================================================================================

                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[X]      Quarterly report under Section 13 or 15(d) of the Securities Exchange
         Act of 1934

                  For the quarterly period ended March 31, 2001

[ ]      Transition report under Section 13 or 15(d) of the Exchange Act

              For the transition period from ________ to _________

                         Commission File Number 0-027073

                              INTRACO SYSTEMS, INC.
                              ---------------------
        (Exact name of small business issuer as specified in its charter)

Nevada                                                        87-0381511
------                                                        ----------
(State or other jurisdiction                                (IRS Employer
of incorporation or organization)                           Identification No.)

                          3998 FAU Boulevard, Suite 210
                              Boca Raton, FL 33431
                              --------------------
                    (Address of principal executive offices)

         Issuer's telephone number, including area code: (561) 367-0600

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

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

                           Yes [X]            No [ ]

State the number of shares outstanding of each of the Issuer's classes of common
equity, as of the latest practical date: At April 26, 2001, there were
outstanding 18,195,218 shares of Common Stock, $.001 par value per share.

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]

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<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

                                     PART I

Item 1.   Financial Statements:

          Condensed Balance Sheet as of March 31, 2001(Unaudited).............1

          Condensed Statements of Operations for the Three
               Months ended March 31, 2001 and 2000 (Unaudited)...............2

          Condensed Statements of Cash Flows for the Three Months ended
               March 31, 2001 and 2000 (Unaudited)............................3

          Notes to Condensed Financial Statements.............................4

Item 2.   Management's Discussion and Analysis or Plan of Operation.........5-9

                                     PART II

Item 1.   Legal Proceedings..................................................10

Item 2.   Changes in Securities..............................................10

Item 3.   Defaults Upon Senior Securities....................................10

Item 4.   Submission of Matters to a Vote of Security Holders................10

Item 5.   Other Information..................................................10

Item 6.   Exhibits and Reports on Form 8-K...................................11

Signatures...................................................................12
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS:

<TABLE>
<CAPTION>
     INTRACO SYSTEMS, INC
     CONDENSED BALANCE SHEET
     MARCH 31, 2001
     (UNAUDITED)

                          ASSETS
<S>                                                                          <C>
     Current assets:
        Cash                                                                 $    87,824
        Accounts receivable, net of allowance of $2,521                           88,039
        Prepaid expenses                                                          64,642
                                                                             -----------
                  Total current assets                                           240,505
                                                                             -----------

     Property and equipment, net                                                 975,315
                                                                             -----------

     Other assets:
        Goodwill, net of amortization of $9,790                                   74,120
        Deposits                                                                  13,521
                                                                             -----------
                  Total other assets                                              87,641
                                                                             -----------

                  Total assets                                               $ 1,303,461
                                                                             ===========

           LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

     Current liabilities:
        Accounts payable                                                     $   844,960
        Deferred revenue                                                          52,568
        Accrued expenses                                                         396,049
        Customer deposits                                                         19,712
        Capital lease payable                                                     10,190
        Stock issuance cost payable                                              254,840
        Dividends payable                                                         53,227
                                                                             -----------
                  Total current liabilities                                    1,631,546
                                                                             -----------

     Capital lease payable                                                        18,698

     Stockholders' equity (deficit):
        Series A convertible redeemable preferred stock, $.001 par value,
         2,500,000 shares authorized and 391,500 shares issued and
          outstanding                                                                392
        Series B  convertible redeemable preferred stock, $.001 par value,
         1,700,000 shares authorized and 872,100 shares issued and
          outstanding                                                                872
        Common stock, $.001 par value, 100,000,000 shares
         authorized, 18,127,218 shares issued and outstanding                     18,127
     Additional paid-in capital                                                7,300,578
     Outstanding stock warrants                                                   27,000
     Accumulated deficit                                                      (7,693,752)
                                                                             -----------
                  Total stockholders' equity (deficit)                          (346,783)
                                                                             -----------

                  Total liabilities and stockholders' equity (deficit)       $ 1,303,461
                                                                             ===========

</TABLE>

            SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.

