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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 March 31, 2003 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to  Commission file number 000-30717
 e-Smart Technologies, Inc.  Nevada
(State or other jurisdiction of
incorporation or organization)
    
    88-0309261
(I.R.S. Employer
Identification No.)7225 Bermuda Road, Suite C
Las Vegas, Nevada
(Address of principal executive offices)
    
    89119
(Zip Code)
 Registrants telephone number, including area code: (702) 447-5210 Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes o No x State the number of share outstanding of each of the issuers classes of common
equity, as of the latest practicable date: 153,973,443 shares
at March 31, 2003. Transitional Small Business Disclosure Format (Check One): Yes o No x    1




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e-SMART TECHNOLOGIES, INC.
FORM 10-QSB  QUARTERLY PERIOD ENDED MARCH 31, 2003 INDEX PART I
    
    FINANCIAL INFORMATION
    
    
    3Item 1.
    
    Financial Statements
    
    
    3Condensed Balance Sheets at March 31, 2003 and December 31, 2002
    
    
    4Condensed Statements of Operations for the Three Months Ended March 31, 2003 and 2002
    
    
    5Condensed Statements of Shareholders Equity for the Three Months Ended March 31, 2003 and 2002
    
    
    6Condensed Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002
    
    
    7Notes to the Condensed Financial Statements
    
    
    8Item 2.
    
    Managements Discussion and Analysis
    
    
    9Item 3.
    
    Controls and Procedures
    
    
    10PART II
    
    OTHER INFORMATION
    
    
    10Item 5.
    
    Other Information
    
    
    10Item 6.
    
    Exhibits and Reports on Form 8-K
    
    
    11SIGNATURES
 EXHIBITS 2




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PART I - FINANCIAL INFORMATION 
 Item 1. Financial Statements The unaudited condensed balance sheets of e-Smart Technologies, Inc., (the
Registrant), at March 31, 2003 and December 31, 2002, and the unaudited
condensed statements of operations, shareholders equity, and cash flows for
the three month periods ended March 31, 2003 and March 31, 2002 follow. The
unaudited condensed financial statements reflect all adjustments that are, in
the opinion of management, necessary to render a fair statement of the results
for the interim periods presented. 3




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e-SMART TECHNOLOGIES, INC. 
  (Unaudited)March 31,
    
    December 31,2003
    
    2002AssetsCurrent assets -Cash
    
    $
    15
    
    
    $
    1,069Due from Associated Business Group, Inc.
    
    
    40,000
    
    
    
    40,000Prepaid expenses
    
    
    65,600
    
    
    
    Total current assets
    
    
    105,615
    
    
    
    41,069Super Smart Card  Technology
    
    
    114,168
    
    
    
    115,740Total assets
    
    $
    219,783
    
    
    $
    156,809Liabilities and Shareholders Equity (Deficiency)Current liabilities -Accounts payable
    
    $
    389,121
    
    
    $
    230,395Notes payable
    
    
    150,000
    
    
    
    150,000Accrued expenses
    
    
    22,103
    
    
    
    14,603Total current liabilities
    
    
    561,224
    
    
    
    394,998Shareholders Equity (Deficiency) -Common Stock, par value $.001 per share, 300,000,000
authorized, 153,973,443 and 153,771,993 issued and
outstanding, respectively
    
    
    153,973
    
    
    
    153,772Additional paid in capital
    
    
    22,742,578
    
    
    
    22,714,779Retained deficiency
    
    
    (23,237,992
    )
    
    
    (23,106,740
    )Total shareholders deficiency
    
    
    (341,441
    )
    
    
    (238,189
    )Total liabilities and shareholders deficiency
    
    $
    219,783
    
    
    $
    156,809
 See notes to condensed financial statements. 4




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e-SMART TECHNOLOGIES, INC. 
  [Unaudited]
 Three Months EndedMarch 31,2003
    
    2002Net revenue
    
    $
    
    
    
    $
    Cost of revenue
    
    
    
    
    
    
    Gross profit
    
    
    
    
    
    
    Operating expenses:Research and development
    
    
    50,000
    
    
    
    20,000Selling, general and administrative
    
    
    73,503
    
    
    
    1,820Interest
    
    
    7,499
    
    
    
    Total operating expenses
    
    
    131,002
    
    
    
    21,820Loss before taxes
    
    
    (131,002
    )
    
    
    (21,820
    )Income tax
    
    
    250
    
    
    
    250Net loss
    
    $
    (131,252
    )
    
    $
    (22,070
    )Net loss per common share -
basic and fully-diluted
    
    $
    (0.00
    )
    
    $
    (0.00
    )Weighted average number of
common shares outstanding
    
    
    153,876,310
    
    
    
    145,462,200
 See notes to condensed financial statements 5




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e-SMART TECHNOLOGIES, INC. 
  [Unaudited]
 Common Stock
    
