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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





Form 10-QSB





(Mark One)

|x | Quarterly report under section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------

for the quarterly period ended: September 30, 2007



| ̈ | Transition report under section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------

for the transition period from  to
.

Commission File No: 0-30717





e-SMART TECHNOLOGIES, INC.

(Name of small business in its charter)







|                                               |  |                       
|---------------------------------------------- |  | ----------------------
|Nevada                                         |  | 88-0409261            
|(State or other jurisdiction of incorporation) |  | (IRS Employer Id. No.)

526 West 26thStreet, Suite 710, New York, NY 10001

(Address of
Principal Office including Zip Code)

Issuers telephone Number: (212) 727-3790





Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

State the number of shares outstanding of each of
the issuers classes of common equity, as of the latest practicable date:

Common Stock, $.001 par value, 703,918,509
shares at September 30, 2007.

Transitional Small Business Disclosure Format (Check one):    Yes   ̈    No  x

Indicate by check mark whether the Registrant is
a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes   ̈    No  x









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e-SMART TECHNOLOGIES, INC. & SUBSIDARIES

FORM 10-QSB - QUARTER ENDED SEPTEMBER 30, 2007

INDEX



|        |  |                                                                                                                       |  |     
|------- |  | --------------------------------------------------------------------------------------------------------------------- |  | ----
|        |  |                                                                                                                       |  | Page
|PART I  |  | FINANCIAL INFORMATION                                                                                                 |  | 2   
|        |  |                                                                                                                      
|Item 1. |  | Financial Statements                                                                                                  |  | 2   
|        |  | Condensed Consolidated Balance Sheets at September 30, 2007 and December 31, 2006                                     |  | 3   
|        |  | Condensed Consolidated Statements of Operations for the Nine and Three Months Ended September 30, 2007 and 2006       |  | 4   
|        |  | Condensed Consolidated Statements of Shareholders Equity (Deficiency) for January 1, 2006 through September 30, 2007 |  | 5   
|        |  | Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2007 and 2006                 |  | 6   
|        |  | Notes to the Condensed Consolidated Financial Statements                                                              |  | 7   
|        |  |                                                                                                                      
|Item 2. |  | Managements Discussion and Analysis or Plan of Operations                                                            |  | 9   
|        |  |                                                                                                                      
|Item 3. |  | Controls and Procedures                                                                                               |  | 12  
|        |  |                                                                                                                      
|PART II |  | OTHER INFORMATION                                                                                                     |  | 12  
|        |  |                                                                                                                      
|Item 6. |  | Exhibits and Reports on Form 8-K                                                                                      |  | 12  
|        |  | SIGNATURES                                                                                                            |  | 13  
|        |  | EXHIBITS                                                                                                              |  | 14  

PART I - FINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

The unaudited condensed
consolidated balance sheet of the Registrant at September 30, 2007, the audited balance sheet at December 31, 2006, and the unaudited condensed consolidated statements of operations, shareholders equity (deficiency), and cash flows
for the nine months and three months ended September 30, 2007 and September 30, 2006 follow. The unaudited condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to a fair
statement of the results for the periods presented.



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e-SMART TECHNOLOGIES, INC. and SUBSIDARIES

