UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-QSB

(Mark One)

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

For the quarterly period ended March 31, 2001

OR

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

For the transition period from __________ to __________

Commission File Number: 000-30090
_________________________

IMAGIS TECHNOLOGIES INC.

|British Columbia, Canada
(State or other jurisdiction of
incorporation or organization)                      | Not Applicable
(I.R.S. Employer Identification No.)
|------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------
|                                                                                                             |                                                    
|1300 - 1075 West Georgia Street
Vancouver, British Columbia
V6E 3C9
(Address of principal executive offices)

(604) 684-2449
(Issuer's telephone number)
_________________________



As of May 11, 2001, 13, 348, 298 Common Shares were issued and
outstanding.



Transitional Small Business Disclosure Format (Check one):  
Yes  [   ]    No  [X]

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IMAGIS TECHNOLOGIES INC.

FORM 10-QSB



For the quarterly period ended March 31, 2001



INDEX



|PART 1.  | FINANCIAL INFORMATION |                                                                                                     
|-------- | --------------------- | ----------------------------------------------------------------------------------------------------
|         |                       |                                                                                                     
|         | Item 1.               | Financial Statements                                                                                
|         |                       |                                                                                                     
|         |                       | Consolidated Balance Sheets as of March 31, 2001 
(unaudited) and December 31, 2000                 
|         |                       |                                                                                                     
|         |                       | Consolidated Statements of Operations (unaudited) for
the three months ended March 31, 2001 and 2000
|         |                       |                                                                                                     
|         |                       | Consolidated Statements of Cash Flows (unaudited) for
the three months ended March 31, 2001 and 2000
|         |                       |                                                                                                     
|         |                       | Notes to Consolidated Financial Statements                                                          
|         |                       |                                                                                                     
|         | Item 2.               | Management's Discussion and Analysis or Plan of
Operation                                           
|         |                       |                                                                                                     
|PART II. | OTHER INFORMATION     |                                                                                                     
|         |                       |                                                                                                     
|         | Item 1.               | Legal Proceedings                                                                                   
|         |                       |                                                                                                     
|         | Item 2.               | Changes in Securities                                                                               
|         |                       |                                                                                                     
|         | Item 3.               | Defaults upon Senior Securities                                                                     
|         |                       |                                                                                                     
|         | Item 4.               | Submission of Matters to a Vote of Security Holders                                                 
|         |                       |                                                                                                     
|         | Item 5.               | Other Information                                                                                   
|         |                       |                                                                                                     
|         | Item 6.               | Exhibits and Reports on Form 8-K                                                                    
|         |                       |                                                                                                     
|         | Signatures            | 16                                                                                                  
|         |                       |                                                                                                     
|         | Exhibit Index         | 17                                                                                                  

2

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PART I - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

The following unaudited financial statements for the period
ended March 31, 2001 are included in response to Item 1 and have been compiled
by management.

The financial statements should be read in conjunction with
the Management's Discussion and Analysis and other financial information
included elsewhere in this Form 10-QSB.

|IMAGIS TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
FOR THE PERIODS ENDED MARCH 31, 2001 AND DECEMBER 31, 2000
(expressed in Canadian dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|ASSETS                                                                                                                                         
|                                                                                                                                               
|CURRENT ASSETS                                                                                                                                 
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|LIABILITIES AND DEFICIENCY IN NET
ASSETS                                                                                                       
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|Advances payable                                                                                                                               
|                                                                                                                                               
|Payable to related parties (note 4)                                                                                                            
|                                                                                                                                               
|                                                                                                                                               
|Deficiency in net assets:                                                                                                                      
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               
|                                                                                                                                               



See accompanying notes to consolidated financial
statements.

3

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|IMAGIS TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2001 AND 2000
(expressed in Canadian dollars)
(Unaudited - Prepared by Management)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|Revenues:                                                                                                                                                                                                
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|Expenses:                                                                                                                                                                                                
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|                                                                                                                                                                                                         
|Loss for the period                                                                                                                                                                                      
|                                                                                                                                                                                                         
|Deficit, beginning of period                                                                                                                                                                             
|                                                                                                                                                                                                         
|Deficit, end of period                                                                                                                                                                                   
|                                                                                                                                                                                                         
|Loss per share                                                                                                                                                                                           
|Weighted average number of shares
outstanding                                                                                                                                                            

See accompanying notes to consolidated financial statements.

4

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|IMAGIS TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2001 AND 2000
(expressed in Canadian dollars)
(Unaudited - Prepared by Management)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|Cash provided by (used in):                                                                                                                                                                  
|Cash flows from operating activities:                                                                                                                                                        
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|Cash flows from investing
activities:                                                                                                                                                        
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|Cash flows from financing
activities:                                                                                                                                                        
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|Increase (decrease) in cash                                                                                                                                                                  
|Cash, beginning of period                                                                                                                                                                    
|Cash, end of period                                                                                                                                                                          
|                                                                                                                                                                                             
|Supplementary information and disclosure of non-cash financing
and investing activities                                                                                                      
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             
|                                                                                                                                                                                             

See accompanying notes to consolidated financial statements.

