UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For: ~~2003~~2004 ~~THIRD~~FIRST QUARTER REPORT FOR THE THREE MONTHS ~~AND NINE MONTHS~~ ENDED ~~SEPTEMBER~~MARCH 3031, ~~2003~~2004

AND NEWS RELEASES FOR ~~AUGUST~~THE ~~THROUGH~~MONTH ~~OCTOBER~~OF ~~2003~~APRIL

COMMISSION FILE NUMBER: 000-29614

TRIANT TECHNOLOGIES INC.

(Exact name of Registrant as specified in its charter)

20 TOWNSITE ROAD, 2^ND FLOOR

NANAIMO, BRITISH COLUMBIA

CANADA V9S 5T7

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F

Form 20-F

[ X ]

Form 40-F

[ ]

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 13g3-2(b) under the Securities Exchange Act of 1934.

Yes

[ ]

[ X ]

If ‘Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

TRIANT TECHNOLOGIES INC.

~~2003~~2004 ~~THIRD~~FIRST QUARTER REPORT

Three months ~~and nine months~~ ended ~~September~~March 3031, ~~2003~~2004

TRIANT TECHNOLOGIES INC.

~~2003~~2004 ~~THIRD~~FIRST QUARTER REPORT

Three months ~~and nine months~~ ended ~~September~~March 3031, ~~2003~~2004

CORPORATE PROFILE

Triant Technologies Inc. is a leader in equipment health monitoring, advanced fault detection and sophisticated data analysis technology. Our initial industry focus is the semiconductor industry where we provide innovative APC (Advanced Process Control) software solutions that enable our customers to improve their productivity and lower their manufacturing costs. In addition to our work in the semiconductor industry, we are pursuing significant opportunities for our technology in other industries and vertical markets.

To address the large market opportunity in the semiconductor industry, we have developed ModelWare^®, a complete equipment health monitoring and advanced fault detection software solution. Leading semiconductor companies are using ModelWare to improve their competitive advantage in manufacturing silicon chips.

Our core technology is UPM^TM (Universal Process Modeling), a proprietary advanced mathematical algorithm that can be used to model the behavior of any correlated system or process turning raw data into useful information. UPM, the heart of ModelWare, is key to our strategy of developing new products and services around our core technology for the semiconductor market, as well as other vertical markets.

CONTENTS

Corporate Profile

Letter to Shareholders

Management’s Discussion and Analysis

Consolidated Financial Statements

Corporate Directory and Other Information

TRIANT TECHNOLOGIES INC.

2003 THIRD QUARTER REPORT

Three months and nine months ended September 30, 2003

LETTER TO SHAREHOLDERS

Third Quarter 2003 Operational Results

Triant’s revenue for the first nine months of 2003 was $4.4 million compared to $4.7 million for the first nine months of 2002, while operating losses were $2.1 million compared to $3.6 million. The weak world economy and semiconductor industry for the past two years have reduced capital spending and have lengthened the Company’s sales cycle in some cases. The Company believes the demand for APC (Advanced Process Control) products and services will continue to increase on a year-over-year basis as customers realize their benefits. Research and development expenses were lowered to $1.9 million from $3.0 million, primarily reflecting the Company’s transition during 2002 away from using outsourced software development services. The net loss for the nine months of 2003 decreased to $2.7 million from $3.4 million for the comparative period and we remained financially strong with cash resources of $9.0 million at quarter-end.

We estimate our break-even revenue point for 2003 at around $10 million, which is based on the Company’s estimates of a 76% average gross margin, $4.2 million for research and development expenses, and $3.6 million for selling, general and administrative expenses. As substantially all our sales are conducted in U.S. dollars and our expenses are primarily in Canadian dollars, it should be noted that a stronger Canadian dollar has the effect of making it more challenging to reach this break-even point.

We are making good progress in our market development activities, which include opening up new accounts and further strengthening our relationships with key existing accounts. We are currently deployed on over 3,500 pieces of equipment and five out of the top ten semiconductor manufacturers use ModelWare, which we believe clearly puts us in a leading position amongst APC vendors.

We continue to focus on securing fab-wide licenses for ModelWare. We anticipate entering into several new fab-wide licenses in the near term and have significant opportunities in Korea, Japan and Taiwan.

Despite the industry uncertainty, our customers are cautiously deploying APC solutions to provide them with a competitive advantage in the area of advanced manufacturing. We are seeing more and more focus from our customers on fab-wide deployments as they realize the benefits of our solution.

Our growth strategy is to focus on the semiconductor industry and develop a sustainable and profitable business in this industry segment. In addition, we are cautiously exploring opportunities in other vertical markets where our technology can be used.

One such market is psychometrics, which we define as the ability to measure and classify human characteristics. Triant’s Psychometric Division has successfully introduced its C-RASTM product into the corrections industry within the United States. C-RAS stands for Corrections Risk Assessment System and is a state-of-the-art software tool, which uses Triant’s proprietary modeling technology to provide corrections agencies with valuable risk assessment information on offenders. While still at a very early stage of adoption, we have seen many states express considerable interest in C-RAS within their Departments of Corrections.

Our vision remains the same – building a global business centered on our core competencies and unique technology.

Key Fiscal 2003 Operational Objectives

We believe Triant is well positioned for continued growth and can increase revenue in 2003 by meeting the following objectives:

•

Expanding deployments of ModelWare in existing accounts and opening up new accounts in Asia, USA and Europe where evaluations are in-progress

•

Aggressively pricing ModelWare for fab-wide deployment

•

Continuing to build an excellent global sales, support and service organization

•

Focusing our Applications Engineering group on solving our customers’ tough manufacturing problems thereby providing a solid return on investment for the deployment of ModelWare

•

Enhancing ModelWare; developing new and complementary products aimed at the semiconductor industry; and cautiously exploring new vertical markets

Outlook

We continue to work diligently to provide our global customers with fab-wide solutions to improve the effectiveness of their wafer processing equipment. We believe that the unfolding migration to 300mm fabrication plants will be a key catalyst for broad APC adoption.

Semiconductor manufacturers are increasingly interested in implementing fab-wide APC solutions, rather than smaller quantities of licenses; it is not unusual for a manufacturer to plan for multiple fab-wide licenses. The market is now maturing, and our customers want to buy a standard product and have it implemented quickly and effectively, so that they can enjoy the benefits of APC. There are encouraging signs that APC will become a manufacturing standard in the semiconductor industry.

