SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


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

                For the quarterly period ended September 30, 2001


                         Commission file number 0-28572


                             OPTIMAL ROBOTICS CORP.
             (Exact name of registrant as specified in its charter)


CANADA                                      98-0160833
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)


         4700 de la Savane, Suite 101, Montreal, Quebec, Canada H4P 1T7


                                 (514) 738-8885
              (Registrant's Telephone Number, including Area Code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes  __X__     No _____


At October 23, 2001, the registrant  had  15,471,335  Class "A" shares  (without
nominal or par value) outstanding.

<PAGE>


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements



               Consolidated Financial Statements of
               (Unaudited)


               OPTIMAL ROBOTICS CORP.


               Periods ended September 30, 2001 and 2000
               (expressed in US dollars)


                                     - 2 -
<PAGE>


OPTIMAL ROBOTICS CORP.
Consolidated Financial Statements
(Unaudited)

Periods ended September 30, 2001 and 2000
(expressed in US dollars)


Financial Statements

     Consolidated Balance Sheets...........................................   4

     Consolidated Statements of Operations.................................   5

     Consolidated Statements of Retained Earnings (Deficit)................   6

     Consolidated Statements of Cash Flows.................................   7

     Notes to Consolidated Financial Statements............................   8


                                     - 3 -
<PAGE>


OPTIMAL ROBOTICS CORP.
Consolidated Balance Sheets
(Unaudited)

September 30, 2001 and December 31, 2000
(expressed in US dollars, unless otherwise noted)

<TABLE>
<CAPTION>
=============================================================================================
                                                            September 30,        December 31,
                                                                     2001                2000
---------------------------------------------------------------------------------------------
                                                              (Unaudited)           (Audited)
<S>                                                         <C>                 <C>
Assets

Current assets:
   Cash                                                     $  12,346,046       $   5,006,982
   Short-term investments                                      75,746,623          71,141,910
   Accounts receivable:
      Trade, net of allowance for doubtful accounts of
         $359,000 (nil at December 31, 2000)                   31,249,211           8,287,492
      Other                                                       293,368           2,197,525
   Inventories (note 4)                                        21,684,980          16,725,885
   Tax credits receivable                                         429,682             323,788
   Future income taxes                                            133,520           2,420,718
   Prepaid expenses and deposits                                  935,962             327,039
---------------------------------------------------------------------------------------------
                                                              142,819,392         106,431,339

Loans receivable                                                  125,934             125,934

Capital assets                                                  4,967,648           3,253,148

Goodwill (note 3)                                               2,348,965                  --

Future income taxes                                             1,322,328           1,462,227

---------------------------------------------------------------------------------------------
                                                            $ 151,584,267       $ 111,272,648
=============================================================================================

Liabilities and Shareholders' Equity

Current liabilities:
   Accounts payable and accrued liabilities                 $   9,232,735       $   6,492,371
   Income taxes payable                                         4,780,222                  --
   Deferred revenue                                             2,086,551              34,695
---------------------------------------------------------------------------------------------
                                                               16,099,508           6,527,066

Shareholders' equity:
   Share capital (note 5)                                     126,476,633         107,050,914
   Other capital                                                    5,282               9,684
   Retained earnings (deficit)                                 10,487,315            (830,545)
   Cumulative translation adjustment                           (1,484,471)         (1,484,471)
---------------------------------------------------------------------------------------------
                                                              135,484,759         104,745,582
Contingency (note 6)

---------------------------------------------------------------------------------------------
                                                            $ 151,584,267       $ 111,272,648
=============================================================================================
</TABLE>


See accompanying notes to unaudited consolidated financial statements.


                                     - 4 -
<PAGE>


OPTIMAL ROBOTICS CORP.
Consolidated Statements of Operations
(Unaudited)

Periods ended September 30, 2001 and 2000
(expressed in US dollars)

<TABLE>
<CAPTION>
=============================================================================================================
                                                Three months ended                    Nine months ended
                                                   September 30,                         September 30,
                                        -------------------------------       -------------------------------
                                                2001               2000               2001               2000
-------------------------------------------------------------------------------------------------------------
<S>                                     <C>                <C>                <C>                <C>
Revenues                                $ 33,757,420       $ 20,300,510       $ 84,450,156       $ 48,427,768

Cost of sales                             20,717,808         15,119,822         52,322,942         36,091,248

