SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________

FORM 10-Q

(Mark One)

(X)    QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2001

OR

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

For the transition period from _______________ to _______________

Commission file number: 0-30467



|INTACTA TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)                    
|----------------------------------------------------------------------------------------------------
|Nevada
(State or other jurisdiction
of incorporation or organization)                               
|945 East Paces Ferry Road N.E. Suite 1445,
Atlanta, Georgia
(Address of principal executive offices)

Registrant's telephone number, including area code: 
 404-880-9919

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirement for the past 90 days.
  YES X    NO___.

As of November 9, 2001, there were 20,345,924 shares of the registrant's common
stock, par value $.0001, outstanding.

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TABLE OF CONTENTS



|PART I - FINANCIAL INFORMATION
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|Item 1.                       
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|Item 2.                       
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|Item 3.                       
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|Item 6.                       
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|Signatures                    

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PART I. - FINANCIAL INFORMATION

Item 1.     CONSOLIDATED
FINANCIAL STATEMENTS

The consolidated financial statements included herein have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. The consolidated balance sheet as of September 30, 2001;
the consolidated statements of operations for the three and nine months ended
September 30, 2001 and September 30, 2000; and the consolidated statements of
cash flows for the nine months ended September 30, 2001 and September 30, 2000
have been prepared without audit. The consolidated balance sheet as of December
31, 2000 has been audited by independent certified public accountants. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures herein are adequate to make the
information presented not misleading. It is suggested that these consolidated
financial statements and related notes be read in conjunction with the
consolidated financial statements and notes thereto, included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2000.

In the opinion of the Company,
the statements for the unaudited interim periods presented included all
adjustments that were were of a normal recurring nature necessary to present a
fair statement of the financial condition and results of operations for such
interim periods. The results of operations for the interim periods presented are
not necessarily indicative of the results of operations for the entire year.

|INTACTA TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
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|Assets                                               
|Current                                              
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|Total current assets                                 
|Property and equipment,net                           
|Patents,net                                          
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See accompanying notes to consolidated financial statements.

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|INTACTA TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
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|Liabilities and Stockholders' Equity                 
|Current liabilities                                  
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|Total current liabilities                            
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|Commitments                                          
|Stockholders' equity                                 
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|Total stockholders' equity                           
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See accompanying notes to consolidated financial statements.

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|INTACTA TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and nine months ended September 30, 2001 and 2000
(Unaudited)
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|Revenues                                                                                                                                   
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|Total revenues                                                                                                                             
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|Operating expenses                                                                                                                         
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|Total operating expenses                                                                                                                   
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|Loss from operations                                                                                                                       
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|Other income (expense)                                                                                                                     
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|Total other income (expense)                                                                                                               
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|Loss before provision for income taxes                                                                                                     
|Provision for income taxes                                                                                                                 
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|Net loss                                                                                                                                   
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|Basic and diluted loss per 
   common share                                                                                                
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|Basic and diluted weighted -
   average common
   shares outstanding                                                                       
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See accompanying notes to consolidated financial statements.

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|INTACTA TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2001 and 2000
(Unaudited)
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|Cash used in operating activities                                                                                                
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|Cash provided by financing activities                                                                                            
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|Net increase (decrease) in cash and cash equivalents                                                                             
|Cash and cash equivalents, beginning of period                                                                                   
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|Cash and cash equivalents, end of period                                                                                         
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|Cash received during the period for interest, net                                                                                
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|Cash paid during the period for income taxes                                                                                     
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See accompanying notes to consolidated financial statements.

6

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INTACTA TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.     Summary of Significant
Accounting Policies

Nature of Operations

Intacta Technologies Inc. (the "Company"), a Nevada corporation, is a
developer and marketer of software products based on its patented technology
that, through its unique combination of compression, encoding and error
correction processes transforms any data format ranging from text, graphic,
audio or video from a binary file into INTACTA.CODETM which is language
transparent and platform independent.  The Company believes that its technology
provides solutions and applications that enable enterprises to bridge their
communications and management information systems across digital and non-digital
media by providing the secure bi-directional transmission and subsequent
recovery and storage of data.