Our outlook for the remainder of 2003 continues to be positive, as we believe Triant is the industry leader in terms of the number of fault detection licenses implemented. Our increasing deployments of ModelWare licenses globally indicate that there is a growing demand for this technology from the leading semiconductor manufacturers.

(Signed) Robert Heath

Robert Heath

Chairman and Chief Executive Officer

TRIANT TECHNOLOGIES INC.

2003 THIRD QUARTER REPORT

Three months and nine months ended September 30, 2003

MANAGEMENT’S DISCUSSION AND ANALYSIS

~~The~~For ~~following discussion should be read in conjunction with, and is qualified in its entirety by,~~ the ~~Company’s~~three ~~audited~~months ~~annual consolidated financial statements and notes thereto for the year~~ ended ~~December~~March 31, 2002 and the unaudited interim consolidated financial statements and notes thereto for the nine months ended September 30, 2003. Those interim financial statements have been prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP) for interim financial statements as disclosed in Note 1 to those interim financial statements, which in the case of those interim financial statements, conform in all material respects with those in the United States (U.S. GAAP), except as disclosed in Note 7 to those interim financial statements and discussed herein. All figures herein are expressed in Canadian dollars unless otherwise noted.2004

The following discussion should be read in conjunction with, and is qualified in its entirety by, the Consolidated Financial Statements of the Company for the year ended December 31, 2003 and the unaudited Interim Consolidated Financial Statements for the three months ended March 31, 2004. Those interim financial statements have been prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP) for interim financial statements as disclosed in Note 1 to those interim financial statements, which in the case of those interim financial statements, conform in all material respects with those in the United States (U.S. GAAP), except as disclosed in Note 8 to those interim financial statements and discussed herein. All figures herein are expressed in Canadian dollars unless otherwise noted.

Operating Results

General

The nature of operations is outlined within Note 1 to the ~~Company’s~~ annual ~~audited~~Consolidated ~~consolidated~~Financial ~~financial~~Statements ~~statements~~of the Company. The Company develops, markets, and supports equipment health monitoring, advanced fault detection and sophisticated data analysis technology. The ~~Company’s~~ revenue of the Company is derived principally from the sale of software licenses, products and services, including software updates and maintenance services provided pursuant to annual service agreements. The Company currently derives revenue primarily from a limited number of customers in the semiconductor industry. As these customers are geographically dispersed and the Company closely monitors credit granted to each customer, credit risks are considered to be minimal. The Company identifies Canada as the primary economic environment in which it operates and uses the Canadian dollar as its functional currency. A substantial amount of the ~~Company’s~~ revenue of the Company and receivables isare denominated in U.S. dollars. The Company translates revenue and the related receivable at the prevailing exchange rate at the time of the sale. Funds denominated in U.S. dollars are translated into Canadian dollars at the rate in effect on the balance sheet date. Translation gains and losses resulting from variations in exchange rates, upon translation into Canadian dollars, are included in ~~the~~results ~~consolidated statements~~ of operations.

The ~~Company’s~~ principal product of the Company, ModelWare, is priced and sold only in U.S. dollars due to the adoption of a common software industry practice of billing worldwide customers in U.S. dollars. This policy of invoicing in U.S. dollars introduces a price risk from exposure to fluctuations in foreign exchange rates. Any increase in the relative value of the U.S. dollar to the Canadian dollar results in increased revenue and net earnings to the Company as the majority of the ~~Company’s~~ expenses of the Company are denominated in Canadian dollars. A decrease in the relative value of the U.S. dollar to the Canadian dollar would decrease sales revenue and ~~would~~net ~~impact~~earnings of the Company~~’s net earnings~~. For example, if the relative value of the U.S. dollar to the Canadian dollar had increased (decreased) by an additional 1.0% for the ~~nine~~three months ended ~~September~~March 3031, ~~2003~~2004, then revenue would have increased (decreased) by approximately 1% or $4410,~~100~~600, costs and expenses would have increased (decreased) by approximately 0.21% or $91,~~500~~400 and loss from operations and net loss would have decreased (increased) by $349,~~600~~200. The Company does not hedge foreign currency transactions nor funds held and denominated in U.S. dollars.

The ~~Company’s~~operations ~~operating~~of ~~results~~the Company are sensitive to fluctuations in revenue as the base of expenses is relatively fixed over the short-term. The Company has developed and continually seeks to refine its management practices to allow initiation of timely corrective actions if operating results fail to reach pre-determined objectives.

Critical Accounting Policies and Significant Estimates

The significant accounting policies are outlined within Note 2 to the annual Consolidated Financial Statements of the Company’s ~~annual~~for ~~audited~~the ~~consolidated~~year ~~financial~~ended ~~statements~~December 31, 2003, except for the change in accounting policy, as of January 1, 2004 and retroactive to January 1, 2002, in accordance with the recommendations of CICA 3870, Stock-Based Compensation and Other Stock-Based Payments, as outlined within Note 2 to the interim Consolidated Financial Statements of the Company for the three months ended March 31, 2004. Some of those accounting policies require the Company to make estimates and assumptions that affect the amounts reported by the Company. The following items require the most significant judgment and may involve complex estimation:

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and for the periods presented. Estimates are used for, but not limited to, accounting for doubtful accounts, determination of the net recoverable value of assets, amortization, income taxes, and contingencies. Actual results may differ from those estimates. Inaccurate estimates or wrong assumptions may have a material effect on the financial condition and results of operations of the Company.

Research and development costs

Research costs are expensed when incurred. Under Canadian GAAP, development costs are capitalized to the extent that recovery of these costs is assured, and are amortized over the life of the related product. No development costs have been capitalized as at ~~September~~March 3031, ~~2003~~2004 and December 31, ~~2002~~2003. The assessment of the extent to which development costs should be expensed or capitalized may have a material effect on the ~~Company’s~~ financial condition and results of operations. of the Company.

