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


                             FORM 10-QSB


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

              For the quarterly period ended September 30, 2001


[ ]    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                                           98-0168932
    ------                ------------                ----------
(State or other       (Commission File No.)         (I.R.S. Employee
jurisdiction of                                     Identification No.)
incorporation)

                     930 West 1st Street, #102
                   North Vancouver, British Columbia
                           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)

<PAGE>

                                  (ii)

Check whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act during the
past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [x]  No []

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
56,793,311 Common shares with par value of $0.001 as at November 13,
2001.

Transitional Small Business Disclosure Format (check one):
Yes [] No [x].

                       Index to Exhibits on page 18



<PAGE>


                                Braintech, Inc.
                                Form 10-QSB
                               TABLE OF CONTENTS
                                                         Page


PART I.   FINANCIAL INFORMATION..................................1

Item 1.      Financial Statements...............................10
Item 2.      Management's Discussion and Analysis or Plan of
             Operation..........................................11
Item 3.      Quantitative and Qualitative Disclsoure about
             March Risk.........................................17

Part II   OTHER INFORMATION

Item 1.      Legal Proceedings..................................18
Item 2.      Changes in Securities and Use of Proceeds..........18
Item 3.      Defaults Upon Senior Securities....................18
Item 4.      Submission of Matters to a Vote of Security
             Holders............................................18
Item 5.      Other Matters    ..................................18
Item 6.      Exhibits and Reports on Form 8-K...................18

                                    (iii)

<PAGE>


                    PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

Each of the following items are contained in our Condensed
Consolidated Financial Statements and are set forth herein.

(i)    Condensed Consolidated Balance Sheets as of September 30, 2001
       (unaudited) and December 31, 2000;

(ii)   Condensed Consolidated Statements of Operations (unaudited) for the
       period from inception on January 3, 1994 to September 30, 2001 and
       for the three and nine month periods ended September 30, 2000 and 2001;

(iii)  Condensed Consolidated Statements of Stockholders' Equity (Deficit)
       (unaudited) for the period from inception on January 3, 1994 to
       September 30, 2001;

(iv)   Condensed Consolidated Statements of Cash Flows (unaudited) for the
       period from inception on January 3, 1994 to September 30, 2001 and for
       the nine month periods ended September 30, 2000 and 2001; and

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

                              1

<PAGE>

 PAGE>

BRAINTECH, INC.
(A Development Stage Enterprise)

Condensed Consolidated Balance Sheets
(unauditrd)
(Expressed in United States dollars)

<TABLE>
<CAPTION>

====================================================================================
                                                      September 30,     December 31,
                                                               2001             2000
------------------------------------------------------------------------------------
                                                     (Unaudited)        (audited)
<S>                                               <C>               <C>

ASSETS

Current assets:
   Cash and cash equivalents                        $    168,721       $    899,573
   Short-term investments                                      -              6,929
   Accounts receivable                                    69,736              6,878
   Inventory                                              29,479              3,369
   Due from related companies                             13,262             28,010
   Prepaid expenses                                       30,517             10,121
   ----------------------------------------------------------------------------------
                                                         311,715            954,880

Deposit on lease                                               -              2,297

Fixed assets                                              198,765           176,895
-------------------------------------------------------------------------------------
                                                     $    510,480     $   1,134,072

Liabilities and Stockholders' Equity

Current liabilities:
   Accounts payable and accrued liabilities          $     97,804     $      50,686
   Due to related company                                   6,816                 -
   ----------------------------------------------------------------------------------
                                                          104,620            50,686

Stockholders' equity:
   Common stock
     Authorized: 200,000,000 shares, with $0.001
     par value
     Issued: 56,793,311 shares (2000 - 45,599,333)
     To be issued:  nil shares (2000 - 400,000)	           56,793            45,599
   Additional paid-in capital                           9,892,124         9,202,233
   Deficit accumulated prior to the development
   stage                                                  (58,800)          (58,800)
   Deficit accumulated during the development
   stage                                               (9,484,257)       (8,105,646)
   ----------------------------------------------------------------------------------
                                                          405,860         1,083,386
-------------------------------------------------------------------------------------

                                                     $    510,480     $   1,134,072
====================================================================================
</TABLE>

Subsequent events (note 8)

See accompanying condensed notes to consolidated financial statements.

                                          2

<PAGE>


BRAINTECH, INC.
(A Development Stage Enterprise)

Condensed Consolidated Statements of Operations
(Unaudited)
(Expressed in United States dollars)

<TABLE>
<CAPTION>
======================================================================================================
                                    Period from
                                   inception on
                                January 3, 1994      Nine months ended          Three months ended
                                    to June 30,         September 30,               September 30,
                                           2001      2001         2000           2001          2000
======================================================================================================
<S>                           <C>              <C>          <C>            <C>             <C>

Sales                           $  245,311       $ 47,752     $ 121,312      $ 22,950       $ 44,139
Cost of sales                       97,416         13,830        47,361         6,355         12,909
======================================================================================================
Gross margin                       147,895         33,922        73,951        16,595         31,230

