UNITED STATES
                       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 September 30, 2004

                                       or

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

                        Commission file number: 000-27773

                              SYSCAN IMAGING, INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

--------------------------------------------------------------------------------
DELAWARE                                                              59-3134518
--------                                                              ----------
--------------------------------------------------------------------------------
(State of incorporation)                    (I.R.S. Employer Identification No.)
--------------------------------------------------------------------------------

                              1772 TECHNOLOGY DRIVE
                           SAN JOSE, CALIFORNIA 95110
          (Address of principal executive offices, including zip code)

                                 (408) 436-9888
                (Issuer's telephone number, including area code)

                              1754 Technology Drive
                           San Jose, California 95110
   (Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months,
and (2) has been subject to such filing requirements for the past 90 days. Yes
|X| No |_|

The number of shares outstanding of the issuer's Common Stock, $.001 Par Value,
on November 18, 2004, was 23,110,515 shares.

Transitional Small Business Disclosure Format (check one):        Yes |_| No |X|
<PAGE>

                              SYSCAN IMAGING, INC.

                                TABLE OF CONTENTS

PART I      FINANCIAL INFORMATION

                                                                     Page Number

Item 1. Financial Statements...................................................3
Item 2. Management's Discussion and Analysis of Financial Condition and
          Results of Operations...............................................13
Item 3. Controls and Procedures...............................................21

PART II     OTHER INFORMATION

Item 1. Legal Proceedings.....................................................21
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds...........21
Item 3. Defaults Upon Senior Securities.......................................21
Item 4. Submission of Matters to a Vote of Security Holders...................22
Item 5. Other Information.....................................................22
Item 6. Exhibits and Reports on Form 8-K......................................22

Signatures....................................................................22
<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                      SYSCAN IMAGING, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2004

ASSETS
Current assets
   Cash and cash equivalents                                       $    848,923
   Accounts receivables, net                                          1,205,528
   Inventories                                                          347,441
   Prepayments and other current assets                                 353,563
   Due from related parties                                           2,542,516
                                                                   ------------
Total current assets                                                  5,297,971

Fixed assets, net                                                        15,674

Other assets
   Intangible assets                                                     13,493
   Long-term investment                                                 997,692
                                                                   ------------
Total other assets                                                    1,011,185
                                                                   ------------

TOTAL ASSETS                                                       $  6,324,830
                                                                   ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
   Bank line of credit                                             $    700,000

   Accounts payable and accrued liabilities                             191,643
   Due to related parties                                               548,578
                                                                   ------------
Total current liabilities                                             1,440,221

Stockholders' equity
   Common stock: $0.001 par value; 50,000,000 shares authorized;
      23,110,515 shares issued and outstanding                           23,110
   Additional paid-in capital                                        25,457,237
   Accumulated deficit                                              (20,595,738)
                                                                   ------------
Total stockholders' equity                                            4,884,609
                                                                   ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $  6,324,830
                                                                   ============


                  SEE CONDENSED NOTES TO FINANCIAL STATEMENTS.


                                                                               3
<PAGE>

                      SYSCAN IMAGING, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004

<TABLE>
<CAPTION>
                                          THREE MONTHS    THREE MONTHS     NINE MONTHS      NINE MONTHS
                                              ENDED           ENDED           ENDED            ENDED
                                          SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,    SEPTEMBER 30,
                                              2004            2003            2004             2003
                                          -------------------------------------------------------------
<S>                                       <C>             <C>             <C>              <C>
NET SALES                                 $  1,954,684    $  1,729,405    $  4,435,632     $  4,454,362

COSTS OF SALES                               1,303,624       1,196,584       2,958,923        3,178,225
                                          -------------------------------------------------------------

GROSS PROFIT                                   651,060         532,821       1,476,709        1,276,137

OPERATING EXPENSES
   Selling and marketing expenses              140,904         144,866         507,341          387,787
   General and administrative expenses         261,425         110,014         602,581          341,047
   Research and development expenses           196,884         160,045         427,581          377,257
                                          -------------------------------------------------------------
Total operating expenses                       599,213         414,925       1,537,503        1,106,091
                                          -------------------------------------------------------------

OPERATING EARNINGS (LOSS)                       51,847         117,896         (60,794)         170,046

Other income                                     1,527         215,780           4,673          552,221
                                          -------------------------------------------------------------

NET EARNINGS (LOSS) BEFORE TAXES                53,374         333,676         (56,121)         722,267

Provision for income taxes                          --              --             800              800
                                          -------------------------------------------------------------

NET EARNINGS (LOSS)                       $     53,374    $    333,676    $    (56,921)    $    721,467
                                          =============================================================

EARNINGS (LOSS) PER SHARE                 $         --    $       0.17    $         --     $       0.38
                                          =============================================================

WEIGHTED AVERAGE SHARES OUTSTANDING         23,110,510       1,907,575      16,017,882        1,904,290
                                          =============================================================
</TABLE>


                  SEE CONDENSED NOTES TO FINANCIAL STATEMENTS.


4
<PAGE>

                      SYSCAN IMAGING, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                          2004             2003
                                                                      ------------     ------------
<S>                                                                   <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net earnings (loss)                                                $    (56,921)    $    721,467
   Adjustments to reconcile net earnings (loss) to net cash flows
      provided by operating activities
   Depreciation                                                              6,430            5,032
   Changes in assets and liabilities
      (Increase) decrease accounts receivables                             893,754         (213,782)
      (Increase) decrease in inventories                                  (147,891)        (302,491)
      (Increase) decrease in other current assets                         (330,771)         126,959
       Increase (decrease) in accounts payables and other accruals        (253,835)          33,925
                                                                      ------------     ------------
   Net cash flows provided by operating activities                         110,766          371,110

CASH FLOWS FROM INVESTING ACTIVITIES
   Capital expenditures                                                    (11,288)              --
                                                                      ------------     ------------
Net cash flows used in investing activities                                (11,288)              --

CASH FLOWS FROM FINANCING ACTIVITIES
   Advances under bank line of credit                                      700,000               --
   Advances (repayments) - related party payables                         (942,472)          64,213
   (Advances) repayments - related party receivables                       (27,905)         336,188
                                                                      ------------     ------------
Net cash flows provided by (used in) financing activities                 (270,377)         400,401
                                                                      ------------     ------------

Increase (decrease) in cash and cash equivalents                          (170,899)         771,511

Cash and cash equivalents, beginning of period                           1,019,822          333,611
                                                                      ------------     ------------

Cash and cash equivalents, end of period                              $    848,923     $  1,105,122
                                                                      ============     ============

CASH PAID FOR:
   Interest                                                                     --               --
   Income taxes                                                                 --               --
</TABLE>


                  SEE CONDENSED NOTES TO FINANCIAL STATEMENTS.


