SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 10-Q


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

                  For the quarterly period ended June 30, 2001


                         Commission file number 0-28572



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


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


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


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



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

Yes      __X__   No _____



At July 30, 2001, the registrant had 14,466,110 Class "A" shares (without
nominal or par value) outstanding.



<PAGE>


PART I.  FINANCIAL INFORMATION


Item 1.  Financial Statements


                                       2
<PAGE>

<TABLE>
<CAPTION>
OPTIMAL ROBOTICS CORP.
Consolidated Balance Sheets

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

--------------------------------------------------------------------------------------------------------------------
                                                                                 June 30,               December 31,
                                                                                     2001                      2000
--------------------------------------------------------------------------------------------------------------------
                                                                                (Unaudited)                (Audited)
<S>                                                                            <C>                      <C>
Assets
Current assets:
Cash                                                                           $   5,127,186            $   5,006,982
     Short-term investments                                                       66,697,764               71,141,910
     Accounts receivable:
         Trade, net of allowance for doubtful accounts of
           $330,000 (nil at December 31, 2000)                                    29,143,154                8,287,492
         Other                                                                       624,588                2,197,525
     Inventories (note 4)                                                         21,327,841               16,725,885
     Tax credits receivable                                                          354,682                  323,788
     Future income taxes                                                             271,275                2,420,718
     Prepaid expenses and deposits                                                   915,684                  327,039
                                                                                 124,462,174              106,431,339

Loans receivable                                                                     125,934                  125,934

Capital assets                                                                     4,729,085                3,253,148

Goodwill (note 3)                                                                  2,409,713                       --

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

---------------------------------------------------------------------------------------------------------------------
                                                                               $ 133,049,234            $ 111,272,648
---------------------------------------------------------------------------------------------------------------------

Liabilities and Shareholders' Equity

Current liabilities:
     Accounts payable and accrued liabilities                                  $  12,856,034            $   6,492,371
     Income taxes payable                                                          2,032,994                       --
     Deferred revenue                                                              3,176,044                   34,695
---------------------------------------------------------------------------------------------------------------------
                                                                                  18,065,072                6,527,066

Shareholders' equity:
     Share capital (note 5)                                                      110,526,577              107,050,914
     Other capital                                                                     5,282                    9,684
     Retained earnings (deficit)                                                   5,936,774                 (830,545)
     Cumulative translation adjustment                                            (1,484,471)              (1,484,471)
---------------------------------------------------------------------------------------------------------------------
                                                                                 114,984,162              104,745,582

Contingency (note 6)

---------------------------------------------------------------------------------------------------------------------
                                                                               $ 133,049,234            $ 111,272,648
---------------------------------------------------------------------------------------------------------------------

</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                       3
<PAGE>

<TABLE>
<CAPTION>
OPTIMAL ROBOTICS CORP.
Consolidated Statements of Operations
(Unaudited)

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

------------------------------------------------------------------------------------------------------------------------------------
                                                                Three months ended                        Six months ended
                                                                      June 30,                                 June 30,
                                                          ---------------------------------        ---------------------------------
                                                               2001                  2000              2001                 2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                 <C>                 <C>                 <C>
Revenues                                                   $ 31,084,738        $ 16,123,099        $ 50,692,736        $ 28,127,258

Cost of sales                                                19,334,127          11,957,323          31,605,134          20,971,426

-----------------------------------------------------------------------------------------------------------------------------------
Gross margin                                                 11,750,611           4,165,776          19,087,602           7,155,832
-----------------------------------------------------------------------------------------------------------------------------------

Selling, general and
   administrative expenses                                    4,506,676           2,444,379           7,819,200           4,300,605
Research and development
   expenses                                                     427,568             237,806             757,572             347,885
Operating lease expense                                         277,897              81,477             484,249             193,615
Amortization                                                    368,523             262,981             666,198             402,360
Investment income                                              (808,914)         (1,183,722)         (1,865,425)         (1,547,047)
Foreign exchange                                                 38,892            (993,785)            144,261            (993,785)
-----------------------------------------------------------------------------------------------------------------------------------
                                                              4,810,642             849,136           8,006,055           2,703,633

-----------------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes                                  6,939,969           3,316,640          11,081,547           4,452,199

Provision for income taxes                                    2,692,088           1,269,279           4,314,228           1,703,620