                                       1
<PAGE>

<TABLE>
<CAPTION>
INTRACO SYSTEMS, INC.
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)

                                                                     FOR THE THREE MONTHS
                                                                       ENDED MARCH 31,
                                                                 ----------------------------
                                                                     2001            2000
                                                                 ------------    ------------

<S>                                                              <C>             <C>
Revenues                                                         $    166,493    $  1,487,864

Cost of Revenues                                                       92,764       1,175,158
                                                                 ------------    ------------

Gross profit                                                           73,729         312,706

General and administrative expenses                                 1,208,261         798,249
                                                                 ------------    ------------

Loss from operations                                               (1,134,532)       (485,543)
                                                                 ------------    ------------

Interest income                                                         3,971           8,576

Interest expense                                                         (649)         (8,238)

Other income                                                            1,119           2,788
                                                                 ------------    ------------

Loss before income taxes                                           (1,130,091)       (482,417)

Provision (benefit) for income taxes                                       --              --
                                                                 ------------    ------------

Net loss                                                         $ (1,130,091)   $   (482,417)
                                                                 ------------    ------------

Net loss per share (basic and diluted)                           $      (0.06)   $      (0.04)
                                                                 ------------    ------------

Weighted average number of shares outstanding and to be issued     17,512,818      13,745,374
                                                                 ------------    ------------
</TABLE>


            SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.

                                       2
<PAGE>

<TABLE>
<CAPTION>
INTRACO SYSTEMS, INC.
CONDENSED STATEMENTS OF CASH FLOW
(UNAUDITED)

                                                           FOR THE THREE MONTHS
                                                             ENDED MARCH 31,
                                                        --------------------------
                                                            2001           2000
                                                        -----------    -----------
<S>                                                     <C>            <C>
Cash flows from operating activities:
   Net loss                                             $(1,130,091)   $  (482,417)
   Adjustments to reconcile net loss to net cash
    provided (used) by operating activities:
        Depreciation and amortization                        90,449         24,130
        Changes in assets and liabilities
        (Increase) decrease in:
           Inventory                                             --         (3,412)
           Accounts receivable                              428,015        (20,981)
           Prepaid expenses                                  15,170        (80,889)
           Deposits                                           3,121             --
        Increase (decrease) in:
           Accounts payable                                 (12,810)      (833,991)
           Deferred revenue                                 (54,838)       121,213
           Customer deposits                                  8,585         (2,400)
           Accrued expenses                                 124,114        147,459
                                                        -----------    -----------
Net cash (used) by operating activities                    (528,285)    (1,131,288)
                                                        -----------    -----------

Cash flows from investing activities:
   Purchase of property and equipment                       (61,995)      (125,457)
   Investment in intangibles                                     --        (50,000)
                                                        -----------    -----------
Net cash (used) by investing activities                     (61,995)      (175,457)
                                                        -----------    -----------

Cash flows from financing activities:
   Proceeds from issuance of stock, net                      61,200      5,267,695
   Repayment of capital lease                                (2,436)            --
   Dividends paid                                                --        (34,861)
   Repayment of long-term debt                                   --       (113,686)
                                                        -----------    -----------
Net cash provided by financing activities                    58,764      5,119,148
                                                        -----------    -----------

Net (decrease) increase in cash                            (531,516)     3,812,403

Cash at beginning of period                                 619,340        151,725
                                                        -----------    -----------

Cash at end of period                                   $    87,824    $ 3,964,128
                                                        -----------    -----------

Supplemental disclosure of cash flow information:
   Cash paid during the period for interest             $       649    $     8,238
                                                        -----------    -----------
Non-cash transactions affecting financing activities:
   Accrued stock issuance cost                          $        --    $   254,840
                                                        -----------    -----------
</TABLE>

            SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.

                                       3
<PAGE>

                              INTRACO SYSTEMS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION
------------------------------

The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and Article 310 of Regulation S-B. Accordingly, they do not include
all of the information and footnotes required for complete financial statements.
In the opinion of management, all adjustments necessary for a fair presentation
of the results for the interim periods presented have been included. Such
adjustments consist of normal recurring accruals and other adjustments.

