              1,627                10
    Changes in non-cash working capital
      (Increase) decrease in other receivable                    (132)                (3)               85
      (Increase) decrease in prepaids and deposits                (50)                26               (34)
      Increase (decrease) in accounts payable                     342                152               (26)
      Increase (decrease) in accrued liabilities                  243                (85)               86
      (Increase) decrease in other assets                         (84)               (83)                -
    -------------------------------------------------------------------------------------------------------
                                                               (7,749)            (1,529)           (1,386)
    INVESTING ACTIVITY
      Additions to property, plant and equipment                 (627)               (47)             (124)
    -------------------------------------------------------------------------------------------------------
    FINANCING ACTIVITIES
      Increase (decrease) in long-term debt                         -                  -                (1)
      Increase (decrease) in due to shareholder                    58                 54                 -
     Advances received from external parties                      296                 (0)               (2)
     Cash acquired on business combination                      4,718                  0                 -
     Advances from subsidiary                                     581                  -                 -
     Issue of capital stock                                     2,151              1,705                37
     Issuance of atypical shares                                1,025                  -                 -
    -------------------------------------------------------------------------------------------------------
                                                                8,829              1,759                34

    (DECREASE) INCREASE IN CASH AND
      CASH EQUIVALENTS                                            453                183            (1,476)

    EFFECT OF FOREIGN EXCHANGE MOVEMENT                           (91)                (4)             (171)

    CASH AND CASH EQUIVALENTS,
      BEGINNING OF PERIOD                                           -                183             2,283

-----------------------------------------------------------------------------------------------------------

    CASH AND CASH EQUIVALENTS,
      END OF PERIOD                                               362                362               636

-----------------------------------------------------------------------------------------------------------
</TABLE>

          See accompanying notes to consolidated financial statements.




                                       4
<PAGE>

iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
(Expressed in United States dollars)
--------------------------------------------------------------------------------

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 acquiror. The comparative financial statements for 1998 are those of iQ
     Battery.  Collectively  within these financial  statements the term Company
     applied to operations subsequent to the business combination.

     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, for the first time, 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, 2001, the Company
     has a negative  working capital  position (see Note 8. Subsequent Event for
     further information).  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  $750,000.  In September 2001, an additional private
     placement  of  333,333  common  shares at $0.75 per share for  proceeds  of
     $250,000 was also completed. The subscribers to the 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,  expansion  of the  Company's  marketing  and  sales
     activities and general working  capital.  Additional funds are necessary to
     allow the Company to complete its product development and marketing plan.




                                       5
<PAGE>


iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
(Expressed in United States dollars)
--------------------------------------------------------------------------------

2.   CONTINUING OPERATIONS (Continued)

     In the year 2000, the Company has signed  agreements to jointly develop its
     applications  with  large  corporations  such  as   DaimlerChrysler.   Such
     alliances  involve  the  utilisation  of certain  aspects of the  Company's
     technology.  The  ability of the Company to succeed in these  alliances  is
     also dependent upon the Company's ability to obtain  additional  financing.
     Management  believes  that the Company will be able to obtain the necessary
     financing.

     As of  September  30,  2001,  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  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.   RECENT PRONOUNCEMENTS

     In July 2001,  the  Financial  Accounting  Standards  Board  issued two new
     statements,  SFAS No.141,  Business Combinations and SFAS No.142,  Goodwill
     and Other Intangible Assets. SFAS No. 141 requires that the purchase method
     be used for all business combinations  initiated after June 30, 2001. Using
     the pooling of interest method will be prohibited.  SFAS No.142 changes the
     accounting for goodwill and intangibles  assets with indefinite  lives from
     an amortization method to an impairment  approach.  Other intangible assets
     will  continue  to  be  amortized  over  their   estimated   useful  lives.
     Amortization  of goodwill,  including  goodwill  recorded in prior business
     combinations,  will cease  prospectively upon the adoption of the standard.
     The Company currently does not have any goodwill or other intangible assets
     on its books as of  September  30,  2001 and will  adopt SFAS No. 142 as of
     January 1, 2002.  Management  believes that the adoption of this  Statement
     will have no effect on its financial statements.



4.   BASIS OF PRESENTATION

     The  unaudited  financial  statements  included  herein have been  prepared
     pursuant  to the rules  aud  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 2000 Annual Report on Form 10-K.

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




                                       6
<PAGE>

iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
(Expressed in United States dollars)
--------------------------------------------------------------------------------

5.     SHARE CAPITAL

       Authorized
           An unlimited number of common shares
       Issued and outstanding
<TABLE>
<S>                                                               <C>                           <C>
                                                                Number of
                                                            Common shares                Amount ($ 000)
                                                         ------------------          ------------------

       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 acqisition                   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 placement, issued for cash                        3,333,333                        1,000
       Other shares issued                                         436,733                          216
       Options exercised during the year                           977,500                          489
       -------------------------------------------------------------------------------------------------
       Balance, September 30, 2001                              14,494,186                        7,646

</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)  Agent's Warrants

               As a part of the issuance of 2,200,000  common shares,  the agent
               to the offering was granted 220,000 Agent Warrants  entitling the
               agent to purchase  220,000  common  shares for $2.50 per share in
               the  first  year of the  warrant  and for  $3.75 per share in the
               second  year of the  warrant.  In  1999,  139,850  warrants  were
               exercised for proceeds of approximately $350,000. In May 2001 the
               remaining 80,150 warrants were cancelled.

          (b) Stock options

               The Company has  established  a Stock Option Plan for  employees,
               officers,  directors,  consultants, and advisors. Options granted
               under the Stock Option Plan may be either  incentive stock option
               or  non-qualified   stock  options.   The  Company  has  reserved
               3,448,000 common shares for issuance under the Stock Option Plan.
               Thereof  1,415,000  options  were  granted in June 2001.  Options
               granted for issuance  under the Stock Option Plan  generally  are
               not  transferable,  and the  exercise  price of  incentive  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
(Expressed in United States dollars)
--------------------------------------------------------------------------------

5.   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.

          The Company  grants stock options both under the Stock Option Plan and
          by way of individual grants outside of the Stock Option Plan.

          Under the Stock  Option Plan the  following  options have been granted
          and remain outstanding at September 30, 2001.

