<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


(MARK ONE)

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

               For the quarterly period ended April 30, 2001.

[_]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934
               For the transition period from _________ to ________

COMMISSION FILE NUMBER: 0-31229

                            GSI TECHNOLOGIES USA INC.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

                               Delaware 65-0902449
       ------------------------------ -----------------------------------
      (State or other jurisdiction of (I.R.S. Employer Identification No.)
                         incorporation or organization)

     2001 McGill College Avenue, Suite 1310, Montreal, Quebec H3A 1G1 Canada
 ------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (514) 940-5262
                ------------------------------------------------
                (Issuer's Telephone Number, including Area Code)


     Check whether the issuer (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act of 1934  during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing  requirements  for the past 90 days. [X]
Yes [ ] No

     As of June 14,2001,  there were 21,076,636 shares of the issuer's $.001 par
value common stock issued and outstanding.

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




                                        1
<PAGE>

                              INDEX TO FORM 10-QSB
                              --------------------
                      For the Quarter Ended April 30, 2001
                      ----------------------------------------



                                                                            PAGE
                                                                            ----

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

     Balance Sheet as of April 30, 2001                                        3

     Statement of Operations for the Three and Six Months
     ended April 30, 2001 and 2000                                             4

     Statements of Cash Flows for Three and Six Months
     and Since Inception To April 30, 2001 and 2000                            5

     Notes to Financial Statements for the                                 6 - 8
     Six Months Ended April 30, 2001.

Item 2. Management's Discussion and Analysis                               9- 16

PART II. OTHER INFORMATION
                                                                              17
Item 1. Legal Proceedings

Item 2. Changes in Securities                                                 17

Item 3. Defaults Upon Senior Securities                                       17

Item 4. Submission of Matters to a Vote of Security Holders                   17

Item 5. Other Information                                                     17

Item 6. Exhibits and Reports on Form 8-K                                      17




                                        2
<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial statements
-----------------------------



                           GSI TECHNOLOGIES USA, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                                  BALANCE SHEET
                                AT APRIL 30, 2001

                                   (UNAUDITED)

<TABLE>
<CAPTION>


           Assets

Current Assets

<S>                                                                                         <C>

     Cash and cash equivalents                                                              $17,548
     Receivables, net (principally related party                                          4,025,340
     Other current assets
                                                                                   -----------------
       Total current assets                                                               4,042,888
Property and equipment, net                                                                  36,917
Investment in affiliates                                                                    244,408
Intangible assets, net                                                                      331,045
Other assets                                                                                 61,105
                                                                                   -----------------
       Total assets                                                                       4,716,363
                                                                                   =================

            Liabilities and Stockholders' Equity

Current Liabilities

     Accounts payable                                                                       576,338
     Defferred Revenue                                                                      102,500
     Notes Payable (principally related party)                                            4,136,051
     Other current liabilities                                                              100,572
                                                                                   -----------------
       Total current liabilities                                                          4,915,461

Stockholder's Deficit

     Common Stock, class A, $1.00 par value; authorized                                          -
          5,000,000 shares; issued and outstanding none
     Common Stock, class B, $.001 par value; authorized                                      21,077
          55,000,000 shares; issued and outstanding - 21,076,636

     Paid in Capital                                                                      1,964,398
     Deficit accumulated during the development stage                                    (2,184,961)
     Accumulated other comprehensive income                                                     388
                                                                                  ------------------
       Total Shareholder's Equity                                                          (199,098)

        Total liabilities and shareholder's equity                                     $  4,716,363
                                                                                  ==================


</TABLE>


        Read the accompanying summary of significant accounting notes to
  financial statements, which are an integral part of this financial statement



                                        3
<PAGE>




                           GSI TECHNOLOGIES USA, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                             STATEMENT OF OPERATIONS
           FOR THE THREE AND SIX MONTHS ENDED APRIL 30, 2001 AND 2000
              FROM INCEPTION (JULY 08, 1998 THROUGH APRIL 30, 2001

                                   (UNAUDITED)



<TABLE>
<CAPTION>

                                                                                                                 Period
                                                                  Three months                Six months      of inception
                                                                 ended April 30,             ended April 30,  July 06, 1998 to
                                                    ---------------------------- --------------------------
                                                        2001           2000          2001          2000        April 30, 2001
                                                    -------------  ------------- ------------  ------------   -------------
<S>                                                       <C>             <C>          <C>           <C>            <C>

Revenues                                               $ 126,043            $ -    $ 132,293           $ -       $ 728,702

Cost of Sales                                             60,343              -       64,093             -         533,509
                                                    -------------  ------------- ------------  ------------   -------------

Gross Profit                                              65,700              -       68,200             -         195,193