-------------------------------------------------------------------------------------------------------------
Gross margin                              13,039,612          5,180,688         32,127,214         12,336,520

Selling, general and
   administrative expenses                 5,089,465          2,818,289         13,052,926          6,125,109
Research and development
   expenses (note 7)                          63,239            175,915            820,811            523,800
Operating lease expense                      332,612            216,866            816,861            410,481
Amortization                                 408,650            262,162          1,074,848            664,522
Investment income                           (663,124)        (1,254,723)        (2,528,549)        (2,801,770)
-------------------------------------------------------------------------------------------------------------
                                           5,230,842          2,218,509         13,236,897          4,922,142

-------------------------------------------------------------------------------------------------------------
Earnings before income taxes               7,808,770          2,962,179         18,890,317          7,414,378

Provision for income taxes                 3,258,229          1,133,626          7,572,457          2,837,246

-------------------------------------------------------------------------------------------------------------
Net earnings                            $  4,550,541       $  1,828,553       $ 11,317,860       $  4,577,132
=============================================================================================================

Weighted average number of shares:
   Basic                                  15,268,386         13,677,286         14,446,265         12,894,858
   Add effect of dilution using
     treasury stock method                 1,148,038          1,233,868          1,120,505          1,467,420

-------------------------------------------------------------------------------------------------------------
   Diluted                                16,416,424         14,911,154         15,566,770         14,362,278
=============================================================================================================

Earnings per share:
   Basic                                $       0.30       $       0.13       $       0.78       $       0.35
   Diluted                                      0.28               0.12               0.73               0.32

=============================================================================================================
</TABLE>


See accompanying notes to unaudited consolidated financial statements.


                                     - 5 -
<PAGE>


OPTIMAL ROBOTICS CORP.
Consolidated Statements of Retained Earnings (Deficit)
(Unaudited)

Periods ended September 30, 2001 and 2000
(expressed in US dollars)

<TABLE>
<CAPTION>
===================================================================================================
                                         Three months ended                   Nine months ended
                                            September 30,                       September 30,
                                  ----------------------------       ------------------------------
                                         2001             2000               2001              2000
---------------------------------------------------------------------------------------------------
<S>                               <C>              <C>               <C>                <C>
Retained earnings (deficit),
   beginning of period            $ 5,936,774      $(2,877,043)      $   (830,545)      $(5,625,622)

Net earnings                        4,550,541        1,828,553         11,317,860         4,577,132

---------------------------------------------------------------------------------------------------
Retained earnings (deficit),
   end of period                  $10,487,315      $(1,048,490)      $ 10,487,315       $(1,048,490)
===================================================================================================
</TABLE>


See accompanying notes to unaudited consolidated financial statements.


                                     - 6 -
<PAGE>


OPTIMAL ROBOTICS CORP.
Consolidated Statements of Cash Flows
(Unaudited)

Periods ended September 30, 2001 and 2000
(expressed in US dollars)

<TABLE>
<CAPTION>
===================================================================================================================
                                                     Three months ended                    Nine months ended
                                                        September 30,                         September 30,
                                              -------------------------------       -------------------------------
                                                      2001               2000               2001               2000
-------------------------------------------------------------------------------------------------------------------
<S>                                           <C>                <C>                <C>                <C>
Cash flows from operating activities:
   Net earnings                               $  4,550,541       $  1,828,553       $ 11,317,860       $  4,577,132
   Adjustments for:
      Amortization                                 408,650            262,162          1,074,848            664,522
      Unrealized foreign exchange
        gain on contract advance                        --                 --                 --              5,948
      Non-refundable tax credits                        --            (26,000)                --            (65,539)
      Future income taxes                          137,755          1,133,626          2,427,097          2,837,246
      Loss on securitization of trade
         accounts receivable                            --                                24,424                 --
   Changes in operating assets and
      liabilities:
         Trade and other receivables            (1,774,837)        (6,520,052)       (22,733,788)       (17,226,353)
         Proceeds on securitization
            of trade accounts receivable                --                 --          3,038,907                 --
         Inventories                              (357,139)        (1,251,524)        (3,704,550)       (10,750,726)
         Tax credits receivable                    (75,000)           (18,000)          (105,894)           (38,451)
         Prepaid expenses and deposits             (20,278)          (172,477)          (466,540)          (328,345)
         Accounts payable and
            accrued liabilities                 (3,623,299)           318,438         (1,176,249)         4,354,648
         Income taxes payable                    2,747,228                 --          4,780,222                 --
         Deferred revenue                       (1,089,493)          (387,427)         1,020,471            573,564
-------------------------------------------------------------------------------------------------------------------
                                                   904,128         (4,832,701)        (4,503,192)       (15,396,354)