          Number of Options          Exercise price           Expiration date

                   300,000                $   0.50           December 1, 2008
                    54,000                $   0.50              June 28, 2009
                   160,000                $   0.50               July 7, 2009
                   115,000                $   0.50           October 15, 2009
                   186,000                $   0.50              June 12, 2010
                   148,000                $   0.50           January 16, 2011
                 1,415,000                $   1.37              June 27, 2011
                 ---------
                 2,378,000


          The following  options have been granted to  non-employees  outside of
          the Stock Option Plan and remain outstanding at September 30, 2001:

            Number of Options         Exercise price           Expiration date

                       40,000               $   0.50             June 12, 2002


          As of  September  30,  2001,  992,500  shares  have been issued on the
          exercise of stock  options  granted under and outside the Stock Option
          Plan  (thereof  60,000 shares  outside the plan).  Of the total shares
          issued,  977,500 shares were issued during the current year and 15,000
          shares were issued in 2000. No options were exercised  under the Stock
          Option Plan in 1999.

          As of September 30, 2001,  480,500 options were cancelled by the Board
          of Directors granted under and outside of the Stock Option Plan.

          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 year ended  December 31, 2000 and 1999, the Company issued options
          to individuals other than employees and directors which under SFAS No.
          123 are  recognized  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  therefore
          adopted the disclosure-only provision of SFAS No. 123.




                                       8
<PAGE>


iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
(Expressed in United States dollars)
--------------------------------------------------------------------------------

5.     SHARE CAPITAL (Continued)

          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. Due to the changes,  all options granted under the plan will
          be  accounted  for  using  variable  plan  accounting  under  APB  25.
          Therefore,  as of September 30, 2001,  the fair value of the Company's
          stock  exceeded the adjusted  exercise  price,  thus  resulting in the
          recognition  of  compensation  expense.  Applying APB 25 resulted in a
          reduction of compensation  expense by $701,800 in the third quarter of
          2001.  This was  mainly  due to the  change of the stock  price  which
          reduced the compensation expense for the options outstanding.  For the
          nine  months  period  ending on  September  30,  2001,  $1,627,475  of
          compensation expense was recognized in the financial statements.

          In July 2001,  the Company  instituted  an  Incentive  Plan  reserving
          1,500,000  shares for issue to officers,  directors,  employees of the
          company and its subsidiary and other persons, including consultants as
          an incentive. No incentive shares have been granted under this plan as
          of September 30, 2001.

     (c)  Loss per share

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

          For the three month period ended September 30, 2001,  292,000 dilutive
          shares  were  added to the basic  shares  for the  calculation  of the
          diluted earnings per share. No change in the earnings/(loss) per share
          amount resulted.

     (d)  iQ share capital

          The  registered  capital of iQ Battery is DM  100,000,  which is fully
          paid.

          All  equity  securities  were  acquired  by iQ  Power  as  part of the
          business combination.

     (e)  Issuance of shares due to private placements

          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.  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 fee to EH&P  Investment AG, a non-U.S.  person outside
          the United  States,  in  connection  with the offering  consisting  of
          120,000 common shares.  The cost of the finders fee was netted against
          the proceeds  obtained from the  financing.  The shares were issued to
          EH&P  pursuant  to an  exemption  from  registration  available  under
          Regulation S of the Securities Act.



                                       9
<PAGE>


iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
(Expressed in United States dollars)
--------------------------------------------------------------------------------

     5.   SHARE CAPITAL (Continued)

          In  September  2001,  the  Company  completed a private  placement  of
          333,333 common shares at $0.75 per share for proceeds of $250,000. The
          subscriber to the private placement was a non-U.S.  person 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 fee to a non-U.S. person outside the United States, in
          connection with the offering  consisting of 33,333 common shares.  The
          cost of the finders fee was netted against the proceeds  obtained from
          the  financing.  The shares were issued  pursuant to an exemption from
          registration available under Regulation S of the Securities Act.

          (f)  Issuance of shares due to consulting agreements

          On May 7, 2001, the Company entered into a European Investor Relations
          Consulting  Agreement with  Magdalena,  a non-U.S.  person outside the
          United States. The Company agreed to pay Magdalena a consulting fee in
          the amount of $62,500 for such services,  payable by issuing Magdalena
          a total of  250,000  common  shares  with a deemed  value of $0.25 per
          share, issuable as follows: 20,850 common shares of the Company during
          the first eleven months and 20,650 common shares in the final month of
          the  agreement.  As of  September  30,  2001,  the  Company had issued
          Magdalena  83,400 common shares under the  agreement.  The shares were
          issued  to  Magdalena  pursuant  to  an  exemption  from  registration
          available under Regulation S of the Securities Act.

          On July 1, 2001,  the Company  entered into a German Public  Relations
          Consulting  Agreement  with  Holtermann & Team GmbH (H&T),  a non-U.S.
          person  outside the United  States.  The  Company  agreed to pay H&T a
          consulting  fee in the amount of EUR 7,500 ($6,822) per month for such
          services.  Of the  consulting  fee, EUR 5,000 is due monthly while the
          remaining  EUR 2,500 is payable by issuing  H&T common  shares  with a
          deemed value of $1.48 per share,  issuable on a quarterly  basis.  The
          first issuance will take place in October,  2001. The agreement has an
          initial term of 12 months.



     6.   RELATED PARTY TRANSACTIONS

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

     (a)  Management  fees for the three  months  ended  September  30,  2001 of
          $18,000 (three months ended September,  2000 - $18,000) were paid to a
          company with a common director.

     (b)  The Company issued  convertible  debentures to John Lawson, a Director
          of the  Company,  in the  aggregate  principal  amount of  CDN$300,000
          ($198,000), at the annual rate of 24%, payable monthly in arrears. The
          convertible  debentures  were issued pursuant to the terms of a credit
          facility dated December 13, 2000, and are secured by the assets of the
          Company  and its  subsidiary  under the  terms of a  General  Security
          Agreement of equal date. The  convertible  debentures are  convertible
          into common  shares of the Company,  at the rate of US$0.50 per share.
          The  convertible  debenture  is payable one month after  demand by the
          holder,  and the Company may prepay the convertible  debenture without
          penalty. The Company received net



                                       10
<PAGE>


iQ POWER TECHNOLOGY INC.
(a development stage company)
Notes to the Consolidated Financial Statements
(Expressed in United States dollars)
--------------------------------------------------------------------------------


    6.   RELATED PARTY TRANSACTIONS (Continued)

          proceeds in the amount of  CDN$100,000  ($66,000) from the issuance of
          the convertible debenture in December 2000, and CDN$200,000 ($132,000)
          in  January  2001.   No  fees  were  paid  in  connection   with  this
          transaction.  On May 24, 2001, the lender opted to convert  CDN$77,365
          ($50,000) of the  convertible  debenture into 100,000 common shares of
          the Company.  On August 29, 2001,  the lendor  converted an additional
          CDN$77,015 ($50,000) into common stock.