    AdditionalPaid-in
    
    RetainedEarningsShares
    
    Amount
    
    Capital
    
    (Deficit)
    
    TotalBalance, January 1, 2002
    
    
    145,117,200
    
    
    $
    145,117
    
    
    $
    122,715
    
    
    $
    (145,580
    )
    
    $
    122,252Issuance of shares for cash
    
    
    1,180,000
    
    
    
    1,180
    
    
    
    21,820
    
    
    
    
    
    
    
    23,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,070
    )
    
    
    (22,070
    )Balance, March 31, 2002
    
    
    146,297,200
    
    
    $
    146,297
    
    
    $
    144,535
    
    
    $
    (167,650
    )
    
    $
    123,182Balance January 1, 2003
    
    
    153,771,993
    
    
    $
    153,772
    
    
    $
    22,714,779
    
    
    $
    (23,106,740
    )
    
    $
    (238,189
    )Issuance of shares for cash
    
    
    201,450
    
    
    
    201
    
    
    
    27,799
    
    
    
    
    
    
    
    28,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (131,252
    )
    
    
    (131,252
    )Balance, March 31, 2003
    
    
    153,973,443
    
    
    $
    153,973
    
    
    $
    22,742,578
    
    
    $
    (23,237,992
    )
    
    $
    (341,441
    )
 See notes to condensed financial statements. 6




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e-SMART TECHNOLOGIES, INC. 
  [Unaudited]
 Three Months Ended March 31,2003
    
    2002Cash flows of operating activitiesNet loss
    
    $
    (131,252
    )
    
    $
    (22,070
    )Adjustments to reconcile net loss to net
cash used by operations:Depreciation and amortization
    
    
    1,572
    
    
    
    Decrease (increase) in assets -
Prepaid expenses
    
    
    (65,600
    )
    
    
    Increase (decrease) in liabilities -
Accounts payable
    
    
    158,726
    
    
    
    Accrued expenses
    
    
    7,500
    
    
    
    Net cash used by operating activities
    
    
    (29,054
    )
    
    
    (22,070
    )Cash flows of financing activities
Proceeds from sale of common shares
    
    
    28,000
    
    
    
    23,000Net cash provided by financing activities
    
    
    28,000
    
    
    
    23,000Net (decrease) increase in cash
    
    
    (1,054
    )
    
    
    930Cash at beginning of period
    
    
    1,069
    
    
    
    81Cash at end of period
    
    $
    15
    
    
    $
    1,011
 See notes to condensed financial statements. 7




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e-SMART TECHNOLOGIES, INC. 
  1. Basis of Presentation The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, 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 three month
periods ended March 31, 2003 and 2002, are not necessarily indicative of the
results that may be expected for the respective years ended December 31, 2002
and 2003. The unaudited condensed 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 two fiscal years ended
December 31, 2003, supplemented by the notes included herein. Such Annual
Report on Form 10-KSB was the first to be filed by the Registrant since present
management assumed control of the Registrant in October 2000. Prior thereto,
the Registrants last audited financial statements were filed with the
Registrants Form 10-SB on May 30, 2000, under the Registrants former name,
Plainview Laboratories, Inc. 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. 2. Related Party Transactions Common Ownership Approximately 42% of the Registrants outstanding common shares are owned
by IVI Smart Technologies, Inc., a Delaware corporation (the Licensor), that
is the sole owner of all of the Super Smart Card technology licensed to the
Registrant. Such license was granted by the Licensor in November 2000 for a
20-year term for commercialization throughout Asia and the United States. In
addition, the Licensors parent, Intermarket Ventures, Inc., a Utah corporation
(Ventures), is the owner of approximately 35% of the Registrants outstanding
common shares. Mary A. Grace, the Registrants President, Chief Executive
Officer and Chief Financial Officer, is a director, executive officer and
principal stockholder of the Licensor and Ventures. Tamio Saito, the
Registrants Chief Technology Officer, is also an executive officer and
principal stockholder of the Licensor and Ventures. The Licensor and Ventures
are in a position to materially influence the direction of the Registrant, its
efforts in raising the additional capital critical to its success, and the
strategies employed in commercialization of the licensed technology, assuming
the Registrants business plan is ultimately successful. 3. Going Concern The Registrants condensed 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 March 31, 2003, of $455,609. In addition, the
Registrant has incurred an accumulated deficit of $(23,237,992) through March
31, 2003. The Registrant is dependent upon the efforts of the Licensor and
Ventures 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 this level of support from the Licensor and Ventures is
uncertain. 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. 8