Operating expenses:
   Consulting and contractors      736,561               -            -              -             -
   Research and development      2,898,751         305,979      353,543        102,140        62,883
   Selling, general and
     administrative              5,744,250       1,088,045      517,912        332,341        94,101
   Loss on settlement of
     litigation                    100,000               -            -              -             -
   Loss on disposal of
     fixed assets                   62,676          36,622            -         28,142             -
   Write-down of investments       100,000               -            -              -             -
   Write-down of intangible
     assets                         17,189               -            -              -             -
   Write-down of organization
     costs                          17,431               -            -              -             -
   ---------------------------------------------------------------------------------------------------
                                 9,676,858       1,430,646      871,455        462,623       156,984
------------------------------------------------------------------------------------------------------

Operating loss                  (9,528,963)     (1,396,724)    (797,504)      (446,028)     (125,754)

Non-operating:
   Interest income                  44,706          18,113       22,850          2,738         5,849
------------------------------------------------------------------------------------------------------

Net loss for the period        $(9,484,257)    $(1,378,611)    $(774,654)     $(443,290)    $(119,905)
=======================================================================================================

Loss per share:
   Basic and diluted           $     (0.34)    $     (0.03)    $   (0.02)     $  (0.01)     $   (0.00)
-------------------------------------------------------------------------------------------------------

Weighted average number of
common shares outstanding:
   Basic and diluted             28,130,416       51,220,276   43,615,786    56,578,933     45,598,409
========================================================================================================
</TABLE>

See accompanying condensed notes to consolidated financial
statements.

                                              3

<PAGE>



BRAINTECH, INC.
(A Development Stage Enterprise)

Condensed Consolidated Statements of Stockholders' Equity (Deficit)
(Unaudited)
(Expressed in United States dollars)


<TABLE>
<CAPTION>
==================================================================================================================
                                                                           Deficit        Deficit
                                                                       accumulated    accumulated            Total
                                  Number       Common     Additional  prior to the     during the    stockholders'
                                      of        Stock         paid-in   development    development           Equity
                                  Shares       amount        capital         stage          stage        (deficit)
------------------------------------------------------------------------------------------------------------------
<S>                             <C>          <C>        <C>            <C>           <C>             <C>

Balance, January 3, 1994        17,400,000   $17,400    $  1,039,271   $  (58,800)     $        -     $   997,871

Loss for the period                      -         -               -	        -      (1,006,716)     (1,006,716)
------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1994      17,400,000    17,400       1,039,271      (58,800)     (1,006,716)         (8,845)

Loss for the period                      -         -               -	        -       (748,310)        (748,310)
------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1995      17,400,000    17,400       1,039,271      (58,800)     (1,755,026)       (757,155)

Common stock transactions
(net of issue costs):
   Issued for cash at
     $.1895 per share              950,000       950         173,440            -               -         174,390
   Issued for cash at
     $.25 per share                733,333       733         183,167            -               -         183,900
   Issued for cash at
     $.20 per share              3,000,000     3,000         592,500            -               -         595,500
   Shares issued for
     services rendered           1,200,000     1,200         238,800            -               -         240,000
Loss for the period                      -         -               -            -        (959,945)       (959,945)
------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1996      23,283,333    23,283       2,227,178      (58,800)     (2,714,971)       (523,310)

Common stock transactions
(net of issue costs):
   Issued for cash at
     $.20 per share              2,000,000     2,000         396,991            -               -         398,991
   Issued for cash at
     $.15 per share              1,000,000     1,000         148,279            -               -         149,279
   Shares issued for
     services rendered             300,000       300          59,700            -               -          60,000
   Compensatory benefit of
     employee stock options              -         -         200,000            -               -         200,000
Loss for the period                      -         -               -            -        (930,042)       (930,042)
------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997      26,583,333    26,583       3,032,148      (58,800)     (3,645,013)       (645,082)

Common stock transactions
(net of issue costs):
   Issued for cash at
     $.25 per share              1,600,000     1,600         398,400            -               -         400,000
   Issued for cash at
     $.20 per share              2,188,000     2,188         435,412            -               -         437,600
   Compensatory benefit of
     employee stock options              -         -         927,800            -               -         927,800
Loss for the period                      -         -               -            -      (2,110,556)     (2,110,556)
------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998      30,371,333    30,371       4,793,760      (58,800)     (5,755,569)       (990,238)

Common stock transactions
(net of issue costs):
   Issued for cash at
     $.15 per share               9,800,000    9,800       1,433,950            -               -        1,443,750
   Issued for cash at
     $.20 per share                 157,000      157          31,243            -               -           31,400
   Issued for cash at
     $.60 per share               1,010,000    1,010         604,990            -               -          606,000
Common stock subscriptions                -        -         110,270            -               -          110,270
Subscriptions receivable                  -     (110)        (65,890)           -               -          (66,000)
Compensatory benefit of
  employee stock options                  -        -           2,000            -               -            2,000
Loss for the period                       -        -               -            -      (1,236,074)      (1,236,074)
-------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999,
carried forward                  41,338,333   41,228       6,910,323      (58,800)     (6,991,643)         (98,892)

</TABLE>


                              4
<PAGE>

BRAINTECH, INC.
(A Development Stage Enterprise)

Condensed Consolidated Statements of Stockholders' Equity (Deficit)
(Unaudited)
(Expressed in United States dollars)


<TABLE>
<CAPTION>
================================================================================================================
                                                                           Deficit        Deficit          Total
                                      Common stock                     accumulated    accumulated  Stockholders'
                                 -------------------      Additional  prior to the     during the         Equity
                                 Number of                   paid-in   development    development      (deficit)
                                    Shares    Amount         capital         stage          stage
----------------------------------------------------------------------------------------------------------------
<S>                            <C>         <C>          <C>            <C>         <C>             <C>