These results have been determined on the basis of generally accepted accounting
principles and practices applied consistently with those used in the preparation
of the Company's Annual Financial Statements for the year ended December 31,
2000 on Form 10-KSB. Operating results for the three months ended March 31, 2001
are not necessarily indicative of the results that may be expected for the year
ending December 31, 2001.

It is recommended that the accompanying condensed financial statements be read
in conjunction with the financial statements and notes thereto included
elsewhere in this filing.

NOTE 2 - PROPERTY AND EQUIPMENT
-------------------------------

Property and equipment consist of the following at March 31, 2001:

         Leasehold improvements                 $    57,908
         Equipment                                1,287,416
         Furniture and fixtures                      22,260
                                                -----------
            Total property and equipment          1,367,584

         Less: accumulated depreciation            (392,269)
                                                -----------
            Property and equipment, net         $   975,315
                                                ===========

Depreciation expense for the three months ended March 31, 2001 was $ 76,550.

NOTE 3 - STOCKHOLDERS' EQUITY
-----------------------------

In January 2001, preferred stock holders converted 5,000 shares of preferred
stock to common stock.

In March 2001, Intraco issued 612,000 shares of restricted common stock to two
investors in connection with the exercise of warrants and issued 13,688 shares
of restricted common stock to a former employee in connection with the exercise
of stock options.

NOTE 4- RECLASSIFICATIONS
-------------------------

Certain amounts previsouly reported for 2000 have been reclassified to conform
with the classifications used in 2001. Such reclassifications had no effect on
the reported net loss.

                                       4
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     You should read the following discussion and analysis in conjunction with
the consolidated financial statements and the notes included elsewhere in this
report.

OVERVIEW

     Intraco is an information technology, data and voice service provider. Its
products and services include speech recognition and voice-activated solutions.
Intraco has shifted its business focus from direct sales of computer hardware
and computer networks to be installed on customer premises to providing speech
recognition and voice command products delivered from Intraco's data center for
recurring monthly fees. This manner of providing products and services from a
remote location for a recurring service charge is referred to as being an
"application service provider."

     Intraco's data center is equipped to deliver Intraco's new services.
Intraco's current speech and voice services include a speech recognition
telephone "operator" that answers incoming telephone calls and directs them to
the appropriate extension by responding to the caller's voice request, a
voice-activated telephone dialing system that places outgoing calls, and
customer queries systems based on voice recognition. Intraco has begun signing
contracts with customers for the sale of some of these new services and for the
testing of others.

     Management believes Intraco's competitive advantage lies in its ability to
combine its in-house expertise with leading speech recognition technologies
available from third parties, including voice browsers and natural language
engines, to create comprehensive packages of technology and voice services for a
variety of businesses. Management believes the major market for these services
is small- to medium-sized businesses and branch offices of larger companies.
Intraco's primary sales channel for these new products will be through
telecommunications companies. At present, Intraco has a fully operational
installation of one of its voice-enabled products.

     Since management believes it will continue to incur net losses and have
negative cash flow for the immediate future, Intraco will require additional
funding to pay its current operating expenses as well as to continue selling,
marketing, testing and installation of its new products. Intraco's operating
expenses total approximately $300,000 per month. The total funds it will need
will depend on both the length of time it takes to raise the funds as well as
the rate at which its new products gain acceptance in the marketplace.
Management believes that the faster it can generate revenues from its new
products, the more operating profit will become available to offset some of its
cash requirements for its operations. Intraco has only recently started to
generate limited revenues from these new products, however, and there can be no
assurance it will be able to generate sufficient revenues from these new
products in order to fund all or a part of its operating expenses. Intraco is
also unable to estimate when sufficient revenues may be generated by sales of
its new products. Therefore, it is actively seeking a capital infusion of
approximately $3-5 million, which it believes will provide substantially all of
the funding needed to meet its operating expenses and its product development
and testing cash needs, while it develops additional sales channels so as to
increase its sales to profitable levels. There can be no assurances that Intraco
will be able to increase sales to profitable levels.