CONDENSED CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                   |  |                              |             |   |                           |   |             |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ----------- | - | ------------------------- | - | ----------- | -
|                                                                                                                                                   |  | [Unaudited]September 30,2007 |             |   | [Audited]December 31,2006 |  
|Assets                                                                                                                                             |  |                              |             |   |                           |   |             |  
|Current assets -                                                                                                                                   |  |                              |             |   |                           |   |             |  
|Cash                                                                                                                                               |  | $                            | 92,795      |   |                           | $ | 49,845      |  
|Prepaid expenses                                                                                                                                   |  |                              | 22,797      |   |                           |   | 7,558       |  
|                                                                                                                                                   |  |                              |             |   |                           |   |             |  
|Total current assets                                                                                                                               |  |                              | 115,592     |   |                           |   | 57,403      |  
|Equipment, net                                                                                                                                     |  |                              | 67,948      |   |                           |   | 41,446      |  
|License of smart card technology, net of amortization                                                                                              |  |                              | 88,038      |   |                           |   | 92,860      |  
|Officers advances                                                                                                                                 |  |                              |            |   |                           |   | 11,549      |  
|Due from IVI Smart Technologies, Inc.                                                                                                              |  |                              | 170,112     |   |                           |   |            |  
|Lease deposit                                                                                                                                      |  |                              | 147,405     |   |                           |   | 79,713      |  
|                                                                                                                                                   |  |                              |             |   |                           |   |             |  
|Total assets                                                                                                                                       |  | $                            | 589,095     |   |                           | $ | 282,971     |  
|                                                                                                                                                   |  |                              |             |   |                           |   |             |  
|Liabilities and Shareholders Equity (Deficiency)                                                                                                  |  |                              |             |   |                           |   |             |  
|                                                                                                                                                   |  |                             
|Current liabilities -                                                                                                                              |  |                              |             |   |                           |   |             |  
|Current portion of notes payable                                                                                                                   |  | $                            | 59,927      |   |                           | $ | 509,927     |  
|Accounts payable                                                                                                                                   |  |                              | 1,904,717   |   |                           |   | 1,286,904   |  
|Accrued officers compensation                                                                                                                     |  |                              | 47,500      |   |                           |   | 544,285     |  
|Accrued expenses                                                                                                                                   |  |                              | 194,057     |   |                           |   | 76,660      |  
|                                                                                                                                                   |  |                              |             |   |                           |   |             |  
|Total current liabilities                                                                                                                          |  |                              | 2,206,201   |   |                           |   | 2,417,776   |  
|Note payable  long-term                                                                                                                           |  |                              | 222,545     |   |                           |   | 1,946,394   |  
|                                                                                                                                                   |  |                              |             |   |                           |   |             |  
|Total liabilities                                                                                                                                  |  |                              | 2,428,746   |   |                           |   | 4,364,170   |  
|                                                                                                                                                   |  |                              |             |   |                           |   |             |  
|Shareholders Equity (Deficiency) -                                                                                                                |  |                              |             |   |                           |   |             |  
|Preferred Stock, $0.001 par value, 20 million shares authorized; 17.5 million and -0- shares issued and outstanding in 2007 and
2006, respectively |  |                              | 17,500      |   |                           |   |            |  
|Common shares, $0.001 par, 730 million shares authorized; 703,918,509 and 242,540,441 shares issued and outstanding in 2007 and 2006,
respectively |  |                              | 703,918     |   |                           |   | 242,540     |  
|Additional paid in capital                                                                                                                         |  |                              | 94,748,131  |   |                           |   | 70,954,225  |  
|Deficit accumulated during development stage                                                                                                       |  |                              | (97,309,200 | ) |                           |   | (75,277,964 | )
|                                                                                                                                                   |  |                              |             |   |                           |   |             |  
|Total shareholders equity (deficiency)                                                                                                            |  |                              | (1,839,651  | ) |                           |   | (4,081,199  | )
|                                                                                                                                                   |  |                              |             |   |                           |   |             |  
|Total liabilities and shareholders equity (deficiency)                                                                                            |  | $                            | 589,095     |   |                           | $ | 282,971     |  
|                                                                                                                                                   |  |                              |             |   |                           |   |             |  

See notes to condensed consolidated financial statements.



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e-SMART TECHNOLOGIES, INC. and SUBSIDARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

[Unaudited]