Cash flows from financing activities:
   Proceeds from issuance of common
      shares                                    15,950,056            190,160         19,421,317         65,324,182
   Share issue costs                                    --                 --                 --         (4,673,729)
   ----------------------------------------------------------------------------------------------------------------
                                                15,950,056            190,160         19,421,317         60,650,453

Cash flows from investing activities:
   Purchase of capital assets                     (586,465)          (710,684)        (1,833,348)        (2,046,225)
   Business acquisition                                 --                 --         (1,141,000)                --
   (Increase) decrease in short-term
      investments                               (9,048,859)         4,456,457         (4,604,713)       (46,944,079)
   Repayment of loan receivable                         --                 --                 --             14,782
   ----------------------------------------------------------------------------------------------------------------
                                                (9,635,324)         3,745,773         (7,579,061)       (48,975,522)

-------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash during the
   period                                        7,218,860           (896,768)         7,339,064         (3,721,423)

Effect of foreign exchange fluctuations
   on cash                                              --                 --                 --           (500,030)

Cash, beginning of period                        5,127,186          1,174,399          5,006,982          4,499,084

-------------------------------------------------------------------------------------------------------------------
Cash, end of period                           $ 12,346,046       $    277,631       $ 12,346,046       $    277,631
===================================================================================================================
</TABLE>


See accompanying notes to unaudited consolidated financial statements.


                                     - 7 -
<PAGE>


OPTIMAL ROBOTICS CORP.
Notes to Consolidated Financial Statements
(Unaudited)

Periods ended September 30, 2001 and 2000
(expressed in US dollars)

================================================================================


1.   Interim financial information:

     The  financial  information  as at  September  30, 2001 and for the periods
     ended September 30, 2001 and 2000 is unaudited;  however, in the opinion of
     management,  all adjustments necessary to present fairly the results of the
     periods  have  been  included.  The  adjustments  made  were  of a  normal,
     recurring  nature.  Interim  results may not  necessarily  be indicative of
     results expected for the year.

     These  financial  statements  have been  prepared  in  accordance  with the
     recommendations  of the Canadian  Institute of  Chartered  Accountants  for
     interim reporting.  The disclosures in these interim consolidated financial
     statements  do not conform in all aspects to the  requirements  of Canadian
     generally accepted accounting  principles for annual financial  statements;
     therefore,  these interim consolidated  financial statements should be read
     in conjunction with the annual  consolidated  financial  statements for the
     year  ended  December  31,  2000.  These  interim  consolidated   financial
     statements  follow  the  same  accounting  policies  and  methods  of their
     application as the annual  consolidated  financial  statements for the year
     ended  December 31, 2000,  except for the change in accounting  policy with
     respect to earnings per share, as described in note 2 (b).

2.   Significant accounting policies:

     (a)  Functional currency:

          During the third quarter of fiscal 2000, the Company  determined  that
          its functional  currency had clearly  changed from the Canadian dollar
          to the US  dollar.  As a result  of this  change,  which  was  applied
          prospectively   from  July  1,  2000,   transactions   denominated  in
          currencies  other  than the US dollar are  translated  into US dollars
          using the  temporal  method.  Under this method,  monetary  assets and
          liabilities  are  translated  into US dollars at the exchange  rate in
          effect on the balance sheet date.  Non-monetary assets and liabilities
          are translated into US dollars at historical exchange rates.  Revenues
          and expenses  are  translated  into US dollars at the  exchange  rates
          prevailing  at the  dates of the  respective  transactions.  Gains and
          losses  resulting from  translation of monetary assets and liabilities
          into US dollars are  reflected  in the  statement of  operations.  The
          translated  amounts for non-monetary  items as at June 30, 2000 became
          the historical basis for those items in subsequent periods.

          Prior to July 1,  2000,  the  Company's  functional  currency  was the
          Canadian  dollar.  However,  the Company  adopted the US dollar as its
          reporting  currency  effective  December  31, 1998.  Accordingly,  the
          financial  statements,  since December 31, 1998,  have been translated
          from  Canadian  dollars into US dollars using the current rate method.
          Gains  and  losses   resulting  from   translation  of  the  financial
          statements were included in the cumulative  translation  adjustment in
          shareholders' equity.


