U.S. SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549


                                 FORM 10-KSB

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

                 For the Fiscal Year Ended December 31, 2000

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

                      Commission File Number:  0-29138

                        INTELLECTUAL TECHNOLOGY, INC.
         (Name of Small Business Issuer as specified in its charter)

     Delaware                                               84-1130227
(State or Other Jurisdiction of              (I.R.S. Employer I.D. No.)
Incorporation or Organization)

       1945 Camino Vida Roble, Suite O, Carlsbad, CA  92008
       (Address of Principal Executive Offices)  (Zip Code)

                          (760) 929-9789
        Registrant's Telephone Number, Including Area Code

Securities registered under Section 12(b) of the Exchange Act:

         None

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.00001 par value

Check whether the Registrant: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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  X   No      .

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosures will be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.  [  ]

The Registrant's revenues for the fiscal year ended December 31, 2000 were
$6,162,099.

<PAGE>


The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of April 13, 2001 was $1,230,000.  For purposes of this
computation, it has been assumed that the shares beneficially held by
directors and officers of Registrant were "held by affiliates;" this
assumption is not to be deemed to be an admission by such persons that they
are affiliates of Registrant.

As of April 11, 2001, the Registrant had outstanding 9,842,681 shares of
Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE

Specified exhibits listed in Part III of this report are incorporated by
reference to the Registrant's Registration Statement No. 33-33092-D,
effective April 17, 1990, or to Registrant's Report on Form 8-K dated March
27, 1997.

     Transitional Small Business Disclosure Format:  Yes        No  X


                                      2
<PAGE>

ITEM 1.  BUSINESS

Historical Development

Image Technology, Inc., a Nevada corporation based in San Diego, California
("ITI Nevada") was formed on April 23, 1992 to engage in the design,
manufacture and sale of systems for the automated preparation and dispensing
of motor vehicle registration forms and license plate decals.  On March 12,
1997, the shareholders of ITI Nevada, in a transaction accounted for as a
reverse acquisition, exchanged all of the outstanding common stock of ITI
Nevada for 450,000,000 shares of the common stock of Bridgestone Corp., a
Delaware corporation.  As a result of this transaction, ITI Nevada
shareholders acquired collectively a 90% interest in Bridgestone Corp., and
ITI Nevada became a wholly owned subsidiary of Bridgestone Corp.
Bridgestone Corp., which was formed on December 1, 1989, for the purpose of
seeking out and acquiring a business opportunity, had completed a public
offering of common stock and warrants in 1990.  In April 1997, Bridgestone
Corp. changed its name to Intellectual Technology, Inc. and effected a 1-
for-50 reverse stock split.  References in this report to the Company and to
ITI are references to Intellectual Technology, Inc., a Delaware corporation,
and its predecessor and wholly owned subsidiary, ITI Nevada, on a
consolidated basis.


Industry and Company Background

Vehicle registration services are operated by all 51 U.S. and many foreign
jurisdictions.  Governments use vehicle registration as a means of
collecting revenues and to provide an orderly method of regulating the
ownership and transfer of motor vehicles.  Management of the Company
recognizes that traditional methods of motor vehicle registration have
resulted in delays experienced by members of the public, significant
personnel and facility costs, the waste of preprinted materials and a
generally inefficient disbursement process, as well as significant losses
occasioned by fraud and theft.  Based upon discussion with law enforcement
officials, the Company believes that losses attributable to these problems
are in the hundreds of millions of dollars.

As early as 1987, ITI's founders envisioned streamlining the distribution of
motor vehicle registrations through the development of an automated, self-
service registration printing and dispensing device.  From 1987 through
1991, the founders of ITI engaged in market research and product
development. In 1992, ITI was formed to continue this process and
commercialize the concepts that had been developed.


The ITI Printing System and Related Print Media

The ITI printing system allows for the real time, on-site creation of
vehicle registration forms and license decals on blank stock, including the
imprinting of the vehicle license plate number on the decal.  This on-demand
printing capability allows Departments of Motor Vehicles to substantially
reduce fraud and theft, increase revenue collection, and reduce personnel,
inventory, and facility costs as a result of increased efficiencies.  The
ITI printing system is designed to operate both as a stand-alone unit in a
printer server environment within a Department of Motor Vehicles ("DMV")
office and as self-service terminals which can be placed in locations remote
from DMV offices.  One of the ITI stand alone printers was patented November
13, 1990.  The Company purchased this patent on October 31, 1995.  Other ITI
stand alone printers have been purchased from an outside vendor.  The
Company does not own the patents on these printers. The self-service
terminal was patented on September 20, 1994.  The Company purchased this
patent in September 1999.

                                      3
<PAGE>

The ITI Printing System and Related Print Media (continued)

The Company believes that the ITI printing system resolves the problems
described above in "Industry and Company Background," in that it prints a
vehicle registration with an applied decal on blank stock, thereby
eliminating inventory and inventory management, as well as the need to
dispose of preprinted stock at year end.  Additionally, it satisfies the
security demands of Departments of Motor Vehicles in that it applies the
vehicle license plate number to the decal, causing the decal to become
significantly less valuable to thieves.  The ITI printing system is equipped
with software that accounts for all transactions effected through the
printer, significantly reducing the likelihood of DMV employee fraud or
theft.  Finally, when combined with automated teller technology, the ITI
printer system is capable of acting as a self-service terminal for motor
vehicle registrations which can be established either in DMV offices or in
remote locations, reducing personnel and facilities' costs.  None of the
Company's products or services require government approval.  The Company is
not aware of any existing or probable government regulations that would
affect its business.


Marketing and Sales

The primary market for the Company's printing systems and services consists
of the Department of Motor Vehicles in each of the 50 U. S. states, the
District of Columbia and Canada.

The Company believes that its experience working with State Motor Vehicle
administrators and the limited number of competitors in this market permit
the Company to approach the vehicle registration and renewal market with
significant efficiencies.  Consequently, the Company plans to market its
products and services through its in-house marketing and sales staff.

The Company solicits interest in its products primarily through direct
contact with DMV officials and attendance at industry conferences.  The
initial marketing package consists of brochures and color photographs, which
are supplemented with an explanation of the product's evolution.  References
of DMV officials of states where the Company has installed its products are
supplied, along with an offer to demonstrate the products.


Contracts

For the year ended December 31, 2000, 97% of revenues was derived from two
customers.

In August 1996, ITI entered into an Equipment Lease, Support and Maintenance
Agreement (the "Indiana Contract") with the Indiana Bureau of Motor Vehicles
Commission (the "BMVC") to implement ITI's printing system solution in
Indiana.  The term of the Indiana Contract was for a period of three years
with a one year renewal option through October 2000 that was exercised.  In
May 2000, the Indiana contract was extended through October 31, 2002.

In the fourth quarter of 1998, the Company entered into a five-year
Agreement with the State of South Dakota to implement ITI's printing system.
ITI began processing 100% of the annual registrations in South Dakota on
April 1, 1999.

The Company is currently in the start up stage of performing as a
subcontractor as part of a contract with the State of Louisiana.  Revenue
from this subcontract is expected to be generated in the second quarter of
2001.