Operating Expenses:
       Marketing                                          41,143              -       69,838        15,949         279,577
       Management and administrative fees                239,733        178,497      472,223       241,061         978,945
       Salaries and related costs                         61,982                     108,794                       208,619
       Rent                                                9,853         24,130       24,636        36,560         138,949
       Financing expense                                  10,000                      10,000                       169,132
       Professional fees                                  10,255         10,697       21,751        18,970         142,112
       Consulting                                                                                                  304,647
       Depreciation                                        2,600                       3,900                         4,293
       Amortization                                       23,879         23,739       47,688        47,478         144,051
       Travel                                             29,001         11,986       37,761        17,909          47,290
       Other selling, general and administrative          54,404         28,758       92,985        49,703         214,699
                                                    -------------  ------------- ------------  ------------   -------------
          Total operating expenses                       482,850        277,807      889,577       427,630       2,632,315

          Loss before other income (expense)            (417,150)      (277,807)    (821,376)     (427,630)     (2,437,121)

Other income (expense):
       Interest income (principally related party)       105,756          8,119      194,462        12,599         271,222
       Interest expense (principally related party)     (106,566)                   (193,349)                     (238,470)
       Equity in net earnings (loss) of affiliates        42,550                     219,408                       219,408
                                                    -------------  ------------- ------------  ------------   -------------
          Total other income (expense)                    41,740          8,119      220,521        12,599         252,160


                                                    -------------  ------------- ------------  ------------   -------------
Net Loss                                                (375,410)      (269,688)    (600,856)     (415,031)     (2,184,961)
                                                    =============  ============= ============  ============   =============

Basic weighted average common shares outstanding      20,788,768     20,185,472   20,689,767    20,070,565
                                                    =============  ============= ============  ============

Basic Loss per common share                            $ (0.0181)     $ (0.0134)   $ (0.0290)    $ (0.0207)
                                                    =============  ============= ============  ============


</TABLE>

        Read the accompanying summary of significant accounting notes to
  financial statements, which are an integral part of this financial statement


                                        4
<PAGE>

                           GSI TECHNOLOGIES USA, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                             STATEMENT OF CASH FLOWS
           FOR THE THREE AND SIX MONTHS ENDED APRIL 30, 2001 AND 2000
              FROM INCEPTION (JULY 08, 1998) THROUGH APRIL 30, 2001

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                 Inception
                                                                           For the six months   (July 08, 1998)
                                                                           ended January 31,      through
                                                             ----------------------------------
                                                                 2001             2000          April 30, 2001
                                                             -------------    -------------    --------------

<S>                                                                <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income (Loss)                                              $ (600,856)      $ (415,031)     $ (2,184,960)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
         Depreciation and amortization                             51,588           47,478           148,344
         Issuance of stock for contract settlement                  5,000                -             5,500
         Accrued Interest Expense                                 193,349                -           238,470
         Accrued Interest Income                                 (194,462)         (12,599)         (271,214)
         Equity in net earnings (loss) of affiliates             (219,048)               -          (219,048)

Changes in Operating assets and liabilities:
         Receivables and other current assets                    (134,472)          70,868          (153,076)
         Other assets                                                   -                -           (61,104)
         Accounts Payable and Accrued Liabilities                 189,630         (138,203)          782,334
                                                             -------------    -------------    --------------

Net cash provided by/(used in) operating activities              (709,271)        (447,487)       (1,714,755)


CASH FLOWS FROM INVESTING ACTIVITIES:


Net cash provided by/(used in) investing activities
         Loan Receivable, principally related parties            (655,743)        (163,401)       (3,657,969)
         Purchase of property and equipment                          (459)               -           (41,525)
                                                             -------------    -------------    --------------

Net cash provided by/(used in) investing activities              (656,202)        (163,401)       (3,699,494)


CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from:
  Notes payable, principally related parties                       50,000         (279,667)        2,622,599
  Short term borrowings                                         1,103,617                -         1,103,617
  Sales of common stock                                           225,000          577,100         1,705,195
                                                             -------------    -------------    --------------

Net cash provided by/(used in) financing activities             1,378,617          297,433         5,431,411
                                                             -------------    -------------    --------------

Effect of exchange rate changes on cash and cash eqivalents             -                -               386
                                                             -------------    -------------    --------------

Net increase (decrease) in cash and cash equivalents               13,144         (313,455)           17,548
Cash and cash equivalents, beginning of period                      4,404          350,019                 -
                                                             -------------    -------------    --------------

Cash and cash equivalents, end of period                         $ 17,548         $ 36,564          $ 17,548
                                                             =============    =============    ==============
</TABLE>
<TABLE>
<CAPTION>
Supplemental Schedule of noncash investing and financing activities:
<S>                                                                                                  <C>

         Issuance of note for payment of license rights                                              200,000
         Issuance of shares for license rights                                                       274,779
         Issuance of shares for dividend to affiliate                                                325,221
</TABLE>

        Read the accompanying summary of significant accounting notes to
  financial statements, which are an integral part of this financial statement

                                        5
<PAGE>

                           GSI TECHNOLOGIES USA, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS

                                   (Unaudited)

                                 APRIL 30, 2001




NOTE 1 -BASIS OF PRESENTATION

     The  accompanying   unaudited   condensed   financial   statements  of  GSI
Technologies USA, Inc. have been prepared in accordance with generally  accepted
accounting   principles  for  interim   financial   information   and  with  the
instructions  to Form 10-QSB and Article 10 of  Regulation  S-X.  The  financial
statements  reflect all adjustments  consisting of normal recurring  adjustments
which,  in the opinion of management,  are necessary for a fair  presentation of
the results for the periods shown.  Accordingly,  they do not include all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements.