     (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  and directors of iQ Battery.  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 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.


     7.   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.  All of the
          Company's significant physical assets are located in Germany.


     8.   SUBSEQUENT EVENT

          Subsequent to the quarter ended September 30, 2001, the Company raised
          an additional $713,541 in equity capital through the private placement
          of 1,019,344  units of the Company at US$0.70 per unit, each such 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.  The Company paid a finder's fee of 80,434 common
          shares in connection  with the offering.  The  securities  were issued
          subject to resale restrictions.

          The subscribers to the private  placement and the finder were non-U.S.
          persons  outside  the United  States and the  offering  was  conducted
          pursuant  to  Regulation  S  as   promulgated  by  the  United  States
          Securities and Exchange Commission.




                                       11
<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, as amended. 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 (collectively,  referred to
as "we," "us," "our," iQ Power" and/or "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;   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;  risks  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;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  Securities
and Exchange  Commission.  You are cautioned  against  placing undue reliance on
forward looking statements.

     Unless provided otherwise, all amounts are in United States dollars.

Overview

     The Company was incorporated on December 20, 1994 under the Canada Business
Corporations Act as 3099458 Canada Inc. The Company changed its name to iQ Power
Technology Inc. on May 9, 1997. The Company's  principal  executive  offices are
located at Suite 708-A, 1111 West Hastings Street, Vancouver,  British Columbia,
Canada V6E 2J3, and the  Company's  telephone  number at that  location is (604)
669-3132.

     iQ Battery Research & Development GmbH ("iQ Germany") was formed in 1991 to
research and evaluate methods of maximizing lead-acid battery  performance.  The
Company was formed to acquire iQ Germany and to license the technology developed
by iQ  Germany  to  others  or to  market  products  based  on such  technology.
Throughout this quarterly report the Company refers to the technology  developed
by iQ Germany as the "iQ technology."

     The Company is an early stage  company and its  principal  activity to date
has been  research and  development.  The Company has not derived  revenues from
operations. The Company does not anticipate that it will generate revenues until
it begins  marketing  and selling its  Generation I iQ Battery  product which is
expected to occur in 2002, assuming adequate financing is available. The Company
anticipates it may generate  additional  revenues from service  agreements  with
battery manufacturers and licensing agreements during 2002, although the Company
currently  has no  service or  licensing  agreements  in place.  There can be no
assurance  that that  sufficient  financing  will be available  to  successfully
commercialize  the Generation I iQ Battery or that the Company will generate any
material  revenues  during 2002 from the sale of  batteries  or from  service or
license  arrangements,  if any. 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 may be required
to increase  spending on product research and development,  marketing,  staffing
and other general operating expenses in order to successfully  commercialize its
technology.  For these reasons,  the Company believes its expenses,  losses, and
deficit  accumulated  during the development  stage will increase  significantly
before it begins to generate material revenues.

         Prior to June 18, 1999, the financial statements of the Company and iQ
Germany were presented as separate and distinct, as the former shareholders of
iQ Germany had a put option to enable them to reverse the August 25, 1998
transaction. That option terminated on June 18, 1999, when the Company raised in
excess of $3,000,000 by equity financing. After June 17, 1999, all financial
information is reported on a consolidated basis. Any financial information of



                                       12
<PAGE>



the Company used for  comparative  purposes prior to June 18, 1999, is financial
information of iQ Germany only. All amounts are set forth in U.S. dollars unless
provided otherwise.

     On March 30, 2000, the Company's  shareholders  approved a reverse-split of
the Company's issued and outstanding common shares on a two and one-half (2 1/2)
share for one (1) share basis.  On April 10, 2000, the Company filed Articles of
Amendment to effect the reverse  split,  and each 2 1/2 common shares issued and
outstanding on April 10, 2000 were automatically  converted into 1 common share.
The information contained in the Company's financial statements,  which are part
of this report, and this report give effect to the reverse split.

The  Company's  Results of Operations  for the Three Months Ended  September 30,
2001 compared to the Three Months Ended September 30, 2000

     The Company  recorded no revenues in either the  three-month  period  ended
September 30, 2001 or the three-month period ended September 30, 2000.

     The Company had net income of $208,000  for the  three-month  period  ended
September 30, 2001, compared to a net loss of $635,000 for the comparable period
in 2000. The Company realized income for the three-month  period ended September
30, 2001 as a result of non-cash stock based  compensation  which was reduced by
$702,000.  Absent the gain from non-cash stock based  compensation,  the Company
would have  realized a net loss of  $494,000.  For the same  period in 2000,  no
stock based compensation was realized.

     The operating  expenses for the three-month period ended September 30, 2001
were $602,000 compared to $688,000 for the comparable period in 2001, a decrease
of $86,000 or 12.5%.

     Research and development  expenses decreased by $69,000 to $220,000 for the
three-month  period ended  September 30, 2001 from  $289,000 for the  comparable
period in 2000. This decrease  reflects the Company's  completion of the initial
development  of the  Company's  battery  technology  in 2000,  and  research and
development  efforts  during 2001 to finalize the  development of the pre-series
production of the  Generation I iQ Battery  technology.  R&D personnel  expenses
decreased  for the  three-month  period  ended  September  30,  2001 to $115,000
compared  to  $163,000  during  the same  period  in 2000;  laboratory  expenses
increased for the  three-month  period ended  September 30, 2001 to $80,000 from
$61,000 during the same period in 2000; R&D office expenses  declined to $14,000
for the  three-month  period ended September 30, 2001 compared to $43,000 during
the same quarter in 2000; no R&D Consulting  services  expenses were incurred in
the third quarter of 2001 compared to $10,000 for the same quarter in 2000;  and
professional  fees were stable at $11,000 for the third quarter 2001 compared to
$12,000 for the same period in 2000.  During the fiscal quarter ended  September
30, 2001, the Company's research and development were conducted primarily by its
employees.