|                                                     |  |                                 |             |   |                                  |   |             |                                                                    |  |   |             |   |  |   |             |   |  |   |             |  
|---------------------------------------------------- |  | ------------------------------- | ----------- | - | -------------------------------- | - | ----------- | ------------------------------------------------------------------ |  | - | ----------- | - |  | - | ----------- | - |  | - | ----------- | -
|                                                     |  | Nine Months Ended September 30, |             |   | Three Months Ended September 30, |   |             | January 1, 2001(inception ofdevelopmentperiod)
toSeptember 30,2007 | 
|                                                     |  | 2007                            |             |   | 2006                             |   |             | 2007                                                               |  |   | 2006        |   | 
|Revenue                                              |  | $                               |             |   |                                  | $ |            |                                                                    |  | $ |             |   |  | $ |            |   |  | $ |            |  
|                                                     |  |                                 |             |   |                                  |   |             |                                                                    |  |   |             |   |  |   |             |   |  |   |             |  
|Operating expenses:                                  |  |                                 |             |   |                                  |   |             |                                                                    |  |   |             |   |  |   |             |   |  |   |             |  
|Research and development                             |  |                                 | 3,135,909   |   |                                  |   | 447,575     |                                                                    |  |   | 469,039     |   |  |   | 120,001     |   |  |   | 18,286,218  |  
|Marketing, general and administrative                |  |                                 | 18,780,813  |   |                                  |   | 2,773,878   |                                                                    |  |   | 4,062,622   |   |  |   | 1,075,417   |   |  |   | 78,548,651  |  
|Interest                                             |  |                                 | 112,864     |   |                                  |   | 163,996     |                                                                    |  |   | 953         |   |  |   | 62,988      |   |  |   | 463,881     |  
|                                                     |  |                                 |             |   |                                  |   |             |                                                                    |  |   |             |   |  |   |             |   |  |   |             |  
|Total operating expenses                             |  |                                 | 22,029,586  |   |                                  |   | 3,385,449   |                                                                    |  |   | 4,532,614   |   |  |   | 1,258,406   |   |  |   | 97,298,750  |  
|                                                     |  |                                 |             |   |                                  |   |             |                                                                    |  |   |             |   |  |   |             |   |  |   |             |  
|Loss before provision for Income taxes               |  |                                 | (22,029,586 | ) |                                  |   | (3,385,449  | )                                                                  |  |   | (4,532,614  | ) |  |   | (1,258,406  | ) |  |   | (97,298,750 | )
|                                                     |  |                                 |             |   |                                 
|Provision for income taxes                           |  |                                 | 1,650       |   |                                  |   | 2,000       |                                                                    |  |   | 350         |   |  |   | 500         |   |  |   | 10,450      |  
|                                                     |  |                                 |             |   |                                  |   |             |                                                                    |  |   |             |   |  |   |             |   |  |   |             |  
|Net Loss                                             |  | $                               | (22,031,236 | ) |                                  | $ | (3,387,449  | )                                                                  |  | $ | (4,532,964  | ) |  | $ | (1,258,906  | ) |  | $ | (97,309,200 | )
|                                                     |  |                                 |             |   |                                  |   |             |                                                                    |  |   |             |   |  |   |             |   |  |   |             |  
|Loss per share                                       |  | $                               | (0.05       | ) |                                  | $ | (0.02       | )                                                                  |  | $ | (0.00       | ) |  | $ | (0.00       | ) |  | $ | (0.48       | )
|                                                     |  |                                 |             |   |                                  |   |             |                                                                    |  |   |             |   |  |   |             |   |  |   |             |  
|Weighted average number of common shares outstanding |  |                                 | 451,178,569 |   |                                  |   | 200,000,000 |                                                                    |  |   | 657,668,509 |   |  |   | 200,000,000 |   |  |   | 202,391,260 |  
|                                                     |  |                                 |             |   |                                  |   |             |                                                                    |  |   |             |   |  |   |             |   |  |   |             |  

See notes to condensed consolidated financial statements.



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e-SMART TECHNOLOGIES, INC. and SUBSIDARIES

CONDENSED CONSOLIDATED STATEMENT OF

SHAREHOLDERS EQUITY (DEFICIENCY)