Balance, December 31, 1999,
  carried forward               41,338,333  $ 41,228      $ 6,910,323   $ (58,800)  $  (6,991,643)  $   (98,892)

Common stock issued for cash
  at $0.20 per share
  (net of share issue costs)     3,976,000     3,976         790,305            -               -       794,281
Subscriptions received in cash           -       110          65,890            -               -        66,000
Settlement of litigation                 -         -         606,000            -               -       606,000
Common stock issued for cash
  on subscriptions                 285,000	 285            (285)           -               -             -
Common stock subscriptions
  received in cash                       -         -         730,000            -               -       730,000
Common stock to be issued
  in settlement of legal claim           -         -         100,000            -               -       100,000
Net loss                                 -         -               -            -       (1,114,003)  (1,114,003)
-----------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000,     45,599,333    45,599       9,202,233      (58,800)     (8,105,646)    1,083,386

Common stock issued for
  promissory notes (note 3)      1,333,334      1,334       198,666            -                -       200,000
Less:  Promissory notes
  receivable for subscription
  of common shares (note 3)              -          -      (200,000)           -                -      (200,000)
Common stock issued for
  settlement of legal
  claim                            400,000        400          (400)           -                -             -
Common stock issued for
  cash at $0.15 per share
  (net of share issue
  costs and share
  subscriptions received
  in 2000)                       9,040,189      9,040        607,685           -                -       616,725
Common stock issued for
   cash at $0.22 per share
   (net of share issue
   costs)                          295,455        295         60,065           -                -        60,360
Shares issued for services
rendered                           125,000        125         23,875           -                -        24,000
Loss for the period                      -          -              -           -       (1,378,611)   (1,378,611)
-----------------------------------------------------------------------------------------------------------------

Balance, September 30, 2001     56,793,311    $56,793     $9,892,124    $(58,800)     $(9,484,257)     $405,860
=================================================================================================================
</TABLE>

See accompanying condensed notes to consolidated financial statements.

                              5
<PAGE>

BRAINTECH, INC.
(A Development Stage Enterprise)

Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Expressed in United States dollars)

<TABLE>
<CAPTION>

==============================================================================================
                                               Period from
                                              inception on
                                           January 3, 1994           Nine months ended
                                               to June 30,              September 30,
                                                      2001            2001          2000
==============================================================================================
<S>                                      <C>                 <C>             <C>
Cash flows from operating activities:
  Loss for the period                      $    (9,484,257)    $  (1,378,611)  $  (774,654)
  Items not involving cash:
    Amortization                                   221,247            89,175        50,587
    Bad debt                                        75,108                 -         2,126
    Loss on disposal of fixed assets                62,676            36,622             -
    Write-down of investments                      100,000                 -             -
    Write-down of intangible assets                 17,189                 -             -
    Write-down of organization costs                17,431                 -             -
    Shares issued for services rendered            324,000            24,000             -
    Shares issued for satisfaction of
      legal claim                                  100,000                 -             -
   Compensatory benefit of employee
      stock options                              1,129,800                 -             -
   Changes in non-cash operating
   working capital:
     Inventory                                     (29,479)          (26,110)            -
   Short-term investments                               72                72             -
   Accounts receivable                             (89,273)          (62,858)      (70,640)
   Prepaid expenses                                (30,517)          (20,396)       (4,874)
   Accounts payable and accrued
     liabilities                                   104,766            47,118         1,837
   Deferred revenue                                      -                 -       (21,506)
---------------------------------------------------------------------------------------------
Net cash used in operating activities           (7,481,237)       (1,290,988)     (817,124)

Cash flows from investing activities:
   Purchase of marketable securities              (100,000)                -             -
   Purchase of fixed assets                       (523,135)         (147,667)     (115,652)
   Purchase of short-term investments	            (6,929)                -             -
   Proceeds from short-term investments              6,857             6,857             -
   Proceeds from notes receivable                 (130,181)                -             -
   Proceeds from disposal of real estate           306,752                 -             -
   Proceeds from disposal of fixed assets           41,506                 -             -
   Deposit on lease                                      -             2,297        (2,297)
--------------------------------------------------------------------------------------------
Net cash used in investing activities             (405,130)         (138,513)     (117,949)

Cash flows from financing activities:
   Notes receivable                                 55,073                 -        10,130
   Loans to directors and officers                   7,304                 -       (35,635)
   Due to (from) related companies                 (19,029)           21,564        47,872
   Mortgages payable                              (207,739)                -             -
   Common shares issued, net of issue
      costs                                      7,975,367           677,085       860,566
   -----------------------------------------------------------------------------------------
   Net cash provided by (used in)
      financing activities                       7,810,976           698,649       882,933
--------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash
   equivalents                                     (75,391)         (730,852)      (52,140)

Cash and cash equivalents, beginning
   of period                                       244,112           899,573       431,390
--------------------------------------------------------------------------------------------

Cash and cash equivalents, end
   of period                                     $ 168,721          $168,721      $379,250
============================================================================================

Supplemental information:
   Cash paid for interest                        $   3,797          $      -      $      -
   Non-cash financing and
   investing activities:
      Shares issued for services
        rendered                                   324,000            24,000             -
      Shares issued for promissory
        notes                                      200,000           200,000             -
      Shares issued for satisfaction
        of legal claim                             100,000                 -             -
=============================================================================================
</TABLE>

                                              6

<PAGE>

BRAINTECH, INC.
(A Development Stage Enterprise)

Condensed Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in United States dollars)


Nine months ended September 30, 2001 and 2000
Three month ended September 30, 2001 and 2000
Period from inception on January 3, 1994 to September 30, 2001

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




1.  DESCRIPTION OF BUSINESS AND FUTURE OPERATIONS:

    Braintech, Inc. (the "Company") together with its wholly owned
    subsidiary, Braintech Canada, Inc., is a high tech development
    company, developing advanced video recognition software.  All
    sales of its products and services are made in this industry segment.