5

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IMAGIS TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(expressed in Canadian dollars)
(Unaudited - Prepared by Management)



1.     Operations:

Imagis Technologies Inc. ("Imagis" or, subsequent
to the transaction described below, the "Company") was incorporated
under the Company Act (British Columbia) on March 23, 1998.  The common shares
of the Company were listed on the Vancouver Stock Exchange, now the Canadian
Venture Exchange (the "Exchange"), on September 9, 1998 as a venture
capital pool corporation ("VCP") as defined by the policies of the
exchange.

On October 6, 1998, Imagis, Imagis Cascade Technologies
("Imagis Cascade"), a private Canadian company which develops and
markets law enforcement and security software products, and the Imagis Cascade
shareholders entered into a Confidentiality and Standstill Agreement pursuant to
which Imagis was able to complete due diligence respecting the business and
affairs of Imagis Cascade.  On October 16, 1998, Imagis gave notice to the
Imagis Cascade shareholders of its intention to acquire all of the issued and
outstanding shares of Imagis Cascade.

Effective February 23, 1999, Imagis acquired 100% of the
outstanding shares of Imagis Cascade.

These financial statements have been prepared on a going
concern basis which includes the assumption that the Company will be able to
realize its assets and settle its liabilities in the normal course of business.
At March 31, 2001, the Company had a deficiency in net assets of $1,389,859 and
had a working capital deficit of $47,980.  Accordingly, the Company will require
continued financial support from its shareholders and creditors until it is able
to generate sufficient cash flow from operations on a sustained basis.  Failure
to obtain ongoing support of its shareholders and creditors may make the going
concern basis of accounting inappropriate in which case the Company's assets and
liabilities would need to be recognized at their liquidation values.  These
financial statements do not include any adjustment due to this going concern
uncertainty.

The Company prepares its consolidated financial statements in
accordance with generally accepted accounting principles in Canada and reflect
the following significant accounting policies:

(a)     Basis of presentation:

These consolidated financial statements include the accounts
of the Company and its wholly owned subsidiary, Imagis Cascade Technologies,
Inc.  All material intercompany balances and transactions have been
eliminated.

(b)     Equipment:

Equipment is recorded at cost and is amortized over its
estimated useful life on a straight-line basis at the following annual
rates:



|Asset                  | Rate
|---------------------- | ----
|Computer hardware      | 30% 
|Furniture and fixtures | 20% 



(c)     Revenue recognition:

(i)     Software sales revenue:

The Company recognizes revenue consistent with Statement of
Position 97-2, "Software Revenue Recognition".  In accordance
with this Statement, revenue is recognized when persuasive evidence of a
contractual arrangement exists, title has passed, delivery and customer
acceptance has occurred, the sales price is fixed or determinable and collection
is reasonably assured.  When software is sold under contractual arrangements
that include post sales customer support, the elements are separated to the
extent of the existence of vendor specific objective evidence.  If such evidence
does not exist, all contracted revenue is recognized as support revenue.  The
Company provides for estimated return and warranty costs, which to date, have
been nominal, on recognition or revenue.



6

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IMAGIS TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(expressed in Canadian dollars)
(Unaudited - Prepared by Management)

2.     Significant accounting
policies, cont'd:

(c)     Revenue recognition,
cont'd:

(ii)     Support revenue:

Contract support services revenue is deferred and is
amortized to revenue over the period that the support services are provided.

(d)     Use of estimates:

The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported or disclosed in the financial
statements.  Actual amounts may differ from these estimates.

(e)     Foreign currency:

Monetary items denominated in foreign currencies are
translated to Canadian dollars at exchange rates in effect at the balance sheet
date.  Revenues and expenses are translated to using rates in effect at the time
of the transactions.  Foreign exchange gains and losses are included in
income.

(f)     Income taxes:

The Company uses the asset and liability method of accounting
for income taxes.  Under the asset and liability method, future tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases.  Future tax assets and
liabilities are measured using enacted or substantively enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.  The effect on future tax
assets and liabilities of a change in tax rates is recognized to income in the
period that includes the date of enactment or substantive enactment.  To the
extent that it is not considered to be more likely than not that a deferred tax
asset will be realized, a valuation allowance is provided.

(g)     Stock compensation:

The Company has a stock option plan.  No compensation expense
is recognized when stock options are issued.  Any consideration paid on exercise
of stock options is credited to share capital.

(h)     Loss per share:

Loss per share is calculated using the weighted average
number of shares outstanding during the fiscal period.  This average includes
outstanding common shares issued in a reporting period from their date of
issuance.  Fully diluted per share amounts are not presented as the effect of
outstanding options and warrants is anti-dilutive.