     These financial  statements  should be read in conjunction with the audited
financial  statements and footnotes  thereto included in GSI  Technologies  USA,
Inc.'s 10K-SB as filed with the Securities and Exchange Commission.

     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  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements and that effect the reported  amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.


NOTE 2 - REVENUE RECOGNITION

     Revenue from sales of display  units are recorded at the time the units are
delivered.  Revenues  from sub-  licensing  the master  licensing  agreement are
recognized over the term of the sub-licensing agreement.

     In December 1999, the  Securities  and Exchange  Commission  ("SEC") issued
Staff  Accounting  Bulletin No. 101 ("SAB 101"),  "Revenue  Recognition,"  which
provides guidance on the recognition,  presentation and disclosure of revenue in
financial  statements  filed with the SEC. SAB 101  outlines the basic  criteria
that must be met to  recognize  revenue and  provide  guidance  for  disclosures
related  to  revenue   recognition   policies.   Management  believes  that  GSI
Technologies  USA, Inc.'s revenue  recognition  practices are in conformity with
the guidelines of SAB 101.

NOTE 3 - NET EARNINGS (LOSS) PER SHARE

     Earnings  (Loss) per common share are  calculated  under the  provisions of
SFAS No. 128,  "Earnings per Share," which  establishes  standards for computing
and presenting  earnings per share.  SFAS No. 128 requires the Company to report
both basic  earnings  (loss) per share,  which is based on the  weighted-average
number of common  shares  outstanding  during the period,  and diluted  earnings
(loss) per share, which is based on the weighted-average number of common shares
outstanding plus all potential dilutive common shares  outstanding.  Options and
warrants are not considered in  calculating  diluted  earnings  (loss) per share
since considering such items would have an anti-dilutive effect.


                                        6
<PAGE>

                           GSI TECHNOLOGIES USA, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS

                                   (Unaudited)

                                 APRIL 30, 2001


NOTE 4 - GOING CONCERN

     The  accompanying  financial  statements  have been  prepared  assuming the
Company will  continue as a going  concern.  The Company  reported a net loss of
$600,556  for the  six  months  ended  April  30,  2001  (unaudited)  as well as
reporting net losses of $2,184,961  from inception  (July 08, 1998) to April 30,
2001  (unaudited).  As reported  on the  statement  of cash  flows,  the Company
incurred  negative cash flows from operating  activities of $709,271 for the six
months ended April 30, 2001 (unaudited)  respectively and has reported deficient
cash flows from  operating  activities of $1,714,755  from  inception  (July 08,
1998)  (unaudited).  To date, these losses and cash flow  deficiencies have been
financed  principally  through the sale of common stock  ($1,705,195)  and short
term borrowings  (1,103,617).  Continuation of the Company as a going concern is
dependent upon obtaining sufficient working capital for its planned activity and
the  management of the Company has developed a strategy,  which it believes will
accomplish  this objective  through  additional  equity  funding,  and long term
financing, which will enable the Company to operate for coming year.

NOTE 5 - Investment in Affiliates

     The  Company's  investments  in  affiliates  consists of a 25%  interest of
Groupe Solcom,  headquartered  in France,  which  participates in the electronic
advertising and interactive  information  display.  The Company accounts for its
25%  interest  in Group  Solcom  using the equity  method.  Condensed  financial
information for investments in affiliiates accounted for under the equity method
of accounting are summarized below.

<TABLE>
<CAPTION>

                                                             April 30, 2001            April 30, 2000
<S>                                                                <C>                         <C>
Current assets                                                     2,759,077                   0
Other assets                                                       3,316,783                   0
                                                             --------------            --------------
                                                                   6,075,860                   0

Current liabilities                                                2,202,148                   0
Other liabilities                                                  2,977,279
Shareholder's equity                                                 896,433                   0
                                                              --------------           --------------
                                                                   6,075,860                   0

Net Sales                                                          2,803,386                   0
Gross profit                                                       2,156,356                   0
Net income                                                           877,634                   0

</TABLE>

                                        7
<PAGE>



                           GSI TECHNOLOGIES USA, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS

                                   (Unaudited)

                                 APRIL 30, 2001




NOTE 6 - Line of Credit

     The Company maintains a line of credit with a foreign financial institution
to meet short term working  capital  needs which allows the Company to borrow up
to $1,150,000 on an unsecured  basis at the prime rate of interest (8.50 percent
at January  31,  2001) plus 2.50  percent.  At April 30,  2001,  the Company had
borrowed $1,103,617. This line of credit expires December 01, 2001.


