This Form 10-QSB is the subject of a Form 12b-25

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

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

For the quarterly period ended June 30, 2003

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

For the transition period from

BRAINTECH, INC.(Exact name of Registrant as specified in its charter)

|Nevada(State or jurisdiction of incorporation) | 000-24911(Commission File Number) | 98-0168932(IRS Employer Identification No.)
|---------------------------------------------- | --------------------------------- | -------------------------------------------

930 West 1st Street, Unit #102, North Vancouver, B.C., Canada, V7P 3N4(Address of Principal Executive offices)

Issuer's Telephone Number:(604) 988-6440

Securities registered pursuant to section 12(b) of the Act:

None

Securities registered pursuant to section 12(g) of the Act:

Common Stock, $0.001 par value
(Title of Class)

Check 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 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 [ ]

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 15,295,394 Common shares, par value $0.001, as at August 13, 2003

Transitional Small Business Disclosure Format (check one):

Yes [ ] No [x]

Index to Exhibits on Page 29

1

Braintech, Inc.

Form 10-QSB

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements page 4

Item 2. Management's Discussion and Analysis or Plan of Operation page 17

Item 3 Controls and Procedures page 27

PART II. OTHER INFORMATION

Item 1. Legal Proceedings page 27

Item 2. Changes in Securities page 27

Item 3. Defaults upon Senior Securities page 28

Item 4. Submission of Matters to a Vote of Securities Holders page 28

Item 5. Other Information page 28

Item 6. Exhibits and Reports on Form 8-K page 28

2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Each of the following items is contained in our Condensed Consolidated Financial Statements and form part of this quarterly report.

(i) Condensed Consolidated Balance Sheets as at June 30, 2003 (unaudited) and December 31, 2002;

(ii) Condensed Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2002 and 2003;

(iii) Condensed Consolidated Statements of Stockholders' Equity (Deficit) (unaudited) for the six months ended June 30, 2003;

(iv) Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2002 and 2003; and

(v) Condensed notes to Consolidated Financial Statements (unaudited).

3

|Condensed Consolidated Financial Statements of
(Expressed in United States dollars)
BRAINTECH, INC.Six months ended June 30, 2003 and 2002
Three months ended June 30, 2003 and 2002
(Unaudited - Prepared by Management)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4

|BRAINTECH, INC.                                  
|-------------------------------------------------
|                                                 
|Condensed Consolidated Balance Sheets            
|(Expressed in United States dollars)             
|                                                 
|                                                 
|                                                 
|                                                 
|Assets                                           
|                                                 
|Current assets:                                  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|Fixed assets                                     
|                                                 
|                                                 
|                                                 
|Liabilities and Stockholders' Equity (Deficiency)
|                                                 
|Current liabilities:                             
|                                                 
|                                                 
|                                                 
|                                                 
|Stockholders' equity (deficiency):               
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 

Subsequent events (note 8)

See accompanying notes to condensed consolidated financial statements.

5

|BRAINTECH, INC.                                
|-----------------------------------------------
|                                               
|Condensed Consolidated Statements of Operations
|(Unaudited - Prepared by Management)           
|(Expressed in United States dollars)           

|                            | Six Months Ended June 30            | Three Months Ended June 30
|--------------------------- | ----------------------------------- | --------------------------
|2003                        | 2002                                | 2003                      
|                            |                                     |                           
|Sales                       |                                     | $100,467                  
|Cost of sales               | 4,243                               | 14,248                    
|                            |                                     |                           
|Gross margin                | 96,224                              | 99,303                    
|                            |                                     |                           
|Operating expenses:         |                                     |                           
|                            | Research and development            | 245,055                   
|                            | Selling, general and administration | 746,579                   
|                            |                                     | 991,634                   
|                            |                                     |                           
|Operating loss              | (895,410)                           | (931,393)                 
|                            |                                     |                           
|Non-operating:              |                                     |                           
|                            | Interest income                     | 31                        
|                            | Interest on promissory notes        | (8,875)                   
|                            |                                     | (8,844)                   
|                            |                                     |                           
|Loss for the period         | $(904,254)                          | $(930,680)                
|                            |                                     |                           
|Loss per share information: |                                     |                           
|                            | Basic and diluted                   | $(0.06)                   
|                            |                                     |                           
|                            |                                     |                           
|Weighted average number of  |                                     |                           
|                            | Common shares outstanding           | 14,924,035                

See accompanying condensed notes to consolidated financial statements.

6

|BRAINTECH, INC.                                                       
|----------------------------------------------------------------------
|                                                                      
|Condensed Consolidated Statements of Stockholders' Equity (Deficiency)
|(Unaudited - Prepared by Management)                                  
|(Expressed in United States dollars)                                  

|                           |                              |                               |                 |              |             |                 
|-------------------------- | ---------------------------- | ----------------------------- | --------------- | ------------ | ----------- | ----------------
|                           |                              |                               |                 |              |             |                 
|                           | Common stock                 |                               | Shares          |              | Total      
|                           | Number of                    |                               | Additional      | reserved for | Accumulated | stockholders'   
|                           | shares                       | Amount                        | paid-in capital | issuance     | deficit     | equity (deficit)
|                           |                              |                               |                 |              |             |                 
|                           |                              |                               |                 |              |             |                 
|Balance, December 31, 2002 | 15,219,394                   | $                             | 15,219          | $            | 11,804,849  | $               
|                           | Shares reserved for issuance |                               |                 |              |             |                 
|                           |                              | for services rendered         | -               | -            | -           | 5,400           
|                           | Shares issued on exercise of |                               |                 |              |             |                 
|                           |                              | employee stock options        | 56,000          | 56           | 11,144      | -               
|                           | Compensatory benefit of      |                               |                 |              |             |                 
|                           |                              | warrants issued to contractor | -               | -            | 4,121       | -               
|                           | Loss for the period          | -                             | -               |              |             | (904,254)       
|Balance, June 30, 2003     | 15,275,394                   | $                             | 15,275          | $            | 11,820,114  | $               

See accompanying condensed notes to consolidated financial statements.