-----------------------------------------------------------------------------------------------------------------------------------
Net earnings                                               $  4,247,881        $  2,047,361        $  6,767,319        $  2,748,579
-----------------------------------------------------------------------------------------------------------------------------------

Weighted average number of shares:
     Basic                                                   14,247,188          13,567,536          14,028,380          12,511,532
     Add effect of dilution using
       treasury stock method                                    972,425           1,355,163           1,097,361           1,582,182

-----------------------------------------------------------------------------------------------------------------------------------
     Diluted                                                 15,219,613          14,922,699          15,125,741          14,093,714
-----------------------------------------------------------------------------------------------------------------------------------

Earnings per share:
     Basic                                                 $       0.30        $       0.15        $       0.48        $       0.22
     Diluted                                                       0.28                0.14                0.45                0.20

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to unaudited consolidated financial statements.


                                       4
<PAGE>

<TABLE>
<CAPTION>

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

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

------------------------------------------------------------------------------------------------------------------------------------
                                                               Three months ended                        Six months ended
                                                                    June 30,                                  June 30,
                                                       -----------------------------------       ----------------------------------
                                                           2001                  2000                2001                2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                 <C>                   <C>                   <C>
Retained earnings (deficit),
   beginning of period                                  $1,688,893          $(4,924,404)          $  (830,545)          $(5,625,622)

Net earnings                                             4,247,881            2,047,361             6,767,319             2,748,579

-----------------------------------------------------------------------------------------------------------------------------------
Retained earnings (deficit),
   end of period                                        $5,936,774          $(2,877,043)          $ 5,936,774           $(2,877,043)
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                       5

<PAGE>

<TABLE>
<CAPTION>
OPTIMAL ROBOTICS CORP.
Consolidated Statements of Cash Flows
(Unaudited)

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

------------------------------------------------------------------------------------------------------------------------------------
                                                                   Three months ended                       Six months ended
                                                                         June 30,                                June 30,
                                                            ---------------------------------     ----------------------------------
                                                                 2001                  2000              2001                 2000
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                <C>                <C>                <C>
Cash flows from operating activities:
     Net earnings                                             $  4,247,881       $  2,047,361       $  6,767,319       $  2,748,579
     Adjustments for:
         Amortization                                              368,523            262,981            666,198            402,360
         Unrealized foreign exchange
           gain on contract advance                                     --              5,036                 --              5,948
         Non-refundable tax credits                                     --            (39,539)                --            (39,539)
         Future income taxes                                       659,096          1,269,279          2,289,342          1,703,620
         Loss on securitization of trade
           accounts receivable                                          --                 --             24,424                 --
     Changes in operating assets and
       liabilities:
         Trade and other receivables                            (9,944,872)        (4,295,112)       (20,958,951)       (10,706,301)
         Proceeds on securitization
           of trade accounts receivable                                 --                 --          3,038,907                 --
         Inventories                                              (436,507)        (8,283,449)        (3,347,411)        (9,499,202)
         Tax credits receivable                                    (75,000)            75,868            (30,894)           (20,451)
         Prepaid expenses and deposits                              52,294            (59,227)          (446,262)          (155,868)
         Accounts payable and
           accrued liabilities                                    (513,802)           884,467          2,447,050          4,036,210
         Income taxes payable                                    2,032,994                 --          2,032,994                 --
         Deferred revenue                                         (619,719)           781,570          2,109,964            960,991
-----------------------------------------------------------------------------------------------------------------------------------
                                                                (4,229,112)        (7,350,765)        (5,407,320)       (10,563,653)

Cash flows from financing activities:
     Proceeds from issuance of common shares                     1,735,283         64,991,586          3,471,261         65,134,022
     Share issue costs                                                  --         (1,225,461)                --         (4,673,729)
     Repayment of advance from broker                                   --         (2,835,629)                --                 --
-----------------------------------------------------------------------------------------------------------------------------------
                                                                 1,735,283         60,930,496          3,471,261         60,460,293

Cash flows from investing activities:
     Purchase of capital assets                                   (440,930)          (750,702)        (1,246,883)        (1,335,541)
     Business acquisition                                       (1,141,000)                --         (1,141,000)                --
     (Increase) decrease in short-term
       investments                                                (770,073)       (52,061,172)         4,444,146        (51,400,536)
     Repayment of loan receivable                                       --             14,782                 --             14,782
-----------------------------------------------------------------------------------------------------------------------------------
                                                                (2,352,003)       (52,797,092)         2,056,263        (52,721,295)

