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 Fiscal Quarter Ended December 31, 2000

                                       or

              [ ] Transition Report Pursuant to Section 13 or 15(d)
                      of the Securities Exchange Act of 1934
                    For the transition period from _____ to _____

                         Commission File Number: 0-24380


                            E-AUTOMATE, CORPORATION
             (Exact name of registrant as specified in its charter)

         Delaware                                           33-0601502
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                          Identification No.)

                               831 East 340 South
                            American Fork, Utah 84003
              (Address of principal executive offices and zip code)

                                 (801) 492-1705
              (Registrant's telephone number, including area code)



State the number of shares outstanding of each of the issuer's classes
of common equity, as of January 31, 2001:

                        Common Stock:         5,935,198

Transitional Small Business Disclosure Format (Check one):
                         Yes [ ] No [x]

/1/

                             E-AUTOMATE CORPORATION
                                  FORM 10-QSB

                        QUARTER ENDED DECEMBER 31, 2000

                               TABLE OF CONTENTS



                                                                     Page
                                                                     -----

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

 Condensed Consolidated Balance Sheets(Unaudited)December 31, 2000 and
  March 31, 2000                                                       3

 Condensed Consolidated Statements of Operations (Unaudited) for the
  Three and Nine Months Ended December 31, 2000 and 1999 and for the
  Cumulative Period From November 22, 1995 (Date of Inception) through
  December 31, 2000                                                    5

 Condensed Consolidated Statements of Cash Flows(Unaudited)for the
  Nine Months Ended December 31, 2000 and 1999 and for the Cumulative
  Period from November 22, 1995 (Date of Inception) through
  December 31, 2000                                                    6

 Notes to the Condensed Consolidated Financial Statements (Unaudited)  7

Item 2. Management's Discussion and Analysis and Plan of Operations   15

PART II - OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds                     20

Item 3. Defaults upon senior securities

Item 6. Exhibits and Reports of Form 8-K                              22

Signatures                                                            24

/2/

                  PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

               E-AUTOMATE CORPORATION AND SUBSIDIARIES
                    (A Development Stage Company)
                CONDENSED CONSOLIDATED BALANCE SHEETS
                           (UNAUDITED)

                                ASSETS

                                                    December 31,  March 31,
                                                       2000         2000
                                                     ----------  ----------
Current Assets
  Cash                                               $    8,997  $      219
  Investment in securities available-for-sale                 -       5,470
  Trade accounts receivable, net of $13,368
   and $0 allowance for doubtful accounts               213,904      23,099
                                                     ----------  ----------
     Total Current Assets                               222,901      28,788
                                                     ----------  ----------
Property and Equipment
  Furniture and fixtures                                382,726      75,566
  Computer equipment                                    458,669     173,946
                                                     ----------  ----------
     Total Property and Equipment                       841,395     249,512

  Less: Accumulated depreciation                       (123,877)    (44,752)
                                                     ----------  ----------
     Net Property and Equipment                         717,518     204,760
                                                     ----------  ----------
Other Assets
  Purchased software for internal use, net
   of accumulated amortization of $7,021
   and $2,755, respectively                              30,782      15,548
  Purchased software for sale or lease, net
   of accumulated amortization of $25,000               125,000           -
  Purchased customer list, net of accumulated
   amortization of  $50,733                             253,666           -
  Security deposits                                       8,564       5,401
  Long-term trade receivables                             8,353           -
                                                     ----------  ----------
      Total Other Assets                                426,365      20,949
                                                     ----------  ----------
Total  Assets                                        $1,366,784  $  254,497
                                                     ==========  ==========

The accompanying notes are an integral part of these condensed
consolidated financial statements.

/3/

               E-AUTOMATE CORPORATION AND SUBSIDIARIES
                    (A Development Stage Company)
          CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
                             (UNAUDITED)

                LIABILITIES AND STOCKHOLDERS' DEFICIT

                                                     December 31,  March 31,
                                                        2000        2000
                                                     -----------  -----------
Current Liabilities
  Cash overdraft                                     $         -  $   114,075
  Accounts payable                                       987,504      278,454
  Accrued liabilities                                    378,659        1,258
  Deferred revenue                                        73,653      158,138
  Notes payable - related party                          177,000      237,281
  Revolving credit note payable                                -      169,915
  Note payable - current portion                         430,537      168,000
  Obligation under capital leases - current portion       34,758       24,614
  Obligation to redeem preferred stock                 2,603,750            -
                                                     -----------  -----------
     Total Current Liabilities                         4,685,861    1,151,735
                                                     -----------  -----------
Long-Term Obligation Under Capital Leases                 65,599       46,045
                                                     -----------  -----------
Stockholders' Deficit
  Series B convertible preferred stock -
   $0.001 par value; 1,000 shares authorized;
   629 shares outstanding at December 31, 2000,
   liquidation preference $629,000                       628,983            -
  Undesignated preferred stock - $0.001 par value;
   994,500 shares authorized; no shares outstanding            -            -
  Common stock - $0.001 par value; 20,000,000
   shares authorized; shares outstanding:
   5,882,300 at December 31, 2000 and 5,296,205
   at March 31, 2000                                       5,888        5,296
  Additional paid-in-capital                           7,567,623    3,784,079
  Unearned compensation                                  (90,106)    (179,572)
  Deficit accumulated during the development stage   (11,497,064)  (4,553,086)
                                                     -----------  -----------
     Total Stockholders' Deficit                      (3,384,676)    (943,283)
                                                     -----------  -----------
Total  Liabilities and Stockholders' Deficit         $ 1,366,784  $   254,497
                                                     ===========  ===========

The accompanying notes are an integral part of these condensed
consolidated financial statements.

/4/

               E-AUTOMATE CORPORATION AND SUBSIDIARIES
                    (A Development Stage Company)
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                            For the Period
                                                                                            From Inception
                                           For the Three Months     For the Nine Months     (November 22,
                                            Ended December 31,       Ended December 31,     1995) Through
                                         ------------------------  ------------------------  December 31,
                                            2000          1999       2000          1999         2000
                                         -----------  -----------  -----------  -----------  ------------
<S>                                     <C>          <C>          <C>          <C>          <C>
Revenues
  Software licenses                      $   185,659  $    20,217  $   466,070  $   127,624  $  1,023,838
  Services                                    96,409       28,365      221,987       60,999       461,030
                                         -----------  -----------  -----------  -----------  ------------
  Total Revenues                             282,068       48,582      688,057      188,623     1,484,868

Cost of Revenues                             277,258      135,517      639,625      406,530     1,282,362
                                         -----------  -----------  -----------  -----------  ------------
Gross Profit (Loss)                            4,810      (86,935)      48,432     (217,907)      202,506
                                         -----------  -----------  -----------  -----------  ------------
Operating Expenses
  Research and development                   590,450      257,440    1,517,450      555,535     3,236,240
  Selling and marketing                      351,474      321,714      913,618      538,624     2,290,396
  General and administrative                 603,341      235,086    1,691,461      834,020     3,053,576
  Write-off of deferred offering costs       477,992            -      477,992            -       477,992
                                         -----------  -----------  -----------  -----------  ------------
     Total Operating Expenses              2,023,257      814,240    4,600,521    1,928,179     9,058,204
                                         -----------  -----------  -----------  -----------  ------------
Loss From Operations                      (2,018,447)    (901,175)  (4,552,089)  (2,146,086)   (8,855,698)

Interest Expense                             (60,682)     (12,356)     (94,926)     (64,195)     (344,403)
                                         -----------  -----------  -----------  -----------  ------------
Net Loss                                  (2,079,129)    (913,531)  (4,647,015)  (2,210,281)   (9,200,101)

Preferred Dividends                       (2,257,401)           -   (2,296,963)           -    (2,296,963)
                                         -----------  -----------  -----------  -----------  ------------
Loss Applicable to Common Shareholders   $(4,336,530) $  (913,531) $(6,943,978) $(2,210,281) $(11,497,064)
                                         ===========  ===========  ===========  ===========  ============
Basic and Diluted Loss Per
 Common Share                            $     (0.74) $     (0.19) $     (1.22) $     (0.52)
                                         ===========  ===========  ===========  ===========
Weighted-Average Number of Common
 Shares Used in Per Share Calculation      5,850,671    4,909,323    5,679,813    4,263,466
                                         ===========  ===========  ===========  ===========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.