7

|BRAINTECH, INC.                     
|------------------------------------
|                                    
|Condensed Consolidated Cash Flows   
|(Unaudited - Prepared by Management)
|(Expressed in United States dollars)

|                                                 |                                                |                                                      
|------------------------------------------------ | ---------------------------------------------- | -----------------------------------------------------
|                                                 | Six Months Ended June 30                      
|                                                 | 2003                                           | 2002                                                 
|                                                 |                                                |                                                      
|Cash flows from operating activities             |                                                |                                                      
|                                                 | Loss for the period                            | $                                                    
|                                                 | Items not involving cash:                      |                                                      
|                                                 |                                                | Amortization                                         
|                                                 |                                                | Shares issued for services rendered                  
|                                                 |                                                | Shares reserved for issuance for services rendered   
|                                                 |                                                | Compensatory benefit of warrants issued to contractor
|                                                 | Changes in non-cash operating working capital: |                                                      
|                                                 |                                                | Inventory                                            
|                                                 |                                                | Accounts receivable                                  
|                                                 |                                                | Prepaid expenses                                     
|                                                 |                                                | Deferred costs                                       
|                                                 |                                                | Accounts payable and accrued liabilities             
|                                                 |                                                | Deferred revenue                                     
|                                                 | Net cash used in operating activities          | (693,441)                                            
|                                                 |                                                |                                                      
|Cash flows from investing activities             |                                                |                                                      
|                                                 | Purchase of fixed assets                       | (2,124)                                              
|                                                 | Net cash used in investing activities          | (2,124)                                              
|                                                 |                                                |                                                      
|Cash flows from financing activities             |                                                |                                                      
|                                                 | Promissory notes payable                       | 700,632                                              
|                                                 | Share subscriptions received                   | -                                                    
|                                                 | Common shares issued, net of issue costs       | 11,200                                               
|                                                 | Net cash provided by financing activities      | 711,832                                              
|                                                 |                                                |                                                      
|Increase (decrease) in cash and cash equivalents | 16,267                                         | (58,097)                                             
|                                                 |                                                |                                                      
|Cash and cash equivalents, beginning of period   | 51,688                                         | 101,880                                              
|                                                 |                                                |                                                      
|Cash and cash equivalents, end of period         | $                                              | 67,955                                               
|                                                 |                                                |                                                      
|Supplemental information:                        |                                                |                                                      
|                                                 | Non-cash financing and investing activities:   |                                                      
|                                                 |                                                | Shares issued for services rendered                  
|                                                 |                                                | Shares reserved for issuance for services rendered   
|                                                 |                                                |                                                      

See accompanying condensed notes to consolidated financial statements.

8

|BRAINTECH, INC.                                     
|----------------------------------------------------
|                                                    
|Notes to Condensed Consolidated Financial Statements
|(Unaudited - Prepared by Management)                
|(Expressed in United States dollars)                
|                                                    
|Six months ended June 30, 2003 and 2002             
|                                                    
|                                                    
|1.                                                  
|                                                    
|                                                    
|                                                    
|                                                    
|2.                                                  
|                                                    
|                                                    

9

|BRAINTECH, INC.                                     
|----------------------------------------------------
|                                                    
|Notes to Condensed Consolidated Financial Statements
|(Unaudited - Prepared by Management)                
|(Expressed in United States dollars)                
|                                                    
|Six months ended June 30, 2003 and 2002             
|                                                    
|                                                    
|2.                                                  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    

11

|BRAINTECH, INC.                                     
|----------------------------------------------------
|                                                    
|Notes to Condensed Consolidated Financial Statements
|(Unaudited - Prepared by Management)                
|(Expressed in United States dollars)                
|                                                    
|Six months ended June 30, 2003 and 2002             
|                                                    
|                                                    
|2.                                                  
|                                                    

|                                          | Six Months Ended June 30                  | Three Months Ended June 30
|----------------------------------------- | ----------------------------------------- | --------------------------
|2003                                      | 2002                                      | 2003                      
|                                          |                                           |                           
|Net loss as reported                      | $                                         | (904,254)                 
|Stock-based employee compensation cost    |                                           |                           
|                                          | included in the determination of net loss | -                         
|Stock-based employee compensation cost if |                                           |                           
|                                          | fair-value based method applied           | (46,164)                  
|Pro forma net loss as if fair-value based |                                           |                           
|                                          | method had been applied                   | $                         
|                                          |                                           |                           
|Basic and diluted net loss per share      |                                           |                           
|                                          | As reported                               | $                         
|                                          | Pro forma                                 | $                         

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | The weighted average fair-value of stock options granted during the six months ended June 30, 2003 was $0.32 per option (2002 - $0.24 per option).                                                                                                                                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | The fair-value for the options granted during the six months ended June 30, 2003 was estimated using the Black-Scholes option-pricing model and the following weighted-average assumptions: dividend yield 0% (2002 - 0%), expected volatility 175% (2002 - 80%), risk-free interest rate 1.47% (2002 - 2.75%), and an expected term of 2 years (2002 - 2 Years).
|   | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Comparative figures:                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Certain figures have been reclassified to conform to the financial statement presentation adopted in the current year.                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3. | Recent accounting pronouncements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | In November 2002, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Indirect Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 expands on previously issued accounting guidance and requires additional disclosure by a guarantor to recognize, at the inception of a guarantee, a liability for the fair value of the obligation assumed by issuing a guarantee. The provision for initial recognition and measurement is applied on a prospective basis to guarantees issued or modified after December 31, 2002. The Company has adopted FIN 45 in these condensed consolidated financial statements.

12

|BRAINTECH, INC.                                     
|----------------------------------------------------
|                                                    
|Notes to Condensed Consolidated Financial Statements
|(Unaudited - Prepared by Management)                
|(Expressed in United States dollars)                
|                                                    
|Six months ended June 30, 2003 and 2002             
|                                                    
|4.                                                  
|                                                    
|                                                    
|5.                                                  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    

13

|BRAINTECH, INC.                                     
|----------------------------------------------------
|                                                    
|Notes to Condensed Consolidated Financial Statements
|(Unaudited - Prepared by Management)                
|(Expressed in United States dollars)                
|                                                    
|Six months ended June 30, 2003 and 2002             
|                                                    

|6. | Share purchase warrants:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | During the years ended December 31, 2002 and 2001, 1,066,902 and 564,319 share purchase warrants were issued in conjunction with private placements of common shares. As at December 31, 2002, the holders of the 1,066,902 warrants were entitled to purchase one additional common share of the Company for $0.75 per share to February 28, 2003. The holders of the 564,319 warrants were entitled to purchase one additional common share of the Company for $1.00 per share to April 16, 2003. By a directors' consent resolution dated March 20, 2003, the Company extended the expiry date on the 1,066,902 and 564,319 warrants to February 28, 2004.
|   | As partial consideration for an investor relations service agreement, the Company issued share purchase warrants as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The compensatory benefit of these warrants has been recorded at fair value using the Black-Scholes option-pricing model and the following assumptions: dividend yield 0%, expected volatility 95%, risk free rate interest rate 2.61%, and an expected term of 1 year.                                                                                                                                                                                                                                                                                                                                                                                       
|   | A summary of the Company's share purchase warrants outstanding as at June 30, 2003 is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Number of warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | 427,797                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 133,553                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 148,667                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 113,740                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 203,820                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 288,462                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 1,066,902                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | 564,319                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 500,000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 50,000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | 3,497,260                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