(i)     Unaudited interim financial
information:

The information as at March 31, 2001 and for the three month
periods ended March 31, 2001 and 2000 is unaudited.  However, such financial
information reflects all adjustments (consisting solely of normal recurring
adjustments) necessary for a fair presentation of the results for the periods
presented.  The unaudited interim consolidated financial statements are prepared
using accounting policies consistent with and should be used in conjunction with
the Company's consolidated financial statements as at and for the year ended
December 31, 2000 which are included in the Company's 2000 Annual Report on Form
10-KSB.

7

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IMAGIS TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(expressed in Canadian dollars)
(Unaudited - Prepared by Management)

During the period, the Company entered into a loan agreement with
a related party.   The funds advanced under the agreement are unsecured and
subject to interest at a rate of 8% per annum.



|                                        |   | March 31, 2001 | 
|--------------------------------------- | - | -------------- | 
|                                        |   |                | 
|International Portfolio Management
Inc. | $ | 804,226        | 
|Pacific Cascade Consultants Ltd.        |   | 444,095        | 
|                                        | $ | 1,248,321      | 

The amounts owing are non-interest bearing, unsecured and
have no specific terms of repayment.

5.     Share capital:

(a)     Authorized:

100,000,000 common shares without par value

(b)     Issued:

|                                          | Number
of shares                                                     |           | Amount    |          
|----------------------------------------- | -------------------------------------------------------------------- | --------- | --------- | ---------
|                                          |                                                                      |           |           |          
|Balance, December 31, 1999                | 8,958,214                                                            |           | 3,223,995 |          
|Issued during the year for cash:          |                                                                      |           |           |          
|                                          | On private placement                                                 | 875,000   |           | 700,000  
|                                          | On debt conversion, including value assigned to warrants on issuance | 930,000   |           | 730,200  
|                                          | Options exercised                                                    | 442,170   |           | 442,170  
|                                          | Warrants exercised                                                   | 1,749,000 |           | 1,261,200
|                                          | Issued for services related to private
placement                     | 11,581    |           | 7,296    
|                                          | Share issuance costs                                                 | --        |           | (35,706  
|Balance, December 31, 2000                | 12,965,965                                                           |           | 6,329,155 |          
|Issued during the period for cash:        |                                                                      |           |           |          
|                                          | Options exercised                                                    | 6,333     |           | 6,333    
|                                          | Warrants exercised                                                   | 80,000    |           | 64,000   
|Issued as bonus shares per loan
agreement | 20,000                                                               |           | 29,000    |          
|Share issuance costs                      | --                                                                   |           | (527      | )        
|Balance, March 31, 2001                   | 13,072,298                                                           | $         | 6,427,961 |          

(c)     Escrowed shares:

As at March 31, 2001, 270,670 common shares are being held in
escrow.  These shares will be released on February 23, 2002.

8

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IMAGIS TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(expressed in Canadian dollars)
(Unaudited - Prepared by Management)

5.     Share capital, cont'd:

(d)     Warrants:

|December 31, 
2000 | Granted | Exercised |   | Expired |  | March 31,
2001 | Exercise
price | Expiry date      
|------------------ | ------- | --------- | - | ------- |  | -------------- | -------------- | -----------------
|266,666            | --      | --        |   | --      |  | 266,666        | $1.25          | February 23, 2002
|133,334            | --      | --        |   | --      |  | 133,334        | $1.25          | February 23, 2003
|80,000             | --      | (80,000   | ) | --      |  | --             | $0.80          | --               
|200,000            | --      | --        |   | --      |  | 200,000        | $3.50          | April 7, 2001    
|50,000             | --      | --        |   | --      |  | 50,000         | $4.00          | June 16, 2002    
|730,000            | --      | (80,000   | ) | --      |  | 650,000        |                |                  



(e)     Options:

|December 31, 
2000 | Granted | Exercised |   | Expired |   | March 31,
2001 | Exercise
price | Expiry date                 
|------------------ | ------- | --------- | - | ------- | - | -------------- | -------------- | ----------------------------
|230,000            | --      | --        |   | --      |   | 230,000        | $0.30          | July 6, 2003                
|646,164            | --      | (6,333    | ) | (3,333  | ) | 636,498        | $1.00          | Various to
February 21, 2006
|550,000            | 15,000  | --        |   | --      |   | 565,000        | $1.50 to
$2.90 | Various to
December 20, 2005
|1,426,164          | 15,000  | (6,333    | ) | (3,333  | ) | 1,431,498      |                |                             

6.     Related party transactions
not disclosed elsewhere are as follows:

(a)     included in accounts payable
and accrued liabilities is $88,248 which is due to companies with a director in
common.

(b)     included in administration
expense is $61,725 for payments made to a company with a director in common for
services rendered to the Company.