                                                                               5
<PAGE>

                              SYSCAN IMAGING, INC.
            NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

NOTE 1 - BACKGROUND, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

BACKGROUND

On April 2, 2004, Syscan Imaging, Inc. (formerly known as "BankEngine
Technologies, Inc." and referred to herein as the "Company") completed its
acquisition of 100% of the issued and outstanding capital stock of Syscan, Inc.,
pursuant to a Share Exchange Agreement ("Agreement") dated March 29, 2004.
Pursuant to the Agreement, the sole stockholder of Syscan, Inc., Syscan Imaging
Limited, received 18,773,514 post-reverse split shares of the Company's common
stock in exchange for all of the issued and outstanding capital stock of Syscan,
Inc. In connection with the issuance of the Company's common stock to Syscan
Imaging Limited, Syscan Imaging Limited beneficially became the owner of 81.2%
of the issued and outstanding securities of the Company.

Upon completion of the reverse acquisition, the Company changed its name to
Syscan Imaging, Inc. and effectuated a 1-for-10 reverse split of its common
stock. Pursuant to the Agreement, the following persons were appointed to the
Company's board of directors: Darwin Hu, Wai Cheung, Peter Mor and Lawrence
Liang. Michael Xirinachs resigned as Chairman and Chief Executive Officer, and
remained director of the Company until his resignation on July 19, 2004.
Concurrent with the closing on April 2, 2004, the Board of Directors of the
Company appointed Darwin Hu as the Company's President and Chief Executive
Officer, Stephen Yim as the Company's Chief Financial Officer and William
Hawkins as the Company's Chief Operating Officer and Secretary. A more detailed
description of this transaction is set forth in the Company's Current Report on
Form 8-K dated April 2, 2004, filed with the Securities and Exchange Commission
on April 19, 2004. These financial statements should be read in conjunction with
the Company's Current Report on Form 8-K/A dated April 2, 2004 and filed with
the Securities and Exchange Commission on June 14, 2004.

Syscan Inc. was founded in Silicon Valley in 1995 to develop and manufacture a
new generation of CIS (CMOS-Complimentary Metal Oxide Silicon) imaging sensor
devices. During the late 1990's, the Company established many technical
milestones and was granted numerous patents based on their linear imaging
technology (Contact Image Sensors). Syscan's patented CIS and mobile imaging
scanner technology provides very high quality images but at extremely low power
consumption, allowing it to manufacture very compact scanners in a form ideally
suited for the mobile computer user who needs to scan and/or fax documents while
away from their office.

This "enabling" technology is found in a variety of applications such as
document management, ID card and passport security scanners, bank note/check
verification, business card readers, scanning 2D bar codes and optical mark
readers used in lottery terminals. Syscan has grown to be one of the largest OEM
-- private label manufacturers of mobile scanning systems and contact image
sensor modules for a large number of major brands such as PENTAX, COREX,
VISIONEER, DATACOLOR, DIGIMARC, SCANSOFT, NORTEK and OMRON. Syscan's vertically
integrated design and manufacturing model allows rapid time-to-market for these
leading companies. Syscan's manufacturing is completed at an affiliated
China-based facility, which provides a low-cost manufacturing base for these
industrial and consumer products.

BASIS OF PRESENTATION

The financial statements in the filings of Syscan Imaging, Inc. become those of
Syscan, Inc. and thus, the consolidated financial statements of Syscan Imaging,
Inc. and subsidiaries represent the activities of its 100% owned subsidiary,
Syscan, Inc. Although the Company is the legal acquirer, Syscan, Inc. will be
treated as having acquired the Company for accounting purposes and all of the
operations reported are for Syscan, Inc. Syscan Imaging, Inc.'s


6
<PAGE>

continuing operations and balance sheet are insignificant and therefore, no pro
forma balance sheet and income statements have been presented.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the
accounts of the Company and its subsidiaries. The results of subsidiaries
acquired or disposed of during the periods presented are consolidated from or to
their effective dates of acquisition or disposal. All significant intercompany
balances and transactions have been eliminated in consolidation.

USE OF ESTIMATES - The preparation of financial statements in conformity with
U.S. 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 the reported amounts of revenues and expenses
during the reporting period. Management makes its best estimate of the ultimate
outcome for these items based on historical trends and other information
available when the financial statements are prepared. Changes in estimates are
recognized in accordance with the accounting rules for the estimate, which is
typically in the period when new information becomes available to management.
Actual results could differ from those estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS - For certain of the Company's financial
instruments, including cash and cash equivalents, accounts receivable and
payable, prepaid expenses and other current assets, amounts due to / from
related parties, bank line of credit, and other payables and accruals, the
carrying amounts approximate fair values due to their short maturities.

RELATED PARTY TRANSACTIONS - A related party is generally defined as: (i) any
person that holds 10% or more of the Company's securities and their immediate
families, (ii) the Company's management, (iii) someone that directly or
indirectly controls, is controlled by or is under common control with the
Company, or (iv) anyone who can significantly influence the financial and
operating decisions of the Company. A transaction is considered to be a related
party transaction when there is a transfer of resources or obligations between
related parties.

CASH AND CASH EQUIVALENTS - The Company considers all highly liquid instruments
purchased with an original maturity of three months or less to be cash
equivalents.

CONCENTRATION OF CREDIT RISK FOR CASH HELD AT BANKS - The Company maintains cash
balances at several banks. Accounts at each institution are insured by the
Federal Deposit Insurance Corporation up to $100,000.

CONCENTRATION OF CREDIT RISK DUE TO GEOGRAPHIC SALES AND SIGNIFICANT CUSTOMERS -
The Company operates in a single industry segment - scanner and fax modules. The
Company markets its products in the United States, Europe and the Asia Pacific
region through its sales personnel and independent sales representatives.

The Company's geographic sales as a percent of total revenue were as follows for
the nine months ended September 30:

                                     2004          2003
                                   --------      --------
United States                         96%           95%
Europe and others                      3%            5%
Asia Pacific                           1%            0%


                                                                               7
<PAGE>

Sales to major customers as a percentage of total revenues were as follows for
the nine months ended September 30:

                                     2004          2003
                                   --------      --------
Customer A                            38%           15%
Customer B                            20%           10%
Customer C                            13%           40%
Customer D                             9%            7%

CONCENTRATION OF CREDIT RISK - Financial instruments that potentially subject
the Company to a concentration of credit risk consist primarily of trade
receivables. The Company's customers are concentrated in the industrial/consumer
electronics channels and with major original equipment manufacturers. As of
September 30, 2004 and 2003, the concentration was approximately 77% (3
customers) and 77% (3 customers), respectively. The loss of any of these
customers could have a material adverse effect on the Company's results of
operations, financial position and cash flows.

CONCENTRATION OF CREDIT RISK DUE TO SIGNIFICANT VENDORS - For the nine months
ended September 30, 2004 and 2003, the Company's purchases of finished scanner
imaging products have primarily been concentrated with one (1) vendor that is a
subsidiary of the Company's majority stockholder. If this vendor was unable to
provide materials in a timely manner and the Company was unable to find
alternative vendors, the Company's business, operating results and financial
condition would be materially adversely affected.