14

|BRAINTECH, INC.                                     
|----------------------------------------------------
|                                                    
|Notes to Condensed Consolidated Financial Statements
|(Unaudited - Prepared by Management)                
|(Expressed in United States dollars)                
|                                                    
|Six months ended June 30, 2003 and 2002             
|                                                    

|7. | Product warranty:                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Software systems manufactured by the Company are warranted to be free from defects in materials and workmanship and that they will perform to specification for a period of one year from the date of installation. The Company's product warranty accrual reflects management's best estimate of probable liability under its product warranties. Management determines the warranty based on known product failures (if any), historical experience, and other currently available evidence.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Changes in the product warranty accrual for the six months ended June 30, 2003 were as follows:                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Balance, December 31, 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Payments made                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Change in liability for warranties issued during the period                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Change in liability for preexisting warranties                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Foreign exchange                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Balance, June 30, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|8. | Subsequent events:                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

15

|BRAINTECH, INC.                                     
|----------------------------------------------------
|                                                    
|Notes to Condensed Consolidated Financial Statements
|(Unaudited - Prepared by Management)                
|(Expressed in United States dollars)                
|                                                    
|Six months ended June 30, 2003 and 2002             
|                                                    

|8. | Subsequent events (continued):
|-- | ------------------------------
|   | (c)                           
|   |                               

16

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Forward-looking statements deal with our current plans, intentions, beliefs and expectations and are statements of future economic performance. Statements containing terms like "believes", "does not believe", "plans", "expects", "intends", "estimates", "anticipates", and other phrases of similar meaning are considered to imply uncertainty and are forward-looking statements.

Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from what is currently anticipated. We make cautionary statements throughout this report and the documents we have incorporated by reference, including those stated under the heading "Risk Factors". You should read these cautionary statements as being applicable to all related forward-looking statements wherever they appear in this report, the materials referred to in this report, and the materials incorporated by reference into this report.

We cannot guarantee our future results, levels of activity, performance or achievements. Neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this report.

Where we say "we", "us", "our", or "the Company", we mean Braintech Inc. and its subsidiaries.

OVERVIEW

We entered the technology field in the first quarter of 1994. Since then, the majority of our efforts have been devoted to developing products to be used in creating machine vision systems or "computerized vision", and in developing machine vision systems. Machine vision refers to the technology base that employs any number of electro-optical or non-contact techniques to acquire image data, process that data and analyze it to draw conclusions with little or no operator intervention. Basically, machine vision is the application of electronic imaging, image processing, and image analysis techniques to applications in the manufacturing industries for the purpose of control (process control, quality control, machine control, and robot control).

In 1998, we began to apply our technology and expertise to the development of machine vision systems for industrial applications. We have developed machine vision systems used in product inspection, location analysis, and parts handling and assembly.

In March 2000, we entered into a strategic alliance with ABB Inc. ("ABB"). ABB is a major supplier of industrial robotic systems. Since entering into our alliance with ABB, we have focused on the development and implementation of vision guidance systems for robots used in the automobile manufacturing industry.

17

In 2000, we commenced the development of eVisionFactory ("eVF"), a software environment whose main components are: e - Real-Time Internet Support, V - Vision Science & Engineering, and F - Application Development & Operation. eVF combines vision technology, systems engineering, and a wireless Internet based service and support system. The Internet-based service and support system is designed to provide technical support through the Internet to purchasers of our vision guidance systems. The Internet-based support system could also be used to provide technical support to companies operating other types of industrial machinery and manufacturing systems.

Early in 2002 we completed a commercial version of eVisionFactory that does not include our Internet based service and support system. We included eVisionFactory software with the systems we delivered in 2002.

In the 2nd quarter of 2001, at the request of Ford Motor Company, we completed the development of a 3D single camera vision guidance system for robots used in automotive manufacturing systems ("SC3D"). The SC3D system uses a single conventional CCD (Charge Coupled Device) camera. Software algorithms use images from the camera mounted on the robot arm to determine the position and orientation of an object. That information is used to guide the robot operating on or manipulating the object. Applications for the SC3D system include automated assembly, material handling, spot welding, machining operations, adhesive and sealant application, spray painting, and part identification and inspection. As a result of our completion of the development of SC3D, we received from ABB an order for 19 vision guidance systems for installation into two engine assembly plants of Ford Motor Company.

To date, we have delivered 15 of the 19 SC3D vision systems ordered by ABB. All of these systems include the commercialized version of eVF, SC3D and AutoCal-3D. These systems are integrated with ABB robots and are currently operating in Ford's automotive power train assembly lines. The remaining 4 systems are to be installed during 2003, although the actual installation dates have not been determined.

In July 2001, we entered into a Memorandum of Understanding with Marubeni Corporation, pursuant to which the two companies agreed to cooperate in developing and marketing of the Braintech technology for industrial applications including vision guided robots in Japanese and Asian markets. Marubeni is a Japanese trading company with offices and subsidiaries throughout the world. Marubeni is ranked 25th on the 2002 Fortune Global 500 ranking of the world's largest corporations, based on 2001 revenues.

During 2002, we continued the development of our relationship with Marubeni Corporation and that culminated in the signing of a Marketing and Development Agreement. The agreement, which covers Southeast Asia and Australia, provides for mutual exclusivity, whereby Marubeni is granted an exclusive license to manufacture and distribute Braintech's vision guided robotic systems and Marubeni agrees that it will not deal with any competitive technology or products during the three-year term. Marubeni placed an order for two eVF development systems and these systems were delivered upon completion of the Marketing and Development Agreement. We have completed the integration work for utilization of eVF with Kawasaki robots. We have also set up the demonstration/training models of eVF in the Marubeni Vision Techno Centre in Nagoya, Japan and have provided onsite training to Marubeni engineers. In addition, Mr. Babak Habibi, our President, gave a presentation to senior level executives of Marubeni at the Techno Centre. We have also hired a Vice-President Marketing and Business Relations - Asian Region to oversee and manage our relationship with Marubeni.