7.     Subsequent events:

Subsequent to March 31, 2001:

(a)     The Company signed a note
with a related party on April 2, 2001 for $492,890.  The note was due on May 1,
2001.  This note bore interest at 10% per annum, compounded monthly and was
repaid as due on May 1, 2001.

(b)     On May 2, 2001, Imagis
announced, further to news releases of February 19 and March 22, 2001, the
completion of the first closing of the private placement in the amount of
973,000 units at $1.00 per unit for total gross proceeds of $973,000.  Each unit
consists of one common share and one non-transferable share purchase warrant,
with each warrant exercisable into an additional common share for a period of
one year from closing at a price of $1.10 per share.  Canaccord Capital
Corporation acted as agent in respect of 697,000 units of the placement, and it
was therefore paid $52,275 as commission and issued 69,700 broker's warrants
having the same terms as the warrants under the placement.  Securities issued
pursuant to the placement are subject to a four-month hold period expiring on
August 26, 2001.

9

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IMAGIS TECHNOLOGIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(expressed in Canadian dollars)
(Unaudited - Prepared by Management)

These consolidated financial statements have been
prepared in accordance with generally accepted accounting principles in Canada
("Canadian GAAP") which differ in certain respects with accounting
principles generally accepted in the United States ("U.S. GAAP").
See note 14 of the Company's 2000 Annual Report on Form 10-KSB for a qualitative
description of material differences between Canadian and U.S. GAAP.  The effect
of these accounting differences on deficit, net loss and loss per share under
United States accounting principles are as follows:



|                                        |                    | March 31, 
2001 |  |   | December 31, 
2000 | 
|--------------------------------------- | ------------------ | --------------- |  | - | ------------------ | 
|Deficit, Canadian GAAP                  | $                  | (7,817,820)     |  | $ | (7,169,932)        | 
|Cumulative stock based compensation
(a) |                    | (937,051)       |  |   | (904,501)          | 
|Beneficial conversion options           |                    | (208,200)       |  |   | (208,200)          | 
|Warrants issued for services            |                    | (722,000)       |  |   | (722,000)          | 
|Deficit, U.S. GAAP                      | $                  | (9,685,071)     |  | $ | (9,004,633)        | 
|                                        |                    |                 |  |   |                    | 
|                                        | Three months Ended
|                                        |                    | March 31, 
2001 |  |   | March 31, 
2000    | 
|Loss for the year, Canadian GAAP        | $                  | (647,888)       |  |   | (625,909)          | 
|Stock based compensation (a)            |                    | (32,550)        |  |   | (4,580)            | 
|Warrants issued for services            |                    | --              |  |   | (180,500)          | 
|Loss for the year, U.S. GAAP            | $                  | (680,438)       |  | $ | (810,989           | 
|Net loss per share, U.S. GAAP           | $                  | (0.05)          |  | $ | (0.08              | 



a)     Stock-based compensation:

During the year ended December 31, 2000, the Company granted
stock options to certain non-employees for management advisory services provided
to the Company.  For U.S. GAAP purposes, options granted to non-employee
consultants are required to be measured and recognized at their fair value as
the services are provided and the options are earned.

10

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

Forward-Looking Statements:

Statements in this Quarterly Report on Form 10-QSB, including
those concerning Imagis Technologies Inc.'s (the "Company" or
"Imagis") expectations of future sales, gross profits, sales and
marketing expenses, technical services expenses, technology development
expenses, administration expenses, product introductions and cash requirements
include certain forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and
Section 21E of the Securities Exchange Act of 1934, as amended.  As such, the
Company's actual results may vary materially from expectations as a result of
certain factors including, but not limited to, variations in the level of orders
which can be affected by general economic conditions and in the markets served
by the Company's customers, international economic and political climates,
difficulties or delays in the functionality or performance of the Company's
products, the Company's timing of future product releases, the Company's failure
to respond adequately to either changes in technology or customer preferences,
changes in pricing or that of the Company's competitors, the Company's ability
to manage growth, risk of nonpayment of accounts receivable, changes in budgeted
costs and the factors listed on Exhibit 99.1 to this Quarterly Report, which are
hereby incorporated by reference in this Quarterly Report.

In some cases, you can identify forward-looking statements by
the Company's use of words such as "may," "will,"
"should," "could," "expect," "plan,"
"intend," "anticipate," "believe,"
"estimate," "predict," "potential" or
"continue" or the negative or other variations of these words, or
other comparable words or phrases.

Although the Company believes the expectations reflected in
its forward-looking statements are reasonable, it cannot guarantee future
results, levels of activity, performance or achievements or other future events.
Moreover, neither it nor anyone else assumes responsibility for the accuracy and
completeness of forward-looking statements.  The Company is under no duty to
update any of our forward-looking statements after the date of this filing. You
should not place undue reliance on forward-looking statements.

Unless otherwise indicated, all references herein are to
 Canadian Dollars.