|                                                           |  |                 |  |              |        |                          |             |        |                    |         |  |       |            |   |  |   |             |   |  |   |             |  
|---------------------------------------------------------- |  | --------------- |  | ------------ | ------ | ------------------------ | ----------- | ------ | ------------------ | ------- |  | ----- | ---------- | - |  | - | ----------- | - |  | - | ----------- | -
|                                                           |  | Preferred Stock |  | Common Stock |        | AdditionalPaid-inCapital |             |        | AccumulatedDeficit |         |  | Total |           
|                                                           |  | Shares          |  | Amount       |        | Shares                   |             | Amount |                    |         | 
|[Audited]                                                  |  |                 |  |              |        |                          |             |        |                    |         |  |       |            |   |  |   |             |   |  |   |             |  
|                                                           |  |                 |  |              |        |                          |            
|Balance January 1, 2006                                    |  |                |  | $            |       |                          | 200,000,000 |        | $                  | 200,000 |  | $     | 63,777,497 |   |  | $ | (67,507,910 | ) |  | $ | (3,530,413  | )
|Issuance of shares in relation to related party borrowings |  |                |  |              |       |                          | 20,990,441  |        |                    | 20,990  |  |       | 4,150,278  |   |  |   |            |   |  |   | 4,171,268   |  
|Issuance of shares for services                            |  |                |  |              |       |                          | 21,550,000  |        |                    | 21,550  |  |       | 3,026,450  |   |  |   |            |   |  |   | 3,048,000   |  
|Net loss                                                   |  |                |  |              |       |                          |            |        |                    |        |  |       |           |   |  |   | (7,770,054  | ) |  |   | (7,770,054  | )
|                                                           |  |                 |  |              |        |                          |             |        |                    |         |  |       |            |   |  |   |             |   |  |   |             |  
|Balance, December 31, 2006                                 |  |                |  |              |       |                          | 242,540,441 |        |                    | 242,540 |  |       | 70,954,225 |   |  |   | (75,277,964 | ) |  |   | (4,081,199  | )
|                                                           |  |                 |  |              |        |                          |             |        |                    |         |  |       |            |   |  |   |             |   |  |   |             |  
|                                                           |  |                 |  |              |        |                          |            
|[Unaudited]                                                |  |                 |  |              |        |                          |             |        |                    |         |  |       |            |   |  |   |             |   |  |   |             |  
|                                                           |  |                 |  |              |        |                          |            
|Balance, January 1, 2007                                   |  |                |  |              |       |                          | 242,540,441 |        |                    | 242,540 |  |       | 70,954,225 |   |  |   | (75,277,964 | ) |  |   | (4,081,199  | )
|Issuance of shares for services                            |  |                 |  |              |        |                          | 155,313,844 |        |                    | 155,314 |  |       | 13,441,928 |   |  |   |            |   |  |   | 13,597,242  |  
|Issuance of shares in relation to related party borrowings |  |                |  |              |       |                          | 177,564,224 |        |                    | 177,564 |  |       | 5,497,978  |   |  |   |            |   |  |   | 5,675,542   |  
|Issuance of shares pursuant to Plan of Reorganization      |  | 17,500,000      |  |              | 17,500 |                          |            |        |                    |        |  |       | (17,500    | ) |  |   |            |   |  |   |            |  
|Issuance of shares in payment of license fee               |  |                |  |              |       |                          | 128,500,000 |        |                    | 128,500 |  |       | 4,871,500  |   |  |   |            |   |  |   | 5,000,000   |  
|Net loss                                                   |  |                |  |              |       |                          |            |        |                    |        |  |       |           |   |  |   | (22,031,236 | ) |  |   | (22,031,236 | )
|                                                           |  |                 |  |              |        |                          |             |        |                    |         |  |       |            |   |  |   |             |   |  |   |             |  
|Balance, September 30, 2007                                |  | 17,500,000      |  | $            | 17,500 |                          | 703,918,509 |        | $                  | 703,918 |  | $     | 94,748,131 |   |  | $ | (97,309,200 | ) |  | $ | (1,839,651  | )
|                                                           |  |                 |  |              |        |                          |             |        |                    |         |  |       |            |   |  |   |             |   |  |   |             |  

See notes to condensed consolidated financial statements.



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e-SMART TECHNOLOGIES, INC. and SUBSIDARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