                                        8
<PAGE>


Item 2.  Management's discussion and analysis
---------------------------------------------

Forward looking statements.

     This  report  contains  forward-looking  statements  that are  based on the
Company's  beliefs  as well as  assumptions  made by and  information  currently
available  to the  Company.  When  used in this  report,  the  words  "believe,"
"expect,"  "anticipate,"  "estimate,"  and similar  expressions  are intended to
identify  forward-looking  statements.  Such  statements  are subject to certain
risks, uncertainties and assumptions,  including without limitation, the overall
strength of the national  securities  markets,  the Company's  present financial
condition  and the  risks  and  uncertainties  concerning  the  availability  of
additional  capital  as and  when  required,  technological  changes,  increased
competition, and general economic conditions.  Should one or more of these risks
or uncertainties materialize,  or should underlying assumptions prove incorrect,
actual  results  may vary  materially  from  those  anticipated,  estimated,  or
projected.  The Company cautions potential investors not to place undue reliance
on any such forward-looking  statements,  all of which speak only as of the date
made.


Overview

     GSI specializes in broadcasting  solutions  principally for advertisers and
others seeking to extend their  reaching  power for their  commercial and public
service messages.  Holder of a world-wide license,  GSI's proprietary  software,
hardware, and advanced broadcasting systems respond to their needs. In providing
access  to its  remote  control  broadcasting  capability,  we  enable  users to
transmit  and  receive  full-motion  video,  graphics,  and audio on an array of
attractive, durable and interactive indoor and outdoor display products.


Results from operations

3 months ending April 30, 2001 and 2000

     We are still in the  development  phase after  starting up in 1999.  During
GSI's second quarter from February 1, 2001 to April 30, 2001, we incurred a loss
of  $375,410 or $0.0181  per share  versus  $269,688 or $0.0134 per share in the
same period in 2000.  The  accumulated  deficit to date  during the  development
phase increased to $2,184,961 or $0.1779 per share.


Revenues

     $126,043 in revenues were recognized during the quarter,  versus nil in the
same period in the prior year. This is related to the sale of products,  as well
as a sub-license  sold to Groupe  Solcom  International  France S.A.S.  ("Groupe
Solcom")  giving  it  commercialization  rights  for the  territory  of  London,
England,  Nantes,  France  and a  sub-license  sold  to GSI  Technologies  ("GSI
Canada") giving it  commercialization  rights for the territory of Canada. Since
inception, revenue totals $728,702, primarily from product sales.

Cost of revenues and direct operating costs


     According to the master license  agreement  with GSI Canada,  we owe 60% of
the  price of any  sub-license  we sell to a new  licensee  and this  amount  is
payable  to  GSI  Canada  by the  end  of the  calendar  quarter  in  which  the
sub-license is granted.  We have incurred  $60,343 in direct  operating cost for
the quarter,  versus nil in the same quarter in the prior year. Since inception,
cost of sales is  $533,509,  including  $59,250 in  royalties  and  $474,259  in
product costs.

Operating expenses

     During the three  months  ended  April  30,2001,  we  incurred  $482,850 in
operating  expenses  versus $277,807 in the same period in 2000, The increase is
attributable primarily to an increase in management fees and salary expense.

     Since  exception,  operating  expenses total $2,632,315 and these costs are
primarily associated with the development of the company.


                                        9
<PAGE>

Other income

     During the three months  ending  April 30,  2001,  $105,756 in interest was
earned mainly on the outstanding loan to GSI Canada,  while $106,566 in interest
expense was incurred. This amount includes,  $80,705 for loans from shareholders
and  affiliated  parties,  $25,861  for  interest  and charges on the short term
credit facilities with our principal bank of which, $9,653 was accrued interest.

     Since  inception a total of $271,222  in interest  has been earned  while $
238,470 in expense has been incurred.

     Equity in the net  earnings of our European  affiliate  was $42,550 for the
period versus nil in the same period of 2000. This is discussed further below.

Liquidity and capital resources

     At April 30, 2001 we had $17,548 in cash. Cash used in operating activities
during the six  months  ending  april 30,  2001 was  $709,271,  which was mainly
attributable  to the net cash loss from operations plus changes in net operating
assets and liabilities.

     Cash used in investing  activities  during the period  reflects  additional
short term loans to GSI Canada in the amount of $655,743.

     Cash provided from financing  activities during the period was $225,000 and
includes a private  placement in April 2001 in the amount of  $100,000;  as well
advances  through April 30 of $1,103,617 in short-term bank credit were provided
by the Societe Generale, a leading bank in France.