                                     - 8 -
<PAGE>


OPTIMAL ROBOTICS CORP.
Notes to Consolidated Financial Statements
(Unaudited)

Periods ended September 30, 2001 and 2000
(expressed in US dollars)

================================================================================


2.   Significant accounting policies (continued):

     (b)  Earnings per share:

          During the first quarter of fiscal 2001,  the Company  adopted the new
          recommendations  of the Canadian  Institute  of Chartered  Accountants
          with  respect to the  calculation  of  earnings  per share.  These new
          recommendations  did not  result  in any  changes  to the way in which
          basic  net  earnings  per  share  are  calculated.  However,  the  new
          recommendations   substantially   eliminate  the  differences  between
          Canadian  and  US  generally  accepted  accounting  principles  in the
          calculation of diluted earnings per share.

          The new standard  requires that the treasury  stock method be used for
          calculating diluted earnings per share. Diluted earnings per share are
          computed in a manner  consistent  with basic earnings per share except
          that the weighted average shares  outstanding are increased to include
          additional  shares from the assumed  exercise of options and warrants,
          if dilutive. The number of additional shares is calculated by assuming
          that  outstanding  options and warrants  were  exercised  and that the
          proceeds from such exercises were used to acquire common shares.

          Previously,   diluted  earnings  per  share  were  calculated  on  the
          assumption  that stock options which are dilutive are exercised at the
          beginning  of the year,  or the date  granted if later,  and the funds
          derived  therefrom are invested at the Company's annual after tax cost
          of short-term financing. Under this method, the net earnings available
          to shareholders would be adjusted for this imputed interest.

          This  change,  which has been applied  retroactively,  resulted in the
          following  changes in diluted net earnings per share for the three and
          nine-month periods ended September 30, 2000.

          ======================================================================
                                                Periods ended September 30, 2000
          ----------------------------------------------------------------------
                                                    (3 months)        (9 months)

          As previously reported                    $     0.13        $     0.34
          Restated                                        0.12              0.32

          ======================================================================


                                     - 9 -
<PAGE>


OPTIMAL ROBOTICS CORP.
Notes to Consolidated Financial Statements
(Unaudited)

Periods ended September 30, 2001 and 2000
(expressed in US dollars)

================================================================================


3.   Business acquisition:

     On May 29,  2001,  the  Company  acquired  certain  assets and the  ongoing
     business  of  Alpha  Microsystems  LLC  ("Alpha"),   based  in  Santa  Ana,
     California,  for a total purchase price of approximately  $6.0 million,  of
     which $4.9  million  was paid by the  assumption  of  liabilities  and $1.1
     million was paid in cash.

     Details of the acquisition are as follows:

     ===========================================================================

     Net assets acquired, at assigned values:
        Accounts receivable                                         $ 1,387,105
        Inventory                                                     1,254,545
        Capital assets                                                  875,000
        Other assets                                                    142,383
        Accounts payable and accrued liabilities                     (2,531,613)
        Notes payable                                                (1,385,000)
        Deferred revenue                                             (1,031,385)
        ------------------------------------------------------------------------
                                                                     (1,288,965)

     Goodwill                                                         2,429,965

--------------------------------------------------------------------------------
                                                                    $ 1,141,000
================================================================================

     Consideration given:
         Cash                                                       $ 1,141,000
================================================================================

     Goodwill is being  amortized  over a period of 10 years.  At September  30,
     2001, goodwill consists of:

================================================================================

     Goodwill                                                       $ 2,429,965
     Less accumulated amortization                                      (81,000)

--------------------------------------------------------------------------------
                                                                    $ 2,348,965
================================================================================

     Included in the  determination  of the allocation of the purchase price are
     certain  liabilities which were determined using management's best estimate
     as at the date of the financial statements and are expected to be finalized
     during fiscal 2001.