     During the three-month period ended September 30, 2001, expenses related to
marketing and general and administrative costs decreased by $17,000 to $382,000,
compared  to $399,000 in the same  period in 2000.  Personnel  expenses  for the
three-month  period ended  September 30, 2001  decreased to $40,000 from $63,000
for the same period 2000. Consulting services decreased $56,000 from $72,000 for
the  three-month  period ended  September 30, 2001 to $16,000 in the same period
2001.  Expenses  for  marketing  activities  for the  three-month  period  ended
September 30, 2001 were $48,000, compared to $67,000 in the same period in 2000,
which  included  costs  related to the launch of a new web site in 2000.  In the
third  quarter of 2001,  the Company  focused its  marketing  activities  on the
International  Automotive Show (IAA) in Frankfurt,  Germany.  Professional  fees
increased  to  $64,000  for the third  quarter  2001 from  $22,000  for the same
quarter of the prior year,  due  primarily to auditing  fees and legal  expenses
related to the Company's  Securities and Exchange Commission  filings.  Expenses
for investor relations increased to $113,000 from $32,000 for the third quarters
2001  and  2000,  respectively.  Other  changes  in the  Company's  general  and
administrative  expenses from the  three-month  period ended  September 30, 2001
compared to the same period ended  September 30, 2000,  included lower financing
expenses ($5,000 in 2001,  compared to $12,000 in 2000),  decreased  expenses on
memberships  ($Nil in 2001,  compared  to  $50,000 in 2000,  and other  expenses
($11,000 in 2001, compared to $23,000 in 2000).

     Earnings / Loss per Share:  The Company realized a basic and diluted income
per share of $0.01 for the three-month period ended September 30, 2001, compared
to a basic and diluted loss per share of $0.07 for the three-month  period ended
September  30,  2000.  The Company  realized net income  during the  three-month
period ended  September  30, 2001 as a result of an  adjustment to non-cash base
compensation in the amount of $702,000. Absent


                                       13
<PAGE>


the  adjustment,  the Company  would have realized a net loss of $0.04 per share
during the quarter ended September 30, 2001.

     The Company anticipates that expenditures  related to marketing and general
and administration will increase during the year ending December 31, 2001, as it
conducts  marketing efforts to introduce its Generation I iQ Battery,  including
cost related to building product  awareness and increased  efforts to enter into
service and licensing  arrangements to commercialize our Generation I iQ Battery
and our related energy management technologies.

     The Company's Results of Operations for the Nine Months Ended September 30,
2001 compared to the Nine Months Ended September 30, 2000

     The Company  recorded no  revenues  in either the nine month  period  ended
September 30, 2001 or the nine month period ended September 30, 2000.

     The Company  incurred a net loss of  $3,231,000  for the nine month  period
ended  September  30,  2001,  compared  to a net  loss  of  $1,570,000  for  the
comparable  period in 2000.  Total expenses  increased to $3,258,000  during the
nine month period ended September 30, 2001 compared with $1,752,000 for the same
period in 2000.  The main factor  contributing  to the expense  increase  was an
increase in non-cash stock based  compensation  expense recorded by the Company,
which rose from $10,000  during the first nine months of 2000 to $1,627,000  for
the same period in 2001.  The  non-cash  stock based  compensation  for the nine
month period ended  September 30, 2001 included  $456,000 in expense  recognized
due to variable  accounting  treatment for fully vested  options which  remained
outstanding  and an increase in the price of the  Company's  common stock in the
course of 2001.

     Total  operating  expenses  decreased by $143,000 to $1,599,000  during the
nine month  period  ended  September  30, 2001 from  $1,742,000  during the same
period in 2000. Research and development expenses in total decreased to $741,000
in the  nine  month  period  ended  September  30,  2001  from  $920,000  in the
comparable  period  in 2000,  as the  Company  concentrated  on  finalizing  the
development  of the  pre-series  production  of the  Generation  I - iQ  Battery
technology.  R&D Personnel  costs were kept at the same level for the nine month
period ended  September  30, 2001  ($442,000)  and 2000  ($443,000).  Laboratory
expenses  decreased  for the nine  month  period  ended  September  30,  2001 to
$215,000  from  $229,000  during the same  period in 2000.  R&D office  expenses
declined to $46,000 for the nine month period ended September 30, 2001, compared
to $158,000  during the same quarter in 2000. R&D Consulting  services  expenses
decreased to $1,000 for the nine month period ended September 30, 2001, compared
to $31,000  for the same  quarter in 2000.  R&D  Professional  fees  declined to
$37,000  for the first three  quarters in 2001,  compared to $59,000 in the same
period of 2000.  This  decrease is  primarily  attributed  to our focus on later
stage research and development  efforts. We anticipate that expenditures related
to research and development will remain consistent with our expenditures  during
the first three quarters of 2001 for the balance of 2001.

     The expenses related to marketing and general and administration  increased
$36,000 to $858,000 for the nine month period ended September 30, 2001, compared
to $822,000 for the comparable  period in 2000.  For the  comparable  nine month
periods ended  September 30 for the years 2001 and 2000 the  personnel  expenses
were $123,000 and $132,000,  respectively,  a $9,000  decrease.  During the nine
month period ended September 30, 2001, office expenses  increased to $67,000 due
to newly rented  office  space,  compared to $61,000 in the same period in 2000.
Professional  fees  increased  to $186,000  during the nine month  period  ended
September  30,  2001,  from  $97,000  during the same period  during  2000,  due
primarily  to  auditing  fees  and  legal  expenses  related  to  the  Company's
Securities  and  Exchange  Commission   filings.   Investor  relations  expenses
increased  to $230,000 in the first three  quarters of 2001 from $99,000 for the
comparable period in 2000. Expenses for marketing activities for the nine months
period ended  September 30, 2001 were $59,000,  compared to $109,000 in the same
period in 2000,  which included costs related to the launch of a new web site in
2000.  Other changes in our operating  expenses from the nine month period ended
September  30, 2001  compared  to the same period  during  September  30,  2000,
included lower financing expenses ($6,000 in 2001, compared to $18,000 in 2000);
decreased  consulting  services ($71,000 in 2001,  $119,000 in 2000);  decreased
expenses on memberships  ($Nil in 2001,  compared to $50,000 in 2000;  increased
travel  ($46,000 in 2001,  compared  to $30,000 in 2000);  and  decreased  other
expenses ($16,000 in 2001,  compared to $53,000 in 2000). We anticipate that the
level of  expenditures  related to our marketing and general and  administration
expenses will increase  during the fourth quarter  ending  December 31, 2001. We
anticipate this increase will be on account of our increased  marketing  efforts
to introduce our Generation I iQ Battery. We also expect to increase our efforts
to enter into service and licensing arrangements to commercialize our Generation
I iQ Battery and our related energy management technologies.