     Management is in the process of negotiating with potential private
investors for private equity and a convertible debt investment. The specific
terms of any investment have not yet been negotiated with the potential
investors. There can be no assurances, however, that it will be able to complete
any offerings. If Intraco is not able to raise the required capital, then it
will reduce operations, seek a potential acquirer and/or discontinue operations.

                                       5
<PAGE>

     Intraco was incorporated in Florida in March 1990. In April 1999, it
completed a share exchange with Custom Touch Electronics, Inc., a Nevada
corporation with no material operations whose common stock traded on the OTC
Bulletin Board. Pursuant to the share exchange, all of the outstanding shares of
Intraco capital stock were exchanged for 10,531,500 Custom Touch shares.
Thereafter, Custom Touch changed its name to Intraco Systems, Inc.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000

     REVENUES. Revenues decreased $1,321,371, or 89%, to $166,493 for the three
months ended March 31, 2001, from $1,487,864 for the three months ended March
31, 2000. Of the dollar decrease, $1,387,571 was due to the impact of the
discontinued business lines. In the first quarter of 2001, Intraco eliminated
its systems/networks and service contract units. Intraco has shifted its sales
and marketing efforts to the development of a new generation of voice and speech
recognition products and services, which resulted in revenue of $66,200 for the
three months ended March 31, 2001.

     COST OF REVENUES. Cost of revenues decreased $1,082,394 or 92% to $92,764
for the three months ended March 31, 2001, from $1,175,158 for the three months
ended March 31, 2000. Of the dollar decrease, $1,084,592 was due to the impact
of the discontinued business lines offset by an increase in the cost of revenue
for the new products and services.

     The overall gross profit margins for the three months ended March 31, 2001
and 2000 were 44% and 21%, respectively. In the first quarter of 2001,
management eliminated its systems/networks and service contract units, reduced
Intraco's staff by nine people, and directed more resources toward developing
products and services with higher profit margins. The higher profit margins for
the three months ended March 31, 2001 primarily reflected the development of a
speech recognition system in March 2001. Management currently believes its
voice-activated products, such as the voice-activated auto attendant and
telephone dialer, can be sold at higher profit margins. There can be no
assurances that this strategy will prove successful.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the three months ended March 31, 2001 were
$1,208,261, compared to $798,249 for the three months ended March 31, 2000, an
increase of $410,012, or 51%. Of the dollar increase, $186,731 represented
increased salaries and commission costs primarily due to the payment of
severance and accrued vacation pay to terminated employees and the hiring of
engineers with specialized skills who are developing the new products and
services; $26,923 represented increased professional fees; $46,795 represented
increased legal and printing costs in connection with the filing of a
registration statement on a Form SB-2 with the Securities and Exchange
Commission; $66,319 reflects increased levels of depreciation and amortization
due to capital investments; and $82,498 represented increased network service
charges connected with the operations of the data centers from which Intraco
delivers its new products and services. The network service charges are expected
to decrease due to the consolidation of the two data centers into one data
center in April 2001. The remaining increase was attributable to other
additional selling, general and administrative expenses.

     INTEREST INCOME. Interest income, net of interest expense, increased by
$2,984 to $3,322 for the three months ended March 31, 2001 from $338 for the
three months ended March 31, 2000.

                                       6
<PAGE>

     NET LOSS. As a result of the foregoing, Intraco reported a net loss of
$1,130,091 for the three months ended March 31, 2001, compared to a net loss of
$482,417 for the three months ended March 31, 2000, an increase of $647,674. As
described more fully below under the caption "Liquidity and Capital Resources,"
Intraco anticipates that it will continue to incur net losses and have negative
cash flows. Management has sought to reduce its expenses by, among other things,
reducing personnel and restructuring operations, and is actively seeking
additional funding. Management cannot at this time, however, estimate when, if
ever, it will be able to eliminate its net losses and achieve positive cash
flow.

     ACCOUNTS RECEIVABLE. Accounts receivable decreased $468,364, or 84%, to
$88,039 for the three months ended March 31, 2001 from $556,403 for the three
months ended March 31, 2000. This decrease resulted from the reduction in
revenue due to the discontinuing of systems/networks and service contracts
products.