CONCENTRATION OF CREDIT RISK DUE TO PRODUCT SALES - For the nine months ended
September 30, 2004 and 2003, we had five and two different products,
respectively, that each accounted for more than 10% of our sales. If any of
these products were to become obsolete or unmarketable and the Company was
unable to successfully develop and market alternative products, the Company's
business, operating results and financial condition could be adversely affected

INVENTORIES - Inventories consist of finished goods, which are stated at the
lower of cost or net realizable value, with cost computed on a first-in,
first-out basis. Provision is made for obsolete, slow-moving or defective items
where appropriate. The amount of any provision of inventories is recognized as
an expense in the period the provision occurs. The amount of any reversal of any
provision is recognized as other income in the period the reversal occurs.

FIXED ASSETS - Fixed assets, stated at cost, are depreciated over the estimated
useful lives of the assets using the straight-line method over periods ranging
from three to ten years. Significant improvements and betterments are
capitalized. Routine repairs and maintenance are expensed when incurred. Gains
and losses on disposal of fixed assets are recognized in the statement of
operations based on the net disposal proceeds less the carrying amount of the
assets.

LONG-LIVED ASSETS - Long-lived assets, such as fixed assets, are reviewed for
impairment when circumstances indicate the carrying value of an asset may not be
recoverable. For assets that are to be held and used, an impairment loss is
recognized when the estimated undiscounted cash flows associated with the asset
or group of assets is less than their carrying value. If impairment exists, an
adjustment is made to write the asset down to its fair value, and a loss is
recorded as the difference between the carrying value and fair value. Fair
values are determined based on quoted market values, discounted cash flows or
internal and external appraisals, as applicable. Assets to be disposed of are
carried at the lower of carrying value or estimated net realizable value.

LONG-TERM INVESTMENTS - Long-term investments are carried at cost less provision
for any impairment in value. Income from long-term investments is accounted for
to the extent of dividends received or receivable. Upon disposal of investments,
any profit and loss thereon is accounted for in the statement of operations.

REVENUE RECOGNITION - Revenues consist of sales of merchandise including optical
image capturing devices, modules of optical image capturing devices, and chips
and other optoelectronic products. Revenue is recognized when the product is
shipped and the risks and rewards of ownership have transferred to the customer.
The Company


8
<PAGE>

recognizes shipping and handling fees as revenue, and the related expenses as a
component of cost of sales. All internal handling charges are charged to
selling, general and administrative expenses.

ALLOWANCE FOR DOUBTFUL ACCOUNTS AND RETURN ALLOWANCES - The Company presents
accounts receivable, net of allowances for doubtful accounts, to ensure accounts
receivable are not overstated due to uncollectibility. The allowances are
calculated based on detailed review of certain individual customer accounts,
historical rates and an estimation of the overall economic conditions affecting
the Company's customer base. The Company reviews a customer's credit history
before extending credit. If the financial condition of its customers were to
deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required. Allowance for doubtful accounts at
September 30, 2004 was $86,780 or approximately 4.4% of its sales for the
quarterly period ended September 30, 2004.

RESEARCH AND DEVELOPMENT EXPENSES - Research and development costs are expensed
as incurred.

INCOME TAXES - The Company accounts for income taxes under the provisions of
Statement of Financial Accounting Standards ("SFAS" No. 109), "Accounting for
Income Taxes," whereby deferred income tax assets and liabilities are computed
for differences between the financial statements and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the future,
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary, to reduce deferred income tax assets to the amount
expected to be realized.

INTANGIBLE ASSETS - Intangible assets represents goodwill arising from the
excess of the purchase consideration over the fair value of the net assets at
the date of acquisition of subsidiaries. Goodwill arising in a business
combination initiated after June 30, 2001 is not amortized. Negative goodwill is
charged to the statement of operations, as the carrying amount of an asset
cannot be reduced to below zero.

COMPREHENSIVE INCOME - The Company includes items of other comprehensive income
by their nature in a financial statement and displays the accumulated balance of
other comprehensive income separately in the equity section of the balance
sheet.

FOREIGN CURRENCY TRANSLATION - The reporting currency used in the preparation of
these consolidated financial statements is U.S. dollars. Local currencies are
the functional currencies for the Companies subsidiaries. For the purpose of
consolidation, assets and liabilities of subsidiaries with functional currencies
other than U.S. dollars are translated into U.S. dollars at the applicable rates
of exchange in effect at the balance sheet date and income and expense items are
translated into U.S. dollars at the average applicable rates during the year.
Translation gains and losses resulting from fluctuations in exchange rates are
recorded as a separate component of other comprehensive income within
stockholders' equity as cumulative translation adjustments. Gains and losses
resulting from foreign currency transactions are included in results of
operations.

EARNINGS PER SHARE - Basic earnings (loss) per share ("EPS") are calculated
using net earnings/(loss) (numerator) divided by the weighted-average number of
shares outstanding (denominator) during the reporting period. All per share
amounts in these financial statements are basic earnings or loss per share.

NOTE 2 - CONDENSED FINANCIAL STATEMENTS AND FOOTNOTES

The interim consolidated financial statements presented herein have been
prepared by the Company and include the unaudited accounts of the Company and
its subsidiaries. All significant intercompany accounts and transactions have
been eliminated in the consolidation.

These condensed financial statements have been prepared in accordance with
generally accepted accounting principles in the United States for interim
financial information and the instructions to Form 10-QSB and Article 10 of
Regulation S-X. Certain information and footnote disclosures normally included
in financial statements presented in accordance with generally accepted
accounting principles have been condensed or omitted. Management of the Company
believes the disclosures made are adequate to make the information presented not
misleading. The


                                                                               9
<PAGE>

condensed consolidated financial statements, and notes thereto, should be read
in conjunction with the Company's Current Report on Form 8-K/A dated April 2,
2004 and filed with the Securities and Exchange Commission on June 14, 2004.

In the opinion of management, the unaudited condensed consolidated financial
statements reflect all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position of the Company
as of September 30, 2004, and the results of operations, and cash flows for the
three and nine months ended September 30, 2004 and 2003. Interim results are not
necessarily indicative of full year performance because of the impact of
seasonal and short-term variations.

NOTE 3 - RELATED PARTY TRANSACTIONS

The following is a summary of significant related party purchase transactions,
which were carried out in the normal course of the Company's business, during
the nine months ended September 30, 2004 and 2003:

                                                   2004          2003
                                                ----------    ----------

SYSCAN Intervision Limited (purchases)          $2,522,720    $2,745,416
                                                ==========    ==========

SYSCAN Optoelectronics Technology (Shenzhen)
Company Limited (purchases)                     $  520,200    $      630
                                                ==========    ==========

AMOUNTS DUE TO / FROM RELATED PARTIES ARE UNSECURED, INTEREST-FREE AND REPAYABLE
ON DEMAND AND CONSISTED OF THE FOLLOWING:

AMOUNTS DUE FROM RELATED PARTIES:
Due from ultimate holding company
Syscan Technology Holdings Limited                          $   345,998
Due from immediate holding company (majority
stockholder)Syscan Imaging Limited                              100,000
Due from various subsidiaries wholly-owned by the
Company's ultimate holding company and/or majority
stockholder                                                   2,096,518
                                                            -----------
                                                            $ 2,542,516
                                                            -----------
AMOUNTS DUE TO RELATED PARTIES:
Due to various subsidiaries that are wholly-owned by the
Company's ultimate holding company and / or majority
stockholder                                                 $   548,578
                                                            ===========

NOTE 4 - FIXED ASSETS

Fixed assets consist of the following:

Machinery                               $  211,301
Furniture and office equipment             696,887
Computer equipment                         183,254
                                        ----------
Total                                    1,091,442
Less accumulated depreciation            1,075,768
                                        ----------
Net book value                          $   15,674
                                        ==========


10
<PAGE>

Depreciation expense charged to operations for the nine months ended September
30, 2004 was $6,430 (2003: $5,032).