Intacta Labs Ltd., an Israeli corporation and wholly owned subsidiary ("Intacta
Labs"), primarily conducts product research and development in the high tech
area of Beer Sheva, Israel, and is currently conducting new research projects
expected to produce significant time and cost savings from their products
through continued development of a medium for transmitting and storing data in
secure formats.

From late 1997 and through 1998, the Company ceased production and marketing of
its facsimile-based products used for transmitting and storing information, as a
result of changes in the fax market, which resulted in reduced demand for its
fax related products.  The Company altered its strategy to emphasize the
licensing of its core technology rather than the development and sale of
consumer products.

The Company

On May 31, 1998, the Company completed the acquisition of 100% of the
outstanding common stock of Intacta Delaware Inc. ("Intacta"), a Delaware
corporation, and Intacta Labs in exchange for 11,486,000 shares of the Company's
$.0001 par value common stock valued at $1.  The companies agreed that the value
per common stock share contemplated in the agreement approximated the market
trading value at the time of the initial discussions and the signing of the
letter of intent. For accounting purposes, the acquisition has been treated as
an acquisition of the Company by Intacta and Intacta Labs, with the combined
entity of Intacta and Intacta Labs, companies under common control, as the
acquirer (reverse acquisition). As such, in conjunction with the acquisition,
the historical financial statements of the acquirer replaced the historical
financial statements of the Company.

Principles of Consolidation

The accompanying consolidated financial statements for the three and nine months
ended September 30, 2001 and 2000, and the year ended December 31, 2000 include
the accounts of the Company and its wholly owned subsidiaries.  All intercompany
accounts and transactions have been eliminated.

7

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INTACTA TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.     Summary of Significant
Accounting Policies, continued

Use of Estimates

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Software Development Costs

In accordance with Statement of Financial Accounting Standards (SFAS) No. 86,
Accounting for the Costs of Computer Software to Be Sold, Leased, or
Otherwise Marketed, costs related to the research and development of new
products and enhancements to existing products are expensed as incurred until
technological feasibility of the product has been established, at which time
such costs are capitalized, subject to expected recoverability.    Therefore,
the Company has not capitalized any software development costs related to its
products, since the time period between technological feasibility and the
general release of a market accepted product is not significant.

Goodwill and Other Intangible Assets

In June 2001, the Financial Accounting Standards Board finalized FASB Statements
No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and
Other Intangible Assets (SFAS 142).  SFAS 141 requires the use of the
purchase method of accounting and prohibits the use of the pooling-of-interests
method of accounting for business combinations initiated after June 30, 2001.
SFAS 141 also requires that the Company recognize acquired intangible assets
apart from goodwill if the acquired intangible assets meet certain criteria.
SFAS 141 applies to all business combinations initiated after June 30, 2001 and
for purchase business combinations completed on or after July 1, 2001.  It also
requires, upon adoption of SFAS 142, that the Company reclassify the carrying
amounts of intangible assets and goodwill based on the criteria in SFAS 141.

SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually.  In
addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life.  An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142.  SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were
initially recognized.  SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption.  The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142. The adoption of SFAS No. 141
and SFAS No. 142 is not expected to have a material effect on the Company's
financial position, results of operations and cash flows in 2002 and subsequent
years.

Revenue Recognition

The Company's revenue recognition policies are in compliance with generally
accepted accounting principles including Statement of Position (SOP) 97-2,
Software Revenue Recognition.  As such, the Company recognizes product
revenue upon shipment if persuasive evidence of an arrangement exists, delivery
has occurred, the fees are fixed and determinable and collectibility is
probable.  Appropriate reserves were considered to effectively defer revenue
recognition when material amounts of inventory had not been sold through to the
end user.  Generally, the right of return of these

8

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INTACTA TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.     Summary of Significant
Accounting Policies, continued

products was of short duration (90 days).  No provision for
estimated product returns was necessary based on historical experience.
Maintenance and support arrangements and other post-delivery obligations are
insignificant to the Company's revenues.