[Unaudited]



|                                                                                 |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|-------------------------------------------------------------------------------- |  | ------------------------------- | ----------- | - | ------------------------------------------------------------------ | - | ---------- | - |  | - | ----------- | -
|                                                                                 |  | Nine Months Ended September 30, |             |   | January 1, 2001(inception
ofdevelopment)period toSeptember 30,2007 |  
|                                                                                 |  | 2007                            |             |   | 2006                                                               |   |           
|Cash flows from Operating Activities -                                           |  |                                 |             |   |                                                                    |   |            |  
|Net loss                                                                         |  | $                               | (22,031,236 | ) |                                                                    | $ | (3,387,449 | ) |  | $ | (97,309,200 | )
|Adjustments to reconcile net loss to net cash used in operating activities:      |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|Issuance of common stock and common stock options for services                   |  |                                 | 13,597,242  |   |                                                                    |   |           |   |  |   | 72,593,742  |  
|Issuance of preferred and common stock in payment of license fee                 |  |                                 | 5,000,000   |   |                                                                    |   |           |   |  |   | 5,000,000   |  
|Depreciation and amortization                                                    |  |                                 | 26,827      |   |                                                                    |   | 17,170     |   |  |   | 104,263     |  
|Bad debt expense                                                                 |  |                                 |            |   |                                                                    |   |           |   |  |   | 312,505     |  
|Changes in assets and liabilities -                                              |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|Increase in prepaid expenses                                                     |  |                                 | (15,239     | ) |                                                                    |   | (7,747     | ) |  |   | (22,797     | )
|Decrease in officers advances                                                   |  |                                 | 11,549      |   |                                                                    |   | 32,844     |   |  |   |            |  
|Increase in accounts payable                                                     |  |                                 | 617,813     |   |                                                                    |   | 463,832    |   |  |   | 1,904,717   |  
|Increase (decrease) in accrued expenses                                          |  |                                 | (379,388    | ) |                                                                    |   | 290,118    |   |  |   | 513,797     |  
|                                                                                 |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|Net Cash Used in Operating Activities                                            |  |                                 | (3,172,432  | ) |                                                                    |   | (2,591,232 | ) |  |   | (16,902,973 | )
|                                                                                 |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|Cash Flows from Investing Activities -                                           |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|Acquisition of equipment                                                         |  |                                 | (48,507     | ) |                                                                    |   | (11,728    | ) |  |   | (131,649    | )
|Purchase of technology licenses                                                  |  |                                 |            |   |                                                                    |   |           |   |  |   | (128,600    | )
|Advances to IVI Smart Technologies, Inc.                                         |  |                                 | (170,112    | ) |                                                                    |   |           |   |  |   | (170,112    | )
|Advances to Biosensor, LLC                                                       |  |                                 |            |   |                                                                    |   |           |   |  |   | (312,505    | )
|(Addition) reduction of lease deposit                                            |  |                                 | (67,692     | ) |                                                                    |   | (4,999     | ) |  |   | (147,405    | )
|                                                                                 |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|Net Cash Used in Investing Activities                                            |  |                                 | (286,311    | ) |                                                                    |   | (16,727    | ) |  |   | (890,271    | )
|                                                                                 |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|Cash Flows from Financing Activities -                                           |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|Increase (decrease) in advances from Intermarket Ventures, Inc., a related party |  |                                 | (2,173,849  | ) |                                                                    |   | 2,483,118  |   |  |   | 4,789,406   |  
|Proceeds from other borrowings, net                                              |  |                                 |            |   |                                                                    |   |           |   |  |   | 47,500      |  
|Proceeds from issuances of shares                                                |  |                                 |            |   |                                                                    |   |           |   |  |   | 7,373,591   |  
|Shares issued in relation to borrowings from related parties                     |  |                                 | 5,675,542   |   |                                                                    |   |            |   |  |   | 5,675,542   |  
|                                                                                 |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|Net Cash Provided by Financing Activities                                        |  |                                 | 3,501,693   |   |                                                                    |   | 2,483,118  |   |  |   | 17,886,039  |  
|                                                                                 |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|Net Increase (decrease) in cash                                                  |  |                                 | 42,950      |   |                                                                    |   | (124,841   | ) |  |   | 92,795      |  
|Cash at Beginning of Period                                                      |  |                                 | 49,845      |   |                                                                    |   | 164,584    |   |  |   |            |  
|                                                                                 |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|Cash at End of Period                                                            |  | $                               | 92,795      |   |                                                                    | $ | 39,743     |   |  | $ | 92,795      |  
|                                                                                 |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|Supplemental non-cash financing activities -                                     |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  
|Issuance of shares for services                                                  |  | $                               | 13,597,242  |   |                                                                    | $ |           |   |  | $ | 72,593,742  |  
|Issuance of shares for license fee                                               |  |                                 | 5,000,000   |   |                                                                    |   |           |   |  |   | 5,000,000   |  
|                                                                                 |  |                                 |             |   |                                                                    |   |            |   |  |   |             |  

See notes to condensed consolidated financial statements.