During 2002 we continued to add functionality to eVF by developing additional components as follows:

AutoCal-3D; AutoCal-3D is a fully automated process for 3D calibration of a stationary or robot-mounted camera. Calibration refers to the process whereby the mathematical relationship between pixel coordinates of objects in digital images and real-world coordinates such as inches and millimeters is calculated. In contrast to the

18

manual calibration process, AutoCal-3D eliminates all steps involving operator input thereby increasing both efficiency and accuracy.

Xi2D (Single/Multi-Camera 2D); Xi2D consists of a single or multi-camera arrangement that views various features of interest.

DD3D (Direct Depth 3D); DD3D uses stereo vision for direct measurement and consists of a binocular camera arrangement to view a part or feature.

SR3D (Surround Vision 3D); SR3D is similar to SC3D but involves multiple cameras configured to view different areas of the same part.

We have not at any time been able to generate sufficient revenue from sales of our services or products to sustain ongoing operations, and we do not have an established record of sales or established distribution channels for our services or products. In order to continue as a going concern, we will have to begin generating significant sales revenue.

As of June 30, 2003, we have incurred an aggregate deficit of approximately $12.5 million during our development and operations stage. We may continue to incur significant additional operating losses as our product development, research and development, and marketing efforts continue. Operating losses may fluctuate from quarter to quarter as a result of differences in the timing of expenses incurred and revenue recognised.

We have generated total revenues, from inception on January 3, 1994 to June 30, 2003, in the amount of $807,461..

Results of Operations

We believe that our limited history of revenue generation and recent business developments make the prediction of future results of operations difficult, and, accordingly, our operating results should not be relied upon as an indication of future performance.

Six-month period ended June 30, 2003 compared with the six-month period ended June 30, 2002.

Revenue from operations for the six-month period ended June 30, 2002 was $100,467 (June 30, 2002 - $113,551). The amount of our revenues is calculated in accordance with the software revenue recognition rules outlined in the American Institute of Certified Public Accountant's Statement of Position (SOP) 97-2.

Revenue for the six-month period ended June 30, 2003, included approximately $27,250 for a vision system delivered to ABB for Ford Motor Company, approximately $20,000 for eVF run time licenses for Marubeni, approximately $7,400 for training and consulting revenue and approximately $43,000 previously recorded as deferred revenue and now recognized as revenue.

Cost of sales for the six-month period ended June 30, 2003 was $4,243.

Revenue for the six-month period ended June30, 2002, included $88,453 for the three vision systems delivered to ABB for a major automaker and $25,098 for two vision systems used in the manufacture of plastic fuel tanks that were delivered in December 2001 and March 2002. We are recognizing the revenue from the plastic fuel tanks systems over the twelve-month periods commencing on the delivery date.

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Cost of sales for the six-month period ended June 30, 2002 were $14,248.

Research and development expenses increased from $219,087 for the six-month period ended June 30, 2002 to $245,055 for the six-month period ended June 30, 2003 principally from a small increase in personnel involved in research and development and an increase in lab costs.

Selling, general, and administrative expenses decreased from $811,609 for the six-month period ended June 30, 2002 to $746,579 for the six-month period ended June 30, 2003. Several factors contributed to the increase. The principal factors were as follows:

- General and administrative salaries decreased slightly from approximately $351,000 to approximately $348,000.

- Amortization expenses decreased from $39,065 to $34,184.

- Legal expenses decreased from $80,460 to $29,232, principally due to a reduction in the use of outside legal counsel.

- Overall travel and marketing expenditures decreased from approximately $190,000 to approximately $115,000. The individual components of this decrease are as follows: Expenditures for marketing materials decreased from $58,008 to $100, trade shows increased from $53,722 to $59,685, investor relations decreased from $55,752 to $27,822, travel decreased from $16,616 to $12,040, and web site expenditures increased from $2,247 to $2,850.

- Rent and premises cost increased from $67,946 to $77,448, principally as a result of increases in basic rent, insurance and utilities.

Three-month period ended June 30, 2003 compared with the three-month period ended June 30, 2002.

Revenue from operations for the three-month period ended June 30, 2003 was $25,413 (June 30, 2002 - $105,552

Revenue for the three-month period ended June 30, 2003, includes approximately $7,400 for training and consulting revenue and approximately $18,000 previously recorded as deferred revenue and now recognized as revenue.

Cost of sales for the three-month period ended June 30, 2003 was $2,771.

Revenue for the three-month period ended June30, 2002, included $88,453 for the three vision systems delivered to ABB for a major automaker and $17,099 for two vision systems used in the manufacture of plastic fuel tanks that were delivered in December 2001 and March 2002. We are recognizing the revenue from the plastic fuel tanks systems over the twelve-month periods commencing on the delivery date.

Cost of sales for the three-month period ended June 30, 2002 were $12,323.

Research and development expenses increased from $107,282 for the three-month period ended June 30, 2002 to $130,856 for the three-month period ended June 30, 2003 principally from a small increase in personnel involved in research and development.

Selling, general, and administrative expenses increased from $328,792 for the three-month period ended June 30, 2002 to $450,187 for the three-month period ended June 30, 2003. Several factors contributed to the increase. The principal factors were as follows:

20

- General and administrative salaries increased from approximately $157,000 to approximately $180,500, due to an increase of approximately 2 general and administrative employees.

- Amortization expenses decreased from $19,789 to $17,290, principally as a result of reduced amortization charges relating the write-off of the leasehold improvements of our old offices and the write-off of other fixed assets considered obsolete.

- Legal expenses decreased from $50,288 to $18,395, principally due to a reduction in the use of outside legal counsel.

- Overall travel and marketing expenditures increased from approximately $33,000 to approximately $88,000. The individual components of this increase are as follows: Trade shows expenditures increased from $2,750 to $40,805, investor relations increased from $23,256 to $31,048, travel increased from $4,657 to $6,521, and web site expenditures increased from $904 to $1,462.

- Rent and premises cost increased from $33,101 to $40,158, principally as a result of increases in basic rent, insurance and utilities.

Liquidity and Capital Resources

As of December 31, 2002, our trade accounts receivable balance was $196,160. Subsequent to December 31,2002, this balance was received in full. In addition, we have received $20,000 from the sale of two demonstration run-time licenses and we have also received $28,477 relating to the Ford Motor Company engine assembly plant installations.

In January and March Owen Jones, our Chief Executive Officer, advanced CDN$235,000 (US$155,838) in return for unsecured demand promissory notes with an annual interest rate of 8%.