     ACCOUNTS PAYABLE. Accounts payable increased $652,999, or 340%, to $844,960
for the three months ended March 31, 2001, from $191,961 for the three months
ended March 31, 2000. The increase was due primarily to the delays Intraco has
experienced in obtaining the additional financing required to cover current
operations. On April 26, 2001, Intraco received a commitment for a $3 million
private placement equity financing, which will enable Intraco to receive
additional funding in the second quarter of 2001. Management expects this
additional funding to allow it to reduce the accounts payable balances. However,
there can be no assurances that these committed funds will be received.

     PROPERTY AND EQUIPMENT. Property and equipment increased $865,846, or 173%,
to $1,367,584 for the three months ended March 31, 2001 from $501,738 for the
three months ended March 31, 2000. The increase was due to the investment in
additional equipment to support the new speech and telecommunication services
product lines.

LIQUIDITY AND CAPITAL RESOURCES

     Intraco has historically incurred significant losses and has substantial
negative cash flow from operations. Intraco has included a footnote in its
annual financial statements for the year ended December 31, 2000, which
expresses concern about Intraco's ability to continue as a going concern unless
it can secure additional financing, reduce its operating expenses, and sell its
new products at higher profit margins. Intraco expects significant operating
losses to continue at least during 2001. In April 2001, Intraco received a $3
million private placement equity financing commitment under terms to be
negotiated Intraco anticipates receiving financing over the next 12 months. As
of May 8, 2000, Intraco has received $25,000 under this commitment. There can be
no assurances that any additional funds will be received. Management is also
currently in negotiations with other potential investors. There can be no
assurances that any additional funding will be available or, if available, that
such funding can be obtained on favorable terms.

     At March 31, 2001, Intraco's current assets totaled $240,505 and current
liabilities totaled $1,631,546, resulting in a negative working capital ratio.
Intraco had long-term liabilities of $18,698 at March 31, 2001. Intraco had
$87,824 in cash on hand at March 31, 2001 compared to $619,340 at December 31,
2000. Operating activities for the three months ended March 31, 2001 used cash
of $528,285, primarily due to the net loss of $1,130,091. Net cash used in
investing activities was $61,995, reflecting the purchase of fixed assets.
Financing activities provided cash in the amount of $58,764, primarily due to
the exercise of warrants of $61,200.

     Since management believes it will continue to incur net losses and have
negative cash flow in the immediate future, Intraco will require additional
funding by May 25, 2001 to cover current operations and the implementation of
its business plan. Management is actively seeking to raise additional investment
capital, which is likely to be both convertible debt and equity financing.
Intraco has no material commitments for capital expenditures at the present
time. Management is in negotiations with various potential investors. No
assurance can be made that such funding will be available and, if available,
that such funding will be available on terms acceptable to Intraco.

                                       7
<PAGE>

FACTORS THAT MAY AFFECT FUTURE RESULTS

     CERTAIN IMPORTANT FACTORS MAY AFFECT INTRACO'S ACTUAL RESULTS AND COULD
CAUSE THOSE RESULTS TO DIFFER MATERIALLY FROM ANY FORWARD-LOOKING STATEMENTS
MADE IN THIS QUARTERLY REPORT ON FORM 10-QSB OR THAT ARE OTHERWISE MADE BY
INTRACO OR ON ITS BEHALF. "FORWARD-LOOKING STATEMENTS" ARE NOT BASED ON
HISTORICAL FACTS AND ARE TYPICALLY PHRASED USING WORDS SUCH AS "MAY," "WILL,"
"EXPECT," "BELIEVE," "ANTICIPATE," "INTEND," "COULD," "ESTIMATE" OR "CONTINUE"
AND SIMILAR EXPRESSIONS OR VARIATIONS.

     Differences in actual results may be caused by factors such as those
discussed below, as well as those discussed elsewhere in this report and in
Intraco's filings with the SEC.