                                     - 10 -
<PAGE>


OPTIMAL ROBOTICS CORP.
Notes to Consolidated Financial Statements
(Unaudited)

Periods ended September 30, 2001 and 2000
(expressed in US dollars)

================================================================================


4.   Inventories:

     ===========================================================================
                                                 September 30,      December 31,
                                                          2001              2000
     ---------------------------------------------------------------------------
                                                   (Unaudited)         (Audited)

     Finished goods                                $ 2,673,317       $ 3,543,262
     Work in process                                 1,464,401           589,424
     Raw materials                                   6,604,342         3,657,967
     Replacement parts                              10,942,920         8,935,232

     ---------------------------------------------------------------------------
                                                   $21,684,980       $16,725,885
     ===========================================================================

5.   Share capital:

     During the nine-month  period ended  September 30, 2001, the Company issued
     1,409,225  common  shares  pursuant to the  exercise of stock  options with
     exercise  prices  ranging  between $3 and $47 per share and 353,420  common
     shares  pursuant to the exercise of warrants with exercise  prices  ranging
     between  Cdn$5 and $6.60 per share.  Total  proceeds  from the  issuance of
     these shares amounted to $19,421,317.

6.   Contingency:

     In 1995  and  1996,  the  Company  received  demand  letters  from the same
     claimant alleging patent  infringement.  In June 1999, the claimant filed a
     civil action  alleging  patent  infringement  in the United States District
     Court for the District of Utah against the Company and PSC Inc., one of the
     Company's  suppliers.  In  addition,  a similar  suit has been filed in the
     State of Utah  against  one of the  Company's  customers.  The  Company  is
     contractually  bound to indemnify the customer for any damages it incurs in
     connection  with such suit. At the Company's  expense,  the Company's legal
     counsel is defending  this suit.  The Company  also  received a letter from
     another party in 1999, and again in February 2001, alleging infringement of
     another patent.

     The  Company  believes  these  claims to be  without  merit and  intends to
     vigorously defend its position. Consequently, no provision has been made in
     these financial statements with respect to the above claims.


                                     - 11 -
<PAGE>


OPTIMAL ROBOTICS CORP.
Notes to Consolidated Financial Statements
(Unaudited)

Periods ended September 30, 2001 and 2000
(expressed in US dollars)

================================================================================


7.   Research and development:

     ===========================================================================
                               Three months ended           Nine months ended
                                  September 30,               September 30,
                             ----------------------    -------------------------
                                  2001         2000           2001         2000
     ---------------------------------------------------------------------------

     Research and development
        expenses             $ 511,485    $ 219,915    $ 1,413,613    $ 664,119
     Tax credits              (448,246)     (44,000)      (592,802)    (140,319)

     ---------------------------------------------------------------------------
                             $  63,239    $ 175,915    $   820,811    $ 523,800
     ===========================================================================

8.   Segmented information:

     The  Company  operates  in  one  segment,   the   development,   marketing,
     installation  and servicing of automated  transaction  software and systems
     designed for use in the retail sector.  Substantially  all of the Company's
     revenue  is  derived  from sales to  supermarket  retailers  located in the
     United States and is denominated in US dollars. Capital assets and goodwill
     by geographic area are as follows:

     ===========================================================================
                                                 September 30,      December 31,
                                                          2001              2000
     ---------------------------------------------------------------------------

     Canada                                      $   3,454,948      $  2,782,757
     United States                                   3,861,665           470,391

     ---------------------------------------------------------------------------
                                                 $   7,316,613      $  3,253,148
     ===========================================================================


                                     - 12 -
<PAGE>


OPTIMAL ROBOTICS CORP.
Notes to Consolidated Financial Statements
(Unaudited)

Periods ended September 30, 2001 and 2000
(expressed in US dollars)

================================================================================


9.   Additional  disclosures  required  by U.S.  GAAP  and  differences  between
     Canadian GAAP and U.S. GAAP:

     (a)  Consolidated statement of operations:

          The  reconciliation  of earnings  reported in accordance with Canadian
          GAAP with US GAAP is as follows:

<TABLE>
<CAPTION>
     ===================================================================================================
                                           Three months ended                     Nine months ended
                                              September 30,                         September 30,
                                      ----------------------------       -------------------------------
                                             2001             2000               2001               2000
     ---------------------------------------------------------------------------------------------------
<S>                                   <C>              <C>               <C>                <C>
     Net earnings in accordance
       with Canadian GAAP             $ 4,550,541      $ 1,828,553       $ 11,317,860       $  4,577,132
     Stock-based compensation
       costs (1)                        8,703,560          (25,816)       (23,010,144)       (18,967,181)

     ---------------------------------------------------------------------------------------------------
     Net income (loss) in accordance
       with U.S. GAAP                  13,254,101        1,802,737        (11,692,284)       (14,390,049)

     Other comprehensive income
       (loss):
         Foreign currency translation
           adjustments                         --               --                 --         (2,136,533)