                                      4
<PAGE>

Manufacturing and Supply

The Company uses subcontractors to manufacture and supply most components
and subassemblies of ITI's printing system and to provide the required
printing media. The decal used by the ITI printing system is produced by 3M
Corporation of St. Paul, Minnesota.  The paper materials on which the
Indiana and South Dakota registrations are printed are supplied by NCR (see
"Business - The ITI printing system and Related Print Media").  Thermal
ribbon used in the printing process is produced by NCR Corporation and
Datamax Corporation.  The Company has identified alternative vendor sources
for all materials and assemblies used in its products. The Company believes
the use of outside vendors for its manufacturing process has allowed it to
limit the size of its fixed overhead and to respond quickly to the
volatility of its market which consists of a relatively small number of
significant customers who order products at irregular intervals.


Competition

The Company has identified the automation of vehicle registrations and
registration decal printing as its primary market.  Currently there is only
one major competitor targeting this niche market.  In some markets, however,
state agencies have decided to bundle the automation of the vehicle
registration process into an overall upgrade of state computer and
information systems projects.  In these situations, where the business
targeted by the Company is a component of a larger technology project, there
are many potential competitors, primarily large computer manufacturers and
information technology companies.  Several of these larger companies have
approached the Company seeking to partner on these opportunities.


Research & Development

For the years ended December 31, 2000 and 1999, the Company spent $244,000
and $212,000, respectively on research and development activities.  None of
these costs were borne directly by customers.


Environmental laws

The Company's cost of compliance with environmental laws (federal, state,
local) is estimated to be insignificant.


Employees

The Company has twelve full-time employees and one part-time employee, of
which two are in executive or administrative positions, four are in
engineering/r&d, and one marketing executive.  The Company also retains
three part-time marketing consultants and one business consultant.  None of
the Company's employees are currently represented by a union, and the
Company believes that its relations with its employees are good.

                                      5
<PAGE>

ITEM 2.     PROPERTIES

The Company occupies 2,653 square feet of office space in Carlsbad,
California at a monthly rental of $3,215, subject to cost of living
adjustments, through February 2002.  The Company is also obligated through
September 2001 under a lease for its previous corporate headquarters, which
calls for monthly payments of $2,131.  The Company also leases approximately
1,875 square feet of office/warehouse space in Carmel, Indiana, through
October 2002 at monthly rentals that range from $1,163 to $1,233 per month.
The Company believes that these facilities are adequate to meet its
anticipated needs for the foreseeable future.


ITEM 3.	LEGAL PROCEEDINGS

There are no legal proceedings currently pending.


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

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 2000.


ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED
        STOCKHOLDER MATTERS

The following table sets forth, for the periods indicated, the range of high
and low bid quotations for the Company's common stock as reported by FT
Interactive Data.

                         Quarter Ended         High  Bid     Low  Bid

                        March 31, 1999        $  0.8875      $   0.6250
                        June 30, 1999         $  1.0625      $   0.3125
                        September 30, 1999    $  0.5625      $   0.1875
                        December 31, 1999     $  0.4375      $   0.1875
                        March 31, 2000        $  0.4375      $   0.1875
                        June 30, 2000         $  0.375       $   0.1875
                        September 30, 2000    $  0.3125      $   0.22
                        December 2000         $  0.3125      $   0.0625
                        March 31, 2001        $  0.65        $   0.13

The quotations which appear above reflect inter-dealer prices, without
retail mark-up, mark-down, or commission.

The Company has not paid any dividends on its common stock, and the Board of
Directors of the Company presently intends to retain earnings, if any, for
use in the Company's operations and to finance expansion of its business.
The declaration and payment of dividends in the future, of which there can
be no assurance, will be determined by the Board of Directors in light of
conditions then existing, including the Company's earnings, financial
condition, capital requirements, and other factors.

As of April 13, 2001, the Company had approximately 67 shareholders of
record, which does not include shareholders whose shares are held in street
or nominee names.

                                      6
<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Certain statements contained in this report, including statements concerning
the Company's future cash and financing requirements, and other statements
contained herein regarding matters that are not historical facts, are
forward looking statements; actual results may differ materially from those
anticipated.  For ease in presenting the financial data, figures have been
rounded to the nearest thousand.

Liquidity and Capital Resources

During the last two fiscal years, the Company has been able to use cash flow
from operations to repay debt, and as a result, has generated significant
increases in working capital.  As of December 31, 2000, the Company had
working capital of $974,000 versus a working capital deficit of $490,000 as
of December 31, 1999, an improvement of $1,464,000.  Certain equipment
financing with a monthly payment of $134,695 was fully paid off in December
2000.  The Company's remaining debt service consists of contract financing
with a monthly payment of $17,680 ($212,000 per year) through April 2004 and
a patent purchase payment of $5,000 per quarter ($20,000 per year) through
March 2011.   In 2001, the Company expects to spend another $100,000 on
contract equipment for contracts in effect in 2000.  The Company expects to
generate the cash necessary to meet its debt and capital equipment
obligations under contracts in effect as of December 31, 2000 from current
operations.

The following is a summary of the Company's cash flows from operating,
investing, and financing activities:

                                        Year ended December 31,
                                      2000                        1999

Operating Activities            $   2,042,000               $   1,640,000
Investing Activities                 (331,000)                   (689,000)
Financing Activities               (1,700,000)                   (630,000)

Net effect on cash              $      11,000                $    321,000


Cash flows provided by operations increased from $1,640,000 in 1999 to
$2,042,000, an increase of $402,000 due to (1) timing in the collection of
accounts receivable - $249,000; (2) increases in accruals and reserves -
$131,000 and (3) other items netting to an increase in cash flows of
$22,000.  Cash used in investing activities decreased from $689,000 to
$331,000 as the Company nears completion of installations of equipment under
existing contracts.  Cash used in financing activities increased from
$630,000 in 1999 to $1,700,000 in 2000 due to the receipt of debt proceeds
from a refinancing in April 1999.

In connection with a new subcontract involving the State of Louisiana, the
Company expects an initial capital outlay in 2001, which will be funded from
internal cash flows and external financing from lenders with whom the
Company has established relationships.

                                      7
<PAGE>

Results of Operations

For the year ended December 31, 2000 contract revenues increased from
$6,126,000 to $6,162,000, an increase of $36,000.  This increase in revenue
was due to: (1) additional billings for contract related services -
$150,000; (2) a contract started in 1999 being in effect for additional
three months - $116,000; (3) expiration of a contract in 1999 - ($229,000);
(4) price decrease on existing contract - ($17,000); and (5) other revenues
- $16,000.  The Indiana contract was renewed effective November 1, 2000, but
at a lower transaction price.  The Company expects that this decrease in
price will have an effect of reducing total revenue in 2001 by $1,800,000.

Gross profit decreased $104,000 from $2,545,000 (41.6% of sales) to
$2,441,000 (39.6% of sales).  In 2000, a $390,000 provision for future
contract losses was accrued.  The Company projects that profit margins will
be slightly lower in 2001 due to lower sales prices partially offset by
lower depreciation and the absence of contract losses.

Operating expenses decreased 7.8% from $1,748,000 in 1999 to $1,612,000 in
2000, a decrease of $136,000 of which $85,000 was attributable to patent
amortization.  Selling, general and administrative expenses decreased from
$1,177,000 to $1,109,000, a decrease of $68,000 primarily due to lower
payroll resulting from an employee termination and the untimely death of two
employees - ($82,000).  Research and development increased from $212,000 in
1999 to $244,000 in 2000 as the Company continued to expand on the
application of its products.  The Company expended considerable resources in
developing a "laser printer" solution to real time registration printing and
also developed a "Customer Convenience Center" terminal application which it
expects to bring to market in 2001.   The Company will continue to engage in
research and development of additional applications of its products in
related areas and new product development.