    These consolidated financial statements have been prepared on the
    going concern basis under which an entity is considered to be able
    to realize its assets and satisfy its liabilities in the ordinary
    course of business.  The Company has not generated significant
    revenues and is continuing to develop its business.  Operations to
    date have been primarily financed by equity transactions.  The Company's
    future operations and its continuation as a going concern are dependent
    upon its ability to raise additional capital, increase sales of its
    products by maintaining its strategic sales alliances with a major
    supplier of robotic systems, generating positive cash flows from
    operations and ultimately attaining profitability.  It is the Company's
    intention to focus on developing this alliance and on becoming their
    principal supplier of vision systems, raising financing and achieving
    profitable operations.

    Based on its current financial position, the Company believes that its
    present cash resources will be sufficient to pay ongoing cash operating
    expenses until approximately the end of January 31, 2002.  To continue as
    a going concern, the Company will either have to raise additional capital
    or begin to generate substantial sales revenue.  If the Company cannot do
    either by the end of the fourth quarter of 2001, there is a risk that the
    business will fail.  The consolidated financial statements do not include
    any adjustments relating to the recoverability of assets and any
    adjustments relating to the recoverability of assets and classification of
    assets and liabilities that might be necessary should the Company be unable
    to continue as a going concern.

2.  BASIS OF PRESENTATION:

    These consolidated financial statements have been prepared in accordance
    with generally accepted accounting principles in the United States and
    reflect all adjustments (all of which are normal and recurring in nature)
    that, in the opinion of management, are necessary for fair presentation of
    the interim financial information.  The results of operations for the
    interim periods presented are not necessarily indicative of the results
    to be expected for any subsequent quarter or for the entire year ending
    December 31, 2001.  Certain information and footnote disclosures normally
    included in financial statements prepared in accordance with generally
    accepted accounting principles have been condensed or omitted. These
    unaudited condensed consolidated


                            7
<PAGE>


    financial statements and notes included herein should be read in
    conjunction with the Company's audited consolidated financial
    statements and notes for the year ended December 31, 2000, as filed
    in its annual report on Form 10-KSB.


2.  BASIS OF PRESENTATION (CONTINUED):

    These consolidated financial statements include the accounts of
    the Company, and its wholly-owned subsidiary Braintech Canada,
    Inc., incorporated under the Company Act of British Columbia on
    March 30, 1994.  All material intercompany balances and
    transactions have been eliminated.

    Certain figures have been reclassified to conform to the financial
    statement presentation adopted in the current year.

3.  PROMISSORY NOTES:

    In conjunction with a private placement completed during the first quarter
    of 2001, a director and Chief Financial Officer of the Company issued a
    promissory note in the amount of $100,000 in payment for 666,667 common
    shares and 333,334 common share purchase warrants.  This note receivable
    has been recorded as a deduction from stockholders' equity.  Each common
    share purchase warrant entitles the holder to purchase one additional share
    for one year at $0.20 per share.  In accordance with an Agreement for
    Escrow of Share Certificates dated February 27, 2001, the common share
    certificate and warrant certificate issued will remain in escrow until
    the Company receives full payment of the $100,000 note receivable.
    The amount is due upon demand,
    unsecured and no interest is payable on this note.

    In conjunction with a private placement completed during the second
    quarter of 2001, the Chief Operating Officer and President of the
    Company issued a promissory note in the amount of $100,000 in payment
    for 666,667 common shares and 333,334 common share purchase warrants.
    This note receivable has been recorded as a deduction from
    stockholders' equity.  Each common share purchase warrant entitles
    the holder to purchase one additional share for one year at $0.20 per
    share.  In accordance with an Agreement for Escrow of Share Certificates
    dated June 26, 2001, the common share certificate and warrant
    certificate issued will remain in escrow until the Company receives full
    payment of the $100,000 note receivable.  The amount is due upon demand,
    unsecured and no interest is payable on this note.


                            8
<PAGE>


4.   STOCK OPTIONS:

     A summary of the Company's stock option activity is as follows:

<TABLE>
<CAPTION>
========================================================================
                                                                Weighted
                                           Number                average
                                        of shares         exercise price
------------------------------------------------------------------------
<S>                                  <C>                <C>
Balance, December 31, 2000              4,754,000         $         0.23

Options granted                           950,000                   0.25
Options cancelled/expired                (316,500)                  0.24
------------------------------------------------------------------------
Balance September 30, 2001              5,387,500         $         0.23
========================================================================
</TABLE>

Of those outstanding at September 30, 2001, 2,996,250 are
exercisable (2000 - 2,329,000).