     Although Intraco believes that the expectations reflected in the
forward-looking statements are reasonable, Intraco cannot guarantee that they
will be achieved. Except as applicable law requires, Intraco does not intend to
update any of the forward-looking statements to conform these statements to
actual results.

     Any or all forward-looking statements in this document and in any other
public statements made may turn out to be wrong. They can be affected by
inaccurate assumptions or by known or unknown risks and uncertainties. In
addition to general economic conditions, many factors mentioned in the
discussion below will be important in determining future results.

     Neither Intraco nor its management undertake any obligation to publicly
update any forward-looking statements, whether as a result of new information,
future events or otherwise. The reader is advised, however, to consult any
further disclosures made on related subjects in Intraco's future filings with
the SEC.

INTRACO HAS EXPERIENCED SIGNIFICANT LOSSES AND THESE LOSSES ARE EXPECTED TO
CONTINUE IN THE FUTURE.

     For the three months ended March 31, 2001, Intraco reported net losses of
$1,130,091. As of March 31, 2001, Intraco had an accumulated deficit of
$7,693,752, and negative stockholders' equity of $346,783. There can be no
assurance that Intraco will operate profitably in the future and that Intraco
will not continue to sustain losses. Continued losses could materially and
adversely affect its business.

Intraco will need substantial additional capital in order to continue its
operations.

     Intraco requires substantial working capital to build its application
service provider systems, for marketing and promotion, and to fund its general
business operations. In addition, Intraco anticipates that it will regularly
need to make capital expenditures to upgrade and modify its management
information system, including software and hardware, as it grows and the needs
of its business change. As of March 31, 2001, Intraco had $175,863 in available
working capital, which is not sufficient to meet its currently anticipated needs
for working capital and capital expenditures. Intraco must raise additional
funds from outside funding sources. Intraco is actively seeking additional
financing, which is likely to be convertible debt and equity financing. Intraco
cannot be certain that any additional financing will be available to them when
needed and if available, whether it will be on favorable terms. In addition, if
Intraco raises additional funds through the issuance of equity, equity-related
or debt securities, the securities may have rights, preferences or privileges
senior to those of the rights of its current shareholders and its shareholders
may experience additional dilution.

                                       8
<PAGE>

     Management is in the process of negotiating with potential private
investors for private equity and a convertible debt investment. The specific
terms of any investment have not yet been negotiated with the potential
investors. There can be no assurances, however, that it will be able to complete
any offerings. If Intraco is not able to raise the required capital, then it
will reduce operations, seek a potential acquirer and/or discontinue operations.

INTRACO HAS SHIFTED ITS BUSINESS FOCUS AWAY FROM NETWORK INSTALLATIONS TO
PROVIDING INFORMATION TECHNOLOGY AND VOICE SERVICES, INCLUDING SPEECH
RECOGNITION PRODUCTS AND SERVICES.

     With the hiring of Walt Nawrocki in 1999 as Chief Executive Officer,
Intraco shifted its business focus towards providing speech recognition products
and services. As a result of this shift in focus, Intraco's business plan is
unproven. There can be no assurance that its new business plan will be
successful. Although Intraco is in discussions with several prospective clients,
Intraco has only just begun to sell its newly developed speech recognition
products and services and demand for these products and services is uncertain.
Additionally, Intraco's previous financial history is not a good indication of
how the business is doing or how it is evolving.

INTRACO'S SERVICES ARE BASED ON SOFTWARE OBTAINED FROM THIRD PARTIES. INTRACO
MAY HAVE TO DISCONTINUE OR SIGNIFICANTLY CHANGE ITS PRODUCTS OR SERVICES IF
THESE THIRD PARTIES CANCEL LICENSING AGREEMENTS OR DISCONTINUE PRODUCTION OF THE
SOFTWARE.

     Intraco obtains software products pursuant to agreements with Motorola,
SpeechWorks and Nuance and intends to enter into additional agreements as may be
necessary in the future. Obtaining this software, as well as any additional
software offerings, is critical to Intraco's expansion strategy because it
offers services based on the integration of these software packages to clients.
If one or more of Intraco's existing relationships with its key software
companies were to be terminated or not renewed, it could be faced with
discontinuing products or services or delaying or reducing introduction of
services unless it could find, license and offer equivalent software packages.