     ---------------------------------------------------------------------------------------------------
     Comprehensive income
       (loss)                         $13,254,101      $ 1,802,737       $(11,692,284)      $(16,526,582)
     ===================================================================================================

     Earnings per share:
       Basic                          $      0.87      $      0.13       $      (0.81)      $      (1.28)
       Diluted                               0.81             0.12              (0.81)             (1.28)

     ===================================================================================================
</TABLE>

     (1)  Accounting for stock-based compensation:

          For stock-based  compensation plans, the Company has chosen to use the
          intrinsic   value  method  (APB  Opinion  No.  25),   which   requires
          compensation costs to be recognized on the difference, if any, between
          the quoted  market price of the stock at the grant date and the amount
          the individual must pay to acquire the stock. Certain of the Company's
          stock  options are variable  because the  exercise  price is not known
          until the options are  exercised.  As a result,  compensation  cost is
          measured on the date the options are exercised.

          Under Canadian GAAP, compensation expense is not recognized.


                                     - 13 -
<PAGE>


OPTIMAL ROBOTICS CORP.
Notes to Consolidated Financial Statements
(Unaudited)

Periods ended September 30, 2001 and 2000
(expressed in US dollars)

================================================================================


9.   Additional  disclosures  required  by U.S.  GAAP  and  differences  between
     Canadian GAAP and U.S. GAAP (continued):

     (b)  Consolidated balance sheets:

<TABLE>
<CAPTION>
     ==================================================================================================
                                      September 30, 2001                       December 31, 2000
                              ---------------------------------       ---------------------------------
                                   Canadian                  US            Canadian                  US
                                       GAAP                GAAP                GAAP                GAAP
     --------------------------------------------------------------------------------------------------
<S>                           <C>                 <C>                 <C>                 <C>
     Shareholders' equity:
       Share capital          $ 126,476,633       $ 168,695,446       $ 107,050,914       $ 149,269,727
       Other capital                  5,282          30,288,009               9,684           7,282,267
       Retained earnings
         (deficit)               10,487,315         (60,480,463)           (830,545)        (47,788,179)
       Cumulative translation
         adjustment              (1,484,471)                 --          (1,484,471)                 --
       Accumulated other
         comprehensive loss              --          (3,018,233)                 --          (3,018,233)

     --------------------------------------------------------------------------------------------------
                              $ 135,484,759       $ 135,484,759       $ 104,745,582       $ 104,745,582
     ==================================================================================================
</TABLE>

     (c)  New accounting standards:

          In June 2001, FASB issued SFAS 141,  "Business  Combinations" and SFAS
          142 "Goodwill and Other Intangible  Assets".  SFAS 141, which replaces
          APB Opinion No. 16,  revises the  accounting  standards  for  business
          combinations  and is effective for  acquisitions  initiated after June
          30, 2001.  SFAS 142,  which  replaces APB Opinion No. 17,  revises the
          standards in  accounting  for goodwill  and other  intangibles  and is
          effective for fiscal years after December 15, 2001.  Similar standards
          have been adopted by the Canadian Institute of Chartered  Accountants.
          In  addition,  FASB  also  issued  SFAS  143,  "Accounting  for  Asset
          Retirement Obligations" and SFAS 144 "Accounting for the Impairment or
          Disposal of Long-Lived Assets". The Company does not expect the impact
          of these new standards to be material.


                                     - 14 -
<PAGE>


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

     The  following   discussion  and  analysis  of  the  Company's  results  of
operations  and  financial  condition  should  be read in  conjunction  with the
financial  information  and the  financial  statements  of the Company and their
related notes appearing  elsewhere  herein.  The financial  statements have been
prepared in accordance with Generally Accepted Accounting Principles ("GAAP") in
Canada,  which  conform  in all  material  respects  with  U.S.  GAAP  except as
disclosed in Note 9 to the financial  statements,  which  explains the nature of
the differences between Canadian and U.S. GAAP and their impact on the financial
statements.

Results of Operations

First Nine Months of 2001 Compared with First Nine Months of 2000

     Total revenues increased by $36,022,000,  or 74%, from 2000 to 2001, due to
a  significant  increase in sales to existing  customers and the addition of new
customers. Product revenue increased by $31,474,000, an increase of 68%. Service
contract revenue recognized for hardware and software  maintenance  increased by
$4,366,000,  or 198%, primarily as a result of the increased number of customers
that entered into service contracts.