     In September,  2000, we entered into formal loan  arrangements with a group
of existing investors.  At Apri 30, 2001, the total amount of these obligations,
including interest, is $3,029,509.  The promissory notes have a maturity date of
September 7, 2001,  bear interest at the rate of prime plus two per cent and are
convertible  at any time at the sole  discretion  of the Company  into a certain
number of shares for each holder. If converted, interest on the notes is waived.
In the  event of  conversion,  the total  number of Class B common  shares to be
issued from treasury would be 2,581,584.

     The result of all  activities  during the six month period ending April 30,
2001 was a net increase of $13,144 in our cash position.

     From inception, net cash used in operations has been $1,714,755. A total of
$3,699,494  has been used in investing  activities,  while  $5,431,411  has been
provided by  financing  activities,  including  $1,705,195  from sales of common
stock.

     Since the  beginning of 2001,  we have been  refocusing  our  activities to
concentrate on our core business.

     Through our affiliate, GSI Canada, last summer we successfully installed 32
CityColumns as phase one of our pilot project for shopping  centres owned by the
Ivanhoe Group.  Based on the results of this pilot project,  we have refined our
concept and adjusted our  marketing  strategy and product  development  program.
Operating as the media operator,  GSI Canada has been able to measure the impact
of our  concept  on  advertising  customers,  advertising  agencies,  and target
consumers.

     On March 6,  2001,  we sold a license  to  Groupe  Solcom  for  $1,000,000,
payable in 10 annual instalments of $100,000.  Groupe Solcom is owned 75% by GSI
Canada and 25% by GSI.  Other  sales of  licenses  are  planned in the  European
Community.  Other pilot  projects  have been  successfully  completed  by Groupe
Solcom.

     During the quarter,  Groupe Solcom successfully  completed the installation
of 80 projection  systems for their client,  the MCR Multimedia Group, which use
the GSI Multimedia Pack to broadcast animated  advertising images in the Milano,
Italy subway  system.  The  installations  have been well  received,  and Groupe
Solcom is now proceeding with phase 2 of the project.

     Groupe Solcom has also completed a pilot project with the Societe  Generale
Bank,  installing a network of plasma-screen based DigiColumns.  An order for 50
DigiColumns has been received from the bank.


                                       10
<PAGE>

     Cash requirements of approximately $400 000 are anticipated during our next
fiscal quarter to July 31, 2001, as spending to sustain  operations is currently
running at $125 000 per month.

     Lending  to GSI  Canada  is now  capped at $4.0  million,  an  increase  of
$500,000 from the  previously  authorized  level.  A repayment  program has been
developed.  GSI Canada has commenced a  restructuring  program,  abandoning  its
activities in the computer  business and disposing of or ceasing other  non-core
activities. GSI Canada is also seeking a buyer of the Ivanhoe network as well as
other assets.


     We continue to seek additional sources of funding to sustain operations for
the  long-term.  We have  engaged  a  European  investment  firm to  raise up to
$5,000,000 in capital.  The Societe Generale,  a major France Bank, is providing
short-term funding,  pending the closing of long-term financing.  $1,103,617 has
been drawn through  April 30, 2001.  The line of credit is available to December
1, 2001 and interest accrues at prime plus 2.5%.




Investment in affiliates

     Our 25% share in Group Solcom is reflected as an  investment  in affiliates
on the balance  sheet.  The value of this  investment  was $ 244,408 at April 30
versus nil for the same period of 2000.  The total  revenue  generated by Groupe
Solcom during the period was $ 2,803,386,  a net increase of  $2,803,386  versus
nil at the same period of 2000.

Product sales and distribution and provision of services

     Under the master  license  acquired  in  October  1999,  from our  Canadian
affiliate,  GSI Canada we have access to one of the most  advanced  technologies
currently  available  in the  field  of  information  broadcast  and  electronic
advertising and information  interactive  display.  The term of the license is 5
years to October 26th, 2004 and is  automatically  renewable for another 5 years
at the sole  discretion of GSI. The cost was $800,000,  $200,000 paid in cash in
November 1999; the balance in $600,000 worth of GSI'S common shares.

     GSI Canada's R&D department continues to enhance the GSI Multimedia Pack in
response to the market tests on  installations  in Montreal,  Paris, and Milano.
Now working in our principal office  facilities,  they have completed the latest
version (1.4) of the GSI Multi-Media  Pack, and will fully integrate its billing
manager module, by August 31st 2001.

     Working in  conjunction  with GSI Canada's R & D department,  our New Media
division,  has fully  integrated its E-Commerce  Software in order to be able to
offer  transactional  capabilities  via our products,  further  enhancing  their
potential for acceptance in the fast-evolving market place.

                                    11
<PAGE>

     The  prototype  phase  has  been  completed  and we are now  marketing  the
following products:

     o    Citycolumn:  an indoor  display  unit  indoor/advertising  unit,  with
          interactive kiosk capability.

     o    Transacolumn:  an indoor display  advertising unit with  transactional
          e-column kiosks and ATM cash machine.

     o    Skycolumn: a large outdoor full video advertising LED screen.

     o    Projecolumn:   an  indoor  advertising   display  unit  which  used  a
          projecting system.

     o    Digicolumn: a display kiosk using plasma screens.