License revenues are recognized based on actual sales of licensed software by a
customer/licensee and are not recognized by the company as revenue until the
final sale is reported by the customer/licensee.  This is the time at which the
Company believes that revenue recognition in accordance with SOP 97-2, as
described above, has occurred.  Support revenue is not integral to the
functionality of the licensed software and is billed and recognized as
incurred.

The Company recognized substantially all of its consulting fee revenue during
the second quarter of 2000 from certain software development and programming
projects performed on behalf of customers. These projects were started and
completed within the quarter.

The Company believes that it is in compliance with Staff Accounting Bulletin
("SAB") No. 101, Revenue Recognition, which outlines the basic criteria
that must be met to recognize revenue and provides guidance for presentation of
revenue and for disclosure related to revenue recognition policies in financial
statements filed with the SEC.

Loss Per Share

Basic earnings per share is computed by dividing net loss by the
weighted-average number of common shares outstanding during the period. Shares
issued during the period are weighted for the portion of the period that they
were outstanding.  Diluted earnings per share is computed in a manner consistent
with that of basic earnings per share while giving effect to all potentially
dilutive common shares outstanding during the period.  As a result of losses,
all stock options and warrants outstanding for the periods presented were
antidilutive and accordingly, were excluded from the computation of loss per
share.

2.     Going Concern

The accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As shown in the consolidated
financial statements, the Company has a cumulative deficit of $24,945,100
through September 30, 2001, and has incurred losses of $4,551,200, $3,617,600
and $3,145,800 for the years ended December 31, 2000, 1999 and 1998,
respectively and $2,722,700 for the nine months ended September 30, 2001.  These
losses were primarily the result of the decision by the Company in late 1997 to
curtail further production and marketing of its facsimile-based products upon
realization that the market potential for such products was diminished, and by
the significant overhead costs required to support research, development and
marketing efforts for the Company's INTACTA.CODE related technology. These
conditions give rise to substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of assets or the
amount and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.

Through the first half of 2000, the Company's marketing and sales efforts were
reduced and the Company focused its efforts on design revisions to its core
applications without the benefit of significant cash flow from operations. In
the second half of 2000, primarily as a result of additional resources,
marketing efforts increased and, in addition to marketing its technology for
licensing arrangements, the Company focused on the marketing of its suite of
INTACTA.CODE Software Development Kit (SDK) products, which were subsequently
launched in March 2001. This marketing generated increased activity to its web
site and initiated downloads of the offered Trial SDK.  In addition to the
above, at the end of third quarter 2001 the

9

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INTACTA TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Company launched a suite of data communications products
targeted to the health care industry addressing new healthcare information
security regulations; the Health Insurance Portability and Accountability Act of
1996 (HIPAA). There is not yet any significant revenue impact from these product
lines.

As a result of the foregoing, the Company's capital requirements continue to be
significant and it is not
currently generating sufficient revenues from operations to fund its operating
activities.  The Company anticipates incurring continuing losses in the future
as it expands the development and marketing of its software products and
technology.  Based upon current estimates, management believes that
cash and cash equivalents will be sufficient to fund
the Company's operating activities and capital requirements through the end of
its first quarter of 2002.  Unanticipated changes in economic conditions or
other unforeseen circumstances may cause the Company to expend its cash and cash
equivalents in a shorter period of time.

As a result of the above, the Company's continuation as a going concern is
substantially dependent upon its ability to obtain additional financing that
will be required to fund research and development and marketing of its new
products as well as to fund its current operating activities. If significant
revenues materialize and adequate financing is obtained, the Company anticipates
viability for the year 2001 and beyond, though there can be no assurance that
the Company will be successful in these efforts.  At this time the Company does
not have any current arrangements with respect to other potential sources of
additional financing and cannot assure you that additional financing will be
available to it on commercially reasonable terms or at all.