/5/


               E-AUTOMATE CORPORATION AND SUBSIDIARIES
                    (A Development Stage Company)
     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         For the Period
                                                                         From Inception
                                                   For the Nine Months   (November 22,
                                                    Ended December 31,   1995) Through
                                                 ------------------------ December 31,
                                                    2000         1999         2000
                                                 -----------  -----------  -----------
<S>                                             <C>          <C>          <C>
Cash Flows From Operating Activities
  Net loss                                       $(4,647,015) $(2,210,281) $(9,200,101)
  Adjustments to reconcile net loss to
     net cash used in operating activities:
     Depreciation and amortization                   159,124       24,182      206,631
     Debt discount amortized as interest              33,893        2,125       78,018
     Common stock issued for legal expense            20,001            -       20,001
     Common stock issued for interest expense              -            -       15,360
     Preferred stock issued for interest expense       4,835            -        4,835
     Preferred stock issued for rent expense          13,500            -       13,500
     Compensation paid with common stock             132,001      248,160      791,051
     Compensation from stock options                  89,466       96,787      319,198
     Compensation paid with a note payable                 -       58,969       58,969
      Write-off of deferred offering costs           477,992            -      477,992
     Change in assets and liabilities:
       Trade accounts receivable                    (175,204)      (6,217)    (206,488)
       Prepaid expenses                                    -        4,700            -
       Security deposit                               (3,163)      (2,851)      (8,564)
       Long-term trade receivables                    (8,353)           -       (8,353)
       Accounts payable                              709,050      270,985      987,504
       Accrued liabilities                           225,458      (13,755)     230,526
       Deferred revenue                              (84,485)      21,608       81,838
                                                 -----------  -----------  -----------
Net Cash Used In Operating Activities             (3,052,900)  (1,505,588)  (6,138,083)
                                                 -----------  -----------  -----------
Cash Flows From Investing Activities
  Proceeds from sales of securities
   available-for-sale                                 74,415      353,657      487,695
  Purchase of property and equipment                (543,925)    (106,524)    (714,666)
  Purchase of software for internal use              (18,049)     (12,764)     (18,049)
  Acquisition of FasTrak                            (200,000)           -     (200,000)
                                                 -----------  -----------  -----------
Net Cash Used In Investing Activities               (687,559)     234,369     (445,020)
                                                 -----------  -----------  -----------
Cash Flows From Financing Activities
  Decrease in bank overdraft                        (114,075)      (3,082)           -
  Proceeds from issuance of common stock           1,253,421      819,782    3,110,207
  Proceeds from issuance of redeemable
   preferred stock and warrants                    1,879,700      225,000    1,879,700
  Proceeds from issuance of notes payable            537,450            -    1,209,450
  Proceeds from issuance of notes payable -
   related party                                     602,000      269,997    1,040,997
  Principal payments on notes payable -
   related party                                    (389,548)     (87,627)    (772,067)
  Principal payments on obligation under
   capital leases                                    (19,711)     (12,432)     (38,102)
  Payments to redeem common stock from employees           -            -       (8,000)
  Net change in revolving credit note payable              -       62,452      169,915
                                                 -----------  -----------  -----------
Net Cash Provided By Financing Activities          3,749,237    1,274,090    6,592,100
                                                 -----------  -----------  -----------
Net Increase In Cash                                   8,778        2,871        8,997

Cash at Beginning of Period                              219          386            -
                                                 -----------  -----------  -----------
Cash at End of Period                            $     8,997  $     3,257  $     8,997
                                                 ===========  ===========  ===========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.

/6/

             E-AUTOMATE CORPORATION AND SUBSIDIARIES
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1- NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Condensed   Interim  Financial  Statements  -  The   accompanying
consolidated  financial statements at December 31, 2000  and  for
the  three and nine months ended December 31, 2000 and  1999  are
unaudited.   These  financial  statements  are   condensed   and,
therefore,  do not include all disclosures normally  required  by
generally   accepted  accounting  principles.   These  statements
should be read in conjunction with the Company's annual financial
statements included in the Company's annual report on Form 10-KSB
dated March 31, 2000. In the opinion of management, all necessary
adjustments  (which  include only normal  recurring  adjustments)
have  been made to present fairly the financial position, results
of  operations  and  cash flows for the periods  presented.   The
results  of  operations  for  the three  and  nine  months  ended
December 31, 2000 are not necessarily indicative of the operating
results  to  be  expected  for the full year.   The  accompanying
consolidated  financial  statements  include  the  accounts   and
transactions  of  e-automate Corporation  and  its  wholly  owned
subsidiaries.   The  operations of acquired  entities  have  been
included  from  the  dates  of  their acquisitions.  Intercompany
accounts and transactions have been eliminated in consolidation.

Business  Condition - The accompanying financial statements  have
been  prepared  on a going concern basis, which contemplates  the
realization of assets and the satisfaction of liabilities in  the
ordinary  course  of  business.  As  shown  in  the  accompanying
financial statements, the Company sustained losses applicable  to
common shares of $6,943,978 and $2,210,281 during the nine months
ended  December  31,  2000 and 1999, respectively.  In  addition,
operating  activities  used  cash of  $3,052,900  and  $1,505,588
during the same periods, respectively. During November, 2000  the
Company  reduced its work force by 25%.  In addition, because the
Company's registration statement was not effective by October 17,
2000, the Company is in default on the terms of the Series 2000-A
preferred  stock  purchase agreement, the results  of  which  are
disclosed  in  Note 7 to the financial statements. These  factors
raise  substantial doubt about the Company's ability to  continue
as a going concern.  The Company's ability to continue as a going
concern is dependent upon its ability to generate sufficient cash
flows  to  meet  its  obligations on a timely  basis,  to  obtain
additional   financing,  and  ultimately  to  attain   profitable
operations.

Management's plans include obtaining additional equity  and  debt
financing  and  management believes that profitability  and  cash
flows from operations will improve and will provide the necessary
capital  to  fund  operations due to  the  continued  success  of
existing products and the introduction of new products. There  is
no   assurance,  however,  that  these  efforts  will  result  in
profitable  operations  or  in  the  Company's  ability  to  meet
obligations when due. The financial statements do not include any
adjustments relating to the recoverability and classification  of
recorded  asset  amounts  or  the amount  and  classification  of
liabilities that might be necessary should the Company be  unable
to continue as a going concern.