NOTE 5 - LONG-TERM INVESTMENT

Long-term investment consists of an equity interest in CMOS Sensor, Inc.
("CMOS"), a California corporation, which is principally engaged in the research
and development of infra-red sensors and CMOS sensors. On June 26, 2002, the
Company acquired a 100% equity interest in Syscan Laser Technology Ltd. ("Syscan
Laser") from Syscan Holdings Limited, for total consideration of $1. At the date
of acquisition, Syscan Laser held a 9.7% equity interest (representing 750,000
shares purchased at $0.80 per share) in CMOS. On October 29, 2003, the Company
acquired a 100% equity interest in Leadbuilt Technology Limited ("Leadbuilt")
from Syscan InterVision Limited, for total consideration of $1. At the date of
acquisition, Leadbuilt held a 6.4% (representing 500,000 shares purchased at
$0.80 per share) equity interest in CMOS. As a result of both transactions, the
Company increased its equity interest in CMOS from 9.7% to 16.1%. The Company is
of the opinion that the underlying value of the long-term investment is not less
than the carrying value at September 30, 2004. Long-term investment amounted to
$997,692 at September 30, 2004.

NOTE 6 - COMMITMENTS AND CONTINGENCIES

OPERATING LEASES - The Company is committed under various non-cancelable
operating leases, which expire through November 2006. Rent expense charged to
operations was approximately $80,000 for the nine months ended September 30,
2004 (2003: $70,000). On August 5, 2004, the Company signed a new lease to
increase its occupancy at its U.S. headquarters located in San Jose, California
for a term of two years commencing on December 1, 2004 and ending on November
30, 2006. Future commitments for the period December 1, 2004 to November 30,
2005 are $8,821 per month and for the period December 1, 2005 to November 30,
2006 are $9,185 per month.

LINE OF CREDIT - The Company has a line of credit to borrow up to $1,000,000,
bearing interest at the rate of prime plus 1%, and secured by substantially all
of the assets of the Company. Interest payments are due monthly and all unpaid
interest and principal is due in full on August 24, 2005. Upon certain events of
defaults as more fully described in the agreement, the variable interest rate
increases to prime plus 3%. The Company had $300,000 available for use at
September 30, 2004.

LEGAL PROCEEDINGS - On May 20, 2003, Syscan, Inc., the Company's wholly-owned
subsidiary, filed a lawsuit captioned Syscan v. PPL (Case No. C03-02367 VRW) in
United States District Court, Northern District of California in San Francisco.
Syscan alleges claims against Portable Peripheral Co., Ltd., Image Recognition
Integrated Systems, Inc., Cardreader Inc., and Targus, Inc. for patent
infringement of patent nos. 6,054,707, 6,275,309 and 6,459,506, and unfair
competition. Syscan is seeking: (1) a temporary restraining order, preliminary
injunction and permanent injunction against defendants, restraining defendants
from patent infringement and unfair competition; (2) treble damages due to
defendants' willful infringement; (3) punitive damages; (4) accounting of unjust
enrichment by defendants, resulting from defendants' unfair competition; and (5)
attorney's fees and costs.

The defendants are jointly represented by PPL's counsel. PPL has initiated
counterclaims against Syscan for patent invalidity. This case is currently
pending for claim construction and a hearing has been scheduled for October 4,
2004. If the parties cannot settle this dispute, a trial will most likely be
held after June 2005. Syscan has not yet been able to quantify its damage claim
against PPL. Syscan intends to vigorously pursue this claim and denies PPL's
counterclaim of patent invalidity.

The Company experiences routine litigation in the normal course of its business
and does not believe that any pending litigation will have a material adverse
effect on the Company's financial condition, results of operations or cash
flows.


                                                                              11
<PAGE>

NOTE 7 - STOCK OPTIONS

The Company has a stock option plan, the objectives of which include attracting
and retaining the best personnel, providing for additional performance
incentives, and promoting the success of the Company by providing directors,
consultants, and key employees the opportunity to acquire common stock. The plan
is administrated by the Board of Directors, which determine among other things,
those individuals who shall receive options, the time period during which the
options may be partially or fully exercised, the number of common stock to be
issued upon the exercise of the options and the option exercise price. The
maximum term of the plan is ten years and options may be granted to officers,
directors, consultants, employees, and similar parties who provide their skills
and expertise to the Company.

Options granted under the plans have a maximum term of ten years and shall be at
an exercise price that may not be less than 85% of the fair market value of the
common stock on the date of the grant. Options are non-transferable and if a
participant ceases affiliation with the company for a reason other than death or
permanent and total disability, the participant will have 90 days to exercise
the option subject to certain extensions. In the event of death or permanent and
total disability, the option holder or their representative may exercise the
option within one (1) year. Any unexercised options that expire or that
terminate upon an employee's ceasing to be employed by the Company become
available again for issuance under the plans, subject to applicable securities
regulation. The plans may be terminated or amended at any time by the Board of
Directors.

The Company has the following options outstanding as of September 30, 2004:

As part of an employment agreement signed in December 2003, the employee
received 500,000 options to acquire shares of the company at $.09 per share for
a term of 2 years. Following the restructuring of the Company on April 2, 2004,
and in connection with the 1-for-10 reverse split, the options were re-issued as
50,000 options to acquire shares at $.90 per share. The estimated fair value of
the options on the date of grant using the Black-Scholes option pricing model is
$29,526, based on a risk free interest rate of 1.91%, an expected volatility of
100%, an expected life of 2 years and no dividend yield.

The Company issued 100,000 options to its former legal counsel in consideration
of services rendered. The options are exercisable at $.25 per share for a term
expiring December 2006. These options have been re-issued as 10,000 options to
acquire shares at $2.50 per share following the reverse split in April 2004. The
estimated fair value of the options on the date of grant using the Black-Scholes
option pricing model is $3,824, based on a risk free interest rate of 3%, an
expected volatility of 100%, an expected life of 3 years and no dividend yield.

On April 2, 2004, the Company's Board of Directors authorized the increase in
the number of stock options available under the 2002 Stock Option Plan (the
"Plan") from 200,000 to 2,200,000. On July 21, 2004, the Company's Board of
Directors further authorized the increase in the number of stock options
available under the 2002 Stock Option Plan from 2,200,000 to 3,200,000. The
subject increases are subject to stockholder ratification at the next annual or
special meeting of stockholders, which has not been obtained as of the date of
this filing.