     Total cost of sales  increased by  $16,232,000,  or 45%, from 2000 to 2001.
Overall  gross margin  increased as a percentage  of sales from 25.5% in 2000 to
38.0% in 2001,  representing  primarily the increase in gross margins on product
revenue.  This increase  resulted mainly from the fact that we began to assemble
and deliver U-Scan systems from our facility in Plattsburgh, New York commencing
January 2001, and from our facility in Phoenix, Arizona, commencing April 2001.

     Gross research and  development  expenses  increased by $749,000,  or 113%,
from  2000 to 2001.  As a  percentage  of total  revenues,  gross  research  and
development  expenses  remained  constant at  approximately 2% for both 2001 and
2000.  Research and development  expenses during the period related to continued
enhancements of our product lines and the development of new products.

     Selling,  general,  administrative and other expenses (including  operating
lease expenses) increased by $7,334,000, or 112%, in 2001 compared to 2000. As a
percentage of total revenues,  these expenses  increased from 13% in 2000 to 16%
in 2001.  During the first nine months of 2001, we continued to expand marketing
efforts through an increased  tradeshow  schedule and advertising  campaign.  In
addition,  we  incurred  increased  costs in the  following  areas:  engineering
related to the design,  development  and early phase  commercial  production  of
casings  for  the  redesigned,  small  footprint  U-Scan  Solo  system  and  the
integration of our recent acquisition of Alpha Microsystems.

     As a result of the  increase in revenues  and improved  gross  margin,  the
Company's net earnings were  $11,318,000 in 2001 compared to $4,577,000 in 2000,
an increase of 147%. On a per share basis,  the Company earned $0.78 ($0.73 on a
diluted basis), compared to $0.35 ($0.32 on a diluted basis), in 2000.

Third Quarter of 2001 Compared with Third Quarter of 2000

     Total revenues increased by $13,457,000,  or 66%, from the third quarter of
2000 to the third quarter of 2001,  due to a significant  increase in sales from
existing customers and the addition of new customers.  Product revenue increased
by $10,915,000,  an increase of 57%.  Service  contract  revenue  recognized for
hardware and software maintenance increased by $2,338,000,  or 242%, as a result
of the increased  number of customers  that entered into service  contracts with
us.


                                     - 15 -
<PAGE>


     Total cost of sales  increased by  $5,598,000,  or 37%,  from 2000 to 2001.
Overall  gross margin  increased as a percentage  of sales from 25.5% in 2000 to
38.6% in 2001,  representing  primarily the increase in gross margins on systems
revenue.  This increase  resulted mainly from the fact that we began to assemble
and deliver U-Scan systems from our facility in Plattsburgh, New York commencing
January 2001, and from our facility in Phoenix, Arizona, commencing April 2001.

     Gross research and  development  expenses  increased by $292,000,  or 133%,
from  2000 to 2001.  As a  percentage  of total  revenues,  gross  research  and
development  expenses  increased  from 1% in 2000 to 2% in  2001.  Research  and
development expenses during the period related to continued  enhancements of our
product lines and the development of new products.

     Selling,  general,  administrative and other expenses (including  operating
lease expenses) increased by $2,387,000,  or 79%, in 2001 compared to 2000. As a
percentage of total revenues,  these expenses  increased from 15% in 2000 to 16%
in 2001.  During the third  quarter of 2001,  we continued  to expand  marketing
efforts through an increased  tradeshow  schedule and advertising  campaign.  In
addition,  we incurred  additional  costs in the  following  areas:  engineering
related to the design,  development  and early phase  commercial  production  of
casings  for  the  redesigned,  small  footprint  U-Scan  Solo  system  and  the
integration of our recent acquisition of Alpha Microsystems.

     The Company's net earnings in the third quarter were $4,551,000 compared to
$1,829,000 in the corresponding 2000 period, an increase of 149%. On a per share
basis,  the Company earned $0.30 ($0.28 on a diluted  basis),  compared to $0.13
($0.12 on a diluted basis), in 2000.

Financial Condition

Accounts Receivable

     Accounts  receivable at September 30, 2001 were  $31,543,000  (December 31,
2000 - $10,485,000),  of which $31,249,000 (December 31, 2000 - $8,287,000) were
trade  accounts  receivable.  Calculated  in  accordance  with  common  industry
practice,  the Company's days outstanding of accounts receivable ("DSO's") as at
September 30, 2001 were 73 days.