Revenue recognition

Revenues from software license agreements are recognized upon delivery of software if persuasive evidence of an arrangement exists, collection is probable, the fee is fixed or determinable, and vendor-specific objective evidence exists to allocate the total fee to elements of the arrangement. Vendor-specific objective evidence is typically based on the price charged when an element is sold separately, or, in the case of an element not yet sold separately, the price established by authorized management, if it is probable that the price, once established, will not change before market introduction. Elements included in multiple element arrangements could consist of software products, upgrades, enhancements, or customer support services. If an acceptance period is required, revenues are recognized upon the earlier of customer acceptance or the expiration of the acceptance period. The Company’s agreements with its customers, ~~and~~value-added resellers and distributors do not contain product return rights (except for product defects).

Service revenues are primarily related to training performed on a time-and-materials basis under separate service arrangements related to the use of the Company’s software products. Revenues from services are recognized as services are performed.

Where the Company enters into arrangements which require customization of hardware bundled with software, the Company recognizes revenue upon delivery and acceptance by the customer where the fee is fixed or determinable and collection is reasonably assured. If the fee is not fixed or determinable due to the existence of extended payment terms, revenue is recognized periodically as payments become due, provided all other conditions for revenue recognition are met.

If a transaction includes both license and service elements, license fee revenues are recognized on shipment of the software, provided that services do not include significant customization or modification of the base product, and the payment terms for licenses are not subject to acceptance criteria. In cases where license fee payments are contingent on acceptance of services, the Company defers recognition of revenues from both the license and the service elements until the acceptance criteria are met. Deferred revenue on sales to distributors is recorded net of direct commissions paid.

Revenue related to maintenance agreements for supporting and maintaining the Company’s products is recognized ~~rateably~~ratably over the term of the agreement, generally one year. Where the Company enters into arrangements for the sale of software licenses and maintenance, the Company accounts for such transactions as multiple element arrangements and allocates the consideration received to each element, based on vendor specific objective evidence of the price charged for elements separately. As a result, revenues recognized from maintenance and license agreements may vary depending on the allocation determined by the Company.

~~The~~These revenue recognition policies and related estimates, ~~such as the determination of the percentage stage of completion and percentage imputed for the initial maintenance period,~~ may have a material effect on the ~~Company’s~~ financial condition and results of operations of the Company.

Warranty

A provision for potential warranty claims is provided for at the time that the sale is recognized, based on warranty terms, and prior experience. While these estimates are determined based on product history, as well as an assessment of the potential for future claims, actual claims may have a material adverse effect on the ~~Company’s~~ financial condition and results of operations of the Company.

Stock-based compensation

~~The~~As of January 1, 2004, the Company ~~adopted~~changed its accounting policy, retroactive to January 1, 2002, in accordance with the recommendations of ~~the~~ CICA ~~Handbook section~~ 3870, Stock-Based Compensation and Other Stock-Based Payments~~, effective January 1, 2002~~. This section establishes standards for the recognition, measurement and disclosure of stock-based compensation and other stock-based awards made in exchange for goods and services. ~~The~~As ~~Company~~permitted ~~has~~by ~~adopted~~CICA 3870, the ~~disclosure~~Company ~~only~~has ~~approach~~applied ~~for~~this ~~stock-based~~change ~~awards~~retroactively tofor ~~employees~~new ~~and~~awards ~~directors~~granted ~~rather~~on ~~than~~or ~~the~~after ~~fair~~January ~~value~~1, ~~method~~1995. AsThe aCompany ~~result,~~has ~~there~~adopted isthe nofair ~~compensatory~~value ~~charge~~based ~~for~~method ~~these~~of ~~items,~~accounting ~~which~~of ~~would~~stock-based ~~otherwise~~compensation ~~adversely~~awards ~~affect~~using the ~~Company’s~~Black-Scholes ~~financial~~option ~~condition~~pricing ~~and results of operations~~model.

InUsing ~~accordance~~the ~~with~~fair value method for stock-based compensation, the ~~provisions~~Company ofrecorded ~~SFAS~~an ~~No.~~additional ~~123,~~charge ~~Accounting~~to ~~for~~earnings ~~Stock-Based~~of ~~Compensation~~$113,559 and $143,700 for the ~~Company~~three ~~applies~~months ~~APB~~ended ~~Opinion~~March ~~No.~~31, 252004 and 2003, ~~Accounting~~respectively, for ~~Stock~~stock ~~Issued~~options granted to ~~Employees~~employees and ~~related~~directors. ~~interpretations~~These inamounts ~~accounting~~were ~~for~~determined ~~its~~using ~~stock-based~~an ~~awards~~option topricing ~~employees~~model assuming no dividends were paid, a weighted average volatility of the Company’s share price of 86% (2003 – 58%), a weighted average expected life of 3 years (2003 – 3 years) and ~~accordingly~~a ~~does~~weighted ~~not~~average ~~generally~~annual ~~recognize~~risk ~~compensation~~free ~~expense~~rate of 3% (2003 – 3. 75%). The option valuation produced by the model is $0.28 per share (2003 – $0.14 per share). The Company has ~~adopted~~applied the ~~disclosure~~new ~~only~~ provisions retroactively with the restatement of ~~SFAS~~prior Noperiods. As ~~123.~~a ~~Compensation~~result, ~~costs~~a ~~related~~cumulative adjustment to ~~stock-based~~increase ~~awards~~opening todeficit, ~~non-employees~~share ~~are~~capital ~~recognized~~and ~~under~~contributed ~~U.S.~~surplus ~~GAAP~~by as$2,364,461, an$528,399 ~~expense~~and in$1,836,062, respectively, has been recorded on January 1, 2003 to reflect the ~~period~~retroactive ~~incurred~~impact of adopting the new provisions.

Prior to 2003, the Company accounted for stock-based compensation plans under the recognition and measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees and related Interpretation, and the disclosure provisions of SFAS No. 123, Accounting for Stock-Based Compensation. Effective January 1, 2004, the Company adopted the fair value recognition provisions of SFAS No. 123 for stock-based employee compensation. All prior periods presented have been restated to reflect the compensation cost that would have been recognized had the recognition provisions of SFAS No. 123 been applied to all awards granted to employees after January 1, 1995. As described within Notes 2 and 8 to the interim Consolidated Financial Statements of the Company for the Company for the three months ended March 31, 2004, the Company has adopted the fair value based approach to stock-based compensation and other stock-based payments, under the provisions of CICA 3870 and SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure. The method of adoption applied by the Company is permissible under both Canadian and U.S. GAAP and, as such, no difference will arise. The total unamortized deferred stock-based compensation as at March 31, 2004 is $3,069,864.