5.   SHARE PURCHASE WARRANTS:

     During the nine months ended September 30, 2001, the Company completed
     private placements of 10,373,523 common shares at a price of $0.15 per
     share and 295,455 common shares at a price of $0.22 per share.  In
     conjunction with the private placements, the Company issued 5,334,494
     common share purchase warrants (each purchaser received one common share
     purchase warrant for each two common shares purchased).  Each common
     share purchase warrant entitles the holder to purchase one additional
     share for one year at $0.20 per share for 5,186,766 of the warrants and
     at $0.27 per share for 147,728 of the warrants.  The 5,334,494 share
     purchase warrants were the only warrants outstanding as at September 30,
     2001.  There were no cancellation, exercise or expiration of warrants
     during the period.

6.   COMMITMENTS:

     The Company has obligations under operating lease arrangements which
     require the following minimum annual payments:

<TABLE>
<CAPTION>
==================================================================
<S>                                                 <C>
   2001                                                $    89,054
   2002                                                    130,448
------------------------------------------------------------------
                                                       $   219,502
==================================================================
</TABLE>


7.   CONTINGENCIES

     The Company is a co-covenanter on a lease that includes the premises
     where the Company resides.  The part of the premises not occupied by
     the Company is currently being sub-leased to a third party.  As
     co-covenanter on the original lease, the Company is legally responsible
     for the rent relating to the portion of the premises let to the
     third party. The contingent additional rent totals approximately
     $64,000 per year with the lease expiring August 31, 2003.



                            9
<PAGE>


8.    SUBSEQUENT EVENTS

(a)   PRIVATE PLACEMENT

      On October 31, 2001 the Company received $250,000 on account
      of a further private placement.  No securities have yet been
      issued in consideration of these funds.

(b)   STOCK OPTIONS

      Subsequent to September 30, 2001, the Company granted an
      additional 90,000 stock options at an exercise price of
      $0.25 and 25,000 stock options were cancelled on termination
      of employment.  The Company's stock option plan specifies
      that an optionee may exercise vested options up to 30 days
      subsequent to termination.  The terminated employee's options
      had vested, however the 30 day exercise period expired on
      October 30, 2001 without any of the options being exercised.


                            10
<PAGE>


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

OVERVIEW

Braintech, Inc. was incorporated in 1987.  In January 1994, we entered
the technology field.

Since 1994 we have been developing the Braintech Imaging Library, as
well as other software and hardware products used in processing digitised
video information.  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 for use in product inspection,
location analysis, and parts handling and assembly.  In March 2000 we
entered into a strategic alliance with ABB Flexible Automation, a division
of ABB Inc.  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 guided robotic systems.

We are also developing eVisionFactory ("eVF"), a software environment for
developing, optimising, and supporting industrial automation solutions.
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 guided robotic solutions.  The Internet based support
system can also be used to provide technical support to companies operating
other types of industrial machinery and manufacturing systems.

During 2001 we also commenced development of a 3D vision guided robotic system
for use in automotive manufacturing systems.  The 3D system uses a single
conventional CCD (Charge Coupled Device) camera.  Software algorithms use
information from the camera to determine the position and orientation of
the parts being assembled.  That information is used in turn to control
industrial robots operating on the parts.  Applications for the system
include material handling, spot welding, machining operations, adhesive and
sealant application, spray painting, automated assembly, and part
identification and inspection.

As of September 30, 2001 we have incurred an aggregate deficit of
approximately $9.5 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 September 30, 2001, in the amount of $245,311.



                            11
<PAGE>


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.

NINE MONTH PERIOD ENDED SEPTEMBER 30, 2001 COMPARED WITH THE
NINE MONTS ENDED SEPTEMBER 20, 2000

Revenue from operations for the nine month period ended September
30, 2001 was $47,752.  This amount included:

(a)    $24,802 for a vision system used in the manufacture of plastic
       fuel tanks; and

(b)    $22,950 for a vision system used to locate and inspect automotive
       air conditioning systems.

Both systems were sold through our alliance with ABB Flexible Automation.

Cost of sales for the nine month period ended September 30, 2001 were $13,830.
This amount consisted of:

(a)    $7,475 for equipment used in, and installation costs relating to,
       the fuel tank project; and

(b)    $6,355 for equipment and installation costs relating to the air
       conditioner project.

Revenue from operations for the nine month period ended September 30, 2000
was $121,312.  This amount included:

(a)    $65,786 for a brake shoe sorting and inspection system developed
       for Satisfied Brake Products Inc.;

(b)    $11,387 for the Wizmaster program developed for Sideware Systems
       Inc.; and

(c)    approximately $44,000 from ABB for two vision systems used in
       the manufacture of plastic fuel tanks.

Cost of sales for the nine month period ended September 30, 2000 were $47,361.
This amount consisted of:

(a)    $26,105 paid to a systems integrator working on the Satisfied Brake
       Products Inc. project; and

(b)    approximately $21,000 for equipment and expenses related to the
       projects that generated revenue from operations.


                            12
<PAGE>


Research and development expenses decreased from $353,543 for the nine month
period ended September 30, 2000 to $305,979 for the nine month period ended
September 30, 2001.  The decrease resulted principally from the following
factors:

(a)    During the nine month period ended September 30, 2000 we paid
       approximately $88,000 to North Shore Circuit Design for work on the
       IMPAC accelerator board.  During 2001 we ceased work on the IMPAC
       accelerator board, in order to concentrate our efforts on developing
       our relationship with ABB.  As a result, payments to North Shore Circuit
       design have ceased.

(b)    Salaries and contract labour allocated to research and development
       increased from $239,854 to $279,950.