Comparison of Results of Operations for the three months
ended March 31, 2001 and March 31, 2000:

Revenues:

The Company's revenues for the quarter ended March 31, 2001
were $353,836, compared to $195,135 for the quarter ended March 31, 2000, which
represents an increase of approximately 81%.  Sales of the Company's software
increased approximately 108% to $193,045 for the quarter ended March 31, 2001,
compared to $92,742 for the quarter ended March 31, 2000.  Support and service
revenues increased approximately 57% to $160,791 for the quarter ended March 31,
2001, compared to $102,393 for the quarter ended March 31, 2000.

Operating Costs:

The Company's operating costs increased for the quarter ended
March 31, 2001 to $1,001,724, compared to $821,044 for the quarter ended March
31, 2000, which represents an increase of approximately 22%.  Operating costs
include cost of materials and services, sales and marketing, technical services,
technology development, administration, amortization and interest.

Cost of Materials and Services:

The Company's materials and service costs in conjunction with
the support services that it provides to customers for the quarter ended March
31, 2001 were $33,848, compared to $27,025 for the quarter ended March 31, 2000,
which represents an increase of approximately 25%.  This increase reflects costs
associated with the higher support revenues earned to date.

Sales and Marketing:

The Company's sales and marketing costs for the quarter ended
March 31, 2001 were $260,422, compared to $223,894 for the quarter ended March
31, 2000, which represents an increase of approximately 16%. This increase is
attributable to higher salary costs reflecting additions to staff over the prior
year. Travel and trade show costs also rose slightly due to the increase in
staff over the prior year level.

11

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Technical Services:

The Company's technology services costs for the quarter ended
March 31, 2001 were $175,018, compared to $149,948 for the quarter ended March
31, 2000, which represents an increase of 17%.  This increase reflects staff
additions to the technical services group. The technical services group assists
the Company's strategic partners in the installation of its products and also
provides clients with all technical support they may require under the Company's
annual support contracts, and includes costs for salaries, facilities and
travel.

Technology Development:

The Company's technology development costs for the quarter
ended March 31, 2001 were $273,643, compared to $175,218 for the quarter ended
March 31, 2000, which represents an increase of 56%.  This increase over the
prior period reflects several additions to staff that were necessary, primarily
to continue the development of ID-2000. Recently, the Company completed the
conversion of its core technology into a software development kit (SDK) format
which permits a far broader range of applications of this facial recognition
software. Staff salaries accounted for approximately 73% of the total costs of
this function with the remainder attributable to support facilities.

Administration:

The Company's administration costs for the quarter ended
March 31, 2001 were $221,985, compared to $222,755 for the quarter ended March
31, 2000. Administrative costs include staff salaries, professional fees,
facility and support costs, shareholder and regulatory costs. Costs in each
category were generally consistent with the prior year period, except for
professional fees and travel costs which were higher in 2001. These increases,
however, were more than offset by a foreign exchange gain of $34,993 realized
in the quarter.

Amortization:

The Company's amortization costs for the quarter ended March
31, 2001 were $4,776, compared to $22,204 for the quarter ended March 31, 2000.
The decline in amortization costs reflects the Company's decision, following the
acquisition of Imagis Cascade, to initiate a lease-financing program for all
purchases of new equipment and, as a consequence, the Company's existing fixed
assets are almost fully depreciated at this time.

Interest:

The Company's interest costs for the quarter ended March 31,
2001 were $32,032, compared to no such costs for the quarter ended March 31,
2000.   The interest costs are related to the debt portion of the convertible
loan.

Net Loss for the Period:

The Company's net loss for the quarter ended March 31, 2001
was $647,888, or $0.05 per share, compared to $625,909, or $0.06 per share, for
the quarter ended March 31, 2000, which represents a decrease of approximately
4%.

Liquidity and Capital Resources:

The Company's financial statements are prepared assuming it
will continue as a going concern.  The Company has suffered losses from
operations and it has no established source of significant revenue.
Accordingly, the Company's auditors have qualified their report on our
consolidated financial statements as at December 31, 2000 and 1999 and for the
period ended December 31, 2000 because of substantial doubts as to our ability
to continue as a going concern.

At year-end, the Company's cash position was $59,497,
however, the Company announced its intention to arrange for additional financing
for working capital purposes. Due to market weakening in the first quarter of
2001, the Company was delayed in completing the announced private placement of
approximately $1.4 million and only completed the first closing of 973,000
shares, which yielded gross proceeds to the Company of $973,000 on April 26,
2001. In the interim, the Company arranged for a line of credit of up to
$200,000 from related parties and received $98,559 from this line. As
compensation for the advancement of the funds from related parties under this
credit arrangement, the Company issued 20,000 common shares valued at the then
current market price of $1.45 per share, or $29,000. This was a non-cash cost to
the Company.  In addition, during the quarter, the Company received other
advances of $176,004 from related parties outside of this credit arrangement, an
advance on the intended private placement of $48,500 and proceeds from the
exercise of 6,333 options and 80,000 warrants which yielded $70,333.
Consequently, cash inflows from financing activities aggregated $388,167 for the
first quarter of 2001.