On April 13, 2004, the Company's Board of Directors authorized an aggregate of
1,700,000 options under the Plan to certain individuals at $1.50 per share, and
expiring through April 2014. These options were canceled by the Board of
Directors on May 7, 2004. On July 21, 2004, the Company's Board of Directors
further authorized an aggregate of 2,200,000 options under the 2002 Stock Option
Plan to be issued to certain individuals at $2.00 per share and expiring through
July 2014. The grant of the above options are subject to stockholder
ratification of the Company's increase in the number of stock options available
for grant under the Plan. The Company plans to obtain stockholder approval at
its annual or special meeting of stockholders, which has not yet been scheduled
as of the date of this filing.


12
<PAGE>

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

INTRODUCTION

Management's discussion and analysis of financial condition and results of
operations ("MD&A") is provided as a supplement to the accompanying consolidated
financial statements and footnotes to help provide an understanding of Syscan
Imaging, Inc.'s (the "Company") financial condition, changes in financial
condition and results of operations. The MD&A is organized as follows:

      o     CAUTION CONCERNING FORWARD-LOOKING STATEMENTS AND RISK FACTORS. This
            section discusses how certain forward-looking statements made by the
            Company throughout the MD&A and in the consolidated financial
            statements are based on our present expectations about future events
            and are inherently susceptible to uncertainty and changes in
            circumstances.

      o     OVERVIEW. This section provides a general description of the
            Company's business, as well as recent developments that we believe
            are important in understanding the results of operations and to
            anticipate future trends in those operations.

      o     CRITICAL ACCOUNTING POLICIES. This section provides an analysis of
            the significant estimates and judgments that affect the reported
            amounts of assets, liabilities, revenues and expenses, and related
            disclosure of contingent assets and liabilities.

      o     RESULTS OF OPERATIONS. This section provides an analysis of our
            results of operations for the three and nine months ended September
            30, 2004 compared to the same periods in 2003. A brief description
            is provided of transactions and events, including related party
            transactions, that impact the comparability of the results being
            analyzed.

      o     LIQUIDITY AND CAPITAL RESOURCES. This section provides an analysis
            of our financial condition and cash flows as of and for the nine
            months ended September 30, 2004.

The following management's discussion and analysis should be read in conjunction
with our consolidated audited financial statements for the fiscal years ended
December 31, 2003 and 2002 and related notes to those financial statements and
our unaudited financial statements for the fiscal quarter ended September 30,
2004, and related notes to those financial statements. The following information
relates solely to the business of Syscan Imaging, Inc. and not the business of
BankEngine, which for all intents and purposes was discontinued as an operating
entity prior to the reverse merger with Syscan, Inc.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This filing contains forward-looking statements. The words "anticipate,"
"believe," "expect, "plan," "intend," "seek," "estimate," "project," "could,"
"may," and similar expressions are intended to identify forward-looking
statements. These statements include, among others, information regarding future
operations, future capital expenditures, and future net cash flow. Such
statements reflect the Company's current views with respect to future events and
financial performance and involve risks and uncertainties, including, without
limitation, general economic and business conditions, changes in foreign,
political, social, and economic conditions, regulatory initiatives and
compliance with governmental regulations, the ability to achieve further market
penetration and additional customers, and various other matters, many of which
are beyond the Company's control. Should one or more of these risks or
uncertainties occur, or should underlying assumptions prove to be incorrect,
actual results may vary materially and adversely from those anticipated,
believed, estimated, or otherwise indicated. Consequently, all of the
forward-looking statements made in this filing are qualified by these cautionary
statements and there can be no assurance of the actual results or developments.


                                                                              13
<PAGE>

OVERVIEW

Management's Discussion and Analysis (MD&A) contains statements that are
forward-looking. These statements are based on current expectations and
assumptions that are subject to risks and uncertainties. Actual results could
differ materially because of factors discussed in this report, as well as
factors not within our control. We undertake no duty to update any
forward-looking statement to conform the statement to actual results or changes
in our expectations.

On April 2, 2004, Syscan Imaging, Inc. (formerly known as "BankEngine
Technologies, Inc." and referred to herein as the "Company") completed its
acquisition of 100% of the issued and outstanding capital stock of Syscan, Inc.,
pursuant to a Share Exchange Agreement ("Agreement") dated March 29, 2004.
Pursuant to the Agreement, the sole stockholder of Syscan, Inc., Syscan Imaging
Limited, received 18,773,514 post-reverse split shares of the Company's common
stock in exchange for all of the issued and outstanding capital stock of Syscan,
Inc. In connection with the issuance of the Company's common stock to Syscan
Imaging Limited, Syscan Imaging Limited beneficially became the owner of 81.2%
of the issued and outstanding voting securities of the Company.

Upon completion of the reverse acquisition, we changed our name to Syscan
Imaging, Inc. and effectuated 1-for-10 reverse split of our common stock.
Pursuant to the Agreement, the following persons were appointed to our board of
directors: Darwin Hu, Wai Cheung, Peter Mor and Lawrence Liang. Michael
Xirinachs resigned as Chairman and Chief Executive Officer, but remained as a
director of the Company until his resignation on July 19, 2004. Concurrent with
the closing on April 2, 2004, the Board of Directors of the Company appointed
Darwin Hu as the Company's President and Chief Executive Officer, Stephen Yim as
the Company's Chief Financial Officer and William Hawkins as the Company's Chief
Operating Officer and Secretary. A more detailed description of this transaction
is set forth in the Company's Current Report on Form 8-K dated April 2, 2004,
filed with the Securities and Exchange Commission on April 19, 2004. These
financial statements should be read in conjunction with the Company's Current
Report on Form 8-K/A dated April 2, 2004 and filed with the Securities and
Exchange Commission on June 14, 2004.

We are in the business of developing, designing and delivering imaging
technology solutions. We have been issued 21 patents with another 13 currently
pending in the area of image capture technology. Our approach to research and
development (R&D) is focused on creating new deliverable and marketable
technologies. We sell our products to clients' throughout the world, including
the United States, Canada, Europe, South America, Australia and Asia. We intend
to expand our business and product offerings into the much larger image display
market where we intend to leverage our experience and expertise. We also believe
that we may benefit from a level of transfer of technologies from image capture
to image display.

Our wholly-owned operating subsidiary, Syscan, Inc. ("SI"), was incorporated on
May 1, 1995, under the laws of the State of California and is headquartered in
San Jose with additional strategic offices in Arnhem (the Netherlands) and Hong
Kong. Our majority stockholder is Syscan Technology Holdings Limited, which is
the sole stockholder of Syscan Imaging Limited. Syscan Technology Holdings
Limited is a publicly-held company incorporated in Bermuda whose shares are
listed on The Growth Enterprise Market of The Stock Exchange of Hong Kong
Limited.