Between April 12, 2003 and July 29, 2003, he advanced an additional CDN$833,000 (US$593,716), in bridge financing to the Company. These additional financings bear interest at 8% per annum and are repayable on demand. A general security agreement covering all of the Company's real, personal and intangible property has been pledged as security for these advances.

All of the advances from Mr. Jones are repayable in Canadian Dollars and as such as at June 30, 2003 we have recorded a foreign exchange loss of $41,457 being the difference between the exchange rate at the time of the advances and June 30, 2003. As at June 30, 2003, we have accrued $8,875 in interest.

On August 13, 2003, we executed a funding term sheet whereby a group of investors would advance the sum of $1,500,000 in exchange for a convertible debenture. A general security agreement covering all of our real, personal and intangible property is to be pledged as security for the debenture. The debenture will automatically convert into 6,000,000 common shares and 3,000,000 share purchase warrants exercisable at $0.25 per share for a period of five years in the event that our shares trade at or above $1.00 for thirty consecutive trading days. On closing of the funding agreement, our Chief Executive Officer will cancel the secured and unsecured promissory notes payable to him together with the general security agreement in exchange for a payment of $250,000 and a conversion of the remaining outstanding balance into common shares at a price of $0.25. For each share received on conversion, he will also receive a one-half share purchase warrant. Each whole share purchase warrant will entitle him to purchase one common share at $0.25 per share for a period of five years.

As of August 13, 2003 our cash balance is approximately $30,000. Apart from our cash balance, the funding arrangement described above, and any revenue we receive from operations, we have no other sources of liquidity or capital resources.

At our current level of operation, we estimate that our cash expenses are approximately $165,000 per month. We

21

base this estimate on the following data:

- As at August 13, 2003, we have 23 employees. Our salary costs are approximately $88,000 per month;

- For the six months ended June 30, 2003, our average monthly general, overhead and administrative costs, exclusive of salary costs, were approximately $77,000 per month. We expect that our general overhead and administrative costs, exclusive of salary costs, will continue to be approximately $77,000 per month for the remainder of 2003;

- During the year ended December 31, 2002, we incurred capital expenditures of approximately $9,500, principally for computer equipment and computer software. Between December 31, 2002, and August 13, 2003, we only incurred minor capital expenditures and we do not expect to incur significant capital expenditures during the remainder of 2003 unless they result from an increase in our level of operation.

Based on the foregoing, we estimate that our total cash expenditures for the period August 13, 2003 to December 31, 2003 will be approximately $1,000,000. Accordingly, at our current level of operation, our existing cash balances and the funding agreement described above should be sufficient to pay our anticipated cash expenditures to approximately March 31, 2004. To continue beyond March 31, 2004 as a going concern, we will either have to raise additional capital or generate substantial sales revenue. If we cannot do either by March 31, 2004, we face the risk that our business will fail.

Critical Accounting Policies and Changes to Existing Accounting Policies

On December 12, 2001, the Securities and Exchange Commission issued cautionary advice regarding the disclosure of critical accounting policies. Critical accounting policies are those that our management believes are both most important to the portrayal of our financial condition and results, and that require difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that involve uncertainty.

We believe the "critical" accounting policies we use in preparation of our financial statements are as follows:

Revenue Recognition. We are required to follow the software revenue recognition rules outlined in the American Institute of Certified Public Accountant's Statement of Position (SOP) 97-2. We recognize revenue when there is a persuasive evidence of a contract, delivery has occurred, the fee is fixed or determinative, collection is reasonably assured, and there are no substantive performance obligations remaining. Any cash received in advance of meeting these criteria is recorded as deferred revenue on our balance sheet. Changes in contractual arrangements or customer relationships in the future could impact the extent or timing of revenue recognition.

Income Taxes. Our financial statements reflect a full valuation allowance against the net future income tax assets based on our assessment that we are not more likely than not to be able to utilize certain deductions before their expiry. Our assessment is based on a judgment of estimated loss before such deductions. Changes in the timing of the recognition and amount of revenues and expenses in the future may impact our ability to utilize these deductions.

Effects of Foreign Currency Exchange Rates and Inflation

While we record our financial statements in United States dollars, many of our expenses are incurred in Canadian dollars. As a result, fluctuations in the Canadian dollar exchange rate can affect our expenses, and thus our profit or loss. During the six months ended June 30, 2003 we incurred a foreign exchange loss of $49,412. The foreign

22

exchange loss resulted principally from monitory obligations arising from the translation of transactions carried out in Canadian dollars into United States dollars. As at the date of this quarterly report, we have not engaged in exchange rate-hedging activities. To the extent we implement such hedging activities in the future, we cannot assure that we will be successful.

In the year ended December 31, 2002 and the six months ended June 30, 2003 inflation has had a limited impact on our operations. However, there can be no assurance that inflation will not have a material adverse effect on our results of operations in the future.

Quantitative and Qualitative Disclosures about Market Risk

As at June 30, 2003 we have not entered into or acquired financial instruments that have a material market risk. We have no financial instruments for trading or other purposes or derivative or other financial instruments with off balance sheet risk. All financial assets and liabilities are due within the next twelve months and are classified as current assets or liabilities in the consolidated balance sheet provided with this quarterly report. The fair value of all financial instruments at June 30, 2003 approximate their carrying values.

To June 30, 2003, the majority of our cash costs have been realized or incurred in Canadian dollars. To date we have not entered into foreign currency contracts to hedge against foreign currency risks between the Canadian dollar or other foreign currencies and our reporting currency, the United States dollar. Generally, however, we attempt to manage our risk of exchange rate fluctuations by maintaining sufficient net assets in Canadian dollars to retire our liabilities as they come due.

Plan of Operation

Our strategic operating priorities for fiscal 2003 include the following:

A major priority is to leverage the success of the installations in the Ford Motor Company's engine assembly plants by informing the automotive industry of how the intelligent processing of vision guided robotics allows for greater creativity and flexibility in vehicle design and assembly. In March 2003, we attended the Society of Automotive Engineers World Congress trade show in Detroit Michigan and in June 2003, we attended the International Robots and Vision Show in Rosemont Illinois. We exhibited the vision guidance technology currently being used in Ford's new engine plants at each of these trade shows. We have generated substantial interest in our technology and this is reflected in the number of requests for proposal we have received. We have issued approximately 14 quotations representing approximately 23 vision systems. There can be no assurance of the extent to which these requests for quotations will result in future sales. We have established a formal procedure for the management of sales and marketing process.

