<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


[X]      Quarterly report pursuant to section 13 or 15(d) of the Securities
         Exchange Act of 1934

         FOR THE QUARTER ENDED MARCH 31, 2001


[ ]      Transition report pursuant to section 13 or 15(d) of the Securities
         Exchange Act of 1934

                        Commission file number 333-89561



                            E-XACT TRANSACTIONS, LTD
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                  DELAWARE                                98-0212722
         (State of Incorporation)              (IRS Employer Identification No.)

  555 WEST HASTINGS STREET, SUITE 2410             VANCOUVER, B.C., V6B 4N4
 (Address of principal executive offices)           (City, state, zip code)


       Registrant's telephone number, including area code: (604) 691-1670

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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
requirements for the past 90 days.

                           Yes  X   No
                               ----    ----

Transitional Small Business Disclosure format (check one):

                           Yes      No  X
                               ----    ----

The number of shares outstanding of the Registrant's $0.001 par value common
stock on May 21, 2001 was 8,502,000.

                               Page 1 of 14 Pages


<PAGE>   2

                            E-XACT TRANSACTIONS, LTD
                                   FORM 10-QSB
                                TABLE OF CONTENTS


<TABLE>
<CAPTION>

   PART I.        FINANCIAL INFORMATION                                               PAGE
                                                                                      ----
<S>                                                                                   <C>
     Item 1.      Consolidated balance sheets -
                  March 31, 2001 and December 31, 2000                                  3

                  Consolidated statements of operations - Three Months Ended
                  March 31, 2001 and 2000                                               4

                  Consolidated statements of cash flows -
                        Three Months Ended March 31, 2001 and 2000                      5

                  Notes to consolidated financial statements                            6 - 9

     Item 2.      Management's discussion and analysis of financial condition
                  and results of operations                                             10 -12

  PART II.        OTHER INFORMATION

     Item 1.      Legal Proceedings                                                     13

     Item 2.      Changes in Securities                                                 13

     Item 3.      Defaults Upon Senior Securities                                       13

     Item 4.      Submission of Matters to a Vote of Security Holders                   13

     Item 5.      Other Information                                                     13

     Item 6.      Exhibits and Reports on Form 8-K                                      13

                  Signature                                                             14
</TABLE>




                                       2

<PAGE>   3
EXACT TRANSACTIONS LTD.
CONSOLIDATED  BALANCE SHEETS
Expressed in US Dollars
================================================================================
<TABLE>
<CAPTION>


                                                                     March 31           December 31
                                                                       2001                2000
                                                                   ------------        ------------
                                                                    Unaudited
<S>                                                                <C>                 <C>
ASSETS
Current

    Cash                                                           $     30,648        $     10,476

    Accounts receivable (Note 3)                                        112,686              72,671

    Prepaid expenses and deposits                                        16,994               5,356
                                                                   ------------        ------------
                                                                        160,328              88,503

   Capital assets                                                        93,407             103,601
                                                                   ------------        ------------
                                                                   $    253,735        $     92,104
                                                                   ============        ============

LIABILITIES AND CAPITAL DEFICIENCY

    Accounts payable and accrued liabilities
      (Note 4)                                                     $    583,460        $    541,163

    Income taxes payable                                                 71,909              71,909

    Advance payable                                                     370,844             222,558
                                                                   ------------        ------------

                                                                      1,026,213             835,630
                                                                   ============        ============



Continuing operations (Note 1)

(CAPITAL DEFICIENCY)
 Common stock, common shares issued and outstanding (Note 5)
   8,502,000 at March 31, 2001 and Dec. 31, 2000                          8,502               8,502

Additional paid-in capital                                            3,128,382           3,128,382

Accumulated deficit                                                  (3,909,362)         (3,780,410)
                                                                   ------------        ------------
                                                                       (772,478)           (643,526)
                                                                   ------------        ------------
                                                                   $    253,735        $    192,104
                                                                   ============        ============
</TABLE>