Selling, general, and administrative expenses increased from $517,912
for the nine month period ended September 30, 2000 to $1,088,045 for
the nine month period ended September 30, 2001.  Several factors contributed
to the increase.  The principal factors were as follows:

(a)     General and administrative salaries increased from
        approximately $95,000 to approximately $466,000, due to the hiring
        of approximately 9 additional general and administrative employees
        uring the nine month period ended September 30, 2001.

(b)	Amortization expenses increased from $50,587 to $89,175,
        principally as a result of amortization charges in respect of
        approximately $148,000 in additional capital assets purchased during
        the nine month period ended September 30, 2001.  The capital assets
        purchased related mainly to the increase in our staff and the increase
        in the size of our office premises.

(c)	Legal expenses increased from $86,123 to $121,974, principally due
        to the cost of filing a registration statement under the
        Securities Act of 1933.

(d)	Filing and transfer fees decreased from $30,817 to $4,545.
        During the nine month period ended September 30, 2000 we incurred
        filing fees of approximately $30,000 for the filing of a registration
        statement under the Securities Act of 1933.

(e)     During the nine month period ended September 30, 2000 we incurred a
        foreign exchange loss of $20,484.  The comparative figure for 2001
        was $4,544.  Our foreign exchange losses result principally from
        adjusting entries made in respect of transactions recorded in United
        States dollars, but actually carried out in Canadian dollars.

(f)     During the nine month period ended September 30, 2001, we paid
        $14,383 for public relations services.  There were no similar
        payments during the nine month period ended September 30, 2000.

(g)     Travel and trade show expenses increased from $3,262 to $57,017,
        principally as a result of attending the International Robots &
        Vision Show in Chicago in June 2001.

THREE MONTH PERIOD ENDED SEPTEMBER 30, 2001 COMPARED WITH THE THREE
MONTH PERIOD ENDED SEPTEMBER 30, 2000

Revenue from operations for the three month period ended September
30, 2001 was $22,950.  We received this amount from ABB Flexible
Automation for a vision system used to locate and inspect automotive
air conditioning systems.


                            13
<PAGE>


Cost of sales for the three month period ended September, 2001
were $6,355.  This amount consisted of equipment used in, and installation
costs relating to, the air conditioning project.

Revenue from operations for the three month period ended September 30,
2000 was approximately $44,000.  This amount was received from ABB
Flexible Automation for two vision systems used in the manufacture of
plastic fuel tanks.

Cost of sales for the three month period ended September 30, 2000 were
$12,909.  This amount consisted of equipment used in, and installation
costs relating to, the plastic fuel tank project.

Research and development expenses increased from $62,883 for the
three month period ended September 30, 2000 to were $102,140 for the
three month period ended September 30, 2001.  The increase resulted
principally from the increase in the number of our research and
development personnel.  During the three month period ended September
30, 2000 we made a final payment of $10,319 to North Shore Circuit
Design for work on the IMPAC accelerator board.  There was no similar
payment during the three month period ended September 30, 2001.

Selling, general, and administrative expenses increased from
$94,101 for the three month period ended September 30, 2000 to
$332,341 for the three month period ended September 30, 2001.
Several factors contributed to the increase.  The principal
factors were as follows:

(a)     General and administrative salaries increased from
        approximately $13,400 to approximately $179,000, due to the
        hiring of approximately 9 additional general and administrative
        employees during 2001.

(b)     Amortization expenses increased from $21,606 to $27,092,
        principally as a result of amortization charges in respect of
        approximately $148,000 in additional capital assets purchased
        during 2001.

(c)     Rent expense increased from $15,089 to $29,602, principally as
        a result of our return to office premises which we occupied
        previously at Unit 102, 930 West 1st Street, North Vancouver, B.C.


LIQUIDITY AND CAPITAL RESOURCES

During the first quarter of 2001, we completed a private placement
of 7,600,000 shares at a price of $0.15 per share.  In addition,
for every two shares purchased, each purchaser received one share
purchase warrant.  Each share purchase warrant entitles the holder
to purchase one additional share for one year at $0.20 per share.
Net proceeds from the private placement were approximately $1.1
million.

On June 29, 2001 we completed a private placement of 2,773,523
common shares at a price of $0.15 per share.  In addition, for
every two shares purchased, the purchasers received one share
purchase warrant.  Each share purchase warrant entitles the
holder to purchase one additional share for one year at $0.20
per share.
Net proceeds from the private placement were approximately
$410,000.


                            14
<PAGE>


On August 30, 2001 we completed a private placement of 295,455
common shares at a price of $0.22 per share.  In addition, for
every two shares purchased, the purchasers received one share
purchase warrant.  Each share purchase warrant entitles the holder
to purchase one additional share for one year at $0.27 per
share.  Net proceeds from the private placement were approximately
$60,360.

On October 31, 2001 we received $250,000 on account of a further
private placement.  No securities have yet been issued in
consideration of these funds.