     Our objective is to ramp up revenues from sales of these products,  as well
as  revenues  from  broadcasting,  production  of  content,  technical  support,
maintenance, and consulting contracts.

     In April 2001, we sold  licenses and operating  systems to More Group UK, a
part of the Adshel  Group,  a division of Clear  Channel  International.  We are
currently  installing  our  broadcasting  facilities  in  London  as  previously
announced  on March 5th,  2001.  We will be serving  the More Group in 2 cities,
Bristol and Swindon,  in the first phase.  Activities  in other cities in the UK
are in the planning  phase.  We  anticipate  that our ongoing  association  with
Adshel will help us to identify  the  principal  media  operators in the various
countries  in  Europe,  Asia,  and  the  Americas  and  continue  to ramp up our
commercial operations.

     Our  management  team has  refined  our market  penetration  strategy.  The
world's  large media  groups are only  beginning  to convert  from  conventional
static advertising to full video motion and interactive two-way systems. We are,
therefore,  concentrating on selling license  agreements with large, local media
operators. The networking feature of our concept and the variety of our products
enables   us   to   customize   state-of-the-art   applications   for   reaching
consumers-"What do you want to say to your consumer today and where?"

     As a pioneer in the  advertising  media  industry,  GSI is rapidly  gaining
experience in the  application  of all aspects of our concept,  ranging from the
design of the display products,  to the software that drives them to the content
advertisers  are seeking.  Interest in our technology and networking  concept is
growing,  particularly  from  the  suppliers  of  display  equipment.  Potential
partners have been identified in the fields of telecommunications,  banking, ATM
services, and the Internet.

     Our business development has entered a crucial phase. By signing agreements
with Adshel in the outdoor and indoor out of home market,  we need to deploy our
studio and broadcast installations to support their massive market penetration.


                                       12
<PAGE>


Canada


     The sale of a sub-license  to our affiliate GSI Canada was completed in May
2000 for the  territory of Canada.  The sale of the license was $250 000 payable
in 10 annual instalments of $25 000 a year.  Primarily in Quebec, GSI Canada has
assumed  the role of media  operator  and  acquired  the  right to  install  its
products on sites  managed by 3 major  property  managers  (Ivanhoe,  SITQ,  and
Tulon), and a large  entertainment  complex in Montreal operated by Canderel,  a
leading  Canadian  property  developer.  Negotiations  are  proceeding  with the
Government of Quebec for the deployment of our Citycolumn product throughout the
Province for government  communication purposes. Our affiliate continues to seek
financing in order to complete the planned installations.

     An  agreement  was  signed  with Barco in  February  2001 for GSI Canada to
collaborate as a Value Added Reseller (VAR).  Reflecting  Barco's  confidence in
our technology and deployment concept it calls for GSI to sell the equivalent of
$8 million worth of Barco display products annually.


USA

     Through our office in Orlando,  Florida,  the parks and tourist centres are
our primary  target.  All levels of  government  have been  contacted and strong
links  established  with  Florida's   "Entreprise  Florida"  program  have  been
established. Being under the US Department of Commerce umbrella was instrumental
in our being able to develop the Milan, Italy market opportunity.

     In June 2001, we again  participated  in the  "Entreprise  Florida,"  which
organized a commercial mission at the Comdex Trade fair in Mexico.

                                       13
<PAGE>

     GSI was very well received and the reaction to our technology positive.

     The  sale of a  license  agreement  in  Mexico  is in  progress,  which  we
anticipate  closing  by  June  30th  2001.  Part  of our  strategy  consists  in
installing a GSI broadcast studio in Mexico City in order to  commercialize  our
technology  and  products   throughout  South  America.   We  plan  to  continue
participating on the "Entreprise Florida" Team, in July 2001, in the missions to
Argentina, Brazil, and Chile.


Europe

     Significant  opportunities are being identified in Europe.  The appetite in
Europe for new  technologies  favors the development  and  installation of GSI's
hi-tech products and services.  Through these  opportunities and the progress of
our European affiliate,  Groupe Solcom, we are responding to increasing customer
demand  from,   amongst  others,  the  major  participants  in  the  out-of-home
advertising   industry  and  retail  stores.   Considered  the  most  hospitable
environments in Europe at this stage of our development, our focus is on France,
England, Italy, and Portugal.

     After a successful  presentation in August 2000 in the city of Nantes, with
our partners Adshel (Clear channel) the French division of Adshel won the tender
and announced the  implementation of 7 LED screens,  150 Internet kiosks, and 10
multi-media columns for December 2001.

     Working in  conjunction  with the Adshel  sales  force,  GSI is planning to
install  broadcast systems and a production  Center.  This project will become a
flagship  concept for our  partners  that can be extended to other major  cities
worldwide.  We anticipate the sub-license  agreement will be completed  shortly.
GSI would also benefit from a production  contract and fees from the maintenance
of the network. We have proposed a 10 year contract.