See accompanying notes to consolidated financial statements


<PAGE>   4

EXACT TRANSACTIONS LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
 Expressed in US Dollars
================================================================================

<TABLE>
<CAPTION>

For the three month period ended March 31     2001                 2000
                                           ------------        ------------
                                            Unaudited           Unaudited

<S>                                        <C>                 <C>
Revenue                                         117,751              49,009


Cost of sales                                    14,581              11,935
                                           ------------        ------------

Gross margin                                    103,170              37,074
                                           ------------        ------------

 Expenses:

  General and administrative                    146,563             251,553

  Sales and marketing                            23,624             110,629

  Research and development                       64,280             157,990
                                           ------------        ------------

                                                234,467             520,172
                                           ------------        ------------
Operating Income (Loss)                        (131,297)           (483,098)
                                           ------------        ------------
Other Income (Expenses)

  Interest Income                                 1,865               2,486

  Gain on disposal of capital assets                200                  --

  Foreign exchange gain (loss)                      280             (19,141)
                                           ------------        ------------

                                                  2,345             (16,655)
                                           ------------        ------------
Net  (Loss) Before Income Taxes                (128,952)           (499,753)

Income taxes                                         --              78,690
                                           ------------        ------------

                                               (128,952)           (421,063)

(Deficit), beginning of period               (3,780,410)           (741,110)
                                           ------------        ------------

(Deficit), end of period                     (3,909,362)         (1,162,173)
                                           ============        ============


Basic loss per share                       $      (0.02)       $      (0.07)
                                           ------------        ------------
</TABLE>


See accompanying notes to consolidated financial statements



                                       4
<PAGE>   5
E-XACT TRANSACTIONS LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
Expressed in US Dollars
================================================================================

<TABLE>
<CAPTION>

For the three month period ended March 31                                     2001                2000
                                                                          ------------        ------------
                                                                            Unaudited           Unaudited

<S>                                                                           <C>                 <C>
   OPERATING ACTIVITIES

    Net Loss                                                                  (128,952)           (421,063)
    Item not affecting cash:

          Amortization                                                          10,196               8,081
                                                                          ------------        ------------
                                                                              (118,756)           (412,982)

   Net change in operating assets and liabilities

         (Increase) in accounts receivable                                     (40,015)            (17,350)
         (Increase) in prepaid expenses and deposits                           (11,640)            (29,721)

         (Increase) in income taxes recoverable                                     --             (78,690)
         Increase in accounts payable and accrued liabilities                   42,297             131,303
                                                                          ------------        ------------

                                                                              (128,114)           (407,440)
                                                                          ------------        ------------

  FINANCING ACTIVITIES
    Proceeds on issuance of capital stock, net of offering costs                    --           1,733,211

    Proceeds on notes payable                                                  148,286                  --

    Deferred share issue costs, net of related accounts payables                    --             163,704
                                                                          ------------        ------------

                                                                               148,286           1,896,915
                                                                          ------------        ------------
INVESTING ACTIVITY

  Purchase of capital assets                                                        --             (75,590)
                                                                          ------------        ------------
                                                                                    --             (75,590)
                                                                          ------------        ------------

  INCREASE IN CASH                                                              20,172           1,413,885

  CASH, BEGINNING OF PERIOD                                                     10,476             280,899
                                                                          ------------        ------------
  CASH, END OF PERIOD                                                           30,648           1,694,784
                                                                          ============        ============



Supplemental non cash investing and financing cash flow disclosure:



  Warrants issued for financing                                           $         --        $    138,744
                                                                          ============        ============


  Common stock issued to underwriters                                     $         --        $     75,000
                                                                          ============        ============
</TABLE>


See accompanying notes to consolidated financial statements



                                       5

<PAGE>   6
E-XACT TRANSACTIONS LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
(EXPRESSED IN US DOLLARS)


1.       CONTINUING OPERATIONS

         The Company specializes in online financial transaction processing
         supporting customers' e-commerce activities. The Company was initially
         incorporated on August 13, 1998 under the laws of British Columbia,
         Canada. On July 28, 1999 the Company was reincorporated in the State of
         Delaware.