                                       14
<PAGE>


     Loss per Share: The Company  experienced a basic and diluted loss per share
of $0.28 for the nine month period ended September 30, 2001, compared to a basic
and diluted loss per share of $0.16 for the nine month  period  ended  September
30, 2000.

     We anticipate that losses will increase  marginally,  as we expect to begin
generating  revenues from the commercial  sale of our Generation I iQ Battery in
2002,  assuming adequate financing is available.  Our Generation I iQ Battery is
being  manufactured by a third-party  manufacturer  for limited sales in Europe.
There can be no assurance that our efforts to commercialize  our Generation I iQ
Battery will be successful or that we will not experience  delays in introducing
our battery to the market.

Liquidity and Capital Resources

     Since inception,  the Company has financed its operations primarily through
sales of its equity  securities.  As of September 30, 2001, the Company had cash
and cash equivalents of $362,000,  and a working capital deficit of $8,000. From
inception  to  September  30, 2001,  the Company had raised  approximately  $8.4
million  (net of issuance  costs)  from the sale of  securities,  excluding  the
issuance of 4,000,000  common  shares for deemed  proceeds of  $2,500,000 on the
business combination with iQ Germany.

     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.  The Company paid a finder's
fee of 120,000 common shares in connection with the offering. The subscribers to
the private  placement were non-U.S.  persons  outside the United States and the
offering was  conducted  pursuant to Regulation S as  promulgated  by the United
States Securities and Exchange Commission.

     In August 2001, the Company completed a private placement of 333,333 common
shares at $0.75 per share for proceeds of $250,000.  The Company paid a finder's
fee of 33,333 common shares in connection  with the offering.  The subscriber to
the private  placement was a non-U.S.  person  outside the United States and the
offering was  conducted  pursuant to Regulation S as  promulgated  by the United
States Securities and Exchange Commission.

     Subsequent to the quarter ended  September 30, 2001,  the Company raised an
additional $713,541 in equity capital through the private placement of 1,019,344
units of the  Company  at US$0.70  per unit,  each such 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.  The Company paid a finder's
fee of 80,434 common shares in connection with the offering. The securities were
issued subject to resale restrictions.  The subscribers to the private placement
and the finder were non-U.S.  persons outside the United States and the offering
was  conducted  pursuant to  Regulation S as  promulgated  by the United  States
Securities and Exchange Commission.

     The Company  anticipates  that the proceeds of the private  placements,  if
completed,  will be sufficient to meet its on-going  obligations during 2001 and
to  fund  its  plan of  operation  through  December  31,  2001.  See  "Plan  of
Operation."

     The  Company  plans to  finance  its  capital  needs  principally  from the
proceeds of the private  placement,  cash flow from operations,  if any, the net
proceeds of their  securities  offerings and interest thereon and, to the extent
available,  lines of credit.  There can be no  assurance  that the Company  will
successfully  complete the private  placement as planned.  If the Company cannot
complete the private placement, the Company's business and results of operations
could be materially adversely affected.

Obligations and Commitments

     iQ Germany is  obligated to pay to Horst  Dieter  Braun,  that iQ Germany'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.  The amount is  payable  only out of and only to the extent of the gross
profits of iQ Germany.

     During the year  ended  December  31,  2000,  the  Company  entered  into a
consulting  agreement  dated August 12, 2000 with Richard Singer under which the
parties agreed that Mr. Singer would serve as a strategic advisor to the Company
for an  initial  term of 24  months.  The  Company  agreed  to pay Mr.  Singer a
consulting  fee of $2,000 per full working day in which services are provided to
the  Company.  Mr.  Singer will work an average of one full working day per week
during the term of the  agreement.  The Company also agreed to grant Mr.  Singer
options exercisable to acquire


                                       15
<PAGE>


25,000 common shares at $1.50 per share,  vesting 50% immediately on the date of
the agreement and 50% on the first  anniversary  of such date.  The Company also
agreed to pay Mr. Singer a finder's fee for any financing agreement entered into
by the Company as a result of Mr. Singer's  efforts equal to: 6% on contracts in
excess of $1,000,000;  4% on contracts between  $1,000,001 to $4,000,000;  3% on
contracts  between  $4,000,001  to  10,000,000  and 2% on contracts in excess of
$10,000,001.  In  November  2000,  the Company  and Mr.  Singer  agreed that the
consulting  agreement would be suspended pending the Company's ability to obtain
additional  financing and subject to  renegotiation  of certain the terms of the
agreement.

     On May 7, 2001,  the Company  entered  into a European  Investor  Relations
Consulting Agreement with Magdalena Finance Corp. ("Magdalena"). Under the terms
of the agreement,  Magdalena agreed to provide the Company with certain investor
relations services in Europe for a term of one year,  beginning May 1, 2001. The
Company  agreed to pay  Magdalena a consulting  fee in the amount of $62,500 for
such  services,  payable by issuing  Magdalena a total of 250,000  common shares
with a deemed  value of $0.25 per share,  issuable  as  follows:  20,850  common
shares of the Company during the first eleven months and 20,650 common shares in
the final  month of the  agreement.  On  September  1,  2001,  the  Company  and
Magdalena entered into a supplement to the original  agreement,  under which the
Company agreed to pay Magdalena a bonus of $70,000 and  additional  compensation
of $25,000 per month for four months in  consideration  of additional  services,
including  negotiating a letter of intent with Porsche to test the iQ technology
and to  coordinate  the  preparation  and  dissemination  of not  less  than one
in-depth research report to qualified institutional investors.