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Item 2. Managements Discussion and Analysis 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 develop new products for new markets; the
impact of competition on the Registrants revenues, changes in law or
regulatory requirements that adversely affect or preclude customers from using
the Registrants products for certain applications, 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. Three Months Ended March 31, 2003 and March 31, 2002 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 March 31, 2003 (1Q 03 ) or
March 31, 2002 (1Q 02). Cost of Revenues Consistent with the Registrant still being in its
development stage, it did not experience cost of revenues in either 1Q 03 or
1Q 02. Operating ExpensesOperating expenses rose to $131,002 for 1Q 03
compared to $21,820 for 1Q 02, an increase of $109,182, or 500%. The
principal factors underlying this increase were as follows: (i) increased
marketing expenses during 1Q 03 compared to 1Q 02 consistent with the
Registrants efforts to get closer to developing revenues; (ii) an increase in
general and administrative expenses during 1Q 03 consistent with the
Registrant beginning to create the infrastructure it will require to oversee
its affairs; and (iii) an increase in research and development expenses in 1Q
03 in line with the Registrants technology becoming closer to
commercialization. Loss Before Taxes and Income Taxes As a result of the foregoing, loss
before taxes for 1Q 03 was $(131,002) compared to $(21,820) for
1Q 02 upon
which the Registrants provision for taxes in both periods was solely
attributable to state and local taxes payable. Net LossConsistent with the foregoing analysis, the Registrant reported
a net loss of $(131,252) or $(0.00) per share for 1Q 03, compared to a net
loss of $(22,070) or $(0.00) per share for 1Q 02, based upon weighted average
shares outstanding of 153,876,310 and 145,462,200, respectively. Liquidity and Capital ResourcesThe Registrant has limited working
capital and is dependent upon the efforts of the Licensor and Ventures in
raising proceeds derived from private securities offerings for funds 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 may 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 Registrant believes the BVS2 system and Super Smart Card and other
system technologies will be ready for commercialization in 2004. 9




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At March 31, 2003, the Registrant had current assets of $105,615
(including cash of $15), current liabilities of $561,224, and negative working
capital of $455,609. 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 opinion of Registrants management, the Registrant is generating
sufficient cash from the sale of securities to its accredited investors to meet
its requirements through 2003. The Registrant may rely on these same
resources, as well as debt financing from time to time to meet its long-term
capital needs. Plan of Operations Over
the next 12 months, the Registrant expects to
continue its marketing, research and development efforts through the private
sale of common stock to the accredited investors that have supported the
Registrant to this stage. The Registrant estimates that it will need another $3 to $4 million
in capital until it achieves its first systems sales in mid to late 2004. There
can be no assurances that the Registrant will continue to receive the
support of its
investors. However, the market intelligence the Registrant has gathered regarding the
need for its products and systems continues to be consistently
encouraging. In
view of the foregoing, the Registrant believes it will continue to receive
sufficient capital to sustain its business operations through
commercialization. Off-Balance Sheet
Arrangements The Registrant has 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 are material to investors. 
 Item 3. Controls and Procedures Evaluation of Disclosure Controls and Procedures During the quarter ended March 31, 2003, the Registrant had not yet begun
to implement controls and procedures designed to ensure that information
required to be disclosed in the reports that the Registrant files or submits
under the Securities Exchange Act of 1934, as amended (the Exchange Act), is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the SEC. Based upon their evaluation of the controls
and procedures expected to be implemented between 90 and 120 days from the
filing date of this report, the Chief Executive and Chief Financial Officer of
the Registrant concluded that the Registrants disclosure controls and
procedures are expected to improve substantially. Such officer also concluded
that the Registrants controls and procedures will likely equal or exceed those
required of the Registrant within two or three more operating quarters. 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 Chief Executive and Chief
Financial Officer. 
 PART II - OTHER INFORMATION 
 Item 5. Other Information Delinquent Filings The Registrant has not filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the 12 months preceding the period
covered by this Report. Although the Registrant has been subject to the
Exchange Act filing requirements during the preceding 12 months, the only
Exchange Act filings made by the Registrant were its Form 10-SB on May 30,
2000, under the Registrants former name Plainview Laboratories, Inc., and its
Form 8-K dated October 23, 2001, reporting the change of its independent
accountants. 10




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Item 6. Exhibits and Reports on Form 8-K  (a)
    
    List of ExhibitsExhibit 31.1: Certifications by the Chief Executive Officer and
Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002Exhibit 32.1: Certifications by the Chief Executive Office and
Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002(b)
    
    No reports on Form 8-K have been filed during the quarter for which
this report is filed. ITEMS 1, 2, 3, and 4 are not applicable and have been omitted. 11




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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized. e-Smart Technologies, Inc.Date: June 30, 2004
    
    By:
    
    /s/ Mary A. GraceName: Mary A. GraceTitle: Chief Executive Officer and DirectorDate: June 30, 2004
    
    By:
    
    /s/ Mary A. GraceName: Mary A. GraceTitle: Chief Financial Officer
 12