To continue the development of our relationship with ABB, we intend to expand our presence in the automotive assembly concentrations of Southern Ontario and Detroit Michigan.

To continue the development of our relationship with Marubeni, we intend to assist in their sale process by providing engineering solution assistance. In this regard, Marubeni arranged for the loan of a Kawasaki robot so that we could integrate the Kawasaki robot controller into the eVF platform. Marubeni also arranged for the loan of a Denso robot in order to integrate the Denso robot with eVF. We have shipped the first run-time licenses to Marubeni and expect that more orders for run-time licenses will occur throughout fiscal 2003.

23

We intend to continue to add functionality to eVF by developing additional components. We expect that during fiscal 2003 our Internet based service and support system will have completed field testing and be available for commercial installation.

Presently, our revenues are not sufficient to meet operating and capital expenses. We have incurred operating losses since inception, and this is likely to continue during the remainder of fiscal 2003. Management projects that we may require an additional $2,000,000 to fund our ongoing operating expenses for the next twelve months.

The auditors' report on our December 31, 2002 consolidated financial statements includes an additional paragraph that identifies conditions that raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

RISK FACTORS

Investment in our common stock involves a high degree of risk. Prospective investors should carefully consider the following risk factors in addition to other information in this annual report before purchasing our common stock.

Because we have earned insignificant revenue of only $807,461 from inception to June 30, 2003, we face a risk of insolvency.

We have never earned sufficient operating revenue to pay our operating expenses. We have been dependent on equity financing to pay operating costs and to cover operating losses.

We have sufficient cash and financing commitments to pay ongoing operating expenses, at their current level, to approximately March 31, 2004. To continue operation beyond that we will have to raise additional capital. If we are unable to do so, we face a risk of insolvency.

The auditors' report on our December 31, 2002 consolidated financial statements includes an additional paragraph that identifies conditions that raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Because we have no significant sales history and are substantially dependent on our alliance with ABB to generate future sales, our future is uncertain if our alliance with ABB fails.

We plan to market our vision guidance systems and also our Internet based support and service system through our alliance with ABB Inc. ("ABB"). We believe our alliance with ABB is our best prospect for generating sales revenue. We have no other established distribution channels or marketing arrangements, and if we are unable to generate sales through ABB, our prospects for generating revenue are highly speculative.

Because our alliance with ABB is new, we have no assurance that it will lead to additional sales.

We made our alliance agreement with ABB in March 2000 and together we have been awarded contracts for more than 25 vision guided robotic systems to date. We intend to develop our relationship with ABB to try to make additional sales through that relationship. However, our relationship with ABB is new and our prospects for generating sales under the ABB alliance are uncertain. Furthermore, additional sales through ABB will be dependent upon our products and services meeting customer demands.

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Because our Internet based service and support system is in the development stage, we have no assurance that we will complete development successfully.

We commenced development of our Internet based service and support system during the fall of 2000. That system is still in the development stage. We have no assurance that we will be able to complete development of the system, or that any market will exist for the system when it is completed.

Because of our limited operating and sales history, we cannot make reliable projections of our future operating costs.

If we are able to generate sales, we may have to hire additional personnel to service our customers and to continue development of our technology. We may also have to incur additional marketing and overhead expenses. As a result of our lack of historical sales, we cannot make reliable projections of the number of additional personnel we will require, the cost of employing those personnel, or the level of marketing and overhead expenses we will incur. We thus have no assurance that any revenue we earn will be sufficient to cover the cost of earning that revenue, or to generate operating profits.

Because we develop and install customized vision guidance systems for specific customer needs, we may not be able to create a repeat customer base.

Most vision guidance systems are designed for the specific needs of a particular customer, and represent isolated purchases by the customers in question. As a result, we have no assurance that we will be able to obtain additional contracts to supply our custom vision guidance systems, or that any customers we secure will become repeat customers.

Because our work force is small, with only 23 people employed either as officers, employees or contractors, we are vulnerable to the loss of key people or to rapid expansion.

We employ only 23 people either as officers, employees or contractors. We try to employ people with skill sets that match the specific fields important to our business. As a result, the departure of a single person or a small number of people could materially adversely affect our business. We do not have key man insurance on any of the people we employ.

Qualified technical personnel are in great demand in all high technology industries. Accordingly, it may be difficult for us to replace people who depart, or to hire additional people we may require if we are able to generate substantial sales.

Because we do not have patent protection for any of our products, our intellectual property may be copied or misappropriated.

We do not hold any patents on any of our products. Accordingly, we have no legal means to prevent other companies from developing products that perform similar functions in a similar way. On January 31, 2002, we filed an application in the Canadian Patent Office regarding the Method And Apparatus For Single Camera 3D Vision Guided Robotics and on May 24, 2002 we filed an identical application in the United States Patent Office. On January 31, 2003 we filed an International Application according to the Patent Cooperation Treaty. The Patent Cooperation Treaty provides a procedure enabling applicants to obtain patents in many countries. On August 6, 2003 we filed in the United States Patent Office a continuation-in-part application regarding the Method And Apparatus For Single Image 3D Vision Guided Robotics. These are the only instances in which we have applied for patent protection of our intellectual property.

25

We believe that the software code that we have written for eVisionFactory, the BrainTron processor, the Odysee Development Studio, and each of our custom vision guidance systems is protected by copyright law. However, copyright law does not prevent other companies from developing their own software to perform the same functions as our products.

Because the market price of our common stock has been particularly volatile, purchasers of our common stock face a high degree of market risk.

The market price of our common stock has experienced extreme fluctuations. Since January 1, 2002 the market price of our common stock has varied between $0.11 and $1.05. As we have not announced any material changes to our earnings, we believe that the fluctuations in our stock price have resulted primarily from market perceptions of the speculative value of our business opportunities. The susceptibility of our stock price to fluctuation exposes purchasers of our stock to a high degree of risk.

Because we have generated revenue of only $807,461 from inception to June 30, 2003, and our business has not been profitable with accumulated losses of $12,503,820 from inception to June 30, 2003, we may not be able to raise the additional capital we need.

We will require additional capital to continue the development of our products, to pay the costs of marketing those products, or to cover operating losses until we are able to become profitable. As we have never generated operating profits or significant sales revenue, we may not be able to raise the amount of capital we require.

Several other factors may also hinder our efforts to raise capital. They include the following:

- Our share price has been highly volatile during 2000, 2001 and 2002. The volatility of our share price may deter potential investors.
- Subsequent to the first quarter of 2000, many technology companies have experienced financial difficulties and rapidly declining share prices. As a result, potential investors may be less willing to invest in technology companies generally.
- Subsequent to the first quarter of 2000, capital markets have become tighter generally, with less financing available for technology companies.
- Capital markets have become tighter due to international tensions beginning on September 11, 2001.