-----------------------------------------------------------------------------------------------------------------------------------
(Decrease) increase in cash and cash
   equivalents during the period                                (4,845,832)           782,639            120,204         (2,824,655)

Effect of foreign exchange fluctuations
   on cash                                                              --           (491,408)                --           (500,030)

Cash and cash equivalents, beginning
   of period                                                     9,973,018            883,168          5,006,982          4,499,084

-----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end
   of period                                                  $  5,127,186       $  1,174,399       $  5,127,186       $  1,174,399
-----------------------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents is comprised of:
     Cash                                                     $  5,127,186       $    595,454       $  5,127,186       $    595,454
     US Treasury bill                                                   --            578,945                 --            578,945

-----------------------------------------------------------------------------------------------------------------------------------
                                                              $  5,127,186       $  1,174,399       $  5,127,186       $  1,174,399
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                       6
<PAGE>


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

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

--------------------------------------------------------------------------------

1.   Interim financial information:

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

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

2.   Significant accounting policies:

     (a)  Functional currency:

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

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


                                       7
<PAGE>


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

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

--------------------------------------------------------------------------------


2.   Significant accounting policies (continued):

     (b)  Earnings per share:

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

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

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

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

--------------------------------------------------------------------------------
                                                  Periods ended June 30, 2000
--------------------------------------------------------------------------------
                                                (3 months)           (6 months)

As previously reported                          $   0.15              $   0.22
Restated                                            0.14                  0.20

--------------------------------------------------------------------------------



                                       8
<PAGE>

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

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

--------------------------------------------------------------------------------


3.   Business acquisition:

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

     Details of the acquisition are as follows:

--------------------------------------------------------------------------------

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

     Goodwill                                                        2,429,965

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

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


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

------------------------------------------------------------------------------

     Goodwill                                                      $ 2,429,965
     Less accumulated amortization                                      20,252

------------------------------------------------------------------------------
                                                                   $ 2,409,713
------------------------------------------------------------------------------


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



                                       9
<PAGE>
OPTIMAL ROBOTICS CORP.
Notes to Consolidated Financial Statements, Continued
(Unaudited)

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

--------------------------------------------------------------------------------

4.   Inventories:

-------------------------------------------------------------------------------
                                                      June 30,      December 31,
                                                         2001          2000
-------------------------------------------------------------------------------
                                                    (Unaudited)       (Audited)

     Finished goods                                   $ 2,143,242   $ 3,543,262
     Work in process                                    3,014,630       589,424
     Raw materials                                      5,571,381     3,657,967
     Replacement parts                                 10,598,588     8,935,232

-------------------------------------------------------------------------------
                                                      $21,327,841   $16,725,885
-------------------------------------------------------------------------------

5.   Share capital:

     During the six-month period ended June 30, 2001, the Company issued 402,000
     common  shares  pursuant to the  exercise of stock  options  with  exercise
     prices  ranging  between $3 and $31.25 per share and 353,420  common shares
     pursuant to the exercise of warrants with exercise  prices ranging  between
     Cdn$5 and $6.60 per share. Total proceeds from the issuance of these shares
     amounted to $3,471,261.


6.   Contingency:

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

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



                                       10

<PAGE>
OPTIMAL ROBOTICS CORP.
Notes to Consolidated Financial Statements, Continued
(Unaudited)

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

--------------------------------------------------------------------------------

7.   Research and development:
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------
                                            Three months ended                        Six months ended
                                                 June 30,                                 June 30,
                                     ----------------------------------     ------------------------------------
                                            2001                2000              2001                 2000
----------------------------------------------------------------------------------------------------------------
<S>                                      <C>                  <C>                <C>                  <C>
     Research and development
       expenses                          $ 502,568            $237,806           $ 902,128            $ 444,204
     Tax credits                           (75,000)                 --            (144,556)             (96,319)

---------------------------------------------------------------------------------------------------------------
                                         $ 427,568            $237,806           $ 757,572            $ 347,885
---------------------------------------------------------------------------------------------------------------
</TABLE>


8.   Segmented information:

     The  Company  operates  in  one  segment,   the   development,   marketing,
     installation  and servicing of automated  transaction  software and systems
     designed for use in the retail sector.  Substantially  all of the Company's
     revenue  is  derived  from sales to  supermarket  retailers  located in the
     United States and is  denominated in US dollars.  Substantially  all of the
     Company's long-lived assets are located in Canada.