     Groupe  Solcom has  completed  its test project  with  Societe  Generale to
deploy a network  of plasma  screens.  Financing  is being  sought for the first
phase of the project to install 50 units.

     Other significant opportunities are being pursued in France. In April 2001,
Groupe  Solcom  acquired  a  second  entity,   a  French   company,   PROVIDENCE
TECHNOLOGIQUE.  This company has developed a unique and futuristic touch screen,
which  can be  useful  in  public  sites  such  as  shopping  Centers,  museums,
administrative  buildings,  etc.  This touch screen is managed by versatile  and
friendly  user  software  named  Icos.  Groupe  Solcom  is  confident  that this
integration of the new touch screen with the GSI MULTIMEDIA  PACK will be highly
advantageous.  The commercial  representatives  and the  distributors  of Groupe
Solcom will do the marketing of this product.

Italy

     In January 2001, Groupe Solcom acquired an Italian company, TREDWEB S.R.L.,
which  specialises  in the  creation  of web sites and 3D  animation.  With this
acquisition,  the company has successfully penetrated the Italian market and has
recruited  experts  in the field of  animation.  Supported  by the GSI  team,  a
wide-ranging  project is underway:  the  installation  of multimedia  projectors
using the GSI Multimedia Pack to broadcast animated  advertising on the walls of
the Milan subway system. The team is now in Phase 2 of the project.  TREDWEB SRL
also has  contracts  with  major  companies  operating  in Italy such as Young &
Rubicam,  Dlu.  BDDO.  ALMADEDIA.  Touring  Club and other large  accounts for a
turnover of US$750,000.


                                       14
<PAGE>

     Groupe Solcom has also concluded or is in the process of concluding several
agreements in Italy with several major companies:

     April 21, 2001, with SERENAM srl: This Italian company is doing business in
outdoor  advertising,  mainly in Milan and Rome. It manages both the advertising
site and the sale of  advertising.  The 3 year  agreement is to provide  SERENAM
with 35 LED screens (6mX3m) in the current year, as well as licenses for the GSI
MULTIMEDIA  PACK and servers.  SERENAM is forecasting  orders of a minimum of 10
LED screens in the following years.

     April 21, 2001, with HGV ADVERTISING srl: This Italian company  specializes
in the sale of advertising and 3D animation.  It has obtained several  contracts
with supermarkets such as Conad Pianeta,  Gabrielli Group,  Conad Lazio,  Auchan
Pescara and This D. Puglia for the implementation of a network of plasma screens
in  supermarkets.  Groupe  Solcom has entered  into a 6-year  agreement  for the
creation  of a joint  company  named  OMNIKEY.  This  company  will  realize the
implementation  of the plasma  screens  network  and the  software to enable the
broadcasting  in  supermarkets.  The partners plan to implement their network in
more than 650 supermarkets in the central area of Italy.

     May 17 2001,  with PIELLEFFE srl: This Italian  company  specializes in the
management of major projects in Italy. They also developed a impressive  contact
network at the national level. This company is seeking a partnership with Groupe
Solcom for the creation of a joint company to be called W.A.Waiting Advertising.
The purpose of this company will be to present  tenders for  important  projects
such as the  installation of plasma screens for the Telebingos in Italy, for the
COOP, the airport of Rome,  Bologna,  Torino;  as well as for the metros of Rome
and Naples.

     May 28 2001,  with  INFORMATICA E  TELECOMUNICAZIONI  (I e T): This Italian
company  manages and maintains  data  processing  systems and networks in Italy.
They are also  involved in the research  and  development  of  telecommunication
solutions.  I e T  intends  to sign an  agreement  with  Groupe  Solcom  for the
installation  and the  maintenance  of the LED  screens  network  and for plasma
screens, as well as for the maintenance of the servers for the network. I e T is
also  interested  in  acquiring  a  license  from  PROVIDENCE  TECHNOLOGIQUE  to
manufacture touch screens in Italy. Research and development works could also be
carried out by I e T in their new installations in the suburbs of Rome. I e T is
the largest computer company in Italy.

Portugal

     May 24, 2001,  Groupe Solcom signed an agreement with COMPTA S.A. of Lisbon
for the creation of a new company,  which will be 50% owned by Groupe Solcom and
50% by COMPTA S.A.  The  creation of this new company is planned to be completed
in  June  2001.  The  partners  have  already  started  work on  establishing  a
Multimedia studio in Lisbon and the training of the sale representatives.

     COMPTA,  through its  subsidiary,  Spectacolor,  is involved in the sale of
advertising   for  the  rail  trains  and  already   operates   dynamic  outdoor
advertising.  The  Portugese  market is  growing  rapidly.  The  COMPTA's  group
includes  many  subsidiaries  in the  field  of  telecommunication,  networking,
computer hardware,  It also owns a investment  company.  The COMPTA's group is a
leader in Portugal.  This agreement with this high-ranging  partner is excellent
for Groupe Solcom's development prospects in Europe.