Interest expense decreased from $398,000 in 1999 to $190,000 in 2000.  This
reflects the pay down of equipment financing, and interest savings related
to the patent purchase rescission, mentioned below.  The Company expects
interest expense to continue to decline in 2001.

In 1999, the Company obtained a favorable court judgment involving the
purchase of a patent.  The patent purchase was rescinded by the court.  As a
result of the rescission, the Company recorded debt forgiveness income of
$2,896,702 as an extraordinary item, net of tax of $1,919,000.  Management
recorded a write off of patents which were no longer expected to generate
future cash flows under the current business plan.  As a result, certain
items of income and expense reflected in the accompanying 1999 financial
statements cannot be expected to recur in the future.  Before the effect of
income tax, the Company's non-recurring income and expenses related to the
rescinded agreement for 1999 was as follows:

                                                            1999
         Royalty (expense)                               $ (37,000)
         Amortization (expense)                           (115,000)
         Interest (expense)                               (200,000)
         Loss on patents                                (2,817,000)
         Extraordinary gain before tax                   4,816,000

         Total effect on income                         $1,647,000



Effect of Inflation and Foreign Currency Exchange

The Company has not experienced material unfavorable effects on its results
of operations as a result of foreign currency fluctuations or domestic
inflation.

                                      8
<PAGE>


ITEM 7.  FINANCIAL STATEMENTS

The financial statements set forth in pages F-1 to F-14 of this report are
incorporated herein by reference.


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

The Company's principal independent auditors did not resign or decline to
stand for reelection, nor were they dismissed during the Company's two most
recent fiscal years.


ITEM 9.	DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Identification of Directors, Executive Officers, and Significant Employees

The directors and executive officers of the Company, their ages, and their
positions held in the Company are as follows:


      Name                     Age             Position

Robert Neece                    53             Chairman of the Board,
                                               Director, Chief Executive
                                               Officer and Assistant
                                               Secretary

Craig  Litchin                 45              President, Chief Operating
                                               Officer, Treasurer, Principal
                                               Financial Officer, Principal
                                               Accounting Officer

George McGill                  65              Vice President, Secretary and
                                               General Counsel

William Wallace                69              Vice President in charge of
                                               Engineering and Product
                                               Development

Thomas Flanagan                51              Vice President

Nicholas Litchin               74              Director

Walter G. Fuller               60              Director


Christopher M. Welch           32              Director


Bradford A. Morrow             45              Director

Family Relationships

Craig Litchin is the son of Nicholas Litchin. There are no other family
relationships between any directors or executive officers.

                                      9
<PAGE>

Business Experience

The following is a brief account of the business experience during at least
the past five years of each director and executive officer, including his or
her principal occupation and employment during that period, and the name and
principal business of the organization in which such occupation and
employment were carried out.

Robert Neece has been a Director of the Company since July of 1998, Chairman
of the Board since June of 2000, and Chief Executive Officer and Assistant
Secretary since December 2000.  He has been engaged in the private practice
of law in Denver, Colorado since 1981.  Throughout that period of time, he
has concentrated his practice in the areas of corporation, commercial, and
securities law.  Since 1992, Mr. Neece has been Special Counsel with the
Denver law firm of Burns, Wall, Smith and Mueller, P.C.

Craig Litchin joined the Company as Vice President in July, 1997.    He
served as acting CEO from June to October of 2000 and Chief Operating
Officer since October 2000.  He was appointed President, Treasurer, Principal
Financial Officer and Principal Accounting Officer in November 2000.

George McGill was appointed Vice President and Secretary of the Corporation
in December, 2000.  He is an attorney in private practice in Cardiff,
California and has advised the Corporation since its inception.

William Wallace joined ITI in July of 1996, serving as head of operations.
He became Vice President of Engineering and Product Development in November
2000.  Before joining ITI, Mr. Wallace was Vice President of Sales and
manufacturing for a private contract manufacturing company.

Thomas Flanagan joined ITI in 1997 where he worked in the sales, marketing
and project management functions.  In November 2000, he became Vice President.
Before joining ITI he was Deputy Commissioner for the Bureay of Motor
Vehicles of the State of Indiana.

Nicholas Litchin is a director of the Company.  He was Chairman of the Board
of Directors from July 1998 to April 1999.  Prior to that, he was Vice
Chairman since March, 1997.  He has been a director of the Company since the
formation of Image Technology in April 1992.  Mr. Litchin has been a retired
investor since 1991.

Walter G. Fuller has been a Director of the Company and Image Technology
since March, 1997 and the formation of Image Technology in 1992,
respectively.  He is the President of M&S Steel Co., Inc., a company
specializing in fabricated structural steel for buildings, formed in 1971.
Mr. Fuller is also a director of Garrett Bancorp, Garrett State Bank,
Paragon Tube Corporation, and Paragon Steel Trading Corporation.

Christopher M. Welch was elected a Director of the Company in February 1999.
Mr. Welch worked for New York Life and Nylife Securities from 1995 to 2000
where he attained executive council status.  In 2001, Mr. Welch completed a
post graduate program at San Diego State University in the areas of Client
Server Technology and Computer Programming.  He is currently working on
several projects in the technology industry specializing in database design
and programming.

Bradford A. Morrow was elected Director in December 2000.  He has been a
principal of Paradigm Capital LLC for longer than the past five years.
Paradigm is involved in private placements, mergers and acquisitions and
consulting services to emerging companies, primarily software and satellite
based technologies.


Involvement in Certain Legal Proceedings

No officer, director, significant employee, promoter, or control person of
the Company has been involved in any event of the type described in Item
401(d) of Regulation SB during the past five years.

                                      10
<PAGE>

Compliance with Section 16(a) of the Exchange Act

The only director, officer or beneficial owner of more than 10% of the
Company's common shares who failed to file on a timely basis reports
required by Section 16(a) of the Exchange Act (Forms 3 and 4) was Bradford
A. Morrow, who became a director of ITI on December 8, 2000.

As to Mr. Morrow, the only failure to file a required report during ITI's
most recent fiscal year occurred with respect to Form 3 (Initial Statement
of Beneficial Ownership of Securities), which should have been, but was not,
filed within ten days after Mr. Morrow became a reporting person, which
event occurred on December 8, 2000.  Thus as to Mr. Morrow, there was only
one transaction not reported on a timely basis, and only one failure to file
a required form.

ITEM 10.     EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information regarding compensation paid to the
Company's CEO and the other executive officers of the Company who received in
excess of $100,000 of salary and bonus from the Company during the year ended
December 31, 2000:

                  Annual Compensation       Long-term Compensation Awards
                                              Restricted   Options
                                              Stock        and     Other
Name and Position  Year   Salary    Bonus     Awards       Sar's   Compensation


Robert Neece        1998  $       -   $     -      -           -    $       -
CEO, Director       1999  $     750   $     -      -     250,000    $       -
                    2000  $   2,250   $     -      -     315,000 (1)$       -

Nicholas Denice     1998  $       -   $     -      -          -     $       -
Former CEO, Director1999  $ 104,083   $     -      -     180,000    $       -
                    2000  $  86,333   $     -      -      60,000 (2)$       -

(1)Includes 250,000 options from 1999 plan replaced with options from 2000 plan
(2)Includes 60,000 options from 1999 plan replaced with options from 2000 plan



             OPTION/SAR GRANTS DURING THE LAST FISCAL YEAR

    Name     Number of     % of Total Options/SARS     Exercise
             Securities    Granted to All Employees    Price per    Expiration
             Underlying      For the year 12/31/99     Share        Date
             Options
____________ __________   __________________________  __________  ___________

Robert Neece   185,000                                $0.38       12/8/2005
CEO             65,000             16.7%              $0.38       8/25/2006
                65,000                                $0.18       8/25/2007



Nicholas Denice
(estate)        60,000               3.1%             $0.38       12/8/2005(1)

(1) 120,000 options from the original grant in 1999 were cancelled, since
    vesting was not achieved.