         The Company was formed through the acquisition of certain software and
         other intangible assets from Sutton Group Financial Services ("Sutton")
         and Data Direct Holdings Ltd. ("DataDirect"). In consideration for the
         acquisition of these assets Sutton and Data Direct, two unrelated
         companies, at the time of the acquisition, each received 2,100,000
         common shares.

         The accompanying financial statements have been prepared on a going
         concern basis, which contemplates the realization of assets and
         satisfaction of liabilities in the normal course of business.

         The Company incurred a net loss of $128,952 for the quarter ended March
         31, 2001 and at March 31, 2001 had a working capital deficiency of
         $865,884 and capital deficiency of $772,478. The success of the
         Company's future operations is dependent upon attaining profitable
         operations, and upon its ability to raise additional financing.
         Management's plans include obtaining the continued support of
         creditors, raising additional financing and, ultimately, positioning
         the Company for profitable operations.

         These factors among others indicate that the Company may be unable to
         continue as a going concern for a reasonable period of time. The
         financial statements do not include any adjustments that might result
         from the outcome of this uncertainty. The Company's continuation as a
         going concern is dependent upon achieving operating levels adequate to
         support the Company's cost structure and obtaining adequate financial
         resources through a contemplated financing or otherwise. However, there
         can be no assurance that such financings will be successful.


2.       BASIS OF PRESENTATION

         The accompany unaudited financial statements do not include all
         information and footnote disclosures required under accounting
         principles generally accepted in the United States of America (US
         GAAP). In the opinion of management, all adjustments (consisting
         primarily of normal recurring adjustments) considered necessary for a
         fair presentation of the financial position, results of operations and
         cash flows as at March 31, 2001, and for all periods presented, have
         been included.

         The unaudited balance sheet, statements of operations and deficit and
         statements of cash flows have been prepared in accordance with
         accounting principles generally accepted in the United States of
         America which conform in all material aspects with Canadian generally
         accepted accounting principles for interim financial statements. The
         accompanying financial statements have been prepared pursuant to the
         rules and regulations of the Securities and


                                       6
<PAGE>   7

E-XACT TRANSACTIONS LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
(EXPRESSED IN US DOLLARS)


2.       BASIS OF PRESENTATION (continued)

         Exchange Commission ("SEC") and the relevant guidance of the Canadian
         Institute of Chartered Accountants ("CICA"). These interim financial
         statements follow the same accounting policies and methods of
         applications as the most recent annual financial statements dated
         December 31, 2000. These financial statements should be read in
         conjunction with the financial statements and notes thereto included in
         the Company's Canadian statutory annual report and filing with the SEC
         on form 10K-SB for the fiscal year ended December 31, 2000.


3.       ACCOUNTS RECEIVABLE

         Accounts receivable are recorded net of a $29,926 allowance for
         doubtful accounts at March 31, 2001 (December 31, 2000 - $65,581).


4.       ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

         The principal components of accounts payable and accrued liabilities
         were as follows:

<TABLE>
<CAPTION>

                               -----------------------------------
                               March 31, 2001    December 31, 2000
                               --------------    -----------------
                                 Unaudited
<S>                             <C>                <C>
Trade payables                  $    532,451       $    498,149
Other accrued liabilities       $     51,009       $     43,014
                                ------------       ------------
                                $    583,460       $    541,163
                                ============       ============
</TABLE>

5.       SHARE CAPITAL

         As at May 18, 2001, there were 8,502,000 common shares issued and
         outstanding. As at May 18,2001 there were 498,500 options issued and
         outstanding at exercise prices ranging from $1.00 to $3.35 with
         remaining weighted-average contractual lives of approximately 4 years.
         In addition, as at May 18, 2001, there were 1,556,668 warrants issued
         and outstanding, entitling the holders to acquire 1,331,668 common
         shares at prices ranging from $1.00 to $2.25 and 225,000 common shares
         at a price to be based on a follow-on private placement.