As of November 13, 2001, inclusive of the private placement
proceeds described above, our cash balance is approximately $257,000.
Apart from our cash balance 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 $160,000 per month.  We base this
estimate on the following data:

-  As at November 13, 2001, we have 25 employees.  Our salary
   costs are approximately $95,000 per month.
-  For the nine month period ended September 30, 2001 our average
   monthly general, overhead and administrative costs, exclusive
   of salary costs, were approximately $65,000 per month.  We expect
   that our general overhead and administrative costs, exclusive of
   salary costs, will continue to be approximately $65,000 per month
   for the balance of 2001 and for the first quarter of 2002.
-  During the year ended December 31, 1999 we paid $204,800, a
   llocated to "Research and development", to North Shore Circuit
   Design for work on the IMPAC accelerator board.  During the
   year ended December 31, 2000 we paid $87,751 to North Shore
   Circuit Design.  We do not anticipate using the services of
   North Shore Circuit Design during 2001.
-  During the year ended December 31, 2000 we incurred capital
   expenditures of approximately $136,000, principally for leasehold
   improvements, furniture and fixtures, and computer equipment.
   Between December 31, 2000 and September 30, 2001, we incurred capital
   expenditures of approximately $148,000, principally for leasehold
   improvements, furniture and fixtures, computer equipment, and computer
   software related to the expansion of our staff.  We do not expect to
   incur significant capital expenditures during the remainder of 2001
   and the first quarter of 2002 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 November 13, 2001 to March 31, 2001 will be
approximately $725,000.  Accordingly, at our current level of operation,
our existing cash balances and subscriptions receivable, together with
the revenue generated by our sales to ABB described below, should be
sufficient to pay our anticipated cash expenditures to approximately
March 31, 2002.  To continue as a going concern, we will either have
to raise additional capital or continue to generate substantial sales
revenue.  If we cannot do either by the end of the first quarter of
2002, we face the risk that our business will fail.


                            15
<PAGE>


PLAN OF OPERATION

As announced by press releases dated September 25, 2001 and
October 2, 2001, we have received purchase orders from ABB
to supply 19 3D Vision Guided Robotic solutions for engine parts
handling.  The systems, which include ABB robots guided
by Braintech vision technology, will be installed at one of
North America's major automaker's engine assembly plants.
The first six systems are scheduled for installation in December 2001,
ten of the systems are scheduled for installation in the first quarter
of 2002, and the remaining three systems are scheduled for
installation in the second quarter of 2002.

Our first priority for the balance of 2001 and the first half of
2002 is to complete the orders we have received from ABB.  If we
are successful in completing these orders, the revenues received
should provide the operating cash requirements for approximately
3.5 months.

Our second priority for the balance of 2001 and the first quarter
of 2002 is to continue to build upon our relationship with ABB, to
become the principal supplier Of vision systems to ABB and their
customers.  If we are able to obtain additional multi-order contracts
for the design and installation of our vision guided robotic
systems, we believe we could generate sufficient sales revenue to
achieve positive cash flow.

We are taking the following steps to secure additional contracts with ABB.

- We have hired a sales engineer in the Province of Ontario, Canada,
  where the Canadian automotive manufacturing industry is concentrated.
  Our Ontario sales engineer provides support to ABB sales representatives
  in Ontario, through presentations to potential customers of industrial
  vision guided robotic systems.
- We have installed a single camera 3D demonstration unit in the ABB
  plant in Brampton, Ontario for purposes of displaying our vision guided
  robotic technology to ABB's customers.
- We provide proposals to ABB for vision guided robotic components for
  systems being sold to ABB customers.  As of November 13, 2001 we have
  fifteen proposals outstanding, some of which involve multiple systems.
- We have begun negotiations with ABB's US subsidiary to establish an
  alliance similar to the one we have with ABB's Canadian subsidiary.
  If we are able to conclude an agreement with the US company we plan
  to hire a second sales representative, to be based in the north-eastern
  United States, to support ABB sales representatives in that area.

Our third priority during the balance of 2001 and the first quarter of
2002 is to continue the development of eVisionFactory, including our
Internet based service and support system.  We expect to release a final
production version of the eVisionFactory program, including the Internet
based service and support system, in the first quarter of 2002.

There is no assurance that our plan of operation will succeed.  We have
no assurance of when, if ever, we will secure further contracts for the
sale of vision guided robotic systems.


                            16
<PAGE>


In addition, we have no assurance that we will be able to complete
development of the eVisionFactory program, or that we will be able to
obtain new contracts, or generate sales revenue, through use of that
program.

NEW PREMISES

Effective July 15, 2001 we returned to office premises which we occupied
previously at Unit 102, 930 West 1st Street, North Vancouver, B.C.  From
May 1995 to March 2001, we shared those premises with Sideware Systems Inc.
In June 2001, Sideware vacated the premises, and entered into an agreement
to sub-let a portion of the premises to a third party.  We will occupy the
remainder of the premises, consisting of approximately 9,800 square feet.
The annual rent for our portion of the premises will be approximately
$92,000 per year.  In addition, we will be responsible for costs relating
to property taxes and common area maintenance, totalling approximately
$26,000 per year.  The term of the lease expires August 31, 2003.

The lease for the premises at Unit 102, 930 West 1st Street is in the name of
TechWest Management Inc.  The lease was made at a time when we shared the
premises with Sideware Systems Inc., and we signed the lease as a
co-covenantor, along with TechWest and Sideware.  As co-covenantor on the
original lease, we could also be legally responsible for rent relating to
the portion of the premises which has been let to a third party, if Sideware
Systems Inc. and the sub-tenant both fail to pay that rent.  The additional
rent for which we could be liable totals approximately $64,000 per year,
inclusive of operating costs.

We also continue to use a portion of the premises at Suite 1600-777 Dunsmuir
Street, Vancouver, B.C. V7Y 1K4, Canada, for which Sideware holds the lease.
Our current payments for these premises are approximately $450 per month, but
we are not a party to the lease.