3.  Segment Information

During 1999, the Company adopted SFAS No. 131 "Disclosures about Segments
of an Enterprise and Related Information" which establishes standards for
the way that public business enterprises report information about operating
segments in their financial statements.  The standard defines operating
segments as components of an enterprise about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance.  Based on these standards the Company has determined that it
operates in a single operating segment: the development, marketing and licensing
of software and sale of ancillary components.

Geographic Segments:

The following table represents revenues and other financial information at and
for the periods designated below.  Revenues attributable to geographic areas are
based on the location of the customer.

|                          |                 |                    |                    |                   | September 30, 2001 | December 31, 2000
|------------------------- | --------------- | ------------------ | ------------------ | ----------------- | ------------------ | -----------------
|                          |                 |                    |                    |                   |                    |                  
|Long-lived assets (gross) |                 |                    |                    |                   |                    |                  
|                          | - United States |                    |                    |                   |                    | $                
|                          | - Israel        |                    |                    |                   |                    |                  
|                          |                 |                    |                    |                   |                    |                  
|                          |                 |                    |                    |                   |                    |                  
|                          |                 | Three months ended | Three months ended | Nine months ended | Nine months ended 
|                          |                 | 2001               | 2000               | 2001              | 2000              
|                          |                 |                    |                    |                   |                    |                  
|Revenues                  |                 |                    |                    |                   |                    |                  
|                          | Asia            | $                  | 3,800              | $                 | 4,000              | $                
|                          | Africa/Mid-East |                    | 6,400              |                   | 32,500             |                  
|                          | North America   |                    | 18,400             |                   | 24,400             |                  
|                          |                 |                    |                    |                   |                    |                  
|                          |                 | $                  | 28,600             | $                 | 60,900             | $                
|                          |                 |                    |                    |                   |                    |                  

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4.     Stock Option Plans

The Company at its Annual Meeting in May 2001 voted to increase the reserve of
its common stock for issuance under the 2000 Stock Option Plan to a total of
2,400,000 shares.  During June 2001, the Company granted to employees and
consultants 1,325,000 and 1,003,000 options to purchase its common stock under
its 1998 and 2000 Plans, respectively. These stock options were granted with an
exercise price of $0.75, with vesting over a maximum of three years, and an
expiration of five years.

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

The Private Securities Litigation Reform Act of 1995 provides a
"safe-harbor" for forward-looking statements.  Certain statements
contained in this report that are not historical fact, including, but not
limited to, those concerning our expectations of future sales revenues, gross
profits, research and development, sales and marketing, and administrative
expenses, product introductions and cash requirements are forward-looking
statements. These forward-looking statements are subject to risks and
uncertainties that may cause our actual results to differ from expectations
including variations in the level of orders, general economic conditions in the
markets served by our customers, international economic and political climates,
timing of future product releases, difficulties or delays in product
functionality or performance, our failure to respond adequately to changes in
technology or customer preferences, changes in our pricing or that of our
competitors and our inability to manage growth. All of the above factors
constitute significant risks to our operations. There can be no assurance that
our results of operations will not be adversely affected by one or more of these
factors. As a result, our actual results may vary materially from our
expectations.  The words "believe", "expect",
"anticipate", "intend", and "plan" and similar
expressions identify forward-looking statements.  Readers are cautioned not to
place undue reliance on these forward-looking statements which speak only as of
the date the statement was made.

General

The Company is a developer and marketer of software products based on its
patented technology that, through its unique combination of compression,
encoding and error correction processes, transforms any data format ranging from
text, graphic, audio or video from a binary file into INTACTA.CODETM
which is language transparent and platform independent.  The Company believes
that its technology provides solutions and applications that enable enterprises
to bridge their communications and management information systems across digital
and non-digital media, by providing the secure bi-directional transmission and
subsequent recovery and storage of data.