Operating Results

Revenue for the three months ended ~~September~~March 3031, ~~2003~~2004 was $1,~~896~~062,~~313~~189 compared to $1,~~315~~069,~~772~~368 for the ~~third~~first quarter of ~~2002~~2003. ~~The~~Although ~~weak~~revenue ~~world economy and semiconductor industry~~ for the ~~past~~first ~~two~~quarter ~~years~~of ~~have~~2004 ~~reduced~~was ~~capital~~comparable ~~spending~~to ~~and~~the ~~have~~first ~~lengthened~~quarter ~~Triant’s~~of ~~sales~~2003 ~~cycle~~ in ~~some~~terms ~~cases.~~of ~~The~~Canadian ~~Company~~dollars, ~~believes~~in ~~the~~terms ~~demand~~of ~~for~~U.S. ~~APC~~dollars, ~~(Advanced~~revenue ~~Process~~increased ~~Control)~~16% ~~products~~in ~~and~~the ~~services~~first ~~will~~quarter ~~continue~~of to2004 ~~increase~~compared onto ~~a year-over-year basis as customers realize their benefits. During~~ the ~~third~~first quarter of 2003, (as the Company’s ~~continued~~products toare ~~pursue~~priced ~~licensing, service~~ and ~~maintenance~~paid ~~opportunities~~ for ~~ModelWare~~in ~~and~~U.S. ~~related~~dollars). ~~products~~This ~~with~~variance ~~various~~was ~~semiconductor~~due ~~manufacturers~~to ~~through~~ the ~~Company’s~~significant ~~distribution~~decrease ~~channels~~ in ~~Asia~~the ~~and~~relative ~~directly~~value inof ~~Europe~~the ~~and~~U.S. dollar to the ~~United~~Canadian ~~States~~dollar during 2003. The Company ~~received~~is ~~$1.8~~focusing ~~million~~on inopening up new ~~orders~~fab-wide ~~during~~accounts ~~the~~and ~~third~~further ~~quarter~~deployments of ~~2003~~ModelWare ~~compared~~in toexisting $1accounts.0 ~~million~~As ~~for~~a ~~the~~result ~~third quarter~~ of ~~2002.~~these ~~The~~efforts, ~~Company ended~~ the ~~third~~Company ~~quarter~~received of$1.1 ~~2003~~million ~~with~~in ~~deferred~~new ~~revenue~~orders ~~and~~in ~~backlog~~the ~~totalling~~first ~~$0.7~~quarter ~~million~~of 2004 compared to $20.2 4 million atin the ~~end~~first ~~of the third~~ quarter of ~~2002~~2003.

Cost of revenue for the three months ended ~~September~~March 3031, ~~2003~~2004 was $~~511~~184,~~716~~272 compared to $~~305~~298,~~480~~478 for the ~~third~~first quarter of ~~2002~~2003. These costs consist primarily of commissions, salaries and benefits, travel, allocated overhead costs, freight and brokerage and other costs directly associated with revenue. Gross margin and gross margin percentage for the ~~third~~first quarter of ~~2003~~2004 were $1877,~~384,597~~917 and 7383%, respectively, compared to $1770,~~010,292~~890 and 7772%, respectively, ~~compared~~in to2003. The increase in gross margin percentage for the ~~third~~first quarter of ~~2002.~~2004 ~~The~~compared ~~decrease~~to inthe ~~gross~~first ~~margin~~quarter ~~percentage~~of 2003 was attributable to the combined effect of changes in the distribution channel mix and the product mix.

Operating expenses for the three months ended ~~September~~March 3031, ~~2003~~2004 were $1,~~714~~830,~~937~~409 (including $113,559 for non-cash stock-based compensation expense) compared to $2,~~599~~014,~~105~~603 (including $143,700 for non-cash stock-based compensation expense) for the ~~third~~first quarter of ~~2002~~2003. The 349% decrease in ~~operating~~ expenses for the first quarter of 2004 compared to the first quarter of 2003 was attributable to ~~significantly~~decreased ~~lower~~ research and development expenses, aspartially ~~well~~offset asby ~~lower~~increased selling, general and administrative expenses.

Research and development expenses for the three months ended ~~September 30~~March 31, ~~2003~~ 2004 were $~~937~~771,~~353~~584 compared to $1996,~~569,587~~156 for the ~~third~~first quarter of ~~2002~~2003. The 4023% decrease in research and development expenses ~~reflected~~for the ~~Company’s~~first ~~decision~~quarter ~~during~~of ~~2002~~2004 tocompared ~~transition away from using outsourced software development~~ to ~~building an in-house, world-class research and development team. Development work in~~ the ~~third~~first quarter of 2003 ~~focused~~was ~~primarily~~attributable onto ~~increasing~~decreased ~~the~~personnel ~~ease-of-use~~ and ~~functionality~~related ofcosts ~~ModelWare~~ and ~~related~~to ~~products.~~decreased ~~Research~~outsourcing ~~and~~of ~~development~~certain ~~expenses~~contract ~~represented~~software ~~the~~development ~~largest~~services. ~~expense~~Development ~~category~~work ~~for~~in the ~~Company~~first ~~for~~quarter ~~the third quarters~~ of ~~2003~~2004 ~~and 2002 as the Company~~ continued to ~~invest~~be infocused ~~core~~on ~~product development activities necessary for~~ developing, ~~enhancing,~~new ~~maintaining,~~features ~~and~~that ~~supporting~~support ~~the~~enhanced ~~capabilities~~analysis of ~~its~~archived ~~products~~data and ~~technical~~on ~~operations. With~~developing ~~continuing~~enhanced ~~technological~~features ~~change~~that ~~and~~support ~~competitive~~higher ~~pressures~~reliability ~~characterizing the markets for the Company’s products~~ and ~~services,~~maintainability. ~~the~~The Company expensed costs relating to research and development, as recovery of such costs from future revenue was not assured.