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e-SMART TECHNOLOGIES, INC. & SUBSIDARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1  Basis of Presentation

The Company has been in the
development stage since the commencement of its operations on January 1, 2001. The accompanying unaudited consolidated financial statements include the accounts of the Registrant and its wholly-owned subsidiaries, e-Smart Korea, Inc. and
e-Smart Systems, Inc., and have been prepared in accordance with generally accepted accounting principles for interim financial information. They do not include all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine and three month
periods ended September 30, 2007 and 2006, are not necessarily indicative of the results that may be expected for the respective years ended December 31, 2007 and 2006.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related footnotes included in the Registrants Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2006, supplemented by the notes included herein. Certain prior year amounts disclosed in the accompanying financial statements and notes thereto have been reclassified to conform to the current periods
presentation.

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

Note 2  Letters of Comment

From time to time the Staff of the Securities and Exchange Commissions Division of Corporate Finance may examine the periodic reports of a Registrant for compliance and form and forward letters relating to the
content of such prior filings (Letters of Comment). The Company seeks to respond to all Letters of Comment received addressing any and all issues raised, including the filing of amended quarterly and annual reports as appropriate.

Note 3  Related Party Transactions

The Company
is the owner of technology licenses which grant the Company the exclusive right to market the technology in particular territories. The three territories covered are the Peoples Republic of China, the remainder of Asia and the United States of
America.



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The licenses, which have a term of twenty years commencing January 1, 2001, were granted to the Company by IVI Smart Technologies, Inc.
(IVI). During this period, IVI received common shares in relation to expansion of those licenses to include certain refinements to and expansions of the rights previously granted.

On May 4, 2007, pursuant to the Planned Reorganization and as reported in the Form 8-K filed as of that date, IVI relinquished its shareholdings of e-Smart and its
right to receive additional shares and warrants in relation to its financing of the Company and issuance to the Company of licenses for technology, and cancelled existing indebtedness in exchange for the issuance of 17,500,000 preferred shares of
e-Smart which possess 70% voting control of the Company.

Intermarket Ventures, Inc., IVIs parent (Intermarket), together with its two
principal stockholders (the Companys President and Chief Executive Officer Mary A. Grace and its Chief Technology Officer Tamio Saito), continue to own a substantial percentage of the common stock of the Company and will continue to have the
ability to materially influence the direction of the Company, its efforts in raising the additional capital critical to its success, and the strategies employed in commercialization of the licensed technology.

Note 4  Going Concern

The Registrants condensed
consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

As shown in the accompanying financial statements, the Registrant had negative working capital at September 30, 2007, of $2,090,609. In addition, the Registrant has
incurred an accumulated deficit of $(97,309,200) through September 30, 2007. The Registrant is dependent upon the efforts of its management to raise proceeds from continued debt or equity placements to sustain the research and development and
ultimate commercialization of their respective interests in the Super Smart Card technology. The Registrant's ability to continue to receive the necessary level of funding support through the efforts of its management cannot be guaranteed. The
condensed consolidated financial statements do not include any adjustments that might be necessary if the Registrant is unable to continue as a going concern.

Note 5  Contingencies

The Securities and Exchange Commission has advised the Company that it is conducting an investigation. It has
requested various documents that pertain to loans and the issuance and transfer of the Companys shares. The Company is cooperating with this request. Management cannot determine the effect, if any, that the investigation will have on the
results of operations and financial condition.



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|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
|------- | ---------------------------------------------------------

Plan of Operation

Since the inception of our development period on January 1, 2001, and continuing through September 30, 2007,
our primary source of funds have been private placements of our equity securities to accredited investors and loans from IVI and Intermarket. We presently expect that this dependence will continue until our first system starts to generate sufficient
cash flow to cover our operating costs. As of the date of this Report, we expect this dependence to continue through the first or second quarter of 2008. Based upon our current and planned rate of operating commitments, we will require approximately
$5,000,000 in additional funding during this period. Although management has identified several potential sources of institutional capital, there can be no assurance that we will be able to successfully obtain all or a portion of the funds required
to commence commercial operations.