Intacta was organized in October 1997 to acquire two companies that marketed and
developed two related facsimile storage and retrieval products that incorporated
an early version of our technology.  Development and production of the facsimile
products were performed in Israel by Intacta Labs Ltd., and marketing and
distribution were performed in the United States by Intacta Delaware, Inc.
Intacta acquired the companies in May 1998 in exchange for approximately 70% of
its outstanding capital stock immediately after the acquisition.  The
acquisition was treated, for accounting purposes, as a reverse acquisition.  The
references to "the Company" and "Intacta" refer to the
operation of the acquired entities both before and after the acquisition.

During 1997 and part of 1998 the Company derived substantially all of its
revenues from the sale of facsimile-based products.  Beginning in the latter
part of 1997 and continuing into 1998 the Company began to wind down its
production and active marketing of the facsimile-based products due to reduced
profit margins and anticipated further deterioration of profit margins from
increased competition and costs of marketing the products to the retail market.
At that time, the Company initiated research and development of advanced
products and software applications based on its technology.  The Company also
began, on a very limited basis, licensing its technology for integration with
applications and solutions to end-users.  As a result, revenues declined
substantially from $894,900 for 1997 to $137,800 and $137,400 for each of 1998
and 1999, respectively, and research and development expenses increased
substantially from $343,200 in 1997 to $903,500 in 1998 and $1,047,400 in
1999.

In the middle of 1999, due to competitive pressures and the Company's
re-evaluation of its business model and revenue/cost projections, the Company
determined, except with
respect to certain products that were at or near completion of development, to
forego further development of early stage products based upon its technology and
to focus on direct

11

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marketing of the technology for licensing to large enterprise
and third party solution providers.    The Company's limited financial and other
marketing resources, however, prevented the Company from engaging in a
full-scale marketing campaign for the products that were at or nearing
completion and based upon the current business model and operating strategy the
Company does not intend to devote any significant financial or other resources
at this time to the further development or marketing of these products.

Through the second quarter of 2000, primarily as a result of the limited
financial resources and personnel available for marketing activities, the
Company made limited progress in establishing licensing arrangements for its
technology.  The majority of revenues during this time were generated primarily
from a consulting arrangement and the sale of discontinued hardware products.
Beginning in the second quarter of fiscal 2000, as a result of increased
resources and a shift of personnel to marketing activities, the Company entered
into two licensing arrangements with third party enterprises for its technology.
For the year ended December 31, 2000, licensing revenues accounted for
approximately 12% of the Company's revenues.

In March 2001, the Company launched a suite of INTACTA.CODE Software Development
Kits, or SDK's, making its technology available to software developers for
integration into both existing and new applications requiring features that
provide for the secure transmission and storage of compressed data across
various platforms and operating devices.  The Company markets its technology
licensing arrangements to large enterprises and
third-party solution providers, independent software vendors and original
equipment manufacturers. This marketing generated increased activity to its web
site and initiated downloads of the offered Trial SDK.  In addition to the
above, at the end of the third quarter of 2001 the Company launched a suite of
data communications
products targeted to the health care industry addressing the secure transmission
of confidential information under HIPAA regulations. There is not yet any
significant revenue impact from these product lines.

The Company's independent auditors have included an explanatory paragraph in
their report on the Company's financial statements for each of the three years
in the period ended December 31, 2000, stating that recurring losses from
operations and an accumulated deficit at December 31, 2000 of $22,222,400 raise
substantial doubt the Company's ability to continue as a going concern. The
accumulative deficit as of September 30, 2001 is $24,945,100.

Results of Operations

Three months ended September 30, 2001 as compared to the
three months ended September 30, 2000

Revenues. Revenues decreased by $32,300 or 53.0% to $28,600 for the three
months ended September 30, 2001, from $60,900 for the three months ended
September 30, 2000.  This decrease was primarily attributable to reduced royalty
fees and the more limited sales of products and components from the discontinued
facsimile-based business as compared to the prior comparable period.