                                      11
<PAGE>

Information on Replacement Options

In 1999, the company issued a total of 1,355,000 options to purchase common
shares at $0.38 per share pursuant to its 1999 Stock Option Plan.  The
options, when applicable, were intended to qualify as incentive stock options
under Internal Revenue Code Section 422.  However, due to administrative
delays, the 1999 Stock Option Plan was not formally approved by a vote of the
shareholders within the time frame specified in IRC Section 422, and
consequently, the options were disqualified as to the intended preferential
tax treatment.  In August 2000, the Board of Directors, acting in its capacity
as the Company's compensation committee, authorized the replacement of
outstanding 1999 stock options with substantially identical options pursuant
to the Company's 2000 Stock Option Plan, with the intention that such plan
would be submitted timely to a formal shareholder approval process.


Compensation of Directors

The Company has adopted a policy of paying directors $250 per meeting plus
salary.  Effective December 1, 2000, all directors except Mr. Neece receive
$500 per month salary.  Mr. Neece receives $1,000 per month salary.


Employment Agreements

None.


Termination of Employment and Change of Control Arrangements

None.

                                      12
<PAGE>


ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
           AND MANAGEMENT

As of April 13, 2001, other than certain of its officers and directors, only
two persons were known by the Company to own or control beneficially more
than five percent of its outstanding voting stock.  The table below sets
forth the total number of shares of the Company's outstanding voting stock
owned by greater than 5% shareholders, each director and officer of the
Company, and by all officers and directors as a group.


                                          Number of Shares
Name and Address of                       Owned Beneficially  Percent of
Beneficial Owner       Title of Class     and of Record       Class (6)
------------------     --------------     ------------------  --------------



Walter G. Fuller        Common Stock       2,974,880(4)          25.4%
217 E. Railroad
P.O. Box 299
Garrett, IN  46738

Sandra K. Leatherman    Common Stock       1,601,820 (8)         13.7%
3345 Fosca St.
Carlsbad, CA 92009

Nicholas Litchin        Common Stock        1,589,760(2)(4)      13.6%
6353 Constitution Ave.
Ft. Wayne, IN  46804

Christopher M. Welch    Common Stock        1,379,410(1)(9)      11.8%
2607 Pirineous Way,#311
Carlsbad, CA  92008

Kelly Manoccio          Common Stock        1,231,610(9)       10.5%
C/o 1945 Camino Vida
Roble, Ste. O
Carlsbad, CA 92009

Robert Neece            Common Stock          523,000(4)         4.5%
c/o 303 East 17th Ave.
Denver, Colorado 80202

George E. McGill
120 Birmingham, #240
Cardiff, CA 92007       Common Stock          439,920(4)(10)     3.8%

Bradford A. Morrow      Common Stock          130,000(7)         1.1%
9025 E. Jenan Dr.
Scottsdale, AZ 85260

Craig Litchin           Common Stock            85,000(5)        0.7%
c/o 1945 Camino Vida
Roble, Ste. O
Carlsbad, CA 92008

                                      13
<PAGE>
Tom Flanagan            Common Stock            70,000(11)       0.6%
c/o 1945 Camino Vida
Roble, Ste. O
Carlsbad, CA 92008

William Wallace         Common Stock            65,120(12)      0.6%
c/o 1945 Camino Vida
Roble, Ste. O
Carlsbad, CA 92008

All Officers and       Common Stock           7,257,090      61.9%(6)
Directors as a Group
(7 persons)

                                      13
<PAGE>

(1)   Includes options to purchase 195,000 common shares under the Company's
      incentive stock option plan
(2)   Includes 214,920 shares held of record by L&R Realty, an Indiana
      general partnership, of which Mr. Litchin is a partner, 699,840 shares
      held of record by the Litchin Family Partnership, of which Mr. Litchin
      is a general partner, and 360,000 shares held of record by Mercer
      Beverage Co., an Ohio corporation, of which Mr. Litchin is the
      President and of which Mrs. Litchin is a principal shareholder.  Mr.
      Litchin disclaims beneficial ownership of these shares.
(3)   Includes options to purchase 60,000 common shares under the Company's
      incentive stock option plan
(4)   Includes options to purchase 315,000 common shares under the Company's
      incentive stock option plan
(5)   Includes options to purchase 85,000 common shares under the Company's
      incentive stock option plan
(6)   Adjusted for the effect of 1,882,500 shares issuable upon exercise of
      outstanding incentive stock options
(7)   Includes options to purchase 130,000 common shares under the Company's
      incentive stock option plan
(8)   Includes 1,651,820 shares held as trustee of the J&S Trust
(9)   Includes 465,020 shares held as beneficial owner of the Janice Welch
      Trust
(10)  Includes 74,880 shares held as trustee of the JC Trust
(11)  Includes options to purchase 70,000 common shares under the Company's
      incentive stock option plan
(12)  Includes options to purchase 50,000 common shares under the Company's
      incentive stock option plan


ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As of September 1999, the Company entered into an agreement with American
Registration Systems, Inc., a related party, for the purchase of a patent
for $130,000.  For the years ended December 31, 2000 and 1999, installments
of principal and interest of $25,000 and $10,000, respectively, were paid
and $10,087 and $40,810, respectively, were charged to interest expense.
Future payments are due in quarterly installments of $5,000, inclusive of
interest of 6.61%.

From time to time, the Company has obtained temporary financing from its
directors and officers.   $135,000 was repaid at an interest rate of 8% in
1999.  Interest expense recognized in 1999 as payable to directors and
officers totaled $1,314.

During 1999 and 2000, the Company leased service vehicles from a company
owned by Kent Litchin, the son of Nicholas Litchin, an ITI Director.   In
2000 and 1999, the Company paid $28,136 each year in lease payments.  During
December 2000, the Company purchased the Vehicles for $14,089.

                                      14
<PAGE>


ITEM 13.     EXHIBITS AND REPORTS ON FORM 8-K

(a) Financial Statements

The following Financial Statements are filed as part of this report:

       Report of Independent Public Accountants

       Balance Sheet - December 31, 2000

       Statements of Operations for the years ended December 31, 2000
       and 1999

       Statements of Stockholders' Equity for the years ended December 31,
       2000 and 1999

       Statements of Cash Flows for the years ended December 31, 2000 and
       1999

       Notes to Financial Statements

 (b) Reports on Form 8-K

None.


(c)    Exhibits

3.1(a)	Certificate of Incorporation  (1).

3.1(b)	Amendment to Certificate of Incorporation  (2).

3.2 Bylaws 4(i).  Specimen Stock Certificate  (1).

4.2 Specimen Class A Warrant Certificate  (1).

4.3 Specimen Class B Warrant Certificate  (1).

4.3 Unit Warrant Agreement  (1).

21. Subsidiaries of Registrant.  (3).

     (1)  Incorporated by reference to Registrant's Registration Statement
          No. 33-33092-D, effective April 17, 1990.