Selling, general and administrative expenses for the three months ended ~~September 30~~March 31, ~~2003~~ 2004 were $~~777~~945,~~584~~266 compared to $1874,~~029,518~~747 for the ~~third~~first quarter of ~~2002~~2003. The 248% ~~decrease~~increase in selling, general and administrative expenses ~~included~~in the ~~impact~~first ~~of reduced non-core marketing activities during the third~~ quarter of ~~2003.~~2004 ~~Selling,~~compared ~~general~~to ~~and administrative expenses represented~~ the ~~second~~first ~~largest~~quarter ~~expense category for the third quarters~~ of 2003 ~~and~~was ~~2002~~attributable ~~as the Company continued~~ to ~~invest~~increased ~~in core~~ sales and ~~market~~marketing ~~development~~ activities ~~necessary~~during tothe further strengthen key account relationships and to achieve its goal of providing customers with “best-of-breed” solutions for equipment health monitoring, advanced fault detection and sophisticated data analysis technologyquarter.

Loss from operations for the three months ended ~~September~~March 3031, ~~2003~~2004 was $~~330~~952,~~340~~492 (including $113,559 for non-cash stock-based compensation expense) compared to $1,~~588~~243,~~813~~713 (including $143,700 for non-cash stock-based compensation expense) for the ~~third~~first quarter of ~~2002~~2003. The 23% decrease in loss from operations ~~was~~for ~~due~~the first quarter of 2004 compared to the first quarter of 2003 was a ~~combination~~result of higher ~~revenue~~gross margin and lower ~~operating~~research and development expenses partially offset by higher selling, general and administrative expenses during the quarter.

Net loss for the three months ended ~~September~~March 3031, ~~2003~~2004 was $~~330~~896,~~585~~891 (including $113,559 for non-cash stock-based compensation expense) compared to $1,~~205~~801,~~905~~583 (including $143,700 for non-cash stock-based compensation expense) for the ~~third~~first quarter of ~~2002~~2003. ~~This~~The ~~included~~50% ~~foreign~~decrease ~~exchange~~in ~~losses~~net loss for the first quarter of ~~$36,598~~2004 oncompared ~~U.S.~~to ~~dollar~~the ~~denominated~~first ~~cash~~quarter of 2003 reflected decreased loss from operations, ~~cash~~as ~~equivalents~~well ~~and~~as ~~short-term~~the ~~investments~~effect ~~for~~of a foreign exchange gain of $20,120 in the ~~third~~first quarter of ~~2003~~2004 compared to a foreign exchange ~~gains~~loss of $~~293~~593,~~328~~086 ~~during~~in the ~~third~~first quarter of ~~2002~~2003 ~~resulting~~that resulted from changes in the relative value of the Canadian dollar to the U.S. dollar on working capital denominated in U.S. dollars.

Loss per share for the three months ended ~~September~~March 3031, ~~2003~~2004 was $0.0102 compared to $0.0304 for the ~~third~~first quarter of ~~2002~~2003. The 50% decrease in loss per share ~~resulted~~for ~~from~~the afirst ~~combination~~quarter of ~~decreased~~2004 ~~net~~compared ~~loss~~to ~~and~~the ~~decreased~~first ~~weighted~~quarter ~~average~~of ~~number~~2003 ofresulted ~~shares~~from ~~outstanding~~decreased net loss.

~~The~~In ~~Company~~order ~~estimates~~to ~~its~~conform ~~break-even~~Canadian ~~revenue~~GAAP ~~point~~to ~~for~~U.S. ~~2003~~GAAP, atnet ~~around~~loss ~~$10~~would ~~million,~~be ~~which~~increased isby ~~based~~$302,165 onand ~~the~~$Nil ~~Company’s~~for ~~estimates~~each of athe ~~76%~~three ~~average~~months ~~gross~~ended ~~margin~~March 31, ~~$4.2~~2004 ~~million~~and 2003, respectively, for ~~research~~severance expense recognized as a liability and ~~development~~expense ~~expenses,~~under Canadian GAAP in the fourth quarter of fiscal 2003 and $3under U.6S. ~~million~~GAAP ~~for~~in ~~selling~~the first quarter of fiscal 2004, ~~general~~as ~~and~~described ~~administrative~~within ~~expenses.~~Note As8 ~~substantially~~to ~~all~~the interim Consolidated Financial Statements of the Company’s ~~sales~~for ~~are~~the ~~conducted~~three inmonths ended March 31, 2004. As a result of these adjustments, loss from operations under U.S. ~~dollars~~GAAP would have been $1,254,657 and ~~its~~$1,243,713 ~~expenses~~for ~~are~~each ~~primarily~~of inthe ~~Canadian~~three ~~dollars~~months ended March 31, it2004 ~~should~~and be2003, ~~noted~~respectively, ~~that~~and anet ~~strengthening~~loss ~~Canadian~~under ~~dollar~~U.S. ~~has~~GAAP would have been $1,199,056 and $1,801,583 for each of the ~~effect~~three months ended March 31, 2004 and 2003, respectively, and basic and diluted loss per share under U.S. GAAP would have been $0.03 and $0.04 for each of ~~making~~the itthree ~~more~~months ~~challenging~~ended toMarch ~~reach~~31, ~~this~~2004 ~~break-even~~and ~~point~~2003, respectively.

~~Canadian~~Recent ~~GAAP conforms in all material respects with~~ U.S. GAAP ~~for~~Accounting ~~each~~Pronouncements ofinclude the ~~three months ended September 30, 2003 and 2002, respectively.~~following:

~~Revenue~~In ~~for~~November 2002, the ~~nine~~FASB ~~months~~issued ~~ended~~Interpretation ~~September~~No. 3045, ~~2003~~Guarantor’s ~~was~~Accounting ~~$4,404,489~~and ~~compared~~Disclosure toRequirements ~~$4,744,659~~ for ~~the~~Guarantees, ~~nine~~Including ~~months~~Indirect ~~ended~~Guarantees ~~September~~of ~~30,~~Indebtedness ~~2002.~~of ~~This~~Others ~~revenue~~(“FIN ~~was~~45”). FIN ~~substantially~~45 ~~attributable~~requires toa ~~ModelWare~~company, asat the ~~Company~~time ~~continued~~it toissues ~~focus~~a onguarantee, ~~fab-wide~~to ~~license~~recognize ~~opportunities~~an ~~for~~initial ~~its~~liability ~~principal~~for ~~product.~~the ~~ModelWare~~fair isvalue ~~currently~~of ~~deployed~~obligations onassumed ~~over~~under ~~3,500~~the ~~pieces~~guarantee ~~of equipment~~ and ~~five~~elaborates ~~out~~on ofexisting ~~the~~disclosure ~~top~~requirements ~~ten~~related ~~semiconductor~~to ~~manufacturers~~guarantees ~~use~~and ~~ModelWare~~warranties. The ~~During~~initial ~~the~~recognition ~~nine~~requirements ~~months~~of ~~ended~~FIN ~~September~~45 ~~30, 2003,~~are ~~the~~effective ~~Company~~for ~~received~~guarantees ~~$4.1~~issued ~~million~~or inmodified ~~new~~after ~~orders~~December ~~for~~31, ~~the~~2002. The ~~nine~~adoption ~~months~~of ~~ended~~this ~~September~~Statement ~~30,~~does ~~2003~~not ~~compared~~have toa ~~$6.1~~material ~~million~~impact ~~for~~on the ~~nine~~Company’s ~~months~~financial ~~ended September 30, 2002~~statements.