Software Revenue and Cost Recognition - Revenue from
licenses of the e-automate system is recognized when delivery  is
complete,  when no significant obligations remain unfulfilled  by
the  Company  under  the terms of the license contract  and  when
collection  of  any  remaining receivable is  probable.  Payments
collected  prior to recognition are accounted for as a liability,
"deferred   revenue."   Until  approximately  August  15,   2000,
licenses  of the e-automate system provided for a return  of  the
software by the customer through the completion of implementation
and data conversion--typically 30 or 60 days from the date of the
license.  Accordingly, an allowance for returns was provided  and
included  in  the  deferred revenue liability  until  the  return
privilege  expired.  Subsequently, the Company  has  changed  its
policy  to generally not allow for return of the software.  Costs
related  to  software licenses are not material due  to  charging
software  research and development costs to expense as  incurred.
Revenue  from implementation and data conversion are included  in
revenue from services.

/7/

Revenue from services, including software implementation,
data  conversion, training and consulting, are recognized as  the
services  are performed during the implementation phase  and  are
non-refundable.  Service  revenues  from  post-contract  customer
support  contracts and software upgrade contracts are  recognized
ratably  over  the  period of the related  contracts,  which  are
generally 12 months.

Basic and Diluted Loss Per Share - Basic loss per common
share  is  computed  by  dividing net loss applicable  to  common
shareholders  by  the number of common shares outstanding  during
the  period. Diluted loss per share is calculated to give  effect
to  potentially issuable common shares except during loss periods
when those potentially issuable common shares would decrease  the
loss  per  share.   There were 3,291,876 and 965,943  potentially
issuable  common shares which were excluded from the  calculation
of  diluted  loss  per  common share for the  nine  months  ended
December 31, 2000 and 1999, respectively.

NOTE 2 - CASH FLOW INFORMATION

Supplemental Cash Flow Information - During the nine months
ended  December  31, 2000 and 1999 the Company paid  $26,900  and
$22,437 for interest, respectively.

Noncash Investing and Financing Activities - On July 14 the
Company  issued 50,000 common shares for the purchase of software
for sale or lease valued at $150,000.  On September 13, 2000, the
Company  issued  40,000  common shares  valued  at  $120,000  and
$200,000 cash in the acquisition of the FasTrak business  segment
of  Core  Software,  Inc.   The  total  amount  of  $320,000  was
allocated  to the fair value of the assets acquired  as  follows:
$15,601  to  accounts receivable, and $304,399 to  the  purchased
customer list.

During the nine months ended December 31, 2000, the Company
issued 23,815 common shares upon receipt of marketable securities
with  a fair value of $68,945.  The Company issued 629 shares  of
Preferred  Series  B stock upon conversion of $168,000  in  notes
payable, $272,733 in related party notes payable, $169,915  in  a
revolving  credit note payable with a related party, and  $18,335
in  expenses.  The Company entered into capital lease  agreements
for $49,409 for the lease of office and computer equipment with a
capitalized value of $49,409.

NOTE 3 - OTHER ASSETS

Purchased Software for Internal Use - The Company has
recorded  purchased software for internal use as an other  asset.
The  licenses  are  amortized over  a  five-year  period  by  the
straight-line  method. Amortization expense for the  nine  months
ended   December  31,  2000  and  1999  was  $1,776   and   $901,
respectively.

FasTrak Purchase - On September 13, 2000, e-automate
purchased  the  FasTrak business segment of Core  Software,  Inc.
("Core")  in  exchange  for cash in the amount  of  $200,000  and
40,000  common shares valued at $120,000 or $3.00 per share.   On
the  purchase  date,  all  sales, marketing  and  development  of
FasTrak software ceased.  The Company agreed to continue customer
support  for FasTrak software for a period of one year  from  the
date  of acquisition.  Accordingly, the Company hired one support
representative from Core with a salary of $32,000 per  year.   No
other  revenues  or  expenses related  to  the  FasTrak  business
segment continued after the purchase date.  The substance of  the
transaction was to discontinue the operations of a competitor and
acquire  their  customer  list  of  approximately  200  potential
customers,  for  marketing  purposes.  The  acquisition  of   the
customer  list  does not assure the Company that  any  of  Core's
customers  will  convert  from  Core's  FasTrak  software  to  e-
automate's software, as this is a complex transition, with  other
software providers competing in the same niche.

/8/

The  acquisition was accounted for as a purchase.   The  purchase
price  of $320,000 was allocated to the fair value of the  assets
acquired  as  follows:   $15,601  to  accounts  receivable,   and
$304,399  to the purchased customer list.  The purchased customer
list  is being amortized over two years.

Unaudited pro forma financial information presenting the  results
of  continuing  operations  excludes all  of  the  operations  of
FasTrak  as  they  were  discontinued  and  includes  pro   forma
adjustments  for the amortization of the purchased customer  list
and  the  support  employee's salary.  Assuming  the  acquisition
occurred  April 1, 2000 and 1999, pro forma results of operations
for  the  nine months ended December 31, 2000 and the year  ended
March  31,  2000  reflect loss from continuing  operations  of
$4,726,415  and  $3,480,791, respectively, and basic and diluted
loss per common share of $1.23 and $0.77, respectively. Pro forma
results are presented for comparative purposes only and do not
purport to be indicative of future results or what would have
occurred had the acquisition occurred at the beginning of the
applicable periods.

Purchased Software for Sale or Lease - On July 14, 2000, the
Company acquired a license to an ad hoc query and reporting tool.
To  acquire  these  assets, the Company issued 50,000  shares  of
common  stock,  valued at $150,000, or $3.00 per  share,  to  the
owners  of  ActiveViews Acquisition Corporation (which  held  the
user  license  as its sole asset). To purchase the  license,  the
Company  formed  a  new  joint venture subsidiary  called  Active
Views,  Inc.  (AVI).   The Company owns 100% of  the  outstanding
common  shares in AVI, representing a 75% voting interest in  the
joint venture subsidiary.  The Company has also committed to fund
$1,200,000 of the operations of AVI.  The developers of the  tool
own  2.5  million convertible preferred shares of AVI, which  are
convertible  into common stock of the subsidiary, representing  a
25%  voting interest in the subsidiary.  The source code and  the
minority interest are valued at their historical cost of zero  on
the  books of AVI and consolidated herein.  The Company accounted
for the acquisition as the purchase of software for sale or lease
in  the amount of $150,000 and is amortizing the software over  a
three-year period on a straight-line basis.

NOTE 4 - RELATED PARTY NOTES PAYABLE

During the nine months ended December 31, 2000, the Company
made  payments  of  $30,000  on a  note  payable  to  an  officer
resulting in a balance of $20,000 at December 31, 2000.

On October 27, 2000, an officer and director advanced $107,000 to
the  Company to meet current operating expenses.  Also on October
27,  2000,  an  officer advanced $50,000 to the Company  to  meet
current  operating expenses.  The loans bear interest at 12%  and
are due on demand.

Subsequent  to December 31, 2000, a company related to e-automate
by  virtue of a common director advanced the Company $212,813  in
exchange for a demand note payable bearing interest at 15%.

NOTE 5 - NOTES PAYABLE

At March 31, 2000 the Company had a note payable of
$168,000,  bearing interest at 22%, due at various dates  through
March  31,  2001,  secured  by the assets  of  the  Company.  The
principal  balance  of the note payable was  converted  into  168
shares of Series B convertible preferred stock on June 19, 2000.