Cost of products and components.  Cost of products and components was $0 for
the three months ended September 30, 2001; a decrease of $16,800, or 100.0%,
compared to $16,800 of such costs for the three months ended September 30, 2000.
The decrease in such costs was primarily attributable to the corresponding
reduction in sales of discontinued products and components.

Research and development expenses.  Research and
development expenses increased by $26,800 or 8.4% to $347,400 for the three
months ended September 30, 2001, from $320,600 for the three months ended
September 30, 2000.  The increase resulted from personnel and related office and
other support facility costs related to research and development in the
Company's Atlanta headquarters and additional support in Israel related to the
development of the Company's new software products.  This increase was offset by
a decrease in non-cash charges to $47,300 for the third quarter of fiscal 2001
from $90,400 for the third quarter of fiscal 2000, to account for options
previously granted below fair market value as compensation to employees and
consultants.

Sales and marketing expenses.  Sales and marketing expenses decreased by
$233,700 or 64.9%, to $126,300 for the three months ended September 30, 2001,
from $360,000 for the three months ended September 30, 2000. The decrease in
sales and marketing expenses was primarily attributable to the reduction of
expenses related to marketing materials and consultants and other outside
services.  The decrease was also due to the reduction in non-cash charges to
$2,000 for the

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third quarter of fiscal 2001 from $9,700 for the third
quarter of fiscal 2000, to account for options previously granted below fair
market value as compensation to employees and consultants.

General and administrative expenses.  General and administrative expenses
decreased by $224,400 or 35.2% to $412,900 for the three months ended
September 30, 2001, from $637,300 for the three months ended September 30, 2000.
This decrease was primarily attributable to the administrative costs associated
with the bridge loan financing and private placement during the third quarter of
fiscal 2000 and reduction of the non-cash stock option charges to $14,800 for
the  third quarter of fiscal 2001 from $143,200 for the third quarter of fiscal
2000, to account for options previously granted below fair market value as
compensation to employees and consultants.

Interest income (expense), net.  Net interest income was $11,300 for the
three months ended September 30, 2001 compared to ($259,300) of net interest
expense for the three months ended September 30, 2000.   The net increase was
primarily the result of interest expense related to the bridge loan financing
and accretion of related warrants recognized in the third quarter of 2000,
compared to the earnings in the third quarter of 2001 from funds received from
the Company's private placement in October 2000.

Net loss.  As a result, net loss decreased by $683,800 or 44.6% to $849,300,
or $(0.04) per share, for the three months ended September 30, 2001, as compared
to a net loss of $1,533,100, or $(0.09) per share, for the three months ended
September 30, 2000.

Nine months ended September 30, 2001 as compared to the nine
months ended September 30, 2000

Revenues. Revenues decreased by $568,900 or 81.9% to $125,800 for the nine
months ended September 30, 2001, from $694,700 for the nine months ended
September 30, 2000.  This decrease was primarily attributable to the lack of
consulting revenue in the nine months ended September 30, 2001 as compared to
the prior comparable period, during which the Company recorded revenues from
certain consulting projects completed in the second quarter of fiscal 2000, as
well as a reduction of royalty revenues from licensing arrangements and more
limited sales of products and components from the discontinued facsimile-based
business.

Cost of products and components.  Cost of products and components was
$24,100 for the nine months ended September 30, 2001, a decrease of $89,100, or
78.7%, compared to $113,200 of such costs for the nine months ended September
30, 2000. The decrease in such costs was primarily attributable to the
corresponding reduction in sales of discontinued products and components.