     (2)  Incorporated by reference to Registrant's Registration on Form 8-
          A, filed April 10, 1997.

     (3)  Incorporated by reference to Registrant's Form 10-KSB for the year
          ended December 31, 1996.

                                      15
<PAGE>


Pursuant to the requirements of 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.



INTELLECTUAL TECHNOLOGY, INC.


     By:  /s/ Robert Neece
          Robert Neece, Chief Executive Officer
          Date:  April 16, 2001



In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and
on the dates indicated.


      Signature                           Title                      Date

By:/s/Robert Neece           Chief Executive Officer,
Robert Neece                 Director                         April 16 2001

By:/s/Craig Litchin          Principal Financial and          April 16 2001
Craig Litchin                Accounting Officer, President
                             Treasurer

By:/s/                       Director                         April 16, 2001
Nicholas Litchin

By:/s/George McGill          Secretary                        April 16, 2001
George McGill

By:/s/Walter G. Fuller       Director                         April 16, 2001
Walter G. Fuller

By:/s/Bradford Morrow        Director                         April 16, 2001
Bradford Morrow

By:/s/Christopher M. Welch   Director                         April 16, 2001
Christopher M. Welch

                                      16
<PAGE>


Index to Financial Statements

                                                                   Page


         Report of Comiskey & Company, P.C.
         Independent Public Accountants                           F-1

         Balance Sheet                                            F-2

         Statements of Operations                                 F-3

         Statement of Stockholder's Equity                        F-4

         Statements of Cash Flows                                 F-5

         Notes to Financial Statements                      F-6 through F-14

<PAGE>


                      REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



We have audited the accompanying balance sheet of Intellectual Technology,
Inc. as of December 31, 2000, and the related statements of operations
cash flows, and stockholders' equity for each of the years ended December
31, 2000 and .  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining
on a test basis, evidence supporting the amounts and disclosures in the
financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management.  We believe
our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Intellectual Technology,
Inc. as of December 31, 2000, and the results of its operations, cash flows,
and changes in stockholders' equity for each of the years ended December 31,
2000 and 1999 in conformity with accounting principles generally accepted in
the United States.


Denver, Colorado
February 22, 2001

                                               PROFESSIONAL CORPORATION

                               F-1

<PAGE>
                            Intellectual Technology, Inc.
                                   BALANCE SHEET
                                December 31, 2000


   ASSETS
Current Assets
   Cash and cash equivalents                                    $  516,275
   Certificate of deposit                                          128,677
   Accounts receivable                                             296,698
   Accounts receivable - related party                              13,802
   Inventory                                                       328,095
   Deferred tax asset                                               86,000
   Other current assets                                             17,000
   Prepaid expenses                                                119,807
                                                                ----------

      Total current assets                                       1,506,354

Property & Equipment
   Contract equipment                                            6,279,825
   Equipment - non-contract                                         39,535
   Office equipment, furniture and improvements                     37,420
                                                                ----------
                                                                 6,356,780
   Less: Accumulated depreciation                                5,490,582
                                                                ----------

                                                                   866,198

Other Assets
   Patents, net of accumulated
      amortization of $636,059                                     135,828
   Deferred tax assets                                              87,000
   Due from related parties                                         39,092
   Other non-current assets                                          2,545
                                                                ----------

      Total assets                                              $2,636,997
                                                                ==========

   LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
   Accounts payable                                             $  192,814
   Accrued expenses                                                168,763
   Notes payable                                                   157,600
   Due to related party                                             10,646
   Accrued interest payable                                          2,580
                                                                ----------

      Total current liabilities                                    532,403

Other Liabilities
   Long-term debt, net of current portion                          437,873
   Accrued loss, net of current portion                            214,000
   Due to related party - long term                                135,252
                                                                ----------

                                                                   787,125
                                                                ----------

Stockholders' Equity
   Preferred stock, $0.00001 par value, 1,000,000 shares
      authorized, no shares issued or outstanding                       -
   Common stock, $0.00001 par value, 20,000,000 shares
      authorized, 10,000,000 shares issued and outstanding             100
   Additional paid-in capital                                    1,186,250
   Accumulated deficit                                             131,119
                                                                ----------

                                                                 1,317,469
                                                                ----------

      Total liabilities and stockholders' equity                $2,636,997
                                                                ==========


The accompanying notes are an integral part of the financial statements.
                                   F-2

<PAGE>
                        Intellectual Technology, Inc.
                          STATEMENTS OF OPERATIONS
                 For the years ended December 31, 2000 and 1999

                                                      2000         1999
                                              ------------   ------------
REVENUES
   Registration decals income                 $  5,995,799   $  5,896,458
   Other revenue                                   166,300        229,293
                                              ------------   ------------

      Total revenues                             6,162,099      6,125,751

COST OF REVENUES
   Depreciation and
      amortization                                   969,005    1,737,339
   Insurance                                          19,290       17,164
   Maintenance                                     1,089,729      683,664
   Materials                                       1,639,821    1,100,482
   Royalties                                               -       36,720
   Property taxes                                      2,573        4,819
                                                  ----------   ----------

 Total cost of revenues                            3,720,418    3,580,638
                                                  ----------   ----------

   Gross profit                                    2,441,681    2,545,113

OPERATING EXPENSES
   Depreciation                                       12,979       28,119
   Amortization of patent                            246,478      331,301
   Selling, general
    & administrative expenses                      1,109,239    1,176,990
   Research & development                            243,546      211,958
                                                  ----------   ----------

                                                   1,612,242    1,748,368
                                                  ----------   ----------

      Income from operations                         829,469      796,745

OTHER INCOME (EXPENSE)
   Interest income                                    44,165       12,069
   Impairment loss, patents                                -   (2,819,942)
   Interest expense                                 (190,468)    (398,014)
   Interest on patent purchase                       (10,087)    (200,810)
                                                  ----------   ----------

      Loss before income taxes                       673,049   (2,606,952)

   Income tax (expense) benefit                     (217,667)   2,061,282
                                                  ----------   ----------

   Income (loss) before
      extraordinary item                             455,382     (545,670)

   Extraordinary gain, net
      of income taxes of $1,919,000                        -    2,896,702
                                                  ----------   ----------

      NET INCOME                                     455,382    2,351,032
                                                  ==========   ==========


   Income (loss) per share: (Basic)
    Income (loss) before
      extraordinary
      item                                       $      0.05  $     (0.05)
    Extraordinary item,
      net of tax                                 $         -  $      0.29
                                                  ----------   ----------
    Net income (loss)                            $      0.05  $      0.24
                                                  ==========   ==========

      Weighted average number
        of shares outstanding                     10,000,000   10,000,000
                                                  ==========   ==========

The accompanying notes are an integral part of the financial statements.
                                   F-3
<PAGE>

                              Intellectual Technology, Inc.
                           STATEMENT OF STOCKHOLDERS' EQUITY
                     For the years ended December 31, 2000 and 1999


                   Common Stock     Additional
               -----------------                   Retained earnings
              Number                paid-in        (Accumulated
              of shares   Amount    capital        deficit)       Totals
              ---------   -----   -----------   ------------    -------------

Balances as
  of January
  1, 1999    10,000,000  $ 100   $ 1,186,250   $ (2,675,295)   $ (1,488,945)

Net income          -      -             -        2,351,032       2,351,032
             ----------  -----   -----------   ------------    ------------