12

---

Due to the Company's operating loss in the quarter, it
experienced a net reduction in its available cash of $647,888.  This was
significantly offset, however, by a substantial reduction in the Company's
outstanding receivables of $312,254 and the receipt of additional prepayments of
annual support contract fees providing $57,306. The net impact on cash from
operations as a result of these adjustments and the reduction in the Company's
current liabilities of $173,824 was a reduction in cash of $415,344.

In summary, while the Company added cash through various
means totaling $388,167, as a result of the first quarter operating loss which
reduced its available cash after adjustments by $415,344, the Company closed the
quarter with a net reduction in its cash amounting to $28,813 and had cash on
hand of $30,684 at the end of the quarter.

As noted above, the Company completed a private placement of
973,000 units following the quarter end. Each unit was priced at $1.00 and
consisted of one (1) common share and one (1) share purchase warrant to purchase
an additional common share at an exercise price of $1.10 for a period of one (1)
year from the closing date.

Presently, the Company is slightly ahead of planned revenues,
while its costs are on budget.  The Company expects its operating costs to
remain essentially constant throughout the remainder of the year.  Based upon
management's projections at this time, the Company believes that it will be
able to sustain its operations over the near term and, the Company completes the
second and final closing with net proceeds of approximately $400,000, management
believes that no further financing will be necessary for the remainder of the
year to meet its internal targets for staffing and operations.

There is no assurance that the Company will be able to secure
financing or that such financing will be obtained on terms favorable to the
Company.  Failure to obtain adequate financing could result in significant
delays in development of new products and a substantial curtailment of
operations.

PART II

Item 1.     Legal Proceedings.



As of the date of this Quarterly Report, the Company is not a
party to any legal proceedings, the adverse outcome of which, in management's
opinion, individually or in the aggregate, would have a material effect on the
Company's results of operations or financial position.  From time to time, the
Company may be involved in litigation relating to claims arising out of its
operations in the normal course of business.

Item 2.     Changes in Securities.

a)         
None

b)         
None

c)         
During the quarter ended
March 31, 2001, the Company sold 6,333 common shares pursuant to the exercise of
stock options 
         
   granted under its 1999 Stock Option Plan for aggregate
proceeds to the Company of Cdn$3,333.

During the quarter ended March 31, 2001, the Company issued
20,000 common shares pursuant to the terms of a convertible loan agreement in
which the shares were to be issued to the lender as a bonus.  The deemed value
of the shares was Cdn$1.45 per share.  The shares are subject to a four (4)
month hold period expiring May 12, 2001.

During the quarter ended March 31, 2001, the Company sold
80,000 common shares pursuant to the exercise of warrants issued under previous
financings.  These transactions provided aggregate proceeds to the Company of
Cdn$64,000.

On January 3, 2001, the Company granted 15,000 options under
its 1999 Stock Option Plan to an employee that are exercisable at a price of
Cdn$1.87 and expire on January 4, 2006.  Subsequent to the end of the quarter,
on April 9, 2001, these options expired as a result of the employee's
departure.

In connection with each of the above issuances of securities,
the Company relied on the exemption from registration provided by Rule 903(b)(1)
of Regulation S under the Securities Act.  In each instance, the securities were
issued by the Company, a "foreign issuer," as defined by Regulation S,
to persons outside the United States.

13

---

d)         
None



Item 3.     Defaults Upon Senior
Securities.