Because we will have to raise additional capital, the interests of shareholders may be diluted.

To raise additional capital we may have to issue additional shares, which may dilute the interests of existing shareholders substantially. Alternatively, we may have to borrow large sums, and assume obligations to make substantial interest and capital payments. We may also have to sell significant interests in some or all of our products. If we are able to raise additional capital, we cannot assure that it will be on terms that enhance the value of our common shares.

Because a significant percentage of our issued shares has recently become free trading, and because of the size of anticipated share offerings, there is a risk of downward pressure on our stock price.

During 2001 and early 2002, we issued approximately 2.3 million shares in private placements and other transactions. Those shares are now eligible for re-sale under Rule 144 to the Securities Act of 1933. In addition, during the remainder of 2002, we raised further funds in private placements for which we issued 3,760,716 shares and 1,880,358 share purchase warrants for one share each. We may register these shares and share purchase

26

warrants for resale. The market price of our stock could drop significantly if the owners of these shares sell all or a large portion of the shares, or are perceived as intending to sell them.

Because our stock may be subject to "low price stock" rules, the market for our stock may be limited.

The Securities and Exchange Commission has adopted regulations which generally define a "penny stock" to be any equity security that has a market price less than $5.00. Our stock is presently covered by those rules, and may continue to be so. The penny stock rules require broker-dealers to make a special suitability determination before selling our stock to investors who are not either regular customers or accredited investors. As a result, the potential market for our stock may be limited.

ITEM 3. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Within the 90 days prior to the date of this report, our Chief Executive officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Disclosure controls and procedures are designed to ensure that information required to be disclosed in periodic Securities and Exchange Commission ("SEC") filings is recorded, processed and reported within the time periods specified in the SEC's rules and forms. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective in timely alerting them to material information (including consolidated subsidiaries) required to be included in periodic SEC filings.

Changes in Internal Controls

There were no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

We maintain a system of internal accounting controls designed to provide reasonable assurance that transactions are properly recorded and summarized so that reliable financial records and reports can be prepared and assets safeguarded. There are inherent limitations in the effectiveness of any system of internal control, including the possibility of human error and the circumvention or overriding of controls. Additionally, the cost of a particular accounting control should not exceed the benefit expected to be derived.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As of the date of this quarterly report, we are not involved in any legal proceedings.

ITEM 2. CHANGES IN SECURITIES

Recent Sales of Unregistered Securities

On July 8, 2003, we issued 20,000 unregistered common shares at a deemed price of $0.27 per share for services rendered. The shares were issued pursuant to exemptions from registration as set out in Rule 506 of Regulation D under the Securities Act.

27

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

On June 18, 2003 we held our annual general meeting of shareholders. At the meeting the shareholders elected as directors as follows:

|Director      | Votes For  | Votes Withheld
|------------- | ---------- | --------------
|              |            |               
|Owen Jones    | 11,332,454 | 8,685         
|Babak Habibi  | 11,331,864 | 9,275         
|Edward White  | 11,320,354 | 20,785        
|Lionel Dodd   | 11,320,894 | 20,245        
|Robert Gayton | 11,320,934 | 20,205        
|James Speros  | 11,260,110 | 81,029        

The shareholders also approved the 2003 Stock Option Plan. The results of the voting were: Votes for; 6,482,810, Votes against; 94,351, Votes abstaining; 36,440.

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

INDEX TO EXHIBITS

28

Exhibits

|Number    | Exhibit                                                                                                                                                                      
|--------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1(1)    | Articles of Incorporation, dated February 27, 1987                                                                                                                           
|3.2(1)    | Articles of Amendment, dated July 14, 1998                                                                                                                                   
|3.3(1)    | Articles of Amendment, dated June 28, 1990                                                                                                                                   
|3.4(1)    | Articles Of Amendment of the Company, dated February 8, 1993                                                                                                                 
|3.5(1)    | Articles of Amendment of the Company, dated April 6, 1993                                                                                                                    
|3.6(1)    | Articles of Amendment of the Company, dated December 6, 1993                                                                                                                 
|3.7(8)    | Restated Articles of Incorporation of the Company dated June 1, 2000                                                                                                         
|3.8(1)    | By-Laws of the Company                                                                                                                                                       
|3.9(9)    | Amendment to By-Laws of the Company                                                                                                                                          
|4.1(1)    | Specimen Stock Certificate                                                                                                                                                   
|4.2(2)    | 1997 Stock Option Plan                                                                                                                                                       
|4.3(2)    | 2000 Stock Option Plan                                                                                                                                                       
|4.4(7)    | Amended 2000 Stock Option Plan dated November 1, 2000                                                                                                                        
|10.1(1)   | License Agreement between the Company and Willard W. Olson, dated January 5, 1995.                                                                                           
|10.2(4)   | Cost Sharing and Allocation Agreement between the Company and Sideware Systems Inc.                                                                                          
|10.3(1)   | Assignment of Lease and Modification of Lease Agreement dated August 17, 1998 between HOOPP Realty Inc., Techwest Management Inc., Sideware Systems Inc., and Braintech, Inc.
|10.4(4)   | Software Development and License Agreement dated September 20, 1999 between the Company and Sideware Systems Inc.                                                            
|10.5(4)   | Lease effective as of July 1, 1999 between the Company, Techwest Management Inc., Sideware Systems Inc. and Pacific Centre Leaseholds Ltd.                                   
|10.6(4)   | Assignment Agreement effective as of July 1, 1999 between the Company, Techwest Management Inc., Sideware Systems Inc., and SJM Management Ltd.                              
|10.7(5)   | Alliance Agreement dated March 26, 2000 between the Company and ABB Flexible Automation Group Inc.                                                                           
|10.8(6)   | Letter agreement with Sideware Systems Inc. dated November 1, 2000                                                                                                           
|10.9(7)   | Bluetooth Specification Early Adopters Agreement between IBM and the Company dated December 15, 2000                                                                         
|10.10(7)  | Support and Equipment Lease Agreement between Tactel AB and the Company dated December 19, 2000                                                                              
|10.11(7)  | Assignment Agreement between Pacific Centre Leaseholds Ltd., Techwest Management Inc., Sideware Systems Inc. and the Company dated January 1, 2001                           
|10.12(7)  | Mutual Release and Settlement Agreement between Manfred Kurschner, JMF Management Inc, Techwest Management Inc. and the Company dated February 1, 2001                       
|10.13(7)  | Agreement between Axis Communications Inc. and the Company dated January 29, 2001                                                                                            
|10.14(7)  | Agreement for Escrow of Share Certificate & Promissory Note between Edward White and the Company dated February 27, 2001                                                     
|10.15(8)  | Agreement for Escrow of Share Certificate and Promissory Note between Babak Habibi and the Company dated June 21, 2001                                                       
|          | 29                                                                                                                                                                           
|10.16(9)  | Letter for Resumption of Premises at 102-105 930 W. 1st Street, North Vancouver, June 14, 2001                                                                               
|10.17(9)  | Partial Surrender of Lease for 100-101 A & B 930 W. 1st Street, North Vancouver, June 25, 2001                                                                               
|10.18(9)  | Memorandum of Understanding with Marubeni Corporation                                                                                                                        
|10.19(10) | License Agreement with Marubeni Corporation                                                                                                                                  
|10.20(11) | Certificate of Reverse Stock Split                                                                                                                                           
|10.21(12) | Corporate Governance Committee Charter                                                                                                                                       
|10.22(12) | Audit Committee Charter                                                                                                                                                      
|10.23(12) | Compensation Committee Charter                                                                                                                                               
|10.24(12) | Code of Business Conduct and Ethics for Directors, Officers and Employees                                                                                                    
|10.25(12) | Corporate Governance Guidelines                                                                                                                                              
|10.26(13) | Loan Agreement                                                                                                                                                               
|10.27(13) | General Security Agreement                                                                                                                                                   
|10.28(13) | Service Agreement with Elite Financial Communications Group                                                                                                                  
|10.29(13) | 2003 Stock Option Plan                                                                                                                                                       
|11.1      | Computation of net loss per share                                                                                                                                            
|31.1      | Certificate of Owen L.J. Jones pursuant to Sec 302 of the Sarbanes Oxley Act of 2002.                                                                                        
|31.2      | Certificate of Edward A. white pursuant to Sec 302 of the Sarbanes Oxley Act of 2002.                                                                                        
|32.1      | Certificate of Owen L.J. Jones pursuant to Sec 906 of the Sarbanes Oxley Act of 2002.                                                                                        
|32.2      | Certificate of Owen L.J. Jones pursuant to Sec 906 of the Sarbanes Oxley Act of 2002.                                                                                        