On December 7, 2000, the Company borrowed $540,000, net of
$60,000  loan  costs, by issuing a $600,000 note payable  bearing
interest  at  40%,  due  June 7, 2001,  and  60,000  warrants  to
purchase common shares at $3.00 per share and 40,000 warrants  to
purchase  common  shares at $5.00 per share.   The  warrants  are
exercisable immediately and expire January 1, 2004.  The proceeds
from issuance of the note and warrants were allocated between the
note payable and the warrants based on the relative fair value of
each  underlying  instrument on the date of issuance.   The  fair
values of the warrants of $89,396 and $53,959, respectively, were

/9/

determined  based on the Black-Scholes option pricing model  with
the  following  assumptions: risk-free interest  rate  of  6.08%,
expected  dividend yield of 0%, estimated volatility of 125%  and
expected  life  of  three  years. The total  fair  value  of  the
warrants  was  recorded as additional paid-in capital.  The  note
was  allocated  $396,645 of the proceeds,  which  resulted  in  a
discount  to  the  note of  $203,355. At  December  31, 2000  the
unamortized discount was $169,463. The discount on the  note  and
the  loan  costs are being amortized to interest expense  through
June  7, 2001, and  result in an  effective interest  rate of 163
percent.  The note is secured by the personal assets of a director
and 300,000 common shares which have not yet been issued.

On January 30, 2001, the Company borrowed $200,000 by
issuing  a note payable bearing interest at Zions First  National
Bank's  Prime  Rate (9% on the loan date) plus 2%,  with  accrued
interest  due  quarterly beginning April 30, 2001. The  principal
balance  is  due  February 5, 2002. The note is  secured  by  the
personal assets of a director.

On February 1, 2001, the Company borrowed $250,000 by
issuing  a  demand  note  payable  bearing  interest  at   10.5%.
Principal and accrued interest is due February 1, 2002.  The note
is secured by the personal assets of a director.

During  February 2001, the Company executed a note payable  to  a
professional  service  firm which provided  for  a  reduction  of
accounts  payable  in the amount of $148,457.   The  non-interest
bearing note requires monthly payments of $12,371 through January
2002 and is secured by the Company's property and equipment.   In
the event of failure to make a required monthly payment, the note
will bear interest at 2% per month until payments are current.

NOTE 6 - OBLIGATION UNDER CAPITAL AND OPERATING LEASES

On  May  14  and  August  14,  2000,  respectively,  the  Company
terminated  its  prior office space leases and entered  into  two
five-year  lease  agreements for its  main  offices.   The  total
monthly  cost  of  the  new  leases is  $20,655,  with  a  yearly
escalation  allowance  of 3%. On October  8,  2000,  the  Company
entered  into a lease agreement for an office in Houston,  Texas.
The lease terms are month-to-month with a monthly rental of $525.

NOTE 7 - REDEEMABLE PREFERRED STOCK

Series A Convertible Preferred Stock - On June 19, 2000, the
Board of Directors authorized 5,500 shares of preferred stock  as
Series   2000-A  convertible  preferred  stock  (the  "Series   A
Convertible  Stock")  with a $0.001 par value  per  share  and  a
stated value of $1,000 per share. The Series A Convertible  Stock
shareholder  is  entitled to the number of  votes  equal  to  the
number  of  shares  of  common stock  into  which  the  Series  A
Convertible Stock is convertible.

Securities Purchase Agreement - During the period from June 19,
2000   through  October  17,  2000,  the  Company  executed  five
securities  purchase agreements (the "Purchase Agreements")  with
Aspen   Capital  Resources,  L.L.C.  (the  "Purchaser"   or   the
"Holder"), and issued 2,083 shares of Series A Convertible  Stock
for  $2,083,000, before a 10% placement fee to the Purchaser, and
issued  warrants  for the purchase of 416,600  common  shares  as
explained below.  The Purchase Agreements initially provided  for
the  issuance of 5,000 shares of Series A Convertible  Stock,  at
the  rate  of  500 shares per month, with 1,000,000 warrants  for
cash  in  the  amount of $4,500,000.  Because  of  the  Company's
default  on  the  terms of the Purchase Agreements  as  explained
below,  the Purchaser suspended funding on October 17, 2000,  and
provided only a partial funding for the month of October 2000.

Allocation of Proceeds- Between June 19 and October 17, 2000, the
Company issued a total of 2,083  shares of Series  A  Convertible
Stock in  exchange for net proceeds of $1,874,700 after placement
fees  of  $208,300  to  the  Purchaser.  The  net  proceeds  less
amortization of deferred offering costs of $341,331 were allocated
between the Series A Convertible Stock and the warrants based  on
the  relative  fair  value  of those  instruments  with  $491,403
allocated to the warrants and $1,041,966  allocated to the Series
A Convertible Stock. The fair value of the warrants was determined
based on the Black-Scholes option pricing model with the following
assumptions:  risk-free interest rate of 6.56%, expected dividend
yield of  0%,  estimated volatility of 125% expected life of four
years.   The  resulting  $1,041,034  discount  on  the  Series  A
Convertible Stock was recognized as preferred  dividends.

Events of Noncompliance - Under the Purchase Agreements, an
event  of noncompliance  would occur if (i) the Company fails  to
pay  on  any  dividend payment date the full amount of  dividends

/10/

then  accrued,  (ii)  the Company fails to  make  any  redemption
payment  which  it  is required to make, (iii)  any  registration
statement  required  to  be  filed by the  Company  and  declared
effective  by the Securities and Exchange Commission pursuant  to
the  Purchase Agreement shall not become effective by October 17,
2000  or  shall cease to be effective, or (iv) after October  17,
2000  the common stock is suspended from trading on or the  price
for  the  common stock is not quoted or reported  on  the  NASDAQ
Stock  Market  System  or  the NASD OTC Bulletin  Board,  or  (v)
another event of non-compliance as defined in the Certificate  of
Designation for the Series-A Convertible Stock.

Default - Effective October 17, 2000 (date of default), the
Company  defaulted on the provisions of the Purchase  Agreements,
in  that  the  Company  did  not have an  effective  registration
statement  on  that  date, and since the  trading  price  of  the
Company's  common stock was not quoted or reported on the  NASDAQ
Stock Market System or the NASD OTC Bulletin Board.  As a result,
the  dividend  rate on the stated value of Series  A  Convertible
Stock  outstanding of $2,083,000 as of October 17, 2000 increased
from  8%  to  21% per year and the Company is required  to  issue
64,804  common  shares per month, which is 7% of  the  number  of
common shares the Series-A Convertible Stock is convertible  into
at $2.25 per share, as additional consideration for the preferred
shares.

Mandatory Redemption - During January 2001, the Holder
exercised its option to require the Company to redeem all of  the
outstanding shares of Series A Convertible Stock at 125% of their
stated  value,  or  totaling $2,603,750, $1,250  per  share  (the
Redemption Price).

Temporary Suspension of Terms - Subsequent to December 31,  2000,
the   Company  has  negotiated  a  Redemption  Agreement,   which
effectively suspends the terms of the Purchase Agreement  through
May  1, 2001.  The terms of the Redemption Agreement include  the
opportunity  for the Company to redeem all outstanding  Series  A
Convertible Stock at their face value of $1,000 per share  for  a
cash  payment of $2,083,000 plus the issuance of 200,000 warrants
to   purchase  common  stock  at  $1.00  per  share,  exercisable
immediately,  and  expiring 48 months following  commencement  of
public  trading  of the Company's common stock.  If  the  Company
complies with the terms of the Redemption Agreement, all terms of
the  Purchase  Agreement  shall  be  considered satisfied and the
original warrants issued will be canceled. However, if the Company
does  not  comply with the terms of the Redemption Agreement, all
terms and conditions of the Purchase Agreement shall be  restored
as if there were no suspension.