None

Item 4.     Submission of Matters
to a Vote of Security Holders

None

Item 5.     Other Information

None

Item 6.     Exhibits and Reports
Filed on Form 8-K

a)     Exhibits



|3.1*   | Articles of Incorporation                                                                                                                                                                                        
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1*   | Shareholder Agreement dated February 23, 1999
among the Original Shareholders and the Former Imagis Shareholders                                                                                                 
|4.2*   | Escrow Agreement for a Venture Capital Pool
Issuer dated July 3, 1998 among Colloquium Capital Corp., CIBC Mellon Trust
Company and Sandra Buschau, Altaf Nazerali, Shafiq Nazerali, Rory Godinho and
Ross Wilmot
|4.3+   | Convertible Note Subscription Agreement dated
October 1, 1999                                                                                                                                                    
|10.1*  | Incentive Stock Option Agreements dated July 7,
1998 between Imagis and each of Sandra E. Buschau, Altaf Nazerali and Ross
Wilmot                                                                                
|10.2*  | Confidentiality and Non-Competition Agreement
dated February 23, 1999 among Imagis, the Former Imagis Shareholders and the
principals of the Former Imagis Shareholders                                          
|10.3*  | Revenue Assignment Agreement dated December 15,
1998 among Imagis, Pacific, Imagis Solutions (US) Incorporated and Imagis North
West Solutions Inc.                                                              
|10.4*  | Agency Agreement dated March 29, 1999 among
Imagis and the Agents                                                                                                                                                
|10.5*  | Subscription Agreement dated January 26, 1999
between Imagis and Pacific Cascade Consultants Ltd.                                                                                                                
|10.6*  | Subscription Agreement dated January 26, 1999
between Imagis and First Capital Invest Corp.                                                                                                                      
|10.7*  | Incentive Stock Option Agreements dated February
25, 1999 and March 25, 1999 between Imagis and certain directors, employees and
service providers of Imagis or affiliates or subsidiaries thereof               
|10.8*  | Consulting Services Agreement effective February
25, 1999 between Imagis and Shafiq Nazerali-Walji                                                                                                               
|10.9*  | Warrant dated February 25, 1999 issued to Iain
Drummond                                                                                                                                                          
|10.10* | Warrant dated February 25, 1999 issued to
Armitage and Associates                                                                                                                                                
|10.11* | Employment Agreement dated February 23, 1999
between Imagis and Iain Drummond                                                                                                                                    

14

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|10.12*   | Technology Purchase Agreement dated March 6, 1998
among Imagis Technologies Ltd., Imagis Cascade Technologies Inc. and Penelope
Walker, Richard Graham and William Hawkes
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.13*   | Technology Purchase Agreement dated March 6,
1998 among Imagis, Images Cascade Consultants, Inc. and Former Imagis
Shareholders                                          
|10.14*   | Share Purchase Agreement dated December 14, 1998
among Imagis, Imagis Cascade and the Former Imagis Shareholders                                                         
|10.15*   | Confidentiality and Standstill Agreement dated
October 6, 1998 among Colloquim Capital Corp., Imagis Cascade Technologies Inc.
and Former Imagis Shareholders            
|10.16+   | Loan Agreement dated October 15, 1999 between
Imagis and Rexton Corporation                                                                                              
|10.17++  | Agreement dated May 1, 2000 between Imagis and
Somerset Financial Group Inc.                                                                                             
|10.18++  | Agreement dated August 15, 2000 between Imagis
and GPC Communications                                                                                                    
|10.19++  | Agreement dated August 21, 2000 between Imagis
and Fleishman-Hillard Canada Inc.                                                                                         
|10.20+++ | Imagis Technologies Inc. 2000 Stock Option
Plan                                                                                                                          
|10.21+++ | Agreement dated October 11, 2000 between Imagis
and Orion Scientific Systems Inc.                                                                                        
|10.22    | Imagis Technologies Inc. 1999 Stock Option
Plan                                                                                                                          
|16.1*    | Letter to SEC dated December 10, 1998 from
Elliott Tulk Pryce and Anderson regarding change in certifying
accounts                                                       
|99.1     | Risk Factors                                                                                                                                                             
|99.2     | Form 51-901F as required by the British Columbia
Securities Commission                                                                                                   

*  Previously filed as part of Imagis' Registration Statement on Form 10-SB
(File No. 000-30090).
+  Previously filed as part of Imagis' Annual Report on Form 10-KSB for the
year ended December 31, 1999.
++ Previously filed as part of Imagis' Quarterly Report on Form 10-QSB for
the period ended September 30, 2000.
+++ Previsouly filed as part of Imagis' Annual Report on Form
10-KSB for the year ended December 31, 2000.



b)     Reports on Form 8-K

On February 21, 2001, the Company filed a Form 8-K relating
to a press release dated February 19, 2001, in which the Company announced that
would conduct, subject to regulatory approvals, a private placement of 1,270,000
common shares, with warrants, at a price of $1.20 per share for total proceeds
to the Company of $1,524,000.



On March 8, 2001, the Company filed a Form 8-K relating to
(i) a press release dated March 1, 2001, in which the Company announced that it
and the West Covina Service Group will integrate their software to supply the
Chino Police in San Bernardino County, California with a complete law
enforcement suite and (ii) a press release dated March 6, 2001, in which the
Company announced that it and the West Covina Service Group will integrate their
software to supply the Fullerton Police in Orange County, California with a
complete law enforcement suite.



On March 12, 2001, the Company filed a Form 8-K relating to a
press release dated March 7, 2001, in which the Company announced the adoption
of its 2000 Stock Option Plan.



On March 27, 2001, the Company filed a Form 8-K relating to
a press release dated March 22, 2001, in which the Company announced that the
terms of its proposed private placement announced on February 19, 2001 had
changed.  The Company will now be offering 1,540,000 common shares at a price
of $1.00 per share.