Our strategy is to expand our image capture product line and technology while
leveraging our assets in other areas of the imaging industry. We are actively
shipping five image capture products under the Travel Scan marquee or their OEM
counterparts. The Travel Scan series features portable lightweight scanning in
color and black & white with low power consumption that requires no power
adapter. The 2300U-USB is a 300dpi A4 scanner which represented approximately
3.8% of our sales during the nine months ended September 30, 2004. The 464, like
the 2300 series, is an A4 scanner with 600dpi resolution as opposed to 300dpi
resolution. The 464 is currently our most popular product and represented
approximately18% of our sales during the nine months ended September 30, 2004.
The 662 has an A6 scanning area ideal for photos, checks, passports and various
identification cards. The 662 is our first product geared towards, and being
implemented in, the fast growing security industry. The 662 is our fastest
growing product and represented approximately 12% of our sales during the nine
months ended September 30, 2004. Our fifth product representing approximately 3%
of our sales during the nine months ended September 30,


14
<PAGE>

2004, is the 860 Business Card reader. A different version of the 860 represents
approximately 9.7% of our 860 Business Card reader sales on the product and was
specifically designed and created for one of our customers that accounts for
approximately 83% of the worldwide Business Card reader sales. In addition to
the Travel Scan product line, we also manufacture and sell the Contact Image
Sensor Modules that we use in our products and separately as a component to
other manufacturers. The manufacturers that we sell our modules to integrate our
modules into their products, including check and currency scanners, copiers, and
fax machines, and resell the finished product to the retailer.

We intend to expand our image capture product line with three new products, two
of which we intend to release during the fourth quarter of 2004 and a third
product which we intend to release in early 2005. The first product is a
high-quality true-duplex high-speed A4 scanner in which our customers have
expressed interest. Two premier brands have formally agreed to partner with us
in the product launch. The second product is an Optical Character Recognition
(OCR) pen scanner that can be used for many applications, including the ability
to offer not only text capture but also text to speech functionality. The third
product, an A6 scanner, follows in the footsteps of the current 662 but is high
speed and true duplex, allowing image capture of both sides of a two-sided
document simultaneously. With the growing concerns over Homeland Security and
the implementation of the Patriot Act in the United States, we believe this
product has the ability to address these evolving security requirements and
needs. We believe that this product not only addresses today's security scanning
needs, but also anticipates the proliferation of new technologies such as
digital watermarking.

Over the past twelve months we have begun focusing our sales and marketing
efforts substantially towards the vertical markets such as the Value Added
Reseller (VAR) and small-office-home-office (SOHO) markets. We believe focusing
on these markets is the most effective way to showcase our technological
capabilities and manufacturing efficiencies, while enabling us to maintain
higher margins, and require fewer resources than working directly with the mass
retailers.

While we continue to grow our presence in image capture technology, we have
begun creating, through research and development, new technology solutions for
the substantially larger, image display market. More specifically we are
creating products and technologies to accent and enhance the Liquid Crystal
Display (LCD) television market. Our first image display product, expected to be
available for delivery during the fourth quarter of 2004 is the Syscan View Tech
image/video display processor. The View Tech control board is a highly
integrated, high performance video processor that combines state-of-the-art
scaling and video processing techniques for displaying analog and digital
video/graphics on a LCD-TV/DTV display. We believe that this product will
provide advanced image processing that will greatly enhance LCD display quality.
Its state-of-the-art design incorporates a system-on-chip (SOC) that improves
any pixilated multimedia video. The next product/technology that we are
developing is a Light Emitting Diode (LED) backlighting solution to replace the
industries current standard Cold Cathode Fluorescent Lamp (CCFL). The principal
behind this technology is related to the proprietary technology used in our
image capture products. The benefits are substantial, including longer life,
higher dimming ratio, sharper contrast, and near high definition resolution
without filters, all at a performance value.

In addition to future products and technologies in various stages of research
and development, one of our objectives is to acquire companies in the image
capture and display industry that could compliment our business model, improve
our competitive positioning and expand our offerings to the marketplace, of
which there can be no assurance. In identifying potential acquisition candidates
we will seek to acquire companies with varied distribution channels, rich
intellectual property (IP) and high caliber engineering personnel.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis is based upon our consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. On an on-going basis, we evaluate


                                                                              15
<PAGE>

our estimates, including those related to revenue recognition, accounts
receivable and allowance for doubtful accounts, inventories, intangible and
long-lived assets, and income taxes. We base our estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

An accounting policy is deemed to be critical if it requires an accounting
estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made, and if different estimates that reasonably
could have been used or changes in the accounting estimate that are reasonably
likely to occur could materially change the financial statements. We believe the
following critical accounting policies reflect our more significant estimates
and assumptions used in the preparation of our consolidated financial
statements:

REVENUE RECOGNITION

      Revenues consist of sales of merchandise, including optical image
capturing devices, modules of optical image capturing devices, and chips and
other optoelectronic products. Revenue is recognized when the product is shipped
and the risks and rewards of ownership have transferred to the customer. We
recognize shipping and handling fees as revenue, and the related expenses as a
component of cost of sales. All internal handling charges are charged to
selling, general and administrative expenses.

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

      We present accounts receivable, net of allowances for doubtful accounts,
to ensure accounts receivable are not overstated due to uncollectibility. The
allowances are calculated based on detailed review of certain individual
customer accounts, historical rates and an estimation of the overall economic
conditions affecting our customer base. We review a customer's credit history
before extending credit. If the financial condition of our customers were to
deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required.

INVENTORIES

      Inventories consist of finished goods, which are stated at the lower of
cost or net realizable value, with cost computed on a first in, first-out basis.
Provision is made for obsolete, slow-moving or defective items where
appropriate. The amount of any provision of inventories is recognized as an
expense in the period the provision occurs. The amount of any reversal of any
provision is recognized as other income in the period the reversal occurs. Our
inventory purchases and commitments are made in order to build inventory to meet
future shipment schedules based on forecasted demand for our products. We
perform a detailed assessment of inventory for each period, which includes a
review of, among other factors, demand requirements, product life cycle and
development plans, component cost trends, product pricing and quality issues.
Based on this analysis, we record adjustments to inventory for excess,
obsolescence or impairment, when appropriate, to reflect inventory at net
realizable value. Revisions to our inventory adjustments may be required if
actual demand, component costs or product life cycles differ from our estimates.

INTANGIBLE AND LONG-LIVED ASSETS

      We evaluate our intangible assets and long-lived assets, which represent
goodwill, long-term investments, and fixed assets, for impairment annually and
when circumstances indicate the carrying value of an asset may not be
recoverable. If impairment exists, an adjustment is made to write the asset down
to its fair value, and a loss is recorded as the difference between the carrying
value and fair value. We do not believe any impairment exists for any of these
types of assets as of September 30, 2004.


16
<PAGE>

INCOME TAXES

      The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards ("SFAS" No. 109), "Accounting for Income Taxes,"
whereby deferred income tax assets and liabilities are computed for differences
between the financial statements and tax bases of assets and liabilities that
will result in taxable or deductible amounts in the future, based on enacted tax
laws and rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established when necessary to
reduce deferred income tax assets to the amount expected to be realized.