During July 2007, the Company opened its Engineering Production Center in Seoul, South Korea to be supervised by
e-Smarts Chief Inventor and CTO, Tamio Saito, and Richard Kim, the general manager of e-Smart Korea. That center will coordinate all design and manufacturing functions, and we expect to deliver our product and implement our first system within
the next six months.

Our ability to maintain what we believe to be the state-of-the-art quality of our Super Smart Card and BVS2 system and
related technologies is dependent upon our ability to continue to improve our products functionality and durability, and to reduce their cost of manufacture. In addition, we are constantly trying to find and develop new products that enhance the
functionality of our BVS2 platform. This research and development is expected to continue throughout 2007 and well into 2008. Accordingly, the Company expects to continue to be dependent upon funds from private financing.

We are constantly acquiring equipment in connection with our research and development activities. Our planned 2007 budget is approximately $1,500,000 for such
acquisitions, but could change depending upon our rate of accomplishment in the anticipated sales of one or more systems. Should such sales occur, we will also require an operations and testing center near those customers offices as a
condition of contract.

Off-Balance Sheet Arrangements

During the nine months ended September 30, 2007, we had no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Companys financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. The Company is presently negotiating certain proposed relationships, which if accepted by all parties, may contain terms
that have off-balance sheet implications; see Note 12 to the Consolidated Financial Statements in Item 7 of our Form 10-KSB for December 31, 2006.



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Forward Looking Statements:

The following discussion contains forward-looking statements regarding the Registrant, its business, prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause
the Registrants actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Factors that may affect such forward-looking statements include the
Registrants ability to successfully exploit its licensed technology, develop new products and new markets for its licensed technology; the impact of competition on the Registrants proposed operations, changes in law or regulatory
requirements that adversely affect or preclude customers from using the Registrants licensed technology, delays in the Registrants introduction of new products or services, and failure by the Registrant to keep pace with emerging
technologies.

When used in this discussion, words such as believes, anticipates, expects, intends, and
similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak
only as of the date of this report. The Registrant undertakes no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the
various disclosures made by the Registrant in this report and other reports filed with the Securities and Exchange Commission (SEC) that attempt to advise interested parties of the risks and factors that may affect the Registrants
business.

Discussion and Analysis of the Nine Months Ended September 30, 2007 and 2006

Revenues Since obtaining the license to the Super Smart Card technology in November 2000, the Registrant has been engaged in research and development
efforts to enhance and broaden the technologys applications and in exploring the global market for its optimal commercialization. In the opinion of management, the Registrants Super Smart Card is ready for commercialization. This
fact notwithstanding, the Registrant is still in its development stage for accounting purposes as it has not experienced revenues in either of the nine month periods ended September 30, 2007 (9M7) or September 30, 2006
(9M6).

Operating Expenses  Operating expenses were $22,029,586 for 9M7 compared to $3,385,449 for 9M6 resulting in an increase of
$18,644,137 or 551%. This increase was principally attributable to the various engineering and consulting services, and a licensee fee which were acquired with common shares valued at $13,597,242 and $5,000,000, respectively. There were no
comparable charges in 9M6.

Loss Before Taxes and Income Taxes As a result of the foregoing, loss before taxes for 9M7 was $(22,029,586)
compared to $(3,385,449) for 9M6, upon which the Registrants tax provision in both periods related solely to minimum franchise taxes.

Net Loss
 Consistent with the foregoing analysis, the Registrant reported a net loss of $(22,031,236) or $(0.05) per share for 9M7, compared to a net loss of $(3,387,449) or $(0.02) per share for 9M6, based upon weighted average shares outstanding
of 451,178,569 and 200,000,000, respectively.



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Discussion and Analysis of Three Months Ended September 30, 2007 and 2006

Revenues Since obtaining the license to the Super Smart Card technology in November 2000, the Registrant has been engaged in research and development
efforts to enhance and broaden the technologys applications and in exploring the global market for its optimal commercialization. In the opinion of management, the Registrants Super Smart Card is ready for commercialization. This
fact notwithstanding, the Registrant is still in its development stage for accounting purposes as it has not experienced revenues in either of the three month periods ended September 30, 2007 (3Q7) or September 30, 2006
(3Q6).