                                       11

<PAGE>

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

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

--------------------------------------------------------------------------------

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

     (a)  Consolidated statement of operations:

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

<TABLE>

----------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                   Three months ended                    Six months ended
                                                          June 30,                             June 30,
                                          -------------------------------------     ----------------------------------
                                                2001                  2000              2001                 2000
----------------------------------------------------------------------------------------------------------------------
<S>                                           <C>                 <C>                 <C>                 <C>
     Net earnings in accordance
       with Canadian GAAP                     $  4,247,881        $  2,047,361        $  6,767,319        $  2,748,579
     Stock-based compensation
       costs (1)                               (17,705,079)        (18,807,034)        (31,713,704)        (18,941,365)

----------------------------------------------------------------------------------------------------------------------

     Net loss in accordance with
       U.S. GAAP                               (13,457,198)        (16,759,673)        (24,946,385)        (16,192,786)

     Other comprehensive income
       (loss):
          Foreign currency translation
            adjustments                               --            (1,990,640)               --            (2,136,533)

----------------------------------------------------------------------------------------------------------------------
     Comprehensive loss                       $(13,457,198)       $(18,750,313)       $(24,946,385)       $(18,329,319)
----------------------------------------------------------------------------------------------------------------------

     Basic and diluted net loss per
       common share                           $      (0.94)       $      (1.24)       $      (1.78)       $      (1.29)
----------------------------------------------------------------------------------------------------------------------
</TABLE>


     (1) Accounting for stock-based compensation:

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

          Under Canadian GAAP, compensation expense is not recognized.



                                       12
<PAGE>

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

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

--------------------------------------------------------------------------------


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

     (b)  Consolidated balance sheets:

<TABLE>
<CAPTION>
          --------------------------------------------------------------------------------------------------------------------------
                                                       June 30, 2001                          December 31, 2000
                                                ---------------------------------     ----------------------------------
                                                     Canadian            US               Canadian                US
                                                       GAAP             GAAP                 GAAP                 GAAP
          --------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>                 <C>                 <C>                 <C>
          Shareholders' equity:
               Share capital                     $ 110,526,577       $ 152,745,390       $ 107,050,914       $ 149,269,727
               Other capital                             5,282          38,991,569               9,684           7,282,267
               Deficit                               5,936,774         (73,734,564)           (830,545)        (48,788,179)
               Cumulative translation
                 adjustment                         (1,484,471)               --            (1,484,471)               --
               Accumulated other
                 comprehensive loss                       --            (3,018,233)               --            (3,018,233)

          --------------------------------------------------------------------------------------------------------------------------
                                                 $ 114,984,162       $ 114,984,162       $ 104,745,582       $ 104,745,582
          --------------------------------------------------------------------------------------------------------------------------
</TABLE>

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

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

--------------------------------------------------------------------------------

     (c)  New accounting standards:

          In July 2001, FASB issued SFAS 141,  "Business  Combinations" and SFAS
          142 "Goodwill and Other Intangible  Assets".  SFAS 141, which replaces
          APB Opinion No. 16,  revises the  accounting  standards  for  business
          combinations  and is effective for  acquisitions  initiated after June
          30, 2001.  SFAS 142,  which  replaces APB Opinion No. 17,  revises the
          standards in  accounting  for goodwill  and other  intangibles  and is
          effective  for fiscal  years  after  December  15,  2001.  The Company
          expects the impact of these new standards to be insignificant.



                                       13
<PAGE>


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

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


Results of Operations

First Six Months of 2001 Compared with First Six Months of 2000

     Total revenues increased by $22,565,000,  or 80%, from 2000 to 2001, due to
a significant increase in orders from existing customers and the addition of new
customers.  We delivered 2055 U-Scan(R)  self-checkout  terminals, or 515 U-Scan
systems,  in  the  six-month  period,  an  increase  of  89%  from  1087  U-Scan
self-checkout  terminals,  or 273  U-Scan  systems,  delivered  in the first six
months  of 2000.  This  increase  produced  $19,528,000  of  additional  systems
revenue,  an increase of 74%. Service  contract revenue  recognized for hardware
and software maintenance increased by $2,028,000, or 163%, primarily as a result
of the increased  number of customers  that entered into service  contracts with
us.