CONTINGENCIES

      Currently, there are no outstanding legal proceedings or claims, other
than that disclosed in Note 6 of the Consolidated Financial Statements. The
outcomes of potential legal proceedings and claims brought against us are
subject to significant uncertainty. SFAS 5, ACCOUNTING FOR CONTINGENCIES,
requires that an estimated loss from a loss contingency such as a legal
proceeding or claim should be accrued by a charge to income if it is probable
that an asset has been impaired or a liability has been incurred and the amount
of the loss can be reasonably estimated. Disclosure of a contingency is required
if there is at least a reasonable possibility that a loss has been incurred. In
determining whether a loss should be accrued we evaluate, among other factors,
the degree of probability of an unfavorable outcome and the ability to make a
reasonable estimate of the amount of loss. Changes in these factors could
materially impact our financial position or results of operations.

RESULTS OF OPERATIONS - THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED
TO SEPTEMBER 30, 2003

REVENUE

      Product revenues increased to $1.955 million for the three months ended
September 30, 2004 from $1.729 million for the same period in fiscal 2003, an
increase of $226,000 or approximately 13.0%. Product revenues decreased slightly
to $4.436 million for the nine months ended September 30, 2004 from $4.454
million for the same period in fiscal 2003, a decrease of $18,000 or
approximately 1.0%. The increase for the three months ended September 30, 2004
is primarily attributable to sales of our Travel Scan 662 and associated OEM
products geared towards the growing ID card verification and documentation
market. The decrease in revenues for the nine months ended September 30, 2004 as
compared to the same period in fiscal 2003 is the result of delayed new product
introductions. Scanner products and imaging modules comprised approximately 99%
of our revenues during each of these periods. Our revenue mix has been gradually
trending towards the Value Added Reseller (VAR) and small office home office
(SOHO) markets, which is a result of our efforts to appeal to customers in these
sales channels.

COST OF SALES

      Cost of goods sold (COGS) includes all direct costs related to the
transfer of scanners, imaging modules and services related to the delivery of
those items manufactured in China. A relatively small percentage (< 1%) of COGS
is due to engineering services provided by us. COGS was approximately 67% for
each of the three and nine month periods ended September 30, 2004 compared to
69% and 71%, respectively, for the same periods in 2003. COGS decreased as a
percentage of revenues for each of the three and nine months ended September 30,
2004 as compared to the same periods during September 30, 2003 primarily as a
result of higher gross margins and better pricing elasticity than projected. We
anticipate that our COGS may increase during the remainder of the fiscal year
ended December 31, 2004 as a result of higher source costs from Mainland China
as market insecurities and higher fuel prices persist.


                                                                              17
<PAGE>

GROSS PROFIT

      Gross profit increased to $651,000 or 33.3% of net revenues for the three
months ended September 30, 2004 from $533,000, or 30.8% of net revenues for the
same period in fiscal 2003. Gross profit increased to $1.477 million, or 33.3%
of net revenues for the nine months ended September 30, 2004 from $1.276 million
or 28.6% of net revenues for the same period in fiscal 2003. The increase in
gross profit for the three and nine months ended September 30, 2004 as compared
to the same periods in fiscal 2003 is the result of an increase in sales mix to
the VAR and SOHO markets, which are higher-margin revenue sources for us. We
anticipate that it will be difficult to maintain our gross profit margins as our
main supplier's source costs and logistics costs are projected to rise through
the year ended December 31, 2004, which will result in our paying higher prices
for the purchase of our products.

SELLING AND MARKETING

      Selling and marketing expenses include payroll, employee benefits and
other costs associated with sales, marketing and account management personnel.
Other direct selling and marketing costs include market development funds and
promotions (retail channels only), tradeshows, website support costs,
warehousing, logistics and certain sales representative fees. Selling and
marketing expenses decreased to $141,000 for the three months ended September
30, 2004 from $145,000 for the same period in fiscal 2003, only a slight
decrease of $4,000 or approximately 2.8%. Selling and marketing expenses
increased to $507,000 for the nine months ended September 30, 2004 from $388,000
for the same period in fiscal 2003, an increase of $119,000 or approximately
31%. The changes for the three and nine months ended September 30, 2004 are
primarily attributable to changes in staffing and marketing activities related
to the display imaging (LCD panel) group.

GENERAL AND ADMINISTRATIVE

      General and administrative costs include payroll, employee benefits, and
other headcount-related costs associated with the finance, legal, facilities and
certain human resources, as well as legal and other professional and
administrative fees. General and administrative expenses more than doubled to
$261,000 for the three months ended September 30, 2004 from $110,000 for the
same period in fiscal 2003, an increase of $151,000 or approximately 137%.
General and administrative expenses increased to $603,000 for the nine months
ended September 30, 2004 from $341,000 for the same period in fiscal 2003, an
increase of $262,000 or approximately 77%. The increases for the three and nine
months ended September 30, 2004 are primarily attributable to additional
personnel costs in China, outside fees incurred in connection with our public
listing compliance expenses and the addition of senior financial management
personnel.

OTHER INCOME (EXPENSE)

      Our other income for the three and nine months ended September 30, 2004
were minimal and during the same period of 2003, other income primarily
consisted of collection of a former receivable written off and sale of inventory
previously considered slow-moving.

PROVISION FOR INCOME TAXES

      There is no provision for federal or state income taxes due to the
Company's available net operating loss carryforwards. Provision for income taxes
represents the minimum franchise tax due in the State of California.

RELATED PARTY TRANSACTIONS

      We purchase significantly all of our finished scanner imaging products
from the parent company of our majority stockholder, Syscan Technology Holdings
Limited ("STH"). Our Chairman and CEO, Darwin Hu, is the CEO of STH, and
beneficially owns approximately 5.33% of the issued and outstanding capital
stock of STH. The following is a summary of significant related party
transactions, which were carried out in the normal course of the Company's
business, during the nine months ended September 30, 2004 and 2003:


18
<PAGE>

The table below reflects purchases of finished scanning imaging products made by
us during the nine month periods ended September 30, 2004 and 2003 from
affiliated parties.

                                                     2004          2003
                                                  ----------    ----------

SYSCAN Intervision Limited, a wholly-owned
subsidiary of STH (purchases)                     $2,522,720    $2,745,416
                                                  ==========    ==========

SYSCAN Optoelectronics Technology (Shenzhen)
Company Limited, a wholly-owned subsidiary of
STH (purchases)                                     $520,200          $630
                                                  ==========    ==========

AMOUNTS DUE TO/FROM RELATED PARTIES ARE UNSECURED, INTEREST-FREE AND REPAYABLE
ON DEMAND AND CONSISTED OF THE FOLLOWING:

AMOUNTS DUE FROM RELATED PARTIES:

Due from STH                                                 $   345,998

Due from Majority Stockholder                                    100,000

Due from various subsidiaries wholly-owned by STH              2,096,518
                                                             -----------
                                                             $ 2,542,516
                                                             ===========
AMOUNTS DUE TO RELATED PARTIES:

Due to various subsidiaries that are wholly-owned by STH     $   548,578
                                                             ===========

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents decreased to approximately $849,000 as of September
30, 2004 compared to approximately $1,020,000 as of December 31, 2003, a
decrease of approximately 17.0%. Working capital at September 30, 2004 was
approximately $3,860,000 as compared to approximately $3,940,000 at December 31,
2003, a decrease of approximately 2%. The decrease in cash and working capital
is primarily attributable to our prepayment of certain tooling expenses, an
increase in legal fees as a result of the acquisition, and trade show expenses.