                                       7
<PAGE>   8


E-XACT TRANSACTIONS LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
(EXPRESSED IN US DOLLARS)



6.       FINANCIAL INSTRUMENTS

         (a)      Fair Value

         The carrying values of cash, accounts receivable, deposits, accounts
         payable and accrued liabilities income taxes payable and advances
         payable, as reflected in the balance sheet, approximate their
         respective fair values as at March 31, 2001 and December 31,2000
         because of the demand or short-term maturity of these instruments.

         (b)      Credit Risk and Economic Dependence

                  Financial instruments which potentially subject the Company to
                  credit risk consist of bank deposits and accounts receivable.
                  Cash is deposited with high credit quality financial
                  institutions. Accounts receivable consist of amounts
                  receivable from trade and other receivables. The Company does
                  not require collateral or other security to support accounts
                  receivable. The Company estimates its allowance for doubtful
                  accounts based on analysis of specific accounts and its
                  operating history. During the three months ended March 31,
                  2001 11 % of revenue was derived from two customers (2000-
                  68%)

7.       RELATED PARTY TRANSACTIONS

         Related party transactions not otherwise disclosed in these financial
         statements include:

         (a)      During the three month period ended March 31, 2001, the
                  Company incurred interest of $8,286 (2000 - $Nil); on advances
                  from certain stockholders of the Company.

         (b)      During the three month period ended March 31,2001, the Company
                  incurred accounting fees of $12,000 (2000-$9,500) from a
                  company related to a stockholder of the Company

8.       SEGMENTED INFORMATION

         The Company operates in one segment - electronic commerce services.

         The Company attributes revenue among geographical areas based on the
         location of the customers. During the quarter ended March 31, 2001,
         100% of revenues were derived in Canada (quarter ended March 31, 2000 -
         100%). Long-lived assets include capital assets and are located in
         Canada.

         The Company's customer sales concentration is discussed in Note 6(b).



                                       8

<PAGE>   9

         E-XACT TRANSACTIONS LTD

9.       SUBSEQUENT EVENTS

         On April 27, 2001 the Company announced that it had arranged, subject
         to regulatory approval, a non-brokered private placement of 2,000,000
         special warrants at US$0.20 per special warrant, for total proceeds of
         US$400,000. Each special warrant consists of one common share (at no
         cost to the holder) and one purchase warrant. Each purchase warrant
         will entitle the holder to purchase one additional common share at a
         price of US$0.23 per share in the first year and US$0.27 per share in
         the second. year.









                                       9



<PAGE>   10




         E-XACT TRANSACTIONS LTD


Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

         Forward-looking Statements

         The following Management Discussion and Analysis of Financial Condition
         and Results of Operations should be read in conjunction with the
         accompanying condensed financial statements and notes included in this
         report. Statements made in this Form 10-QSB that are not historical or
         current facts are "forward-looking statements" made pursuant to the
         safe harbor provisions of Section 27A of the Securities Act of 1933 and
         Section 21E of the Securities Exchange Act of 1934. These statements
         often can be identified by the use of terms such as "may," "will,"
         "expect," "believes," "anticipate," "estimate," or "continue," or the
         negative thereof. The Company intends that such forward-looking
         statements be subject to the safe harbors for such statements. The
         Company wishes to caution readers not to place undue reliance on any
         such forward-looking statements, which speak only as of the date made.
         Any forward-looking statements represent management's best judgment as
         to risks, uncertainties and important factors beyond the control of the
         Company that could cause actual results and events to differ materially
         from historical results of operations and events from those presently
         anticipated or projected. These factors include adverse economic
         conditions, entry of new and stronger competitors, inadequate capital,
         unexpected costs, failure to gain product approval in the United States
         or foreign countries and failure to capitalize upon access to new
         markets. Additional risks and uncertainties that may affect
         forward-looking statements about the Company's business and prospects
         include the possibility that a competitor will develop a more
         comprehensive solution, delays in market awareness of its products,
         possible delays in execution of sales and marketing strategy, which
         could have an immediate and material adverse effect. The Company
         disclaims any obligation subsequently to revise any forward-looking
         statements to reflect events or circumstances after the date of such
         statements or to reflect the occurrence of anticipated or unanticipated
         events.