     On May 5, 2001, the Company  entered into a Finders Fee Agreement with EH&P
Investments AG. ("EH&P").  Under the terms of the agreement,  the Company agreed
to pay EH&P a finder's  fee of $30,000 in  connection  with  arranging a private
placement of the Company's  common  stock.  The finder's fee was paid by issuing
EH&P 120,000 common shares of the Company.

     On June 30,  2001,  the Company  entered  into an  amendment  to the credit
facility  dated  December 13, 2000,  by and between the Company and John Lawson.
Under the terms of the amendment, the credit facility due date was extended from
June 30, 2001 to December 31, 2001.  As of September  30, 2001,  Mr.  Lawson has
converted $100,000 of the principal balance into common shares of the Company at
$0.50 per share.

     On July 1, 2001,  the Company  entered  into a Financial  Public  Relations
Consulting Agreement for Germany with Holtermann & Team GmbH ("H&T").  Under the
terms of the agreement, H&T agreed to provide the Company with certain financial
public relations  services in Germany for a term of one year,  beginning July 1,
2001.  The Company agreed to pay H&T a consulting fee in the amount of EUR 7,500
($6,822) per month for such services.  Of the consulting fee, EUR 5,000 ($4,548)
is due monthly while the remaining EUR 2,500  ($2,274) is payable by issuing H&T
common  shares with a deemed  value of $1.48 per share,  issuable on a quarterly
basis.

     On August 29, 2001,  the Company  entered into a Finders Fee Agreement with
Mohamed  Alizade.  Under the terms of the  agreement,  the Company agreed to pay
Alizade a  finder's  fee of  $25,000  in  connection  with  arranging  a private
placement of the Company's  common  stock.  The finder's fee was paid by issuing
Alizade 33,333 common shares of the Company.

     The Company's capital requirements depend on several factors, including the
success and progress of its product  development  programs,  the  resources  the
Company  devotes to developing  its  products,  the extent to which its products
achieve  market  acceptance,  and other factors.  The Company  expects to devote
substantial  resources toward marketing  activities and research and development
activities  during 2001.  The Company cannot  adequately  predict the amount and
timing of its future cash requirements.  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.



                                       16
<PAGE>



     Plan of Operation

     The Company has undertaken and is pursuing the following initiatives:

     o    Since  November  2000,  the  Company  was  awarded   certification  in
          accordance with the  international  standards  organization  (ISO) and
          Verein Deutscher  Automobilzulieferer (VDA), the Association of German
          automotive  suppliers.   ISO  and  VDA  certifications  are  generally
          required  for  battery   suppliers.   No  governmental  or  regulatory
          approvals are required for the development of battery technologies.

     o    The  Company  has  been  able  to  complete  the  development  of  the
          Generation I iQ  intelligent  battery and is currently  attempting  to
          organize  the initial  production  run.  The Company  contracted  with
          suppliers  necessary to provide the  components for the ramp-up of the
          production  according to quality  requirements and at fixed negotiated
          costs.

     o    The Company developed the SEM smart energy management(TM)  application
          together   with   DaimlerChrysler,   which   was   displayed   in  the
          International  Auto Show for Trucks in  Frankfurt.  This resulted in a
          joint  proposal  submitted  to  the  European  Union  for  funding  of
          DaimlerChrysler's  intelligent  Powertrain  X-by-wire concept. If this
          program is  implemented,  iQ will be responsible  for  development and
          delivery of the complete electrical energy storage and supply system.

     o    Since July 2000,  the Company has been  attempting to form an alliance
          in the automotive industry, the DC-BUS Alliance. Supported by BMW, the
          purpose of this alliance is to standardize the powerline communication
          technology that was originally  developed by YAMAR Electronics Israel,
          a strategic  partner of the Company.  In December,  2000, the founding
          members  accepted the proposed  structure  and publicly  announced the
          formation  of the  Alliance.  Peter  E.  Braun,  the  Company's  Chief
          Executive  Officer,  was appointed to coordinate  the  management  and
          administration of the Alliance.

     o    Since the first  quarter  of 2000,  the  Company  has been  invited to
          present its  technology in several  international  conferences  and to
          submit  several  technical  papers.   The  Company  has  entered  into
          negotiations with battery  manufacturers,  suppliers to the automotive
          industry  and  automakers  regarding  the  use  and  licensing  of the
          Company's products and/or its technology.

     The  Company's  strategic  plan and plan of operation  for the remainder of
     2001 is as follows:

Research and Development

     o    expand research and development efforts with existing personnel,

     o    prepare for and start production of the Generation I iQ batteries that
          incorporate the iQ technology,  and prepare for a  pre-production  and
          initial  production of batteries that  incorporate  the iQ technology,
          and

     o    expand its third-party testing program.

The Company anticipates that it will spend approximately $1,000,000 on research
and development during the fiscal year ending December 31, 2001.

Marketing

     o    enter into  development  contracts  with  customers of the  automotive
          industry  and  other  industries  to  apply  its  technology  to their
          individual demands with the goal of producing and supplying components
          for commercial applications in their products,

     o    market the iQ  technology  and our software as part of its  technology
          for state of charge (SOC) and state of health (SOH) status indications
          solutions for original equipment  manufacturer  batteries and/or First
          Tier battery suppliers.  ` The Company  anticipates that it will spend
          approximately  $150,000 on marketing  and sales during the fiscal year
          ending December 31, 2001.


                                       17
<PAGE>


Financial

     o    seek  additional  financing  to expand the  Company's  operations  and
          finance its development and marketing efforts.

The Company anticipates that it will expend approximately $150,000 on capital
raising efforts during 2001.

Personnel

     The Company  anticipates  no  significant  changes in the number of Company
employees  during the fiscal year 2001 and for the next twelve calendar  months.
Similarly,  the  Company  does  not  anticipate  making  purchases  or  sales of
significant  physical facilities or manufacturing  equipment for the next twelve
months.

Administrative and General Operating Budget

     The Company estimates that its general  administrative and operating budget
will be approximately $650,000 during the year ending December 31, 2001.

     The Company  anticipates  that its total operating  budget for 2001 will be
approximately $2,000,000.  The financing agreed upon in October 2001 is expected
to  satisfy  the  Company's   additional   working   capital   requirements   of
approximately  $500,000  through  December 31,  2001.  The Company may need more
financing if it experiences delays, cost overruns,  additional funding needs for
joint ventures or other unanticipated events. The Company cannot assure you that
it will be able to obtain additional financing on favorable terms or on a timely
basis.