(1) Exhibit already on file - exhibit to our Form 10-SB registration statement filed September 25, 1998.

(2) Exhibit already on file - exhibit to our Schedule 14A proxy information filed March 1, 2000.

(3) Exhibit already on file - exhibit to our Form S-1 registration statement filed February 11, 2000.

(4) Exhibit already on file - exhibit to our Form 10-QSB covering the quarter ended September 30, 1999 filed November 15, 1999.

(5) Exhibit already on file - exhibit to our Form 10-QSB covering the quarter ended March 31, 2000 filed May 15, 2000.

(6) Exhibit already on file - exhibit to our Form 10-QSB covering the quarter ended September 30, 2000 dated November 9, 2000.

(7) Exhibit already on file - exhibit to our Form 10-KSB for the year ended December 31, 2000.

(8) Exhibit already on file - exhibit to our Form S-1/A registration statement filed July 3, 2001.

(9) Exhibit already on file - exhibit to our Form 10-KSB for the year ended December 31, 2001.

(10) Exhibit already on file - exhibit to our Form 8-K filed July 5, 2002.

(11) Exhibit already on file - exhibit to our Form 8-K filed September 9, 2002.

(12) Exhibit already on file - exhibit to our Form 10KSB for the year ended December 31, 2002.

(13) Exhibit already on file - exhibit to our Form 10QSB covering the quarter ended March 31, 2003.

REPORTS ON FORM 8-K

None

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SIGNATURES

In accordance with Section 13 of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

/s/ Owen L.J. Jones		Chief Executive Officer,	August 15, 2003

Owen L.J. Jones	Director

(Principal Executive Officer)



/s/ Babak Habibi		President, Director, 	August 15, 2003

Babak Habibi



/s/ Edward A. White		Chief Financial Officer,	August 15, 2003

Edward A. White	Director

(Principal Financial and Accounting Officer)

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CERTIFICATION

I, Edward A. White, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Braintech, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the small business issuer and have:

1. designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
2. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under out supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
3. evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
4. disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in this case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

1. all significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
2. any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal controls.

6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

/s/ Edward A. White	Edward A. White
Principal Financial Officer

Dated: August 15, 2003

32

CERTIFICATION

I, Owen Jones, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Braintech, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the small business issuer and have:

1. designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
2. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under out supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
3. evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
4. disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in this case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

1. all significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
2. any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal controls.

6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

/s/ Owen L. J. Jones	Owen L.J. Jones
Principal Executive Officer
Dated: August 15, 2003

33

EXHIBIT 11.1

CALCULATION OF WEIGHTED AVERAGE FOR SIX MONTHS ENDED JUNE 30, 2003

|BEGINNING BALANCE |               | 14,919,394      
|----------------- | ------------- | ----------------
|                  |               |                 
|                  | NO. OF SHARES | CONTRIBUTION TO 
|DATE              | ISSUED        | WEIGHTED AVERAGE
|                  |               |                 
|June 10, 2003     | 20,000        |                 
|June 16, 2003     | 20,000        |                 
|June 20, 2003     | 16,000        |                 



|Net Loss for the period | $904,254  
|----------------------- | ----------
|Weighted average shares | 14,924,035
|Net Loss per share      | $(0.06)   

34

EXHIBIT 99.1

CERTIFICATION PURSUANT TO 
18 U.S.C. SECTION 1350, 
AS ADOPTED PURSUANT TO 
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Braintech, Inc. (the "Company ") on Form 10-QSB for the three months August 13, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Owen L.J. Jones the Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

__/s/ Owen L.J. Jones____________
Owen L.J. Jones 
Principal Executive Officer

August 15, 2003

35

EXHIBIT 99.2

CERTIFICATION PURSUANT TO 
18 U.S.C. SECTION 1350, 
AS ADOPTED PURSUANT TO 
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Braintech, Inc. (the "Company ") on Form 10-QSB for the three months ended June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Edward A. White, the Principal Financial and Accounting Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

_/s/ Edward A. White_________________________ 
Edward A. White 
Principal Financial Officer and Accounting Officer

August 15, 2003

36