SECURITIES AND EXCHANGE COMMISSION

(Mark One)



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



For the quarterly period ended March 31, 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 May 05, 2001, there were 20,345,924 shares of the registrant's Common
Stock, par value $.0001, outstanding.

---

|TABLE OF CONTENTS             
|------------------------------
|PART I - FINANCIAL INFORMATION
|                              
|                              
|Item 1.                       
|                              
|                              
|                              
|                              
|                              
|                              
|                              
|                              
|Item 2.                       
|                              
|Item 3.                       
|                              
|PART II - OTHER INFORMATION   
|                              
|Item 6.                       
|                              
|Signatures                    

---

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 March 31, 2001; the
consolidated statements of operations for the three months ended March 31,
2001 and March 31, 2000; and the consolidated statements of cash flows for
the three months ended March 31, 2001 and March 31, 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
for the year ended December 31, 2000, 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 of a normal recurring
nature necessary to present a fair statement of the financial condition and
results of operations of 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
|-----------------------------------------------------
|                                                     
|                                                     
|Assets                                               
|                                                     
|Current                                              
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|Total current assets                                 
|                                                     
|Property and equipment,net                           
|                                                     
|Patents,net                                          
|                                                     
|                                                     

See accompanying notes to consolidated
financial statements.

3

---

|INTACTA TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
|-----------------------------------------------------
|                                                     
|                                                     
|Liabilities and Stockholders'
Equity                 
|                                                     
|Current liabilities                                  
|                                                     
|                                                     
|                                                     
|Total current liabilities                            
|                                                     
|Commitments                                          
|                                                     
|Stockholders' equity                                 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                     
|Total stockholders' equity                           
|                                                     
|                                                     

See accompanying notes to consolidated
financial statements.

4

---

|INTACTA TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31, 2001 and 2000
(Unaudited)
|------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|Revenues                                                                                                                      
|                                                                                                                              
|                                                                                                                              
|Total revenues                                                                                                                
|Operating expenses                                                                                                            
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|Total operating expenses                                                                                                      
|Loss from operations                                                                                                          
|Other income (expense)                                                                                                        
|                                                                                                                              
|                                                                                                                              
|Total other income                                                                                                            
|Loss before provision for income
taxes                                                                                        
|Provision for income
taxes                                                                                                    
|Net loss                                                                                                                      
|                                                                                                                              
|Basic and diluted loss per common
share                                                                                       
|Basic and diluted weighted - average
common shares outstanding                                                                

See accompanying notes to consolidated financial
statements.

5

---

|INTACTA TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2001 and 2000
(Unaudited)
|------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|Operating activities                                                                                                          
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|Investing activities                                                                                                          
|                                                                                                                              
|                                                                                                                              
|Cash used in investing activities                                                                                             
|Financing activities                                                                                                          
|                                                                                                                              
|Cash provided by financing
activities                                                                                         
|Net decrease in cash and cash 
   equivalents                                                                                 
|Cash and cash equivalents,
beginning of period                                                                                
|Cash and cash equivalents,end of
period                                                                                       

See accompanying notes to consolidated financial
statements.

6

---

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, the technology 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 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 months
ended March 31, 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

---

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.



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 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 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.

8

---

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 $23,118,800 through March 31, 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 $896,400 for the three months ended
March 31, 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 Kits (SDK) products,
which were subsequently launched in March 2001.

The Company's capital requirements continue to be significant and it is not
currently generating sufficient revenues from operations to funds 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
from operations together with cash and cash equivalents will be sufficient to
fund the Company's operating activities and capital requirements for a period
of approximately twelve months.  Unanticipated changes in economic conditions
or other unforseen circumstances may cause the Company to expend its cash and
cash equivalents in a shorter period of time, in which case it may be required
to seek additional financing in order to fund its capital and operating
activities.  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.

The Company's continuation as a going concern is dependent upon its ability
to actively market its new suite of products, as well as its technology,
which it believes will lead to increased revenues, positive cash flows from
operations, and ultimately to profitability. As mentioned above, the Company may
seek additional financing as may be required to fund research and development
and marketing of its new products. If this plan materializes as expected,
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.



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.

|                |   | March 31, 2001 |  |   | December 31, 2000 | 
|--------------- | - | -------------- |  | - | ----------------- | 
|- United States | $ | 92,300         |  | $ | 69,500            | 
|- Israel        |   | 282,500        |  |   | 281,700           | 
|                |   |                |  |   |                   | 
|                |   | 2001           |  |   | 2000              | 
|Revenues        |   |                |  |   |                   | 
|Asia            | $ | 4,400          |  | $ | 9,200             | 
|Africa/Mid-East |   | 82,200         |  |   | 140,800           | 
|North America   |   | 5,400          |  |   | 3,600             | 
|                | $ | 92,000         |  | $ | 153,600           | 

9

---



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 which 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 of 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 our re-evaluation
of our 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 our technology and to focus on direct 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

10

---

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 anticipates that the licensing of SDK's to software developers will
create an additional revenue stream to its technology licensing
arrangements with large enterprises and third-party solution providers,
independent software vendors and original equipment manufacturers.



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 about the Company's ability to continue
as a going concern. The accumulated deficit as of March 31, 2001 is
$23,118,800.