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

As at September 30, 2001 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 included
in the financial statements included in this Form 10-QSB.  The fair value
of all financial instruments as at September 30, 2001 approximate their
carrying values.

To September 30, 2001, the majority of our revenues and 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.


                            17
<PAGE>


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 AND USE OF PROCEEDS

RECENT SALES OF UNREGISTERED SECURITIES

On August 30, 2001, we issued 295,455 common shares at a price of
$0.22 per share to a single arm's length investor pursuant to a
private placement.  In addition, for every two shares purchased,
the purchaser received one share purchase warrant.  Each share purchase
warrant entitles the holder to purchase one additional share for one
year at $0.27 per share.  A finder's fee of $4,640 was paid to
facilitate the transaction.  The shares and warrants were
issued to an accredited investor pursuant to exemptions from
registration as set out in Rule 506 of Regulation D under the
Securities Act.

On September 6, 2001, we issued 25,000 common shares at a
deemed value of $0.20 per share on account of services rendered by
Farid Rohani.  The shares were issued to an accredited investor
pursuant to exemptions from registration as set out in Rule 506 of
Regulation D under the Securities Act.

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

Not applicable.

ITEM 5.	OTHER MATTERS

Not applicable.

ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K

On July 11, 2001, we filed a report on Form 8-K concerning the
appointment of Babak Habibi as a director and the President
of Braintech, Inc.

INDEX TO EXHIBITS

                        EXHIBITS

<TABLE>
<CAPTION>

INDEX TO EXHIBITS

EXHIBITS  NUMBERS      EXHIBITS
<S>                    <C>

3.1(1)                 Articles of Incorporation, dated February 27, 1987

3.2(1)                 Articles of Amendment, dated July 14, 1998

                                    18
<PAGE>

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                    Restated Articles of Incorporation of the Company dated
                       June 1, 2000

3.8(1)                 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(1)                Product Development Agreement between the Company and
                       United Technologies Microelectronic Systems Inc., dated
                       July 6, 1998.

10.3(1)                Manufacturing and Sales Agreement between the Company
                       and United Technologies Microelectronic Systems Inc.,
                       dated July 6, 1998.

10.4(1)                Operating Agreement between the Company and Sideware
                       Systems Inc., dated November 1, 1995

10.5(4)                Cost Sharing and Allocation Agreement between the
                       Company and Sideware Systems Inc.

10.6(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.

10.7(4)                Software Development and License Agreement dated
                       September 20, 1999 between the Company and Sideware
                       Systems Inc.

10.8(4)                Lease effective as of July 1, 1999 between the
                       Company, Techwest Management Inc., Sideware Systems
                       Inc. and Pacific Centre Leaseholds Ltd.

10.9(4)                Assignment Agreement effective as of July 1, 1999
                       between the Company, Techwest Management Inc.,
                       Sideware Systems Inc., and SJM Management Ltd.

10.10(4)               Agreement between the Company, Mercator Robotec Inc.
                       and Satisfied Brake Products Inc.

10.11(5)               Alliance Agreement dated March 26, 2000 between the
                       Company and ABB Flexible Automation.

10.12(6)               Sublease and Consent to Lease between MGI International
                       Marine Safety Solutions Inc., Techwest Management Inc.
                       and HOOPP Realty Inc., and Offer to Lease

10.13(6)               Letter agreement with Sideware Systems Inc. dated
                       November 1, 2000

10.14(7)               Bluetooth Specification Early Adopters Agreement
                       between IBM and the Company dated December 15, 2000

10.15(7)               Support and Equipment Lease Agreement between Tactel AB
                       and the Company dated December 19, 2000

10.16(7)               Assignment Agreement between Pacific Centre Leaseholds
                       Ltd., Techwest Management Inc., Sideware Systems Inc.
                       and the Company dated January 1, 2001

10.17(7)               Mutual Release and Settlement Agreement between Manfred
                       Kurschner, JMF Management Inc, Techwest Management Inc.
                       and the Company dated February 1, 2001

                                                19
<PAGE>

10.18(7)               Agreement between Axis Communications Inc. and the
                       Company dated January 29, 2001

10.19(7)               Agreement for Escrow of Share Certificate & Promissory
                       Note between Edward White and the Company dated
                       February 27, 2001

10.20(8)               Agreement for Escrow of Share Certificate & Promissory
                       Note between Babak Habibi and the Company dated June
                       26, 2001

11.1                   Computation of net loss per share

21.1(1)                Subsidiaries of the Registrant

</TABLE>


(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 covering
    the fiscal year ended December 31, 2000 dated March 29, 2001.
(8) Exhibit already on file - exhibit to our Form S-1/A registration
    statement filed July 3, 2001.

                                20
<PAGE>

                              SIGNATURES

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


Dated: November 13, 2001		Braintech, Inc.


                                       "Owen L.J. Jones"

                                       By: Owen L. J. Jones
                                       Director
                                       Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
in the capacities and on the dates indicated.

Signature                       Title                        Date


"Owen L.J. Jones"       Chief Executive Officer,        November 13, 2001
-----------------       Director
Owen L.J. Jones         (Principal Executive Officer)


"Babak Habibi"          President and Director          November 13, 2001
---------------------
Babak Habibi


"Edward A. White"       Chief Financial Officer,        November 13, 2001
-----------------       Director
Edward A. White         (Principal Financial and
                         Accounting Officer)

"Owen L.J. Jones"

                                        21
<PAGE>