As  a  result of receiving the mandatory redemption notice  (even
though  the Redemption Agreement may result in a reduced cost  if
the  Company is able to comply with its terms),  the Company  has
increased the recorded value of the Series A Convertible Stock to
the  Redemption  Price of  $2,603,750, with a charge of  $520,750
to   preferred  dividends.   In  addition,  the  Company  accrued
dividends at the rate of 21% per year on the stated value of  the
Series  A  Convertible Stock from October 17, 2000, as  preferred
dividends in the amount of $99,243 during the three months  ended
December 31, 2000.  Accrued  unpaid  dividends  on  the  Series A
Convertible Stock  at  December 31, 2000 total $123,645  and  are
included  in   accrued   liabilities.  The  Company  has  accrued
preferred  dividends  of $194,412 per month for the 7% additional
consideration payable with common shares. During the three months
ended  December  31, 2000,  the  Company  recognized  $583,236 in
preferred  dividends  payable  with common shares which amount is
included in additional paid-in capital.

Conversion  - The Series A Convertible Stock is convertible  into
common  stock  at 80% of the average of the three  lowest  quoted
closing  bid  prices  during the 15 trading  days  preceding  the
conversion date, originally subject to a maximum conversion price
of $5.75 per share.  Following the failure of the Company to make
the  mandatory  redemption payment, the minimum conversion  price
was  reduced  to  $2.25.  The reduction of the  conversion  price
below   the  fair  value  of  the  underlying  conversion  shares
constitutes  a  beneficial  conversion  feature  of   $0.75   per
conversion  share.  Accordingly, the  Company  will  recognize  a
preferred  dividend during January 2001 of $694,334 with  respect
to this feature.

/11/

Warrants  -  The  warrants issued in the Purchase Agreements  are
exercisable  at an initial price of $5.00 per share  through  May
31,  2004. If the market value of the common stock  is less  than
$5.00  per share at anytime during the first six months for which
the Company's common stock is quoted, the exercise price will  be
$4.00 per share.

In  connection  with  the issuance of the  Series  A  Convertible
Stock,  additional warrants to purchase 500,000 shares of  common
stock  at $5.00 per share were issued as a financing fee and  for
cash  proceeds of $5,000 on June 19, 2000. The fair value of  the
warrants  of  $819,327 was determined based on the  Black-Scholes
option  pricing  model with the following assumptions:  risk-free
interest  rate of 6.56%, expected dividend yield of 0%, estimated
volatility of 125% expected life of two years. The fair value  of
the  warrants  was recorded as deferred offering  costs  and  was
being charged against the proceeds received from each issuance of
Series  A Convertible Stock through October 17, 2000.  Since  the
Purchaser discontinued funding of the Seires A Convertible Stock,
the remaining balance of $477,992 in deferred offering  costs was
charged to operations during the three months ended December  31,
2000.

Adjustment of the Conversion Price - If, after June 19, 2000, the
Company issues or sells any shares of common stock or grants  any
rights or options to purchase common stock or any stock or  other
securities convertible into or exchangeable for common  stock  or
issues  or  sells any convertible securities, and the  value  per
share  for  such common stock is less than the fair market  value
per share, the conversion price of the Series A Convertible Stock
is  reduced  according  to  a formula  defined  in  the  Purchase
Agreements.

NOTE 8 - SERIES B CONVERTIBLE STOCK

In June 2000,  the Board of Directors designated 1,000 shares  of
preferred  stock as Series B preferred stock with  a  $0.001  par
value per share and a stated value of $1,000 per share (Series  B
Convertible   Stock).   Each  outstanding  share  of   Series   B
Convertible Stock is entitled to the number of votes equal to the
number  of  shares of common stock into which it is  convertible.
Cumulative dividends accrue on the Series B Convertible Stock  at
8%  per annum and are payable quarterly.  The holder of Series  B
Convertible Stock, at its option, may elect to receive payment of
dividends in cash or in common stock. Dividends on the  Series  B
Convertible  Stock  are preferential to dividends  on  all  other
series  or  classes  of stock but are junior  in  preference  and
subordinate to dividends on the Series A Convertible Stock.

Each share of Series B Convertible Stock is convertible into  200
common  shares, or at $5.00 per share, upon its issuance.  On  or
after  December 19, 2001, the Company can require  conversion  of
the  Series  B  Convertible Stock, upon a 30-day  notice  to  the
holder.

On  liquidation,  the Series B Convertible Shareholders  will  be
entitled to receive $1,000 per share plus any accrued but  unpaid
dividends. The liquidation preference of the Series B Convertible
Stock  ranks junior to the Series A Convertible Stock but retains
priority as to all other series or classes of stock.

/12/

On  June  19,  2000, the Company issued 629 shares  of  Series  B
Convertible  Stock  upon  the conversion  of  $168,000  in  notes
payable, $442,648 in related party notes payable, and $18,335  in
expense  reimbursements. Cumulative unpaid dividends  of  $27,256
are  included  in  accrued  liabilities  at  December  31,  2000.
Dividend  requirement  for the Series  B  Convertible  Stock  are
$50,319 per year.

NOTE 9 - COMMON STOCK

>From January through December 31, 2000, the Company issued 50,000
shares  valued  at $150,000 or $3.00 per share,  to  one  of  the
Company's  directors as part of an agreement  to  compensate  the
director  for  his  services  according  to  a  12-month  vesting
schedule, or 4,167 shares per month. The services were valued  at
the fair value of the shares issued.

>From  April  to June 2000, the Company issued 203,539  investment
units,  under the terms of the 2000 Placement, for cash  proceeds
of  $610,619  or $3.00 per unit. Included as a part of  the  2000
Placement,  1,363  units were issued in exchange  for  securities
available-for-sale with a value of $4,091, or $3.00 per unit.  In
fulfillment  of subscription agreements under the 1999  Offering,
21,822  units  were  issued in exchange for securities available-
for-sale with a value of $64,854, or $3.00 per unit.

During  June  2000, the Company issued 210,866 units,  under  the
terms of the 2000 Placement, for subscriptions receivable in  the
amount  of $632,600, or $3.00 per unit. All funds related to  the
subscription receivables were received during July 2000. The 2000
Placement was closed June 30, 2000.

During  June  2000,  6,667 common shares were  issued  for  legal
services  with a value of $20,001. The value of these shares  was
based  upon  the value the Company received upon the issuance  of
common  shares  for cash in private placements during  the  weeks
surrounding this issuance.

During  November  2000, the Company issued  2,858  common  shares
under the terms of the November 2000  Placement, for $10,003,  or
$3.50 per unit.

NOTE 10 - STOCK OPTIONS AND WARRANTS

Stock  Options - During the nine months ended December  31,  2000
the Company granted 664,750 incentive stock options, all with  an
exercise price of $3.00 per share under terms of the 1999 Plan.

During  November  2000,  four  employees  exercised  options   to
purchase  a  total of 11,480 common shares for total proceeds  of
$100.

Stock  Purchase  Warrants - Under the terms of the  1999  private
placement  offering, the Company issued 239,835 Class A  warrants
and  239,835  Class  B warrants in connection  with  the  479,669
shares  of common stock issued under that offering. Additionally,
the  Company  issued 40,000 Class A warrants and 40,000  Class  B
warrants  in  conjunction with the 80,000 shares of common  stock
issued  under a private placement offering. Each Class A  warrant
is  convertible at $3.50 per share through February 28, 2001, and
each  Class  B warrant is convertible at $4.50 per share  through
February  28, 2001. The Company issued 657,102 Class  C  warrants
along with 657,102 shares of common stock under the terms of  the
2000  private  placement  offering.  Each  Class  C  warrant   is
convertible  into  one common share at $5.50  per  share  through
August 31, 2001.

/13/

Under  the  terms  of the November 2000 placement  offering,  the
Company  issued  2,858 Class D warrants in  connection  with  the
2,858  shares  of common stock issued under that offering.   Each
Class  D  warrant is convertible into common shares at $6.00  per
share through March 31, 2002.