Research and development expenses.  Research and development expenses
increased by $20,800 or 2.2% to $950,000 for the nine months ended September 30,
2001, from $929,200 for the nine months ended September 30, 2000.  The increase
was attributable to expenses resulting from personnel and related office and
other support facility costs related to research and development in the
Company's Atlanta headquarters and additional support in Israel related to the
development of the Company's new software products, partially offset by a
decrease in non-cash charges to $141,900 for the first nine months of fiscal
2001 from $271,200 for the first nine months of fiscal 2000, to account for
options previously granted below fair market value as compensation to employees
and consultants.

Sales and marketing expenses.  Sales and marketing expenses decreased by
$207,200 or 24.5%, to $637,400 for the nine months ended September 30, 2001,
from $844,600 for the nine months ended September 30, 2000.  The decrease in
sales and marketing expenses was primarily attributable to the reduction of
expenses related to marketing materials and consultants and other outside
services, and the reduction in non-cash charges to $5,900 for the first nine
months of fiscal 2001 from $61,800 for the first nine months of fiscal 2000, to
account for options previously granted below fair market value as compensation
to employees and consultants.

General and administrative expenses.  General and administrative expenses
decreased by $262,400 or 16.7% to $1,304,900 for the nine months ended
September 30, 2001, from $1,567,300 for the nine months ended September 30,
2000.  This decrease was attributable to the reduction of the non-cash stock
option charges to $26,300 for the first nine months of fiscal 2001 from $534,500
for the first nine months of fiscal 2000. The foregoing decrease in expenses was
partially offset by (i) additional salaries and costs related to an increased
administrative staff, and (ii) third party consulting and professional fees in
connection with business strategy development and management and operation of
the Company's business.

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Interest income (expense), net.  Net interest income was $79,200 for the
nine months ended September 30, 2001 compared to ($245,900) of net interest
expense for the nine months ended September 30, 2000. The net increase was
primarily the result of interest expense related to the bridge loan financing
and accretion of related warrants recognized during fiscal 2000, compared to the
earnings during fiscal 2001 from funds received from the Company's private
placement in October 2000.

Net loss.  As a result, net loss decreased by $283,700 or 9.4% to $2,722,700,
or $(0.13) per share, for the nine months ended September 30, 2001, as compared
to a net loss of $3,006,400, or $(0.17) per share, for the nine months ended
September 30, 2000.

Liquidity and Capital Resources

The Company's capital requirements continue to be significant and it is not
currently generating revenues from operations to fund its operating activities.
The Company has incurred losses to date resulting in an accumulated deficit as
of September 30, 2001 of $24,945,100 and it anticipates incurring continuing
losses in the future as it expands the development and marketing of its software
products and technology.  Based upon current estimates, management believes that
cash and cash equivalents will be sufficient to fund the Company's operating
activities and capital requirements through the company's first quarter of 2002.
Unanticipated changes in economic conditions or other unforeseen circumstances
may cause the Company to expend its cash and cash equivalents in a shorter
period of time.

As a result of the above, the Company's continuation as a going concern is
substantially dependent upon its ability to obtain additional financing that
will be required to fund research and development and marketing of its new
products as well as to fund its current operating activities. If significant
revenues materialize and adequate financing is obtained, the Company anticipates
viability for the year 2001 and beyond, though there can be no assurance that
the Company will be successful in these efforts.  At this time the Company does
not have any current arrangements with respect to other potential sources of
additional financing and cannot assure you that additional financing will be
available to it on commercially reasonable terms or at all.  Given the
foregoing, if the Company is then successful in its ability to market its new
suite of products, as well as its technology, it believes that it can increase
revenues, generate positive cash flows from operations, and result ultimately in
profitability.

Since inception, the Company has financed its capital requirements primarily
through the private sale of capital stock to various parties and from non
interest-bearing loans from Valor Invest Limited, ("Valor"), an
affiliate of the Company's Chairman, a portion of
which was subsequently converted into equity, and from cash acquired in
connection with the acquisition of its subsidiaries.

At September 30, 2001 the Company had $1,313,400 in cash and cash equivalents
compared to $3,904,500 at December 31, 2000.  At September 30, 2001, the Company
had working capital of $1,107,200 as compared to working capital of $3,641,500
at December 31, 2000.