~~Cost~~In ofApril ~~revenue~~2003, ~~for~~ the ~~nine~~FASB ~~months~~issued ~~ended~~SFAS ~~September~~No. 30149, ~~2003~~Amendment ~~was~~of $1Statement 133 on Derivative Instruments and Hedging Activities. SFAS No. 149 amends and clarifies the accounting for derivative instruments,~~139,064~~ ~~compared~~including tocertain $1derivative instruments embedded in other contracts,~~189,945~~ and for ~~the~~hedging ~~nine~~activities ~~months~~under ~~ended~~SFAS ~~September~~No. 30133. In particular, ~~2002~~SFAS No. ~~Gross~~149 (1) ~~margin~~clarifies ~~and~~under ~~gross~~what ~~margin~~circumstances ~~percentage~~a ~~for~~contract with an initial net investment meets the ~~nine~~characteristic ~~months~~of ~~ended~~a ~~September~~derivative ~~30,~~as ~~2003~~discussed ~~were~~in ~~$3,265,425~~SFAS ~~and~~No. ~~74%~~133, (2) ~~respectively~~clarifies when a derivative contains a financing component, (3) ~~compared~~amends the definition of an underlying derivative to $3conform it to the language used in FASB Interpretation No. 45,~~554,714~~ Guarantor Accounting and ~~75%~~Disclosure Requirements for Guarantees, ~~respectively~~Including Indirect Guarantees of Indebtedness of Others, and (4) amends certain other existing pronouncements. SFAS No. 149 is generally effective for ~~the~~contracts ~~nine~~entered ~~months~~into ~~ended~~or ~~September~~modified after June 30, ~~2002~~2003. The ~~decrease~~adoption inof ~~gross~~this ~~margin~~Statement ~~percentage~~does ~~was~~not ~~attributable~~have toa ~~the~~material ~~distribution~~impact ~~channel~~on ~~mix and~~ the ~~product~~Company’s ~~mix.~~financial statements.

~~Operating~~In ~~expenses~~May ~~for~~2003, the ~~nine~~FASB ~~months~~issued ~~ended~~SFAS ~~September~~No. 30150, ~~2003~~Accounting ~~were~~for ~~$5,334,390~~Certain ~~compared~~Financial toInstruments ~~$7,188,421~~with Characteristics of both Liabilities and Equity. SFAS No. 150 establishes standards for ~~the~~how ~~nine~~an ~~months~~issuer ~~ended~~classifies ~~September~~and ~~30,~~measures ~~2002~~certain financial instruments with characteristics of both liabilities and equity. It ~~The~~requires ~~26%~~that ~~decrease~~an issuer classify a financial instrument that is within its scope as a liability (or an asset in ~~operating~~some ~~expenses~~circumstances). Many ~~was~~of ~~attributable~~those toinstruments ~~significantly~~were ~~lower~~previously ~~research~~classified ~~and~~as ~~development~~equity. Some ~~expenses~~of the provisions of this statement are consistent with the current definition of liabilities in FASB Concepts Statement No. 6, asElements ~~well~~of asFinancial ~~lower~~Statements. This ~~selling~~statement is effective for financial instruments entered into or modified after May 31, ~~general~~2003, and ~~administrative~~otherwise ~~expenses~~is effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of this Statement does not have a material impact on the Company’s financial statements.

~~Research~~In ~~and~~December ~~development~~2003, ~~expenses~~the ~~for~~FASB ~~the~~issued ~~nine~~Interpretation ~~months~~No. ~~ended~~46-Revised ~~September~~(“FIN 3046-R”), ~~2003~~Consolidation ~~were~~of $2Variable Interest Entities,~~843~~ an interpretation of ARB 51 (revised December 2003),~~692~~ ~~compared~~which replaces FIN 46. FIN 46-R incorporates certain modifications of FIN 46 adopted by the FASB subsequent to $4the issuance of FIN 46,~~577~~ including modifications to the scope of FIN 46. For all non-special purpose entities (“SPE”) created prior to February 1,~~705~~ ~~for~~2003, public entities will be required to adopt FIN 46-R at the ~~nine~~end ~~months~~of ~~ended~~the ~~September~~first 30interim or annual reporting period ending after March 15, ~~2002~~2004. For ~~and~~all ~~represented~~entities (regardless of whether the ~~largest~~entity ~~expense~~is ~~category~~an ~~for~~SPE) that were created subsequent to January 31, 2003, public entities are already required to apply the ~~Company~~provisions ~~for~~of ~~each~~FIN 46, and should continue doing so unless they elect to adopt the provisions of ~~these~~FIN ~~respective~~46-R ~~nine~~early ~~months~~as of the first interim or annual reporting period ending after December 15, 2003. If ~~The~~they ~~38%~~do ~~decrease~~not inelect ~~research~~to ~~and~~adopt ~~development~~FIN ~~expenses~~46-R ~~was~~early, ~~attributable~~public entities would be required to apply FIN 46-R to those post-January 31, 2003 entities as of the ~~reduction~~end inof ~~outsourced~~the ~~software~~first ~~development~~interim ~~services.~~or annual reporting period ending after March 15, 2004.

Selling, general and administrative expenses for the nine months ended September 30, 2003 were $2,490,698 compared to $2,610,716 for the nine months ended September 30, 2002 and represented the second largest expense category for the Company for each of these respective nine monthsB. ~~The 5% decrease in selling, general and administrative expenses was attributable to reduced non-core marketing activities during the third quarter of 2003.~~

Loss from operations for the nine months ended September 30, 2003 was $2,068,965 compared to a loss from operations of $3,633,707 for the nine months ended September 30, 2002. The decrease in loss from operations was due to a combination of higher revenue and lower operating expenses.