OPERATING ACTIVITIES. Net cash flows provided by operating activities was
$110,766 and $371,110 for the nine months ended September 30, 2004 and 2003,
respectively. Net cash provided by operating activities for 2004 primarily
reflects cash collections from accounts receivables offset by prepayments for
deposits and payments on trade payables and other accruals. Net cash provided by
operating activities for 2003 primarily reflects an increase in inventory
purchases and accounts payable and other accruals.

INVESTING ACTIVITIES. Net cash flows used in investing activities for the nine
months ended September 30, 2004 of $11,288 represents payments made to acquire
fixed assets.

FINANCING ACTIVITIES. Net cash flows provided by (used in) financing activities
for the nine months ended September 30, 2004 and 2003 was ($270,377) and
$400,401, respectively. Cash flows from financing activities represent advances
to and / or repayments from related party receivables and payables in the
ordinary course of business.


                                                                              19
<PAGE>

We have a $1,000,000 bank line of credit, which bears interest at prime plus one
percent, which is secured by all of our general business assets. The subject
bank line of credit had $700,000 outstanding as of September 30, 2004. We
believe that our line of credit or other financing arrangements, existing
working capital and anticipated cash flows from operations will be adequate to
satisfy our operating and capital requirements for the next 12 months at our
current run rate and without any further expansion. In order to implement our
growth strategy and expansion into the image display area, additional funds will
be required.

Our plans for the next twelve months include continuing to increase our presence
in the image capture market, heavily investing our resources into the image
display market and adding future products and technologies to our current
product offerings. Additionally, we intend to seek to identify acquisition
candidates in the image capture and display industry that we believe could
compliment our business model, improve our competitive positioning and expand
our offerings to the marketplace, of which there can be no assurance. In
identifying potential acquisition candidates, we will seek to acquire companies
with varied distribution channels, rich intellectual property (IP) and high
caliber engineering personnel.

To finance our business expansion plans, we plan to aggressively pursue
additional sources of funds, the form of which will vary depending on the
prevailing market and other conditions, and may include the issuance and sale of
debt or equity securities. However, there is no assurance that such additional
funds will be available for us to finance our expansion plans. Furthermore,
there is no assurance the net proceeds from any successful financing arrangement
will be sufficient to cover cash requirements as the Company expands its
business operations.

CONCENTRATION OF CREDIT RISK

CONCENTRATION OF CREDIT RISK FOR CASH HELD AT BANKS. The Company maintains cash
balances at several banks. Accounts at each institution are insured by the
Federal Deposit Insurance Corporation up to $100,000.

CONCENTRATION OF CREDIT RISK DUE TO GEOGRAPHIC SALES AND SIGNIFICANT CUSTOMERS.
The Company operates in a single industry segment - scanner and fax modules. The
Company markets its products in the United States, Europe and the Asia Pacific
region through its sales personnel and independent sales representatives.

The Company's geographic sales as a percent of total revenue were as follows for
the nine months ended September 30:

                                     2004          2003
                                   --------      --------
United States                         96%           95%
Europe and others                      3%            5%
Asia Pacific                           1%            0%

Sales to major customers as a percentage of total revenues were as follows for
the nine months ended September 30:

                                     2004          2003
                                   --------      --------
Customer A                            38%           15%
Customer B                            20%           10%
Customer C                            13%           40%
Customer D                             9%            7%

CONCENTRATION OF CREDIT RISK. Financial instruments that potentially subject the
Company to a concentration of credit risk consist primarily of trade
receivables. The Company's customers are concentrated in the industrial/consumer
electronics channels and with major original equipment manufacturers. As of
September 30, 2004 and 2003, the concentration was approximately 80% (3
customers) and 77% (3 customers), respectively. The loss of any of these


20
<PAGE>

customers could have a material adverse effect on the Company's results of
operations, financial position and cash flows.

CONCENTRATION OF CREDIT RISK DUE TO SIGNIFICANT VENDORS. For each of the nine
month periods ended September 30, 2004 and 2003, the Company's purchases have
primarily been concentrated with the wholly-owned subsidiary of our majority
stockholder. If this vendor was unable to provide materials in a timely manner
and the Company was unable to find alternative vendors, the Company's business,
operating results and financial condition would be materially adversely
affected.

OFF-BALANCE SHEET TRANSACTIONS

We do not have any transactions, agreements or other contractual arrangements
that constitute off-balance sheet arrangements.

ITEM 3. CONTROLS AND PROCEDURES

Based on an evaluation as of the date of the end of the period covered by this
Form 10-QSB, our Chief Executive Officer and Chief Financial Officer, conducted
an evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures, as required by Exchange Act Rule 13a-15. Based on that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective to ensure that
information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified by the SEC's rules and forms.

CHANGES IN INTERNAL CONTROLS.

There were no significant changes in our internal controls over financial
reporting that occurred during the quarter ended September 30, 2004 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS.

We believe that a control system, no matter how well designed and operated,
cannot provide absolute assurance that the objectives of the control system are
met, and no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within a company have been
detected.


                                                                              21
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We from time to time experience routine litigation in the normal course of our
business. Other than as previously reported in our Form 10-QSB for the quarterly
period ended June 30, 2004, filed with the SEC on August 17, 2004, we are not a
party to any material legal proceedings and we do not believe that any pending
litigation will have a material adverse effect on our financial condition,
results of operations or cash flows.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the quarter ended September 30, 2004, the Company did not sell any
securities.

During the quarter ended September 30, 2004, the Company did not repurchase any
of its equity securities. The Company does not currently have in place a
repurchase program for the repurchase of its common stock, nor does it have any
plans to implement a common stock repurchase program in the near future, if at
all.

ITEM 3. DEFAULTS IN SENIOR SECURITIES.

      None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      None.

ITEM 5. OTHER INFORMATION.

      None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8- K

(a) Exhibits

31      Rule 13a-14(a)/15d-14(a) Certifications.

32.1    Certification by the Chief Executive Officer Relating to a Periodic
        Report Containing Financial Statements.*

32.2    Certification by the Chief Financial Officer Relating to a Periodic
        Report Containing Financial Statements.*

(b) Reports on Form 8-K.

      During the quarterly period covered by this report, the Company filed a
report on Form 8-K on July 14, 2004 pursuant to Items 4 and 7.

* The Exhibit attached to this Form 10-QSB shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange
Act") or otherwise subject to liability under that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended, or the Exchange Act, except as expressly set forth by specific
reference in such filing.


22
<PAGE>
                                   SIGNATURES

      In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


Dated: November 22, 2004                       By: /s/ Darwin Hu
                                                   --------------------------
                                               Name:  Darwin Hu
                                               Title: Chief Executive Officer


Dated: November 22, 2004                       By: /s/ Stephen Yim
                                                   --------------------------
                                               Name:  Stephen Yim
                                               Title: Chief Financial Officer


                                                                              23