     On February 26th 2001, we announced our intent to acquire the remaining 75%
of  Groupe  Solcom  that is  owned  by GSI  Canada  by way of  cash  and a share
exchange.  This  proposed  transaction  was  conditional  on the approval of our
shareholders and regulatory authorities, due diligence, and the obtaining of the
necessary financing. We were not able to raise the required financing.

     On May 16 2001,  GSI's Board  received a formal offer from Groupe Solcom to
acquire all GSI's  outstanding  shares including stock options and warrants.  We
anticipate  that before June 30,  2001,  the Board will  receive the full tender
package,  including a fairness  opinion and a valuation  package  from  external
auditors.

                                       15
<PAGE>

     After  receiving  the  required  documentation,  the Board will provide its
recommendations  to  GSI's  shareholders.  A  majority  vote  of  the  company's
shareholders  is  required.  Groupe  Solcom  also  presented  an  offer  to  the
shareholders of GSI Canada.

The offer consists of the following:

     -    Six (6) shares for every outstanding common share (including all stock
          options) of GSI Canada, a privately-held corporation;

     -    One (1) share of common stock for every two (2) outstanding  shares of
          GSI's  Class B Common  Stock  (including  all issued  and  outstanding
          warrants and stock options);

     Concurrently,  Groupe  Solcom,  announced it intends to file a registration
statement with the US Securities and Exchange  Commission (the `'SEC") and apply
to NASDAQ to have its shares quoted. This transaction is conditional on:

     -    Satisfactory due diligence by Groupe Solcom, GSI Canada, and GSI;

     -    Formal evaluations of Groupe Solcom, GSI Canada, and GSI;

     -    The  approval  of all  regulatory  authorities  including  the SEC and
          Quebec Securities Commission;

     -    A fairness opinion;

     -    Approval by the Board of Directors of GSI Canada and GSI;

     -    Approval by GSI Canada's and GSI's shareholders representing a minimum
          of 66.66% of the outstanding shares of GSI Canada and GSI.


The main objective is to unify the enterprise in order to offer global results
to all shareholders and stakeholders.


                                       16
<PAGE>




                           PART II - OTHER INFORMATION

Item 1.  Legal proceedings
--------------------------

Legal proceeding

     On December 15, 2000,  we signed an  agreement  with the Quebec  Securities
Commission  to  conform  to  filing  requirements  for any  sales of  shares  to
residents of the Province. Our President also agreed that the sale of any shares
directly  by himself or shares  owned by  companies  in which he has an interest
would be in  conformity  with the filing  requirements  in the  jurisdiction  of
Quebec.

     We remain party to one proceeding initiated by another party, a Mr. Jacques
Biron, against GSI Canada, GSI, our President,  and others in the Superior Court
of the  Province  of  Quebec,  District  of  Montreal.  An amount of  $98,766 in
Canadian  dollars has been  claimed for our alleged  failure to pay a commission
and  consequent  damages  relating  to  negotiations  with  GSI  Canada  for  an
acquisition.  We have  retained  legal  counsel in  Montreal,  Mr.  Marc Cote of
Labelle,  Boudrault,  Cote & Associates,  who advises that, in his opinion,  Mr.
Biron's case against the company is without  merit;  that he has no right in law
to sue GSI Technologies USA Inc.


Item 2. Changes to authorized shareholders' capital
---------------------------------------------------

None.

Item 3.  Defaults upon senior securities
----------------------------------------

None.

Item 4.  Submission of matters to vote of security holders
----------------------------------------------------------

None.

Item 5.  Other information
--------------------------

     On April 18, 2001, J. Michel de Montigny  resigned as Chairman of the Board
of GSI, to allow him to concentrate on business development internationally. Mr.
de Montigny  remains CEO and  President  of the  Corporation,  and member of the
Board.

     The Board of  directors  nominated  unanimously  Mr.  Rene Arbic as the new
Chairman.  Mr. Arbic is President of Bridgepoint  International Inc., joined the
Board of  directors.  He is 47. On  retiring  in 1997 after a 25-year  career in
operations and sales with Bell Canada and Stentor,  the former Canadian alliance
of     telecommunications     carriers,     he     launched     a     successful
telecommunications-consulting    firm.    He   then    co-founded    Bridgepoint
International,  a rapidly  growing  innovator in the field of shared  networking
facilities,  voice and date switching, and local technical support.  Bridgepoint
Centers are currently in operation in Montreal,  Toronto,  Calgary and Vancouver
as well as in New York and Los Angeles. The Company is now listed on the Toronto
Stock Exchange and plans to expand in internationally.




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

The following exhibits are contained in this 10-QSB:

   None.


                                   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:  June 14, 2001              GSI TECHNOLOGIES USA INC.

                               By:   /s/  Michel de Montigny
                                     --------------------------------
                                        Michel de Montigny
                                        Chief Executive Officer