Net loss for the nine months ended September 30, 2003 was $2,737,803 compared to $3,395,459 for the nine months ended September 30, 2002. This included foreign exchange losses of $793,759 on U.S. dollar denominated cash, cash equivalents and short-term investments for the first nine months of 2003 compared to foreign exchange losses of $19,569 for the first nine months of 2002 as a result of the significant appreciation of the Canadian dollar during 2003.

Loss per share for the nine months ended September 30, 2003 was $0.07 compared to $0.08 for the nine months ended September 30, 2002. The decrease in loss per share resulted from a combination of decreased net loss and decreased weighted average number of shares outstanding.

In order to conform Canadian GAAP to U.S. GAAP, loss from operations and net loss would be increased by $Nil and $6,475 for each of the nine months ended September 30, 2003 and 2002, respectively, for consulting expense as compensation costs related to stock-based awards to non-employees are recognized under U.S. GAAP as an expense in the period incurred. As a result of these adjustments, loss from operations under U.S. GAAP would have been $2,068,965 and $3,640,182 for each of the nine months ended September 30, 2003 and 2002, respectively, and net loss under U.S. GAAP would have been $2,737,803 and $3,401,934 for each of the nine months ended September 30, 2003 and 2002, respectively, and basic and diluted loss per share under U.S. GAAP would have been $0.07 and $0.08 for each of the nine months ended September 30, 2003 and 2002, respectively. Significant variations from U.S. GAAP are disclosed in Note 7 to the Company’s interim unaudited consolidated financial statements and Note 11 to the Company’s annual consolidated financial statements. Recent U.S. GAAP Accounting Pronouncements include the following:

In November 2002, the FASB issued Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (“FIN 45”). FIN 45 requires a company, at the time it issues a guarantee, to recognize an initial liability for the fair value of obligations assumed under the guarantee and elaborates on existing disclosure requirements related to guarantees and warranties. The initial recognition requirements of FIN 45 are effective for guarantees issued or modified after December 31, 2002. The adoption of this statement does not have a material impact on the Company’s financial statements.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure. SFAS No. 148 amends SFAS No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based compensation. It also amends the disclosure provisions of that statement. The disclosure provisions of this statement are effective for financial statements issued for fiscal periods beginning after December 15, 2002. The adoption of this statement does not have a material impact on the Company’s financial statements.

Liquidity and Capital Resources

At ~~September~~March 3031, ~~2003~~2004, cash, cash equivalents and short-term investments were $96,~~040~~734,~~953~~590 compared to $127,~~442~~354,~~039~~044 at December 31, ~~2002~~2003; working capital was $87,~~247~~413,~~026~~981 compared to $118,~~017~~192,~~628~~230 at December 31, ~~2002~~2003; assets were $109,~~894~~200,~~562~~414 compared to $1411,~~312~~319,~~793~~517 at December 31, ~~2002~~2003; and shareholders’ equity was $87,~~797~~963,~~036~~552 compared to $118,~~534~~745,~~839~~194 at December 31, ~~2002~~2003.

At ~~September~~March 3031, ~~2003~~2004, 49.5% of cash, cash equivalents and short-term investments were denominated in U.S. dollars compared to 462.2% as at ~~September~~December 3031, ~~2002~~2003 and 100% of trade accounts receivable were denominated in U.S. dollars compared to 100% as at December 31, 2003 (since the Company invoices its products primarily in U.S. dollars). Any increase (decrease) in the relative value of the U.S. dollar to the Canadian dollar would increase (decrease) cash, cash equivalents and short-term investments and would impact the ~~Company’s~~ net earnings of the Company. For example, if the relative value of the U.S. dollar to the Canadian dollar had increased (decreased) by an additional 1.0% for the ~~nine~~three months ended ~~September~~March 3031, ~~2003~~2004, then cash, cash equivalents and short-term investments would have increased (decreased) and net loss would have decreased (increased) by approximately $36,~~394~~400 and accounts receivable would have increased (decreased) and net loss would have decreased (increased) by approximately $15,500. The Company does not hedge funds denominated in U.S. dollars.

During the three months ~~ended~~March ~~September 30~~31, ~~2003~~2004, the Company had a net ~~inflow~~outflow of cash and cash equivalents of $~~500~~619,~~022~~454 compared to a net outflow of $12,~~108~~226,~~966~~470 for the ~~third~~first quarter of ~~2002~~2003. During the ~~third~~first quarter of ~~2003~~2004, cash and cash equivalents ~~resulted~~were ~~from operating activities (inflow of $558,587) and~~ used in ~~investing~~operating activities ~~for capital assets~~ (outflow of $58583,~~565~~979)~~. During the third quarter of 2002~~, ~~cash~~provided ~~and~~by ~~cash~~financing ~~equivalents were used in operating~~ activities (~~outflow~~inflow of $1,~~076,782~~690) and used in investing activities for ~~capital~~property, ~~assets~~plant and equipment (outflow of $~~126~~37,~~280~~165).

During the nine months ended September 30, 2003, the Company had a net outflow of cash and cash equivalents of $1,482,109 compared to a net outflow of $2,857,406 for the nine months ended September 30, 2002. During the nine months ended September 30, 2003, cash was used in operating activities (outflow of $3,115,050) and used in investing activities for capital assets (outflow of $159,719). During the nine months ended September 30, 2002, cash was used in operating activities (outflow of $2,752,665), resulted from financing activities for issuances of common shares (inflow of $13,750) and used in investing activities for capital assets (outflow of $223,078).

Also during the nine months ended September 30, 2002, the purchase of 189,500 of the Company’s shares under a Normal Course Issuer Bid at an average price of $0.77 per share and a total cost of $146,509 was an outflow of cash by the Company for financing activities for acquisition of treasury stock. These shares were cancelled on July 15, 2002.

The Company’s Normal Course Issuer Bid ended on August 31, 2003 without any additional purchases of the Company’s shares and has not been renewed.