15

---

SIGNATURES

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

Dated:  May 15, 2000

| | IMAGIS TECHNOLOGIES INC.                          
| | --------------------------------------------------
| |                                                   
| |                                                   
| | /s/ Iain Drummond                                 
| | Iain DrummondPresident and Chief Executive Officer
| |                                                   
| |                                                   
| | /s/ Ross Wilmot                                   
| | Ross WilmotChief Financial Officer                

16

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EXHIBIT INDEX



|Exhibit No. | Description                                                                                                                                                                                                      
|----------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1*        | Articles of Incorporation                                                                                                                                                                                        
|4.1*        | Shareholder Agreement dated February 23, 1999
among the Original Shareholders and the Former Imagis Shareholders                                                                                                 
|4.2*        | Escrow Agreement for a Venture Capital Pool
Issuer dated July 3, 1998 among Colloquium Capital Corp., CIBC Mellon Trust
Company and Sandra Buschau, Altaf Nazerali, Shafiq Nazerali, Rory Godinho and
Ross Wilmot
|4.3+        | Convertible Note Subscription Agreement dated
October 1, 1999                                                                                                                                                    
|10.1*       | Incentive Stock Option Agreements dated July 7,
1998 between Imagis and each of Sandra E. Buschau, Altaf Nazerali and Ross
Wilmot                                                                                
|10.2*       | Confidentiality and Non-Competition Agreement
dated February 23, 1999 among Imagis, the Former Imagis Shareholders and the
principals of the Former Imagis Shareholders                                          
|10.3*       | Revenue Assignment Agreement dated December 15,
1998 among Imagis, Pacific, Imagis Solutions (US) Incorporated and Imagis North
West Solutions Inc.                                                              
|10.4*       | Agency Agreement dated March 29, 1999 among
Imagis and the Agents                                                                                                                                                
|10.5*       | Subscription Agreement dated January 26, 1999
between Imagis and Pacific Cascade Consultants Ltd.                                                                                                                
|10.6*       | Subscription Agreement dated January 26, 1999
between Imagis and First Capital Invest Corp.                                                                                                                      
|10.7*       | Incentive Stock Option Agreements dated February
25, 1999 and March 25, 1999 between Imagis and certain directors, employees and service providers of Imagis or affiliates or subsidiaries thereof               
|10.8*       | Consulting Services Agreement effective February
25, 1999 between Imagis and Shafiq Nazerali-Walji                                                                                                               
|10.9*       | Warrant dated February 25, 1999 issued to Iain
Drummond                                                                                                                                                          
|10.10*      | Warrant dated February 25, 1999 issued to
Armitage and Associates                                                                                                                                                
|10.11*      | Employment Agreement dated February 23, 1999
between Imagis and Iain Drummond                                                                                                                                    
|10.12*      | Technology Purchase Agreement dated March 6,
1998 among Imagis Technologies Ltd., Imagis Cascade Technologies Inc. and
Penelope Walker, Richard Graham and William Hawkes                                        
|10.13*      | Technology Purchase Agreement dated March 6,
1998 among Imagis, Images Cascade Consultants, Inc. and Former Imagis
Shareholders                                                                                  
|10.14*      | Share Purchase Agreement dated December 14, 1998
among Imagis, Imagis Cascade and the Former Imagis Shareholders                                                                                                 
|10.15*      | Confidentiality and Standstill Agreement dated
October 6, 1998 among Colloquim Capital Corp., Imagis Cascade Technologies Inc.
and Former Imagis Shareholders                                                    

17

---





|10.16+   | Loan Agreement dated October 15, 1999 between
Imagis and Rexton Corporation                                       
|-------- | ------------------------------------------------------------------------------------------------------------------
|10.17++  | Agreement dated May 1, 2000 between Imagis and
Somerset Financial Group Inc.                                      
|10.18++  | Agreement dated August 15, 2000 between Imagis
and GPC Communications                                             
|10.19++  | Agreement dated August 21, 2000 between Imagis
and Fleishman-Hillard Canada Inc.                                  
|10.20+++ | Imagis Technologies Inc. 2000 Stock Option
Plan                                                                   
|10.21+++ | Agreement dated October 11, 2000 between Imagis
and Orion Scientific Systems Inc.                                 
|10.22    | Imagis Technologies Inc. 1999 Stock Option
Plan                                                                   
|16.1*    | Letter to SEC dated December 10, 1998 from
Elliott Tulk Pryce and Anderson regarding change in certifying
accounts
|99.1     | Risk Factors                                                                                                      
|99.2     | Form 51-901F as required by the British Columbia
Securities Commission                                            

*  Previously filed as part of Imagis' Registration Statement on Form 10-SB
(File No. 000-30090).
+  Previously filed as part of Imagis' Annual Report on Form 10-KSB for the
year ended December 31, 1999.
++ Previously filed as part of Imagis' Quarterly Report on Form 10-QSB for
the period ended September 30, 2000.
+++ Previsouly filed as part of the Imagis' Annual Report on
Form 10-KSB for the year ended December 31, 2000.

18