     Total cost of sales  increased by  $10,634,000,  or 51%, from 2000 to 2001.
Overall  gross margin  increased as a percentage  of sales from 25.4% in 2000 to
37.8% in 2001,  representing  primarily the increase in gross margins on systems
revenue.  This increase  resulted mainly from the fact that we began to assemble
and deliver U-Scan systems from our facility in Plattsburgh, New York commencing
January 2001, and from our facility in Phoenix, Arizona, commencing April 2001.

     Gross research and  development  expenses  increased by $458,000,  or 103%,
from  2000 to 2001.  As a  percentage  of total  revenues,  gross  research  and
development  expenses  remained  constant at  approximately 2% for both 2001 and
2000.  Research and development  expenses during the period related to continued
enhancements of our product lines.

     Selling,  general,  administrative and other expenses (including  operating
lease expenses)  increased by $3,809,000,  or 85%, in 2001 compared to 2000. For
both periods,  these expenses  represented  approximately 16% of total revenues.
During the first six months of 2001,  we continued to expand  marketing  efforts
through an increased tradeshow schedule and advertising  campaign.  In addition,
we incurred increased costs in the following areas:  engineering  related to the
design,  development  and early phase  commercial  production of casings for the
redesigned  small footprint U-Scan Solo system and the integration of our recent
acquisition.

     As a result  of the  revenues  increase  and  improved  gross  margin,  the
Company's net earnings  were  $6,767,000 in 2001 compared to $2,749,000 in 2000,
an increase of 146%.  On a per share basis,  the Company  earned $0.48 per share
($0.45 per share on a  fully-diluted  basis) compared to $0.22 per share in 2000
($0.20 per share on a fully-diluted basis).



                                    14
<PAGE>


Second Quarter of 2001 Compared with Second Quarter of 2000

     Total revenues increased by $14,962,000, or 93%, from the second quarter of
2000 to the second quarter of 2001, due to a significant increase in orders from
existing  customers and the addition of new customers.  We delivered 1258 U-Scan
self-checkout  terminals,  or 315 U-Scan systems, in the quarter, an increase of
99% from 627 U-Scan self-checkout terminals, or 158 U-Scan systems, delivered in
the second  quarter of 2000.  This increase  produced  $12,687,000 of additional
systems revenue,  an increase of 84%.  Service  contract revenue  recognized for
hardware and software maintenance increased by $1,406,000,  or 209%, as a result
of the increased  number of customers  that entered into service  contracts with
us.

     Total cost of sales  increased by  $7,377,000,  or 62%,  from 2000 to 2001.
Overall  gross margin  increased as a percentage  of sales from 25.8% in 2000 to
37.8% in 2001,  representing  primarily the increase in gross margins on systems
revenue.  This increase  resulted mainly from the fact that we began to assemble
and deliver U-Scan systems from our facility in Plattsburgh, New York commencing
January 2001, and from our facility in Phoenix, Arizona, commencing April 2001.

     Gross research and  development  expenses  increased by $265,000,  or 111%,
from  2000 to 2001.  As a  percentage  of total  revenues,  gross  research  and
development  expenses  increased  from 1% in 2000 to 2% in  2001.  Research  and
development expenses during the period related to continued  enhancements of our
product lines.

     Selling,  general,  administrative and other expenses (including  operating
lease expenses) increased by $2,259,000,  or 89%, in 2001 compared to 2000. As a
percentage of total revenues,  these expenses  decreased from 16% in 2000 to 15%
in 2001.  During the second  quarter of 2001,  we continued to expand  marketing
efforts through an increased  tradeshow  schedule and advertising  campaign.  In
addition,  we  incurred  increased  costs in the  following  areas:  engineering
related to the design,  development  and early phase  commercial  production  of
casings  for  the  redesigned   small  footprint  U-Scan  Solo  system  and  the
integration of our recent acquisition.

     The Company's net earnings in the second quarter were  $4,248,000  compared
to $2,047,000 in the  corresponding  2000 period,  an increase of 107%. On a per
share  basis,  the  Company  earned  $0.30  per  share  ($0.28  per  share  on a
fully-diluted  basis)  compared  to  $0.15  per  share  ($0.14  per  share  on a
fully-diluted basis) in 2000.