During December 2000 , the Company issued 60,000 Class F warrants
to  purchase common shares at $3.00 per share and 40,000 warrants
to  purchase common shares at $5.00 per share in connection  with
the  issuance  of a note payable as described  in  Note  5.   The
warrants expire January 1, 2004.

In  January 2001, the Company issued 917,939 Class F Warrants  to
various creditors.

/14/

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

GENERAL

Management's Discussion and Analysis of Financial Condition and Results of
Operations and other parts of this Quarterly Report contain forward-looking
statements that involve risks and uncertainties.  All forward-looking
statements are based on information available to management on the date
hereof, and management assumes no obligation to update any such forward-looking
statements. E-automate's actual results may differ materially from the results
discussed in such  forward-looking statements as a result of a number of
factors. Readers should carefully review the risk factors described in other
documents that the E-automate files from time to time with the Commission,
including the Annual Report on Form 10-KSB and the Quarterly Reports on Form
10-QSB.

INTRODUCTION

e-automate Corporation began operations in September 1995 and has developed
and markets a sophisticated, highly scalable Enterprise Resource Planning (ERP)
business management software system designed to meet the needs of small
businesses in a number of targeted vertical market segments. e-automate
provides true Microsoft Windows(r) functionality; an intuitive, easy-to-use
interface; task automation, and many other desirable innovations that
streamline business operations and enable companies to run more efficiently,
effectively and profitably.

RESULTS OF OPERATIONS

Comparison of three months ended December 31, 2000, and 1999.

GROSS REVENUE

For the quarter ended December 31, 2000, our total gross revenue was $282,068
compared to $48,582 for the quarter ended December 31, 1999, an increase of
$233,486 or 481%.  The increase can be attributed to increased sales efforts
in our market niche and additional sales staff.  E-automate also began
actively marketing e-automate to companies using the discontinued Fastrak
product from Core Systems, Inc. from whom, e-automate purchased their
customer list as discussed in Note 5 to the financial statements. During
the three months ended December 31, 2000, sales to former users of FasTrak
accounted for approximately 20% of total revenues.  E-automate has also
received a very positive market response to its' version 3.0 release of
e-automate.

GROSS PROFIT

Our cost of revenues related to software licenses revenue includes the cost of
manuals and product documentation, production media used to deliver our
products, and packaging costs. Our cost of revenue related to services includes
customer support, implementation and training personnel salaries and related
departmental expenses.

We experienced a gross profit for the quarter ended December 31, 2000, of
$4,810 compared to a gross loss of $86,935 for the quarter ended December 31,
1999.  In November 2000, e-automate completed work on a tool that automates
the conversion of data for customers previously using the FasTrak

/15/

product in a simple, low cost and efficient process.  The automation has
reduced the cost of implementation and therefore decreased the gross loss
of e-automate.  Future plans project the gross profit margin to increase
as we continue to refine our implementation processes by developing and
utilizing automated implementation tools.  In November 2000, Thom Pronk
was promoted to Vice President of Services and given the assignment to
reduce the cost of implementation and improve gross profit.

OPERATING EXPENSES

Our operating expenses are classified as research and development, sales and
marketing, and general and administrative.  All charges to these operating
expense categories are based on the nature of the expenditures. Although
each category includes expenses that are unique to the category type, there are
common recurring expenditures that are typically included in all operating
expense categories, including salaries, employee benefits, travel costs,
professional fees, and telephone.

The sales and marketing category of operating expenses includes additional
expenditures specific to the sales group, such as commissions, and expenditures
specific to the marketing group, including public relations and advertising,
trade shows and marketing collateral materials.  To achieve profitability,
we will have to continue to significantly increase our total revenues and
reduce our cost of revenues.

In the development of enhancements of existing products, the technological
feasibility of the software is not considered established until substantially
all product development is complete. Historically, software development costs
eligible for capitalization have been insignificant, and are expensed as
incurred.

We anticipate that our operating expenses will remain relatively flat over the
next two fiscal quarters.  However, we intend to continue to incur higher
research and development costs than our competitors in our current market niche
in order to maintain product superiority.  We will incur these costs in the
production of additional automated implementation processes, product
enhancements, and automated tasks.  We also intend to invest additional
resources in the expansion of our sales and support organizations to build an
infrastructure to support our long-term growth strategy.

In order to achieve a more rapid path to profitability, yet sustain our current
growth, we reduced our workforce by 21 employees on November 3, 2000. Overall
quarterly employee related costs are expected to decrease by approximately
$270,000 per quarter beginning in the fourth fiscal quarter of 2000.  Savings
of approximately $56,000 were achieved for December 2000.  As of December 31,
2000 we have 65 full-time and 2 part-time employees.

The following paragraphs give a comparison of the three-month periods ending
December 31, 2000 and 1999.  However, in view of our limited operating history,
we believe that period-to-period comparisons of revenues and operating expenses
are not necessarily meaningful and should not be relied upon as indicative of
future performance.  Our prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in early stages
of development, particularly companies in new and rapidly evolving markets.

/16/

Total operating expenses increased, from the quarter ended December 31, 1999,
to the quarter ended December 31, 2000, a total of $1,209,017 from $814,240
to $2,023,257.  Operating expenses for the quarter ended December 31, 2000
include the one-time charge for deferred offering costs of $477,992.
Excluding this amount, total operating expenses increased $731,025.  The
following paragraphs detail other specific changes in operating expenses.

General and administrative expenses for the quarter ending December 31, 2000,
were $603,341 compared to $235,086 for the same quarter of the previous year,
an increase of $368,255.  The reason for the increase in general and
administrative expenses is due to a fully staffed management team, increased
rent and other general increases associated with a growing business. The
management team was reduced by three employees during the reduction in force.
Other expenses are being carefully reviewed by management to determine where
cost savings can be achieved.

Research and development expenses increased a total of $333,010 from a
December 31, 1999, total of $257,440 to the current quarter total of $590,450.
The increase in research and development expenditures is largely due to the
expansion of our development and quality assurance staff.  These increases in
employees are enabling e-automate to develop its product to handle expansion
into other market niches as well as handle larger customers.  Continued
research and development expenses are required for additional revenue
generating products and cost saving implementation tools.

Selling and marketing expenses for the quarter ending December 31, 1999, were
$321,714 and increased for the period ending December 31, 2000, to $351,474.
The increase of $29,760 represents an increased effort in marketing our
software package through attendance at various tradeshows as well as increased
headcount in the sales department.  During the reduction in force, the
marketing staff was reduced by seven, including five tele-marketers considered
by management as largely unproductive.

NET LOSS

e-automate's net loss for the quarter ending December 31, 2000, was
$2,079,129, an increase of $1,165,598, compared to the loss for the
quarter ended December 31, 1999, of $913,531.

LOSS APPLICABLE TO COMMON SHARES

e-automate's loss applicable to common shares of $4,336,530 for the quarter
ending December 31, 2000, reflects a charge of $2,257,401 to preferred
dividends.  Preferred dividends for the quarter ended December 31, 2000
increased over prior quarters due to e-automate's default on the provisions
of the Series A Convertible Stock purchase agreement and the related redemption
notice as discussed in Note 7 of the financial statements.  Similar charges,
excluding the one-time charges totaling $1,561,784 to preferred dividends to
write-up the recorded value of the Series A Convertible Stock to its'
mandatorily redeemable value, will continue to be incurred unless e-automate
is able to secure a long-term funding package and take advantage of the
Redemption Agreement as discussed in Note 7 to the financial statements.