Balances as
  of December
  31, 1999   10,000,000    100     1,186,250       (324,263)        862,087

Net income          -      -             -          455,382         455,382
             ----------  -----   -----------   ------------    ------------

Balances as
  of December
  31, 2000   10,000,000  $ 100   $ 1,186,250   $    131,119    $  1,317,469
            ==========  =====   ===========   ============    =============

The accompanying notes are an integral part of the financial statements.
                                   F-4

<PAGE>

                               Intellectual Technology, Inc.
                                 STATEMENTS OF CASH FLOWS
                      For the years ended December 31, 2000 and 1999


                                                  2000            1999
                                               ------------   ------------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                    $   455,382     $ 2,351,032
Adjustments to reconcile net income to net
   cash flows from operating activities:
    Amortization                                  246,478         332,560
    Depreciation                                  981,984       1,764,199
    Deferred tax credits                           10,000        (183,000)
    Effect of ARS Recission                             -      (1,998,760)
    Changes in components
     of working capital:
      Certificate of deposit                      (28,677)       (100,000)
      Accounts receivable                          48,107        (201,962)
      Inventory                                    23,304         (89,354)
      Prepaid expenses                            (33,739)        (61,052)
      Notes receivable/employee advances           (1,860)        (37,212)
      Deposits and other assets                    55,043          20,805
      Accounts payable                                166        (304,183)
      Accrued expenses and interest               285,885         147,136
                                              -----------     -----------

      Net cash flows from
       operating activities                     2,042,073       1,640,209

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of non-contract equipment             (26,509)        (14,922)
   Investment in contract costs
      and equipment                              (304,826)       (674,687)
                                              -----------      ----------

      Net cash flows from
        investing activities                     (331,335)       (689,609)

CASH FLOWS FROM FINANCING ACTIVITIES
   New borrowings                                       -       1,335,937
   Debt repayments                             (1,700,186)     (1,823,571)
   Loan costs                                           -        (142,000)
                                              -----------      ----------

      Net cash flows from
        financing activities                   (1,700,186)       (629,634)
                                              -----------      ----------

NET INCREASE IN CASH AND CASH EQUIVALENTS          10,552         320,966

CASH AND CASH EQUIVALENTS, beginning of period    505,723         184,757
                                              -----------      ----------

CASH AND CASH EQUIVALENTS, end of period      $   516,275      $  505,723
                                              ===========      ==========


SUPPLEMENTAL DISCLOSURE OF CASH
   FLOW INFORMATION:
   Cash paid during the year for interest     $   159,372      $  351,871
                                              ===========      ==========
   Cash paid during the year for income taxes $   241,640      $   14,461
                                              ===========      ==========


The accompanying notes are an integral part of the financial statements.
                                   F-5

                        INTELLECTUAL TECHNOLOGY, INC.
                        Notes to Financial Statements
                             December 31, 2000



1.     Description of Business and Summary of Significant Accounting
       Policies
     Corporate History
Intellectual Technology, Inc. ("ITI," "the Company") was incorporated in the
State of Delaware under the name Bridgestone Corp. on December 1, 1989.
Image Technology, Inc., a Nevada corporation ("ITI Nevada") was formed on
April 23, 1992 to engage in the design, manufacture, and sale of systems for
the automated preparation and dispensing of motor vehicle registration forms
and license plate decals.  On March 12, 1997, the shareholders of ITI
Nevada, in a transaction accounted for as a reverse acquisition, exchanged
all of the outstanding common stock of ITI Nevada for 450,000,000 shares of
the common stock of Bridgestone Corp.  As a result of this transaction, ITI
Nevada shareholders acquired collectively a 90% interest in Bridgestone
Corp., and ITI Nevada became a wholly-owned subsidiary of Bridgestone Corp.
Bridgestone Corp. had completed a public offering of common stock and
warrants in 1990.  In April 1997, Bridgestone Corp. changed its name to
Intellectual Technology, Inc. and effected a 1 for 50 reverse stock split.
References in this report to the Company and to ITI are references to
Intellectual Technology, Inc., a Delaware corporation, and its predecessor
and wholly owned subsidiary, ITI Nevada, on a consolidated basis.

Description of Business
ITI is engaged in the design, manufacture, and sale or lease of equipment
for the automated preparation and dispensing of motor vehicle registration
forms and license plate decals.  The Company's printing systems are
currently installed in the states of Indiana, Maryland, and South Dakota.
The printing system is designed as a stand-alone unit, which is used as such
in individual motor vehicle registration offices and mailrooms, and has also
been incorporated into a self-service terminal ("SST") assembly.

Effective November 1, 1996, the Company entered into a lease with the
Indiana Bureau of Motor Vehicles Commission ("BMVC") for a period of three
years, with a renewal clause for an additional year.  This lease has been
extended through October 2002.  The lease requires ITI to provide the
necessary equipment and media to print registrations and decals, and to
support and maintain the equipment during the period of the contract.  ITI
will receive an all-inclusive per transaction lease fee for these services.

Effective November 15, 1998, the Company entered into a Letter of Agreement
for Consultant Services with the South Dakota Department of Revenue for the
lease of ITI printing systems.  This agreement commences April 1, 1999 and
ends March 31, 2004. The lease requires ITI to provide the equipment and
media necessary to print registrations and decals, and to support and
maintain the equipment during the period of the contract.  ITI will receive
an all-inclusive per transaction lease fee for these services.

ITI printer systems were sold in Maryland on a subcontract basis for use in
SST installations in that state.  ITI currently supplies the media for these
printers.

In 1996, the Company had also purchased the rights to a contract with the
state of New Hampshire to provide drivers' licenses.  These amounts were
billed on a per transaction basis through September 30, 1999.

Significant Accounting Policies
Principles of Consolidation
Unless otherwise indicated, all references to "the Company" in these
financial statements are references to Intellectual Technology, Inc. and its
wholly owned subsidiary, Image Technology, Inc.  Intercompany transactions
have been eliminated in consolidation.

                                      F-6
<PAGE>

                        INTELLECTUAL TECHNOLOGY, INC.
                        Notes to Financial Statements
                             December 31, 2000



1.     Description of Business and Summary of Significant Accounting
       Policies (continued)
     Cost Recovery - Equipment and Contract Costs
Leased contract equipment costs have been capitalized, and include the
manufactured cost of the printers and SST's, operating software,
installation, freight, packaging, contract startup costs, and other costs
incidental to making the equipment operational.

All costs are recovered in the ratio that transactions to date bear to total
estimated transactions over the contract term.  For purposes of hardware and
software costs, the Company is using the transactions expected over the
period of the Indiana Contract, plus the three years of renewal, for a total
of six years.  Installation and other costs which are directly associated
with the state of Indiana projects were depreciated using the projected
number of transactions for the initial three-year contract period only.

The amount of cost recovery (depreciation) charged to operations in the
current period is based on management's assumptions.  Significant additional
transactions may occur throughout the remaining term of the contract.
Differences in actual results from those estimated by management could
materially accelerate the rate of cost recovery charged to operations.

Significant project management costs paid in advance have been deferred, and
are amortized on a per transaction basis based on the expected transaction
volume over the period of the project management contract.

Repairs and Maintenance
Maintenance costs are expensed as incurred.  All costs associated with
maintenance contracts are prorated over the period of the maintenance
contract.

Inventory
Inventory consists of media (tag stock paper, ribbon, and decals) used to
produce the motor vehicle registration forms and decals.  Inventory is
stated at the lower of cost or market on a first-in, first-out basis.