         Overview

         The Company was incorporated under the laws of the Province of British
         Columbia on August 13, 1998. On July 29, 1999 the Company filed a
         certificate of domestication and certificate of incorporation with the
         Secretary of State of the State of Delaware, thereby "domesticating" or
         transitioning from a Canadian company to one organized under the laws
         of the State of Delaware.

         The consolidated financial statements of the Company are prepared in
         accordance with accounting policies generally accepted in the United
         States of America which for this Company complies in all material
         respects with Canadian generally accepted accounting principles. The
         Company provides real-time financial transaction processing services
         using web-centric technology. Its electronic commerce (e-commerce)
         software services allow PC based cash registers, PCs, point-of-sale
         terminals, computer systems and proprietary product platforms to accept
         credit card payments and submit those payments to various payment
         processing companies for pre-authorization, authorization and
         settlement/deposit. The Company is approved to act as a third party
         payment processor to conduct transaction processing with major banks in
         North America.

         The Company's success will depend largely upon its ability to compete
         successfully, develop new products and services and market them
         successfully in a market that is becoming increasingly competitive.


                                       10
<PAGE>   11
         E-XACT TRANSACTIONS LTD


         Results of Operations

         Interim Financial Results

         (All amounts are expressed in U.S. dollars)

         The Company earns its revenues by charging its customers setup fees,
         monthly account maintenance fees and transaction fees for usage of its
         services. Transaction fees are based on the number of transactions
         processed in a month.

         Revenues. During the three month period ended March 31, 2001, revenues
         were $117,751 compared to $49,009 for the three months ended March 31,
         2000. Revenues were derived primarily from transaction processing fees
         and monthly service fees. Gross margins increased from 76% in 2000 to
         88% in the quartered ended March 31, 2001. The increased was due
         primarily higher sales volumes without the need for increasing delivery
         capacity.

         Expenses. During the quarter ended March 31, 2001, the Company embarked
         on an aggressive campaign to reduce its operating expenses. Total
         expenses during the three months ended March 31, 2001 amounted to
         $234,467 compared to $520,172 for the three months ended March 31,
         2000.

         General and Administrative (G&A). During the three months ended March
         31, 2001, G&A expenses were $146,563 compared to $251,553 for the
         comparable period in 2000. Consulting fees decreased from $61,219 in
         2000 to $1,747 in 2001 while wages and salaries decreased from $97,720
         in 2000 to $48,452. The Company began reducing its personnel in the
         fourth quarter of 2000 and the first quarter of 2001. This process was
         completed by the end of March 31, 2001.

         Sales and Marketing. Sales and Marketing expenditures decreased from
         $110,629 for the three months ended March 31, 2000 to $23,624 for the
         corresponding period in 2001. The Company reduced its marketing budget
         as it concentrated its resources on ensuring that it was able to meet
         it operating expenses.

         Research and development. Research and development expenses consist
         primarily of compensation expenses and consulting fees to support the
         development of the Company's software, services and technologies.
         Research and development expenditures were $64,280 for the three months
         ended March 31, 2001 compared to $157,990 for the comparable period in
         2000. The decrease in expenses was due to a reduction in personnel as
         well as a reduction in the use of outside consultants. The Company
         believes that these reductions will not impede the Company's ability to
         development its software programs.