Cash used in operating activities for the nine months ended September 30, 2001
was $2,539,600, primarily consisting of the net loss of $2,722,700 and an
increase of $106,600 in other current assets, partially offset by $174,100 of
non-cash compensation expense, a decrease in accounts receivable of $57,000,
and an increase in accounts payable of $89,100.  Cash used in investing
activities was $51,500.  As a result, the Company had a net decrease of
$2,591,100 in cash and cash equivalents during the nine months ended September
30, 2001.

Cash used in operating activities for the nine months ended September 30, 2000
was $1,952,900, primarily consisting of the net loss of $3,006,400 and a
decrease in accounts payable and accrued expenses of an aggregate of $139,900,
which was partially offset by $1,074,600 of non-cash compensation expense and
accretion of warrants and a decrease in inventory of $53,200. Cash used in
investing activities was $54,700.  Cash provided by financing activities was
$2,802,100, representing Bridge Financing and the net of non-interest bearing
loans from Valor.  As a result, the Company had a net increase in cash and cash
equivalents of $794,500 during the nine months ended September 30, 2000.

As of January 1, 2000, a balance of $89,000 of non-interest bearing loans from
Valor was outstanding.  During the first half of 2000, Valor loaned an
additional $704,500 to the Company on a non interest-bearing basis, of which

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In May and June 2000, the Company completed a Bridge Financing, in which it
issued 25 units, each unit consisting of a $100,000 principal amount bridge note
and bridge warrants to purchase 25,000 shares of common stock at an exercise
price of $3.50 per share, for aggregate gross proceeds of $2,500,000.

In October 2000, the Company completed a Private Placement in which it issued an
aggregate of 2,333,310 units consisting of one share of common stock and one
warrant to purchase one share of common stock at an exercise price of $3.50, for
aggregate gross proceeds of $7,000,000.  Approximately $2,267,000 of the gross
proceeds received in the Private Placement represented the conversion of the
principal and accrued interest of outstanding bridge notes by certain holders
thereof into units in the Private Placement.  A portion of the proceeds of the
Private Placement was used to repay the principal and accrued interest on the
balance of outstanding bridge notes not converted into units in the Private
Placement.  After deduction of cash commissions and related expenses as well as
the conversion of the bridge notes, the Company received approximately
$3,522,000 in net proceeds from the Private Placement.  In connection with the
Private Placement, Valor converted the principal amount of its notes into units
in the Private Placement.  Valor also converted a substantial portion of its
subordinated loans into units in the Private Placement.

Item 3.     QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company does not engage in trading market risk sensitive instruments, nor
does the Company purchase for investment, hedging or for purposes "other than
trading", instruments that are likely to expose it to market risk, whether it be
interest rate, foreign currency exchange, commodity price or equity price risk.
Consequently, management believes that as of September 30, 2001, the Company
does not have exposure to foreign currency exchange risk.

PART II. - OTHER INFORMATION

Item 6.     EXHIBITS AND REPORTS
FILED ON FORM 8-K

(a)  Exhibits

none

(b) Reports on Form 8-K

On July 9, 2001 the Company filed a Current Report on Form 8-K reporting a
development alliance with aeonware, Inc. to provide secure online transactions
and data to the biotech marketplaces.

On August 20, 2001 the Company filed a Current Report on Form 8-K reporting
the opening of its beta program for a suite of communication products designed
to address HIPAA Safe Harbor requirements for the sharing of patient
information.

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SIGNATURES

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

Dated: November 14, 2001

|    | INTACTA TECHNOLOGIES INC.
(Registrant)                       
|--- | -------------------------------------------------------------
|    |                                                              
|By: | /s/ Noel R. Bambrough
Noel R. Bambrough
President and CEO    
|    |                                                              
|By: | /s/ Graham E. Argott
Graham E. Argott
Chief Financial Officer