Operating Expenses  Operating expenses were $4,532,614 for 3Q7 compared to $1,258,406 for 3Q6 resulting in an increase of
$3,274,208 or 260%. This increase was principally attributable to the various engineering and consulting services associated with the expansion of our licensed technology which were acquired with common shares valued at $3,025,000; there were no
comparable charges in 3Q6.

Loss Before Taxes and Income Taxes As a result of the foregoing, loss before taxes for 3Q7 was $(4,532,614)
compared to $(1,258,406) for 3Q6 upon which the Registrants provision for taxes in both periods was solely attributable to minimum state franchise taxes payable.

Net Loss  Consistent with the foregoing analysis, the Registrant reported a net loss of $(4,532,964) or $(0.00) per share for 3Q7, compared to a net loss of $(1,258,906) or $(0.00) per share for 3Q6,
based upon weighted average shares outstanding of 657,668,509 and 200,000,000, respectively.

Liquidity and Capital Resources  The Registrant
has limited working capital and is dependent upon the efforts of its management in obtaining financing for the continuation of its proposed smart card business. Currently, the Registrant does not have any existing credit facilities or similar bank
borrowing arrangements. The Registrant will need to obtain additional financing in order to carry out its entire business plan. There can be no assurance that any additional financing will be available to the Registrant on acceptable terms, if at
all. If the Registrant raises additional funds by issuing additional equity securities, further dilution to existing equity holders will result. If adequate additional funds are not available, the Registrant may be required to curtail significantly
its long term business objectives and the Registrant still may not be able to transition out of the development stage, notwithstanding that the BVS2 systems and Super Smart Card and other smart card system technologies are ready for
commercialization.

At September 30, 2007, the Registrant had current assets of $115,592 (including cash of $92,795), current liabilities of
$2,206,201, and an accumulated deficit of $(97,309,200) . The Registrant periodically evaluates its liquidity requirements, capital needs and availability of capital resources in view of its plans for commercialization of its technology, and other
operating cash needs. In the



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opinion of Registrants management, the Registrant is entirely dependent upon private financing during the next several months in order to sustain its
current developmental efforts, commence commercial operations, and ultimately transition out of the development stage.



|ITEM 3. | CONTROLS AND PROCEDURES
|------- | -----------------------

Evaluation of Disclosure Controls and
Procedures

The Companys Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the Companys
disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as of September 30, 2007, as required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15. Based upon this evaluation,
the CEO and CFO has concluded that as of September 30, 2007, the Companys disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files
or submits under the Exchange Act is recorded, processed, and summarized, within the time periods specified in the Commissions rules and forms and that information required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is accumulated and communicated to its management, including its principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures. Management also
acknowledged that it failed to submit its periodic filings for the first, second and third quarters of 2007 in a timely fashion, and continues its efforts to ensure the level of funding that is necessary for the reporting function.

Changes in Internal Controls

The Registrant made no significant
changes in its internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation of those controls by the CEO and CFO.

PART II - OTHER INFORMATION



|ITEM 6. | EXHIBITS AND REPORTS ON FORM 8-K
|------- | --------------------------------



|          |  |                                                                                
|--------- |  | -------------------------------------------------------------------------------
|Exhibits: |  | 31.1 - Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|          | 
|          |  | 32.2  Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 

Reports on Form 8-K: None.



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SIGNATURES

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



|                           |  |                                      
|-------------------------- |  | -------------------------------------
|e-Smart Technologies, Inc.
|                           | 
|By:                        |  | /s/ Mary A. Grace                    
|                           |  | Chief Executive Officer, and Director
|                           | 
|By:                        |  | /s/ Mary A. Grace                    
|                           |  | Chief Financial Officer              

Dated: April 3, 2008



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Exhibit Index



|            |  |                                                                         
|----------- |  | ------------------------------------------------------------------------
|Exhibit No. |  | Description                                                             
|31.1        |  | Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|            | 
|32.1        |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 



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