Inventory

     The  total  inventory  position  at  September  30,  2001  was  $21,685,000
(December 31, 2000 - $16,726,000).  This increase is mainly  attributable to the
planned build-up of work in process, raw materials,  and finished goods in order
to provide for deliveries in the fourth quarter of 2001.

Future Income Taxes

     Current  future income tax assets at September 30, 2001 were  $1,456,000 as
compared to  $3,883,000  at December 31, 2000,  a decrease of  $2,427,000.  This
decrease is  attributable  to the  utilization  of a substantial  portion of our
future income tax assets to reduce  taxable  income for the first nine months of
2001.

Accounts Payable and Accrued Liabilities

     Accounts  payable and accrued  liabilities  increased by  $2,741,000,  from
$6,492,000  at December  31, 2000 to  $9,233,000  at September  30,  2001.  This
increase is primarily due to the purchase of inventories.


                                     - 16 -
<PAGE>


Deferred Revenue

     Deferred revenue increased by $2,052,000, from $35,000 at December 31, 2000
to  $2,087,000  at  September  30,  2001.  This  increase is due to hardware and
software  maintenance  contracts  being  invoiced at the  beginning  of the year
whereas the associated  revenue is recognized  over twelve months.  In addition,
approximately  $760,000 of this increase is related to our recent acquisition of
Alpha Microsystems.

Liquidity and Capital Resources

     As of September 30, 2001, the Company had cash and  short-term  investments
of  $88,093,000  (December  31,  2000 -  $76,149,000)  and  working  capital  of
$126,720,000 (December 31, 2000 - $99,904,000).

     Operating  activities  used  $4,503,000 in the first nine months of 2001 as
compared to $15,396,000  for the first nine months of 2000.  The  improvement in
operating cash flow resulted from increased  operating earnings in 2001 compared
to 2000. In the first nine months of 2001, the Company issued  1,762,645 (2000 -
644,269)  common shares  pursuant to the exercise of options and warrants  which
resulted in cash proceeds of $19,421,000 (2000 - $1,966,363).

     In the first nine months of 2001, the Company had capital  expenditures  of
$1,833,000 (2000 - $2,046,000),  principally relating to leasehold improvements,
test systems and computer hardware. The Company also utilized cash of $1,100,000
in connection with the Alpha acquisition.

     The  Company  believes  that its cash and  short-term  investments  will be
adequate to meet its liquidity needs for at least the next 12 months.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We have no material  changes to the  disclosure  on this matter made in our
Annual Report on Form 10-K for the year ended December 31, 2000.


                                     - 17 -
<PAGE>


PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     In each of 1995  and  1996,  we  received  a  demand  letter  from the same
claimant  alleging that U-Scan  infringes  upon the claimant's  patent.  In July
1999, this claimant filed a civil action in the United States District Court for
the  District  of Utah  against  us and PSC,  the  former  assembler  of U-Scan,
alleging patent infringement.  A second party also sent a demand letter to us in
1999,  and again in February  2001,  alleging a different  patent  infringement.
Although after  consultation  with counsel,  we believe that the former claimant
should  not  prevail in its  lawsuit  and that the  latter  claimant  should not
prevail if a lawsuit is brought to assert its claim,  and that these claims will
not have a material  adverse  effect on our business or prospects,  no assurance
can be given that a court will not find that the  system  infringes  upon one or
both of such claimants' rights.

     A subsidiary of Kroger has also been sued by the same claimant in the State
of Utah based upon the same issues underlying the suit filed against us in 1999.
At our expense,  our counsel is also  defending the subsidiary of Kroger in such
action.  Furthermore,  we are  contractually  bound to indemnify  Kroger for any
damages that it may incur in connection with such suit.

Item 2. The registrant has nothing to report under this item.

Item 3 through 5. The registrant has nothing to report under these items.

Item 6.

(a)  Exhibits - Not applicable.

(b)  Reports on Form 8K - No reports on Form 8K were filed during the period.


                                     - 18 -
<PAGE>


                                   Signatures

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                             OPTIMAL ROBOTICS CORP.


Dated: October 25, 2001                 By:  /s/  Holden L. Ostrin
                                             ----------------------------------
                                                  Holden L. Ostrin
                                                  Co-Chairman


                                        By:  /s/  Gary S. Wechsler
                                             ----------------------------------
                                                  Gary S. Wechsler
                                                  Treasurer and Chief Financial
                                                  Officer


                                     - 19 -