     All of Intraco's third-party agreements are non-exclusive. Intraco's
competitors could also license and offer software products that Intraco offers
as part of its services. Intraco cannot be sure that its current vendors will
continue to offer or support the software it currently licenses from them in
current form, nor can it be sure that it will be able to adapt its systems to
changes in such software.

INTRACO'S SERVICES INCLUDE INFORMATION, DATA AND VOICE SERVICES, SUCH AS E-MAIL
AND VOICE MAIL, THAT ARE OFTEN ESSENTIAL TO A BUSINESS. INTRACO COULD BE SUBJECT
TO LIABILITY IF IT DOES NOT PROVIDE ITS SERVICES TO THEIR CLIENTS IN ACCORDANCE
WITH THE TERMS OF THE AGREEMENTS.

     Many of the engagements Intraco has begun or plans to undertake involve
projects involving information, data and voice services that are critical to the
operations of its clients' businesses and provide benefits to its clients that
may be difficult to quantify. If Intraco fails or is unable to meet a client's
expectations in the performance of its services, its client's operations could
be adversely affected. This could give rise to claims against Intraco or damage
its reputation, adversely affecting its business, operating results and
financial condition.

                                       9
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

     On October 29, 1999, Banker's Leasing Association ("Banker's") filed a suit
against Intraco and Jack Berger in the Circuit Court of the Fifteenth Judicial
Circuit in and for Palm Beach County, Florida for breach of a master lease
agreement and personal guaranty related to computer equipment, software and
services leased by Intraco for the amount of $71,608. Intraco filed a
counterclaim based on Banker's failure to provide services agreed to in the
lease and breach of fiduciary duty. Banker's has answered Intraco's counterclaim
and has now filed suit against AIM Solutions, Inc. ("AIM"), as successor to
Enterprises Solutions Group, Inc., the third party responsible for setting up
the computer equipment and software and providing services. In its answer, AIM
has denied Banker's allegations and has raised affirmative defenses. Discovery
has not yet commenced.


ITEM 2.   CHANGES IN SECURITIES

     In January 2001, Intraco issued 5,000 shares of common stock to a preferred
shareholder who converted a like number of shares of preferred stock. The shares
were issued pursuant to an exemption from registration under Section 3(a)(9) of
the Securities Act.

     In March 2001, Intraco issued 13,668 restricted shares of common stock to
one former employee upon the employee's exercise of stock options granted to the
employee under Intraco's stock option plan in connection with the person's
employment with Intraco. Intraco did not receive any proceeds from the exercise
of options because the option holder used the cashless exercise method. The
shares issued were valued at $10,251. The shares were issued pursuant to
exemptions from registration under Section 3(a)(9) and 4(2) of the Securities
Act. The employee had access to the Company's reports filed pursuant to the
Exchange Act and a copy of the stock option plan and was familiar with Intraco's
operations and financial condition. Intraco did not pay any fees or commissions
in connection with this issuance.

     In March 2001, Intraco issued 612,000 restricted shares of common stock at
$0.10 per share for $61,200 to two investors who exercised their warrants. The
shares were issued pursuant to an exemption from registration under Section 4(2)
of the Securities Act. Intraco did not pay any fees or commissions in connection
with this issuance.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

     None.

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

     None.

ITEM 5.   OTHER INFORMATION

     None.

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<PAGE>

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits:

      EXHIBIT NO.                 DESCRIPTION OF EXHIBIT
-------------------------    --------------------------------



     (b) Reports on Form 8-K:

     Intraco did not file any current reports on Form 8-K for the quarter ended
     March 31, 2001.

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<PAGE>

                                   SIGNATURES

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

                                           INTRACO SYSTEMS, INC.

Dated:   May 11, 2001                      By: /s/ WALT NAWROCKI
                                           ------------------------------------
                                           Walt Nawrocki
                                           Chief Executive Officer and Director
                                           (Principal Executive Officer)




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