     If the Company is unable to raise additional financing on acceptable terms,
the Company 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 its operations until sufficient financing is available; or

     o    sell or wind up and liquidate its business.

Any of these  action  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.

Foreign Currency Translation Risk

     To date,  exposure to foreign currency  fluctuations has not had a material
effect on our  operations.  The Company  believes  its risk of foreign  currency
translation  is limited,  as its  operations are based in Germany with resulting
transactions  primarily  denominated in United States dollars.  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.

Political and Economic Uncertainties

     The Company's business and its ability to raise additional financing may be
adversely  affected by  political  and  economic  risks and  uncertainties.  The
general economic slow down in the United States and Europe may reduce demand for
automobiles  and automotive  products.  The events of September 11, 2001 and the
political  uncertainty  in the Middle  East may  negatively  affect the  capital
markets and the Company's  ability to raise capital on acceptable  terms.  There
can


                                       18
<PAGE>
 be no assurance that the Company will be able to raise  sufficient financing to
successfully  commercialize  the iQ Battery  or that  there  will be  sufficient
demand for the iQ Battery.

Part II - OTHER INFORMATION

          ITEM 1.  LEGAL PROCEEDINGS

          As of September  30,  2001,  there is no material  litigation  pending
          against us or iQ Germany.

          On August 4, 2000, a civil  lawsuit was filed by Gerhard Trenz against
     iQ Power  and iQ  Battery  in the  Labor  Court of  Munich  (Case  No. 3 Ca
     10364/00).  Mr. Trenz was dismissed as Chief Financial  Officer of IQ Power
     in July, 2000. He filed a lawsuit claiming  wrongful  termination and seeks
     an order to continue his  employment  until  August  2001.  On December 21,
     2000, the Labor Court of Munich allowed an action to be brought against us.
     We made an appeal to a superior  court.  In August,  2001,  iQ Power and iQ
     Battery entered into a settlement agreement with Mr. Trenz.

          From time to time, the Company may be a party to litigation and claims
     incident  to  the  ordinary  course  of  business.  While  the  results  of
     litigation  and claims  cannot be  predicted  with  certainty,  the Company
     believe  that the final  outcome of such  matters  will not have a material
     adverse effect on its business, financial condition and operating results.

         ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         Sales of Unregistered Securities.

          During the quarter  ended  September  30, 2001,  the Company  issued a
     total of 62,550 common shares to Magdalena Finance Corp., a non-U.S. Person
     outside the United States, in consideration for services provided under the
     terms  of  a  European  Investor  Relations   Consulting   Agreement.   See
     "Management's Discussion and Analysis of Financial Results- Obligations and
     Commitments."  Subsequent  to  September  30, 2001,  the Company  issued an
     additional  41,700  common  shares  to  Magdalena  under  the  terms of the
     agreement.  The  shares were  issued  in  reliance  upon   exemption   from
     registration available under Regulation S promulgated under Securities Act.

          On July 1, 2001, the Company entered into a Financial Public Relations
     Consulting Agreement for Germany with Holtermann & Team GmbH ("H&T"),a non-
     U.S. Person outside the United States. Under the terms of the agreement,H&T
     agreed to provide the  Company  with  certain  financial  public  relations
     services in Germany  for a term of one year,  beginning  July 1, 2001.  The
     Company  agreed  to pay H&T a  consulting  fee in the  amount  of EUR 7,500
     ($6,822)  per month for such  services.  Of the  consulting  fee, EUR 5,000
     ($4,548) is due monthly while the  remaining EUR 2,500  ($2,274) is payable
     by  issuing  H&T  common  shares  with a deemed  value of $1.48 per  share,
     issuable on a quarterly  basis.  On October 30,  2001,  the Company  issued
     4,300 common shares to H&T in reliance upon an exemption from  registration
     available  under  Regulation S as  promulgated  under the Securities Act of
     1933.

          On August 29, 2001,  the Company  issued 100,000 common shares to John
     Lawson,  a  Director  of  the  Company,   pursuant  to  the  conversion  of
     convertible  debentures  in the  principal  amount of  $50,000.  The common
     shares were issued in reliance upon  Regulation S of the  Securities Act as
     promulgated by the Securities and Exchange Commission.

          In  September  2001,  the  Company  completed a private  placement  of
     333,333  common  shares at $0.75 per share for  proceeds of  $250,000.  The
     subscriber  to the  private  placement  was a non-U.S.  person  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  fee to Mohamed  Alizade,  a non-U.S.  person  outside  the United
     States, in connection with the offering  consisting of 33,333 common shares
     at the deemed  value of  $25,000.  The shares  were  issued  pursuant to an
     exemption from registration  available under Regulation S of the Securities
     Act.

          Subsequent to the quarter ended September 30, 2001, the Company raised
     an additional  $713,541 in equity capital through the private  placement of
     1,019,344  units of the  Company  at  US$0.70  per  unit,  each  such  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.  The Company paid a finder's  fee of 80,434  common  shares in
     connection with the offering.  The securities were issued subject to resale
     restrictions.  The subscribers to the private placement and the finder were
     non-U.S.  persons  outside the United States and the offering was conducted
     pursuant to Regulation S as promulgated by the United States Securities and
     Exchange Commission.

         ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

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

                                       19
<PAGE>


          No matters  were  submitted to a vote of the  Shareholders  during the
     quarter ended September 30, 2001.

         ITEM 5.  OTHER INFORMATION

         None.





                                       20
<PAGE>




     ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits.


  Exh. 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

    6.1(1)   Form of Atypical Share Exchange Agreement

    6.2(1)   Share  Exchange  Agreement  dated August 25, 1998, between iQ Power
             Technology  Inc., iQ Battery Research and  Development GmbH and the
             Shareholders of iQ Battery Research and Development GmbH

    6.3(1)   Pooling  Agreement  No. 1 dated  August 25,  1998, between iQ Power
             Technology  Inc., Montreal Trust  Company  of Canada and the
             Shareholders of iQ Power Technology Inc.

    6.4(1)   Pooling Amendment Agreement dated August 15, 1998, between iQ Power
             Technology Inc., Montreal Trust Company of Canada and the
             Shareholders  of iQ Power Technology Inc.

    6.5(1)   Management  Agreement dated January 1, 1997, between 3099458 Canada
             Inc. and Mayon Management Corp.