In order to take advantage of the Redemption Agreement, e-automate must
pay Aspen Capital $2,083,000 on or before May 1, 2001 and issue 200,000
warrants to purchase e-automate's common shares at an an exercise price
of $1.00, exerciseable immediately and expiring 48 months following

/17/

commencement of public trading of e-automate's common stock.  Complying with
the provisions of the redemption agreement will reduce e-automate's future
losses attributable to common shares by an estimated $693,000 per quarter
and enable e-automate to save approximately $521,000 in the redemption price
of the Series A Convertible Stock.

RESULTS OF OPERATIONS

Comparison of nine months ended December 31, 2000, and 1999.

GROSS REVENUE

For the nine months ended December 31, 2000, gross revenue was
$688,057 compared to $188,623 for the same period of 1999, an increase of
$499,434 or 265%.  The increase can be attributed to increased sales efforts
in our market niche and additional sales staff.  E-automate also began
actively marketing e-automate to companies using the Fastrak product from
Core Systems, Inc. from whom, e-automate purchased their customer list as
discussed in Note 5 to the financial statements.

GROSS PROFIT

We experienced a gross profit for the nine months ended December 31, 2000, of
$48,432 compared to a gross loss of $217,907 for the nine months ended
December 31, 1999.  The increase can be attributed to an improved, more
user-friendly product which is less difficult to implement and to improved
management of e-automate's services department.  As discussed above, in
November 2000, e-automate completed work on a tool that automates the
conversion of data from customers previously using the FasTrak product
in a simple, low cost and efficient process.  The automation has reduced
the cost of implementation and therefore decreased the gross loss of
e-automate.  Future plans project the gross profit margin to increase as we
continue to refine our implementation processes and develop automated
implementation tools.

OPERATING EXPENSES

The following paragraphs give a comparison of the nine-month periods ending
December 31, 2000, and 1999.  Total operating expenses increased period over
period $2,673,342 from $1,928,179 to $4,600,521.  Operating expenses for
the recent period include the write-off of deferred redeemable preferred
stock offering costs of $477,992.  Excluding this amount, total operating
expenses for the recent period would have been $4,412,529, an increase over
the prior period of $2,195,350.  The following paragraphs detail other
specific changes in operating expenses.

General and administrative expenses for the nine months ending December
31, 2000, were $1,691,461 compared to $834,020 for the same period of the
previous year, an increase of $857,441.  The reason for the increase in
general and administrative expenses is due to having a fully staffed
management team during the recent period, increased rent and other general
increases associated with a growing business.  The management team was
reduced by three employees during the reduction in force.  Other expenses
are being carefully reviewed by management to determine where cost savings
can be achieved.

Research and development expenses increased a total of $961,915 from the
nine months ended December 31, 1999 total of $555,535 to the current period

/18/

total of $1,517,450.  The increase in research and development expenditures
is largely due to the expansion of our development and quality assurance staff.
The increase in employees are enabling e-automate to develop its product to
handle expansion into other market niches as well as handle larger customers.
Continued research and development expenses are required for additional revenue
generating products and cost saving implementation tools.

Selling and marketing expenses for the nine months ending December 31, 1999,
were $538,624 and increased for the period ending December 31, 2000, to
$913,618. The increase of $374,994 represents an increased effort in marketing
our software package through attendance at various tradeshows as well as
increased headcount in the sales and marketing departments.  During the
reduction in force, the marketing staff was reduced by seven, including five
tele-marketers.

NET LOSS

e-automate's net loss for the nine months ended December 31, 2000, was
$4,647,015, an increase of $2,436,734, when compared to the loss for the
nine months ended December 31, 1999, of $2,210,281.

LOSS APPLICABLE TO COMMON SHARES

See discussion above under "RESULTS OF OPERATIONS", "Comparison of three months
ended December 31, 2000, and 1999."

LIQUIDITY AND CAPITAL RESOURCES

We are currently unable to finance our operations from operating activities,
and historically have relied on proceeds from loans, issuance of equity
instruments through private placements.  In the short-term, we expect to
continue to finance our operations through these sources as well as increased
cash flow from operations.

At December 31, 2000, we had current assets of $222,901 and current liabilities
of $4,685,681 resulting in negative working capital of $4,462,780.  If
e-automate can take advantage of the provisions of the Redemption Agreement,
the negative working capital can be effectively reduced by $520,750 to
$3,942,030.  Management believes that in order for e-automate to continue as a
going concern and capitalize on its market opportunity, they and the members of
the board of directors will need to raise additional capital.  Further, until
e-automate is able to secure long-term financing, it will continue to incur
the higher costs of short-term financing.  Management intends to raise the
additional short-term funds needed through private placements of equity
instruments, loans in the form of notes payable or debenture bonds and
extensions from our creditors.  e-automate management and board of directors
are targeting conventional financing instruments to secure long-term financing.

Our total liabilities as of December 31, 2000, were $4,751,460, an increase of
$3,553,680 when compared to total liabilities of $1,197,780 as of March 31,
2000.

INFLATION

We do not expect the impact of inflation on operations to be significant.

/19/

YEAR 2000

We had developed plans to address the possible exposures related to the impact
on our computer systems for the Year 2000.  Since entering the Year 2000, we
have not experienced any major disruptions to our business, nor are we aware of
any significant Year 2000 related disruptions impacting our customers and
suppliers.  Furthermore, we did not experience any material impact on business
at calendar year end.  We will continue to monitor our critical systems over
the next several months but do not anticipate any significant impacts due to
Year 2000 exposures from our internal systems as well as from the activities of
our suppliers and customers.

FORWARD LOOKING STATEMENTS.

When used in this 10QSB and in other filings by e-automate with the Securities
and Exchange Commission ("SEC"), in our press releases or in other public or
stockholder communications or oral statements made with the approval of any of
our authorized executive officers, the words or phrases "would be," "will
allow," "intends to," "believes," "plans," "will likely result," "are expected
to," "will continue," "is anticipated," "estimate," "project," or similar
expressions are intended to identify "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.  These
statements are based on our beliefs and the assumptions we made using
information currently available to us.  We caution readers not to place undue
reliance on any forward-looking statements, which speak only as of the date
made, are based on certain assumptions and expectations which may or may not be
valid or actually occur, and which involve risks of product demand, market
acceptance, economic conditions, competitive products and pricing, difficulties
in product development, commercialization, and technology, and other risks.  In
addition, sales and other revenues may not commence and/or continue as
anticipated due to delays or otherwise.  As a result, our actual results for
future periods could differ materially from those anticipated or projected.

We do not intend to update the forward looking statements contained in this
report, except as may occur as part of our ongoing periodic reports filed with
the Securities and Exchange Commission.


                        PART II - OTHER INFORMATION

Item 2. Changes in Securities.

(c) Recent Sales of Unregistered Securities

1. In November 2000, the Company issued 2,858 shares of its' common stock and
   2,858 warrants to purchase shares of e-automate's common stock at $6.00 per
   share to the Thomas and Susan Richards Trust at a price of $3.50 per share
   or total proceeds of $10,003. The shares were issued in reliance upon
   Section 4(2) of the Securities Act of 1933, as amended and Rule 504 of
   Regulation D promulgated thereunder. The Company believes that Thomas and
   Susan Richards Trust are an accredited investor.

2. In November 2000, four employees exercised options to purchase a total of
   11,480 common shares for total proceeds of $100.  The shares were issued
   in accordance with the terms of e-automate's 1999 Employee Incentive Stock
   Option Plan.