Non-contract Equipment
Cost of equipment used in operations has been capitalized and is depreciated
using the declining balance method over useful lives of 3 to 7 years.

Intangibles
Patent costs are capitalized, and are amortized over the remaining useful
life of the patent, which had been 17 years from issue.  However, as of June
30, 1999, the lives of these patents were reduced to 16 months, which was
the expected remaining useful life of the technology.

Certain costs to obtain debt financing have been deferred and are amortized
over the length of the loan using the effective interest rate method.

Research and Development
Research and development costs are expensed as incurred.

                                       F-7
<PAGE>

                        INTELLECTUAL TECHNOLOGY, INC.
                        Notes to Financial Statements
                             December 31, 2000



1.     Description of Business and Summary of Significant Accounting
       Policies (continued)
     Cash and Equivalents
For purposes of the statements of cash flows, the Company considers highly
liquid debt instruments purchased with an initial period of three months or
less to be cash equivalents.

Significant Concentrations
For the years ended December 31, 2000 and 1999, revenue from registration
decals accounted for 97% and 96% of total revenues, and was derived from two
contracts.

From time-to-time, the Company maintains cash balances in excess of FDIC
insured limits.  The amount of such excess at December 31, 2000 was
approximately $473,000.

Earnings per Share
Basic earnings per share are computed using the weighted average number of
shares outstanding.  Shares issued in the stock transfer and exchange
described in Note 7 are considered outstanding for all periods presented.
The effect of outstanding options and warrants would be antidilutive and,
consequently, diluted earnings per share have not been presented.

Fair Value of Financial Instruments
Unless otherwise indicated, the fair value of all reported assets and
liabilities which represent financial instruments (none of which are held
for trading purposes) approximate the carrying values of such instruments.

2.      Working Capital
At December 31, 2000, the working capital of the Company was $973,951 and
the current ratio was 2.83 to 1.

Under the Company's current financing arrangement, receivables from certain
contracts have been assigned to the note holder.  The amount of monthly cash
flow from the contracts is remitted net to the Company after debt service is
satisfied.

3.   Related Party Transactions
Amounts charged to operations for royalty to a related party were $-0- and
$36,720 for the years ended December 31, 2000 and 1999, respectively.  (see
Note 8)

From time to time, the Company has obtained temporary financing from its
directors and officers.  A total of $-0- for 2000 and $135,000 for 1999 was
repaid at an interest rate of 8%.  Interest expense recognized in 2000 and
1999 as payable to directors and officers totaled $-0- and $1,314,
respectively.

The Company also obtained certain temporary financing from shareholders or
parties related to shareholders.  The average interest rate on these
obligations was 8%.  At December 31, 2000 and 1999, principal amounts owed
to shareholders totaled $-0- and $5,801, and accrued interest was $-0- and
$32, respectively.  The amount of interest expense on these notes totaled
$223 for 2000 and $3,083 for 1999.

                                       F-8
<PAGE>

                        INTELLECTUAL TECHNOLOGY, INC.
                        Notes to Financial Statements
                             December 31, 2000



3.     Related Party Transactions (continued)
As of April 2000, the Company rents office space for $650 a month from a
company whose significant ownership is also a related party.  For the year
ended December 31, 2000, $5,949 was paid for rents and other reimbursable
expenses.

The Company leases service vehicles from a company owned by a relative of
one of ITI's directors.  The lease called for monthly payments of $2,233.
During December 2000, the Company purchased the remainder of the leases.

As of September 1999, the Company entered into an agreement with ARS, for
the purchase of a patent for $130,000 plus accrued interest.  For the years
ended December 31, 2000 and 1999, $14,913 and $10,000 of this amount were
repaid, and $10,087 and $40,810 were charged to interest expense,
respectively.  The remainder of the payable, $145,898 including accrued
interest, is due in quarterly installments of $5,000, inclusive of interest
of 6.61%.

For the year ended December 31, 2000, the Company has two related party
receivables totaling $39,072.

As of December 31, 2000, the Company had a receivable from an officer in the
amount of $13,802.  As of February 2001, this amount has been repaid.

4.      Notes Payable and Long-term Debt
The Company is obligated under the following notes at December 31, 2000:

                                                Short-term         Long-term

10.4% Installment notes, secured by
miscellaneous equipment and the assignment
of certain accounts receivable, principal and
interest payable in monthly installments of
$17,680.  Matures April 2004.                    $  161,868     $   433,605

Scheduled note maturities on debt over the next five years and in the aggregate
are as follows:

              For the year ended
              December 31,                   Amount

              2001                     $        161,868
              2002                              178,166
              2003                              196,106
              2004                               59,333
              Thereafter                              -

                                       F-9
<PAGE>

                        INTELLECTUAL TECHNOLOGY, INC.
                        Notes to Financial Statements
                             December 31, 2000



5.     Leases
The Company leases for its own use office space, vehicles, and office
equipment under non-cancelable operating leases expiring in the years 2000
to 2002. During 1999, the Company relocated its corporate offices to
Carlsbad, California.  The Company continues to be obligated under its
former office lease through September 15, 2001.

Future minimum lease payments on non-cancelable operating leases over the
next five years are as follows:

                For the year ended
                December 31,                      Amount

                2001                     $            74,226
                2002                                  18,763
                Thereafter                                 -

Rent expense for the years ended December 31, 2000 and 1999 was $75,481 and
$88,370, respectively, net of sublease income of $25,474 and $6,305 in 2000
and 1999.

6.     Income Taxes
The components of the provision for income taxes are as follows:

                                              2000                  1999

        Current federal income tax
        expense (benefit)                     $  155,000       $ (1,009,000)
        Reversal of valuation allowance                -           (910,000)
        State and local income taxes currently
            paid or payable                       52,667             40,718
        Deferred tax increase (decrease)          10,000           (183,000)


        Income tax expense (benefit)          $   217,667      $ (2,061,282)

For the year ended December 31, 1999, and with regard to a transaction more
fully described in Note 8, the Company re-evaluated its likelihood of using
its net operating losses, and determined that it was more likely than not
that they would be used.  As a result, the Company has recorded a deferred
tax asset for the year ended December 31, 1999.

The Company has $115,000 in unamortized startup costs deductible for income
tax purposes in 2001 and $310,000 of projected losses deductible for income
tax purposes in 2001, 2002, 2003, and 2004.  The Company also has
approximately $12,000 in California Credits for Increasing Research
Activities available to offset future California taxable income and related
tax.  The following are the components of the Company's deferred tax assets
and liabilities:

                                      F-10
<PAGE>

                        INTELLECTUAL TECHNOLOGY, INC.
                        Notes to Financial Statements
                             December 31, 2000



6.     Income Taxes (continued)

                                                  2000             1999
       Non-benefited net operating loss
            Carryforwards                    $        -      $    44,000
            Unamortized startup costs            43,000           93,000
            Projected losses                    118,000                -
            Research and development credits     12,000           46,000

       Total deferred tax assets             $  173,000      $   183,000

       Deferred tax liabilities              $        -      $         -

Reconciliation between statutory federal income tax rate and the effective
income tax rates based on income before income taxes and extraordinary
items:

                                                  2000             1999

        Statutory federal income tax rate         34.0%             (34.0)%
        Federal income tax credits                (9.5)%             (1.3)%
        State income taxes, net of federal
        tax benefit                                7.8%              (8.8)%
        Valuation allowance                         - %             (34.9)%

        Effective income tax rates                32.3%             (79.1)%

7.      Stockholders' Equity
Preferred Stock
At December 31, 2000, the Company has authorized a total of 1,000,000
preferred shares to be issued in series with rights and privileges to be
determined by the Board of Directors.  No preferred shares are outstanding,
nor have any series of preferred shares been designated.