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

    6.7(1)   Employment Agreement dated August 31,1998 with Dr. Gunther C. Bauer

    6.8(1)   Employment Agreement dated August 31, 1998 with Peter E. Braun

    6.9(1)   Employment Agreement dated September 1, 1998 with Gerhard K. Trenz

    6.10(1)  Form of Confidentiality Agreement between iQ Power Technology Inc.
             and certain Officers of the Company

    6.11(1)  Lease Agreement by and between iQ Battery Research and Development
             GmbH and Spima Spitzenmanufaktur GmbH dated December 9, 1997
             (Translated to English)

    6.12(1)  Commercial Lease Agreement by and between iQ Battery Research and
             Development GmbH and Josef Landthaler, GmbH dated May 9, 1996, as
             amended (Translated to English)

    6.13(1)  Form of iQ Germany Confidentiality Agreement(Translated to English)

    6.14(1)  Form  of iQ  Germany  Employee  Confidentiality  and  Nondisclosure
             Agreement (Translated to English)

    6.15(1)  Cooperation  Agreement  by and  between  iQ Battery  Research  and
             Development GmbH and BASF Aktiengesellschaft(Translated to English)

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


                                       21
<PAGE>

  Exh. No.   Description

   6.17(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)

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

   6.19(1)   Letter  Agreement  between iQ Battery Research and Development GmbH
             and  Manufacturer  of  Batteries  Moll  Ltd. dated  August  3, 1998
             (Translated to English)

   6.20(1)   Mutual  Confidentiality  Agreement  between iQ Battery Research and
             Development GmbH and Manufacturer of Batteries Moll dated September
             8, 1997 (Translated to English)

   6.21(1)   Loan  Contract  by and  between  Karin  Wittkewitz  and iQ  Battery
             Research and Development GmbH dated December 28, 1996 (Translated
             to English)

   6.22(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)

   6.23(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)

   6.24(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)

   6.25(1)   Consulting  Contract  by  and  between  iQ  Battery  Research  and
             Development  GmbH and Peter Braun dated August 28, 1994 (Translated
             to English)

   6.26(1)   Consulting  Contract  by  and  between  iQ  Battery  Research  and
             Development GmbH and Dr. Gunther Bauer dated October 30, 1996
             (Translated to English)

   6.27(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)

   6.28(1)   Agreement (Debt Deferral) by and between iQ Research and
             Development GmbH and Gunther Braun dated December 27, 1996
             (Translated to English)

   6.29(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)

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

   6.31(1)   1998 Stock Option Plan

   6.32(1)   Form of Stock Option Agreement

   6.33(1)   License  Agreement  dated  September  1,  1998  between  iQ  Power
             Technology, Inc. and Mattalex Management Ltd.

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

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


                                       22
<PAGE>

   Exh. No.  Description

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

    6.37(2)  Pooling  Agreement  No. 2 dated  December 1, 1998  between iQ Power
             Technology,  Inc., Montreal Trust Company  of  Canada  and  certain
             shareholders of iQ Power Technology, Inc.

    6.38(2)  Lease Agreement  effective as of February 16, 1999 between Dr. Arne
             Curt Berger and iQ Battery  Research and Development  GmbH
             (Translated to English)

    6.39(2)  Rescission   Agreement   dated  January  13,  1999  between  Spima
             Spitzenmanufaktor GmbH and iQ Battery Research and Development GmbH

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

    6.41(3)  Investor Relations Consulting Agreement dated December 8, 1999
             between Boyle International (Guernsey) Investor Relations and iQ
             Power Technology Inc.

    6.41(4)  Corporate  Consulting  Agreement  May 1, 2000,  between TRT Capital
             Projects Inc. and iQ Power Technology  Inc. and Letter of Amendment
             dated July 31, 2000

    6.43(4)  Consulting  Agreement  dated  August  12,  2000,  between iQ Power
             Technology and Richard J. Singer

    6.44(4)  Convertible  Debenture  dated  December 27,  2000,  among iQ Power
             Technology Inc.,John Lawson,and iQ Battery Research and Development
             GmbH

    6.45(4)  Grid  Promissory  Note dated  December 27,  2000,  between iQ Power
             Technology Inc. and John Lawson

    6.46(4)  Commitment   Letter  dated  December  13,  2000,  among  iQ  Power
             Technology Inc.,John Lawson,and iQ Battery Research and Development
             GmbH

    6.47(4)  Guarantee  dated  December  27,  2000,  between John Lawson and iQ
             Battery Research and Development GmbH

    6.48(4)  General  Security  Agreement  dated  December 27, 2000,  between iQ
             Power Technology Inc. and John Lawson

    6.49(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

    6.50(5)  Amendment No. 3 to iQ Power Technology 1998 Stock Option Plan

    6.51(5)  iQ Power Technology 2001 Incentive Plan

    6.52(6)  Finder's Fee Agreement by and between iQ Power and EH&P Investments
             AG dated May 5, 2001

    6.53(6)  European  Investor  Relations  Agreement  by and  between iQ Power
             Technology Inc. and Magdalena Finance Corp. dated May 7, 2001

     6.54    European Investor Relations Agreement- Supplement #1 by and between
             iQ Power Technology Inc.and Magdalena Finance Corp. dated September
             1, 2001.

     6.55    Financial Public Relations Adviser Consulting Agreement by and
             between iQ Power Technology Inc. and Holterman & Team GmbH dated
             July 1, 2001.



                                       23
<PAGE>





     6.56   Amendment to Terms of  Non-Revolving Term Credit Facility  Effective
            June 30, 2001 by and between iQ Power Technology Inc. and John
            Lawson.

     7.1(1) List of Material Foreign Patents


---------------------

     (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 31, 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 on July 25, 2001 (File No. 333-65848).

     (6)  Previously filed as an exhibit to the registrant's quarterly report on
          Form 10-QSB for the quarter ended June 30, 2001.

          (b)  Reports on Form 8-K.

               None.





                                       24
<PAGE>




                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                            IQ POWER TECHNOLOGY INC.



                                            By: /s/ Peter E. Braun
                                               ------------------------
Date: November 14, 2001                        Name: Peter E. Braun
                                              Title: President
                                                    (Principal Financial and
                                                     Accounting  Officer)




                                       25
<PAGE>