         Net loss. The Company incurred a net loss ( before income taxes ) of
         $128,952 for the three months ended March 31, 2001 compared to a loss
         of $421,062 in 2000. The net loss in the first quarter of 2001
         consisted primarily of operational expenses compared to 2000 which
         included startup expenses for the US office as well operational
         expenses.



                                       11
<PAGE>   12

         E-XACT TRANSACTIONS LTD


         In July 1999, the FASB announced a delay of the effective date of SFAS
         No. 133, Accounting for Derivative Instruments and Hedging Activities
         to the first quarter of 2001. SFAS No. 133 establishes accounting and
         reporting standards for derivative instruments, including certain
         derivative instruments embedded in other contracts, and for hedging
         activities . It requires companies to recognize all derivatives as
         either assets or liabilities on the balance sheet and measure those
         instruments at fair value. Under SFAS No. 133, gains or losses
         resulting from changes in the values of those derivatives are accounted
         for depending on the use of the derivative and whether it qualifies for
         hedge accounting. The Company adopted SFAS No. 133 on January 1, 2001
         with no material effect on the Company's financial position or results
         of operations.

         Liquidity & Capital Resources

         Cash flow. The Company's net cash flows used for operating activities
         during the three months ended March 31, 2001 was a negative $128,115
         compared to a negative $407,439 for the three months ended March 31,
         2000. The loss was financed by advances from certain shareholders. No
         investment was made in capital equipment during the quarter ended March
         31, 2001.During the quarter ended March 31, 2001 shareholder advances
         amounted to $148,286. These advances were used to cover the Company's
         operating expenses. The Company's negative cash flow from operations is
         the result of inadequate sales revenue to support operating expenses.
         Management will continue to review its operations and adjust its
         operations based on market conditions.

         Capital resources. The Company had a working capital deficiency of
         $865,884 as at March 31, 2001 compared to a deficiency of $747,127 as
         at December 31, 2000.

         Management believes that the Company will continue to incur losses
         through the remainder of 2001. In the event that cash flow from
         operations, together with the proceeds of any future financings, are
         insufficient to meet these expenses, the Company will be required to
         re-evaluate its planned expenditures and allocate its total resources
         in such manner as the board of directors and management deems to be in
         the best interest of the Company and its stockholders.

         Subsequent events

         On April 27, 2001 the Company announced that it had arranged, subject
         to regulatory approval, a non-brokered private placement of 2,000,000
         special warrants at US$0.20 per special warrant, for total proceeds of
         US$400,000. Each special warrant consists of one common share (at no
         cost to the holder) and one purchase warrant. Each purchase warrant
         will entitle the holder to purchase one additional common share at a
         price of US$0.23 per share in the first year and US$0.27 per share in
         the second. year.

         The Company is currently negotiating with its trade suppliers and
         creditors. The success of the company is dependant upon the continuing
         support of its creditors, its ability to continue to raise financing to
         fund operations and ultimately upon its ability to achieve profitable
         operations.





                                       12
<PAGE>   13




E-XACT TRANSACTIONS LTD


     Part II.  Other Information

Item 1. Legal Proceedings

     Not applicable

Item 2. Changes in Securities

     No change

Item 3. Defaults Upon Senior Securities

     Not applicable

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

     Not applicable

Item 5. Other Information

     Not applicable

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

         None

(b)      Reports on Form 8-K.
         No form 8-K reports were file in the quarter ended March 31, 2001



                                       13
<PAGE>   14



                             E-XACT TRANSACTIONS LTD

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1933 the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.


                                             E-XACT TRANSACTIONS LTD
                                                   (Registrant)


Dated:   May 21, 2001                        By: /s/ Peter Fahlman
                                                 -------------------------------
                                                 Peter Fahlman
                                                 President and CEO



                                       14