Common Stock
At December 31, 2000, a total of 20,000,000 shares of $0.00001 par value
common stock were authorized, and 10,000,000 were issued and outstanding.

Warrants
The Company has outstanding warrants to purchase common shares as follows:

   Number            Type           Exercise      Expiration
of Warrants         of Warrant        Price           Date

  200,000           Class A       $ 12.50/share     4/17/02
  200,000           Class B       $ 12.50/share     4/17/02

The warrants are callable at $0.0001 by the Board of Directors with 30 days
written notice.  The warrants may only be exercised with a current
registration statement in effect.

                                      F-11
<PAGE>

                        INTELLECTUAL TECHNOLOGY, INC.
                        Notes to Financial Statements
                             December 31, 2000



7.     Stockholder' Equity (continued)
Stock Transfer and Exchange with Image Technology, Inc.
On March 12, 1997, the Company entered into a stock transfer and exchange
agreement with Image Technology, Inc.  The pre-acquisition company,
Bridgestone, issued a total of 450,000,000 shares of common stock to acquire
100% of the issued and outstanding common stock of Image Technology, Inc.
As a result of the transaction, the shareholders of Image Technology, Inc.
acquired collectively a 90% interest in Bridgestone, with the remaining 10%
ownership retained by the original Bridgestone shareholders.  Subsequent to
the acquisition, Bridgestone's sole officer and director resigned in favor
of persons appointed by the new majority shareholders.

The stock transfer and exchange agreement also provided that certain members
of pre-acquisition management of Bridgestone Corp. be engaged as consultants
to the Company after the transaction.

As a direct result of the transaction, and effective March 12, 1997, the
Company changed its name from Bridgestone Corp. to Intellectual Technology,
Inc.  The Company also underwent a 1 for 50 reverse split of common shares,
and reduced the number of authorized shares from 500,000,000 common shares
to 20,000,000 common shares, and 20,000,000 preferred shares to 10,000,000.

The transaction has been accounted for as a recapitalization of the private
company, Image Technology, Inc.  The accompanying financial statements
include the operations of Image Technology, Inc. prior to the acquisition
and the operations of Intellectual Technology, Inc. and Image Technology,
Inc. on a consolidated basis subsequent to the transaction.

Stock Options
In a transaction more fully described in Note 9, the Company issued
1,882,500 stock options to purchase shares of stock in the Company at $0.38
and $0.18 per share.

Stockholders Equity and Comprehensive Income
SFAS 130 requires companies to present comprehensive income (consisting
primarily of net income items plus other direct equity changes and credits)
and its components as part of the basic financial statements.  For the year
ended December 31, 2000, the Company's financial statements do not contain
any changes in equity that are required to be reported separately in
comprehensive income.

8.     Extraordinary Item
On September 13, 1999, ITI was awarded an entry of judgment against
defendant American Registration Systems, Inc. ("ARS"), rescinding the
purchase and sale agreement dated October 31, 1995, and its purported
addendum thereto dated March 11, 1997.  As a result of this default
judgment, the agreement, which had required ITI to pay to ARS or its
assignees $4,000,000, plus a $0.01 per transaction royalty, was determined
to be of no further force or effect.

The accompanying financial statements include an extraordinary gain of
$2,896,702, which represents the elimination of $4,693,335 in principal and
accrued interest and $122,367 in accrued royalties, net of an approximate
tax benefit of $1,919,000.

                                      F-12
<PAGE>

                        INTELLECTUAL TECHNOLOGY, INC.
                        Notes to Financial Statements
                        December 31, 2000



9.     Stock Option Plan
On December 8, 2000, the directors of Intellectual Technology, Inc. issued
options under the 2000 Stock Option Plan ("2000 Plan") consisting of a pool
of 2,500,000 incentive stock options and non-statutory stock options.  This
pool of share options will be reduced by the shares issued upon the exercise
of the options issued under the 1999 Stock Option Grant Plan ("1999 Plan").
The 1999 Plan will remain in full effect until no options awarded under this
plan remain outstanding.  As of December 31, 2000, 5,000 non-qualified
options issued under the 1999 Plan remain outstanding, 170,000 incentive
stock options were forfeited and the remaining 1,350,000 incentive stock
options outstanding as of December 31, 1999 have been voluntarily
relinquished and reissued with substantially the same exercise features
under the 2000 Plan.

A summary of option activity is as follows (all values restated for stock
splits):

                                        Weighted                    Weighted
                        Shares          Average                     Average
                        Under           Exercise      Options       Exercise
                        Option          Price         Exercisable   Price
                        ---------       --------      -----------   --------

December 31, 1998               -       $      -                -   $      -

Options granted         1,525,000           0.38          600,000       0.38
Option exercised                -                               -
                        ---------       --------      -----------   --------
Options outstanding as of
     December 31, 1999  1,525,000       $   0.38          600,000   $   0.38

Options granted           527,500           0.18                -       0.18
Previous options vesting        -           0.38          377,500       0.38
Options forfeited        (170,000)          0.38                -       0.38
Options exercised               -             -                 -        -

Options outstanding as of
     December 31, 2000  1,882,500       $   0.32          977,500   $   0.38

Options have an exercise prices of $0.38 and $0.18 per share.

All of the options granted expire at various times over a period of five
years from the date of grant in the case of significant shareholders and
five years from the date of vest for all others and have the following
vesting characteristics:

     Number of options     Vesting period    Vested at December 31, 2000

       977,500               Immediately         977,500
       442,500               1 year                    -
       462,500               2 years                   -

     1,882,500                                   977,500

                                      F-13
<PAGE>

                        INTELLECTUAL TECHNOLOGY, INC.
                        Notes to Financial Statements
                             December 31, 2000



9.     Stock Option Plan (continued)
Pro Forma Disclosure
The Company applies Accounting Principles Board No. 25, Accounting for Stock
Issued to Employees, and related interpretations in accounting for its plan.
Accordingly, no compensation costs were recorded for options issued at
prices which reflect no intrinsic value at the grant or modification date.
The Company considered the effects of recognizing compensation cost pursuant
to the provisions of Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation, (SFAS No 123).  Using the Black-
Scholes option pricing model, which takes into account the exercise price of
the options, expected life, current price of the underlying stock, its
expected volatility and dividends, and the risk-free interest rate, net
income would have been decreased to the pro forma amounts as follows for the
years ending December 31:

                               1999                             1998
                    --------------------------     ---------------------------
                    As            Pro              As              Pro
                    Reported      Forma            Reported        Forma
                    -----------   ------------     -----------     -----------

Net Income       $   495,472    $  440,589       $ 2,351,032    $ 2,268,547

Net income
   per share     $     0.05      $    0.04       $      0.24    $   0.23

The average fair value of options granted during fiscal 2000 was $0.0558.
The fair value of options is estimated on the date of grant using the Black-
Scholes option-pricing model with the following weighted average
assumptions:  risk-free interest rate of 7.0 percent for fiscal 2000;
expected life of 602 days; dividend yield percentage of 0%; and volatility
of 279% for the year ended December 31, 2000.

                                      F-14