/20/

Item 3. Defaults Upon Senior Securities.

(a) Default - Effective October 17, 2000 (date of default), the
Company  defaulted on the provisions of the Purchase  Agreements,
in  that  the  Company  did  not have an  effective  registration
statement  on  that  date, and since the  trading  price  of  the
Company's  common stock was not quoted or reported on the  NASDAQ
Stock Market System or the NASD OTC Bulletin Board.  As a result,
the  dividend  rate on the stated value of Series  A  Convertible
Stock  outstanding of $2,083,000 as of October 17, 2000 increased
from  8%  to  21% per year and the Company is required  to  issue
64,804  common  shares per month, which is 7% of  the  number  of
common shares the Series-A Convertible Stock is convertible  into
at $2.25 per share, as additional consideration for the preferred
shares.

Mandatory Redemption - During January 2001, the Holder
exercised its option to require the Company to redeem all of  the
outstanding shares of Series A Convertible Stock at 125% of their
stated  value,  or  totaling $2,603,750, $1,250  per  share  (the
Redemption Price).

Temporary Suspension of Terms - Subsequent to December 31,  2000,
the   Company  has  negotiated  a  Redemption  Agreement,   which
effectively suspends the terms of the Purchase Agreement  through
May  1, 2001.  The terms of the Redemption Agreement include  the
opportunity  for the Company to redeem all outstanding  Series  A
Convertible Stock at their face value of $1,000 per share  for  a
cash  payment of $2,083,000 plus the issuance of 200,000 warrants
to   purchase  common  stock  at  $1.00  per  share,  exercisable
immediately,  and  expiring 48 months following  commencement  of
public  trading  of the Company's common stock.  If  the  Company
complies with the terms of the Redemption Agreement, all terms of
the  Purchase  Agreement  shall  be  considered satisfied and the
original warrants issued will be canceled. However, if the Company
does  not  comply with the terms of the Redemption Agreement, all
terms and conditions of the Purchase Agreement shall be  restored
as if there were no suspension.

As  a  result of receiving the mandatory redemption notice  (even
though  the Redemption Agreement may result in a reduced cost  if
the  Company is able to comply with its terms),  the Company  has
increased the recorded value of the Series A Convertible Stock to
the  Redemption  Price of  $2,603,750, with a charge of  $520,750
to   preferred  dividends.   In  addition,  the  Company  accrued
dividends at the rate of 21% per year on the stated value of  the
Series  A  Convertible Stock from October 17, 2000, as  preferred
dividends in the amount of $99,243 during the three months  ended
December 31, 2000.  Accrued  unpaid  dividends  on  the  Series A
Convertible Stock  at  December 31, 2000 total $123,645  and  are
included  in   accrued   liabilities.  The  Company  has  accrued
preferred  dividends  of $194,412 per month for the 7% additional
consideration payable with common shares. During the three months
ended  December  31, 2000,  the  Company  recognized  $583,236 in
preferred  dividends  payable  with common shares which amount is
included in additional paid-in capital.

[Also refer to Note 7 in the financial statements.]

/21/

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

(a)	Index to Exhibits

Exhibit
No.     Description of Exhibit
-----  ----------------------
2.    Plan of acquisition, reorganization, arrangement,
        Liquidation, or succession

2.1	Series A Preferred Stock Purchase Agreement, dated August 1, 2000,
        by and between ActiveViews, Inc. a Delaware corporation and the
        Series A Investors, Eric Meyers and Aaron Meyers.(5)
2.2	Reorganization Agreement, dated August 1, 2000, between and among
        e-automate Corporation, a Delaware corporation, and ActiveViews
        Acquisition Corporation, a Utah corporation, Eric Meyers, an
        individual, and Aaron Meyers, an individual, e-automate, AAC,
        Aaron Meyers and Eric Meyers collectively referred to as the "
        Parties" and Aaron Meyers and Eric Meyers collectively referred
        to as the "Shareholders."(5)
2.3	Joint Formation Agreement, dated August 1, 2000, between and among
        e-automate Corporation, a Delaware corporation, and Eric Meyers,
        an individual, and Aaron Meyers, an individual.(5)
2.4   e-automate Stock Purchase Agreement, by and between ActiveViews, Inc.
        a Delaware corporation and e-automate Corporation, a Delaware
        corporation.(5)

3.    Certificate of Incorporation and Bylaws

3.1  	Articles of Incorporation.(1)
3.2  	Bylaws(1)
3.3 	Amendment to Certificate of Incorporation changing name to Aureus
      Corporation.
3.4 	Amendment to Certificate of Incorporation changing name to
      e-automate Corporation.(3)
3.5  	Articles of Incorporation of ActiveViews Acquisition Corporation,
      dated August 1, 2000.(5)
3.6  	Bylaws of ActiveViews Acquisition Corporation.(5)


4.    Instruments Defining Rights of Security Holders

4.1 	Certificate of Designation creating Series 2000-A Convertible
      Preferred Stock, dated as of June 19, 2000. (4)
4.2	Warrant Certificate for Series 2000-A Warrants, dated as of
      June 19, 2000. (4)
4.3	Certificate of Designation creating Series B Convertible Preferred
      stock, dated as of June 19, 2000. dated as of June 19, 2000. dated
      as of June 19, 2000. (4)
4.4	Warrant Certificate for Series 2000-B Warrants, dated as of
      June 19, 2000. (4)

/22/

10.   Material Contracts

10.1 	1992 Stock Option Plan(1)
10.2	Stock Option Agreement with Jehu Hand(1)
10.3	Stock Option Agreement with Eric Anderson(1)
10.4	Stock Option Agreement with Jehu Hand(2)
10.5	1999 Stock Incentive Plan(3)
10.6	Stock Purchase Agreement with Richard Stout, James A. Phillips
      and Alan Fine, dated as of June 19, 2000. (4)
10.7	Loan Agreement with Inside Out Development, LLC. (4)
10.8	Securities Purchase Agreement with James K. Phillips, dated as of
      June 19, 2000. (4)
10.9	Securities Purchase Agreement with Alan Fine, dated as of
      June 19, 2000.  (4)
10.10	Securities Purchase Agreement with Lee Monson, dated as of
      June 19, 2000. (4)
10.11 Purchase Agreement between Registrant and Aspen Capital
      Resources, LLC, dated as of June 19, 2000. (4)
10.12 Asset Purchase and Sale Agreement, dated as of
      September 13, 2000. (6)
10.13 Series A Convertible Stock Redemption Agreement, dated
      as of January 8, 2001.*

_____________________________

(1) Incorporated by reference to the same numbered exhibits as filed with
    e-automate's registration statement on Form 10-SB, File No. 0-24380.
(2) Incorporated by reference by e-automate's 1996 Annual Report on Form
    10-KSB.
(3) Incorporated by reference to e-automate's quarterly report on Form
    10-QSB, filed December 2, 1999.
(4) Incorporated by reference to e-automate's 2000 Annual Report filed
    on Form 10-KSB, dated June 30, 2000.
(5) Incorporated by reference to e-automate's quarterly report on Form 10-QSB,
    filed August 15, 2000.
(6) Incorporated by reference to e-automate's quarterly report on Form 10-QSB/A,
    filed November 21, 2000.
_____________________________
*    Filed herewith.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the reporting quarter.

/23/

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

      e-automate Corporation


      /s/ Lon D. Price
      _______________________
      Lon D. Price
      Chief Executive Officer
      Date: February 20, 2001



      /s/ Greg L. Popp
      _______________________
      Greg L. Popp
      Chief Financial Officer
      Date: February 20, 2001

/24/