     On May 29,  2001,  the  Company  acquired  certain  assets and the  ongoing
business of Alpha  Microsystems,  LLC ("Alpha") based in Santa Ana,  California,
for a total purchase price of approximately $6.0 million,  of which $4.9 million
was paid by the  assumption  of  liabilities  and  $1.1  million  in  cash.  The
acquisition  of Alpha did not have a  significant  effect on the  Company's  net
earnings in the second quarter.



                                       15
<PAGE>


Financial Condition

Accounts Receivable

     Accounts receivable at June 30, 2001 were $29,768,000  (December 31, 2000 -
$10,485,000),  of which $29,143,000  (December 31, 2000 - $8,287,000) were trade
accounts receivable. Calculated in accordance with common industry practice, the
Company's days outstanding of accounts receivable  ("DSO's") as at June 30, 2001
were 77 days.

Inventory

     The total inventory position at June 30, 2001 was $21,328,000 (December 31,
2000 -  $16,726,000).  This  increase  is  mainly  attributable  to the  planned
build-up of work in  process,  raw  materials,  and  finished  goods in order to
provide for deliveries in the third quarter of 2001.

Future Income Taxes

     Current future income tax assets at June 30, 2001 were $271,000 as compared
to $2,421,000 at December 31, 2000, a decrease of  $2,149,000.  This decrease is
attributable  to the  utilization of a substantial  portion of our future income
tax assets to reduce taxable income for the first six months of 2001.

Accounts Payable and Accrued Liabilities

     Accounts  payable and accrued  liabilities  increased  by  $6,364,000  from
$6,492,000 at December 31, 2000 to $12,856,000  at June 30, 2001.  This increase
is primarily due to the purchase of inventories.

Deferred Revenue

     Deferred revenue  increased by $3,141,000 from $35,000 at December 31, 2000
to  $3,176,000  at June 30, 2001.  This increase is due to hardware and software
maintenance  contracts  being  invoiced at the beginning of the year whereas the
associated revenue is recognized over twelve months. In addition,  approximately
$1,000,000 of this increase is related to our recent acquisition.

Liquidity and Capital Resources

     As of June 30, 2001,  the Company had cash and  short-term  investments  of
$71,825,000   (December  31,  2000  -  $76,149,000)   and  working   capital  of
$106,397,000 (December 31, 2000 - $99,904,000).

     Operating  activities  used  $5,407,000  in the first six months of 2001 as
compared to  $10,584,000  for the first six months of 2000.  The  improvement in
operating cash flow resulted from increased  operating earnings in 2001 compared
to 2000.  In the first six months of 2001,  the Company  issued  755,420 (2000 -
633,384)  common shares  pursuant to the exercise of options and warrants  which
resulted in cash proceeds of $3,471,000 (2000 - $1,779,000).

     In the first six months of 2001,  the Company had capital  expenditures  of
$1,246,000 (2000 - $1,335,541),  principally relating to leasehold improvements,
test systems and computer hardware. The Company also utilized cash of $1,100,000
in connection with the Alpha acquisition.

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



                                       16
<PAGE>


Item 3. There have been no material changes since December 31, 2000.



                                       17
<PAGE>


PART II.  OTHER INFORMATION


Item 1.  Legal Proceedings

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

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


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


Item 3. The registrant has nothing to report under this item.


Item 4. The registrant  held its annual meeting of the  shareholders on June 21,
2001. The following resolutions were adopted:


<TABLE>
<CAPTION>
Resolution                         Votes For          Votes Against     Withheld           Spoiled
----------                         ---------          -------------     --------           -------
<S>                                <C>                <C>               <C>                <C>
Election of Directors              10,792,765                           9,143              28,378

Appointment of KPMG, LLP as        10,820,215                           6,591              3,480
Auditors
</TABLE>


Item 5. The registrant has nothing to report under this item.


Item 6.

(a)  Exhibits - Not applicable.

(b)  Reports  on Form 8K - One  report  on Form  8K was  filed  on May 18,  2001
     relating to the change of Auditors (Item 4).



                                       18
<PAGE>

Signatures


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



                                               OPTIMAL ROBOTICS CORP.




Dated: August 2, 2001                      By: /s/ Holden L. Ostrin
                                               ---------------------------------
                                                   Holden L. Ostrin
                                                   Co-Chairman


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





                                       19