Results of Operations



Three months ended March 31, 2001 as compared to
the three months ended March 31, 2000



Revenues.  Revenues decreased by $61,600 or 40.1% to
$92,000 for the three months ended March 31, 2001, from $153,600 for the
three months ended March 31, 2000.  This decrease was primarily
attributable to 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 $13,800 for the three months ended March 31, 2001; a
decrease of $58,300, or 80.9%, compared to $72,100 of such costs for the
three months ended March 31, 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 decreased by $7,900 or 2.6% to $292,500 for the three
months ended March 31, 2001, from $300,400 for the three months ended March
31, 2000.  The decrease was attributable to a decrease in non-cash charges
to $47,300 for the first quarter of fiscal 2001 from $90,400 for the first
quarter of fiscal 2000, to account for options previously granted below fair
market value as compensation to employees and consultants.  The foregoing
decrease was partially offset by an increase in expenses resulting from
personnel and related office and other support facility costs related to
research and development in the Company's Atlanta headquarters.



Sales and marketing expenses.  Sales and marketing
expenses increased by $39,800 or 18.4%, to $255,700 for the three months
ended March 31, 2001, from $215,900 for the three months ended March 31,
2000. The increase in sales and marketing expenses was primarily
attributable to (i) increased salaries and related costs resulting from the
hiring of additional personnel in connection with the Company's
focus on marketing its INTACTA.CODE technology and (ii) costs for the
development of marketing materials and related market research.  The
foregoing increase in expenses were partially offset by the reduction in
non-cash charges to $2,000 for the first quarter of fiscal 2001 from
$28,200 for the first 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 increased by $109,000 or 31.2% to $458,200 for the
three months ended March 31, 2001, from $349,200 for the three months ended
March 31, 2000.  This increase was attributable to (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.  The
foregoing increase in expenses was partially offset by the reduction of the
non-cash stock option charges to $5,800 for the first quarter of fiscal
2001 from $225,400 for the first quarter of fiscal 2000.

11

---



Interest income, net.  Net interest income was
$33,100 for the three months ended March 31, 2001 compared to $18,200 of
net interest income for the three months ended March 31, 2000, an increase
of 81.9% or $14,900. The increase was primarily the result of earnings on
funds received from the Company's private placement in October 2000.



Net loss.  As a result, net loss increased by
$129,700 or 16.9 % to $896,400, or $(0.04) per share, for the three months
ended March 31, 2001, as compared to a net loss of $766,700, or $(0.04) per
share, for the three months ended March 31, 2000.



Liquidity and Capital Resources



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  President and
Chief Executive Officer, a portion of which was subsequently converted into
equity, and from cash acquired in connection with the acquisition of its
subsidiaries.



At March 31, 2001 the Company had $2,981,800 in cash and cash equivalents
compared to $3,904,500 at December 31, 2000.  At March 31, 2001, the
Company had working capital of $2,783,400 as compared to working capital of
$3,641,500 at December 31, 2000.



Cash used in operating activities for the three months ended March 31, 2001
was $885,700, primarily consisting of net loss and a decrease of an
aggregate of $151,900 in accrued expenses and related party payables,
partially offset by $55,000 of non-cash compensation expense and a decrease
in accounts receivable of $26,200.  Cash used in investing activities was
$37,000.  As a result, the Company had a net decrease of $922,700 in cash
and cash equivalents during the three months ended March 31, 2001.



Cash used in operating activities for the three months ended March 31, 2000
was $557,000, primarily consisting of net loss and a decrease in accounts
payable and accrued expenses of an aggregate of $188,200, which was
partially offset by $344,000 of non-cash compensation expense and a
decrease in inventory of $44,300. Cash provided by financing activities was
$436,000, representing non-interest bearing loans from Valor.  As a result,
the Company had a net decrease in cash and cash equivalents of $121,000
during the year ended March 31, 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
$312,000 was subsequently repaid.  In May 2000, Valor converted $250,000 of the
unpaid balance of these loans into 2.5 units identical to the units offered by
the Company in its Bridge Financing described immediately below.  Valor also
subordinated the balance of such loans to the repayment of the bridge notes.  As
discussed below, Valor converted the principal amount of the notes included in
the units it acquired in May 2000 as well as a substantial portion of its
subordinated loans into units offered in the Company's October Private
Placement.



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.

12

---



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 has incurred losses to date resulting in an accumulated
deficit as of March 31, 2001 of $23,118,800 and anticipate 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 from operations together with cash and cash equivalents will be sufficient
to fund the Company's operating activities and capital requirements for a period
of approximately twelve months.  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, in which case it may be required to
seek additional financing in order to fund its capital and operating activities.
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.



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 March 31, 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 January 17, 2001 the registrant filed a Current Report on
Form 8-K reporting the use of INTACTA.CODE in the United States Presidential
Inauguration publications.



On February 21, 2001 the registrant filed a Current Report on
Form 8-K reporting the entering into of an alliance with SecureWorks, Inc. to
develop applications for the pervasive computing market.



On February 21, 2001 the registrant filed a Current Report on
Form 8-K reporting that Fujitsu, Ltd of Japan was shipping 1,000,000 personal
computers with the registrant's INTACTA.CODE Reader software preinstalled.



On March 15, 2001 the registrant filed a Current Report on
Form 8-K reporting the market launch of a suite of INTACTA.CODE Software
Developers Kits.

13

---

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: May 9, 2001



| |     | INTACTA TECHNOLOGIES INC.
(Registrant)             
| | --- | ---------------------------------------------------
| |     |                                                    
| | By: | /s/ Altaf Nazerali
Altaf Nazerali
President        
| |     |                                                    
| | By: | /s/ Ross Wilmot
Ross Wilmot
Vice President, Finance

14