Effective February 21, 2003, the Company adopted a shareholder rights plan, which has received regulatory approval and which was ratified by the shareholders of the Company at the annual general meeting held on June 19, 2003. The shareholder rights plan is intended to provide the board of directors of the Company and its shareholders with a reasonable period of time to fully consider any unsolicited take-over bid. It will also provide the board with more time to consider and pursue, if appropriate, other alternatives for the purpose of maximizing shareholder value. The shareholder rights plan is in effect for five years with two five-year renewal options subject to shareholder approval.

The Company believes that its existing cash resources are sufficient to fund expected capital requirements and operating losses for the next 12 months. The Company intends to use its existing cash resources to fund research and development of existing and new technologies; to fund new business development programs, including sales and marketing of existing and new products; and for general corporate purposes, including possible future acquisitions and investments. While management anticipates continued growth in revenue from its products and services, there is no assurance that the Company will earn sufficient revenue to maintain future operations and fund the growth of the Company. Consequently, the Company may raise additional funds through financings in the future in order to take advantage of any growth opportunities, which may require a more rapid expansion, or acquisitions of complementary businesses or technologies, the formation of new alliances, the development of new products, and other responses to competitive pressures. There can be no assurance that additional financing will be available, if at all, on terms favourable to the Company. If such funds are unavailable or are not available on acceptable terms, the Company may be unable to maintain its future operations, take advantage of opportunities, develop new products, or otherwise respond to competitive pressures.

At ~~September~~March 3031, ~~2003~~2004, the aggregate minimum future payments under operating leases for the years ending December 31, ~~2003~~2004 to 2007 are $~~133~~248,~~223~~903, $~~402,891, $~~233,~~242~~346, $162,~~065~~216, and $40,~~516~~554, respectively.

Summary

The ~~management~~Company ~~and~~believes ~~strategic~~the ~~focus~~demand offor ~~the~~APC ~~Company~~products isand services will continue to beincrease ~~the~~on ~~market~~a year-~~leading~~over-year ~~provider~~basis ofas ~~equipment~~customers ~~health~~realize ~~monitoring,~~their ~~advanced~~benefits. ~~fault~~According ~~detection~~to ~~and~~the ~~sophisticated~~Semiconductor ~~data~~Industry ~~analysis~~Association, ~~technology~~2004 byis ~~offering~~expected ~~our~~to ~~customers~~be ~~“best-~~another year of strong double-~~breed”~~digit ~~solutions~~growth for the semiconductor industry and is now expected to exceed 19%. ~~ModelWare~~The Company is optimistic that this will have a ~~complex~~positive ~~software~~effect ~~system~~on ~~that~~its ~~has~~business. toFor ~~operate~~40 24years ~~hours~~the ~~a day,~~semiconductor ~~365~~industry ~~days~~has sustained a ~~year,~~remarkable begrowth ~~deployable~~due onto a ~~fab-wide~~variety ~~scale,~~of ~~provide~~design ~~solutions~~and tomanufacturing improvements that have resulted in the ~~tough~~proliferation ~~manufacturing~~of ~~problems~~electronics. Because of ~~customers~~these improvements, ~~and~~the doindustry sohas ~~with~~managed ana ~~attractive~~30% ~~return~~per onyear ~~investment~~cost reduction per chip function and ~~low~~has ~~cost~~managed to grow at a compound annual rate of ~~ownership~~17% per year during this period. ~~The~~However, ~~Company~~the ~~firmly~~industry ~~believes~~is ~~that~~facing ~~for~~some ittough challenges, which include: increasingly complex factories due to bethe arapid ~~market-leader~~changes in semiconductor technologies, business requirements and market conditions; the ~~semiconductor~~efficiency of the equipment used to manufacture chips is not keeping up with industry-specific targets, which has a significant impact on capital and ~~compete~~operating costs; and with ~~other~~respect ~~larger~~to ~~companies~~the conversion to 300mm factories, itthe Industry must ~~continue~~quickly toramp ~~invest~~300mm inproduction ~~research~~to ~~and~~high ~~development~~volumes and ~~market~~it ~~development~~must ~~activities~~achieve toits ~~position~~efficiency targets. APC can help the ~~Company~~semiconductor ~~for~~industry ~~future~~meet ~~growth~~these and other challenges it currently faces. APC is the Company’s business.

The ~~total~~management ~~commitment~~and strategic focus of the Company is to ~~developing~~be the market-leading provider of equipment health monitoring, advanced fault detection and ~~commercializing~~sophisticated ~~world~~data analysis technology by offering our customers “best-~~class~~of-breed” ~~products~~solutions. ModelWare is ~~needed~~a tocomplex ~~enable~~software ~~the~~system ~~Company~~that has to ~~further~~operate ~~strengthen~~24 ~~its~~hours ~~relationships~~a ~~with~~day, ~~existing~~365 ~~and~~days toa ~~win~~year, ~~new~~be ~~customers~~deployable inon ~~the~~a ~~semiconductor~~Fab-wide ~~industry~~scale, asprovide ~~well~~solutions asto inthe ~~other~~tough ~~markets~~manufacturing ~~where~~problems ~~the~~of ~~Company~~customers, ~~believes~~and ~~significant~~do ~~opportunities~~so ~~exist.~~with ~~This~~an ~~will~~attractive ~~enable~~return ~~the~~on ~~Company~~investment toand ~~successfully~~low ~~transition~~cost ~~from~~of aownership. ~~research~~The ~~and~~Company ~~development-driven~~firmly ~~company~~believes that for it to be a market-~~driven~~leader ~~company~~in bythe ~~using~~semiconductor ~~its~~industry ~~financial~~and ~~strength~~compete ~~for~~with ~~its~~other larger companies, it must continue to invest in research and development and market development activities. to position the Company for future growth.

~~(Signed)~~The ~~Robert~~total ~~Heath~~commitment of the Company to developing and commercializing world-class products is needed to enable the Company to further strengthen its relationships with existing and to win new customers in the semiconductor industry, as well as in other markets where the Company believes significant opportunities exist. This will enable the Company to successfully commercialize its products by using its financial strength for its research and development and market development activities.

Robert Heath

Chairman and Chief Executive Officer

(Signed) Mark Stephens

Mark Stephens

Chief Financial Officer and Corporate Secretary

TRIANT TECHNOLOGIES INC.

~~CONSOLIDATED~~Consolidated ~~BALANCE~~Balance ~~SHEETS~~Sheets

(Expressed in Canadian Dollars)

(Unaudited)

~~September~~March 3031, ~~2003~~2004 December 31, ~~2002~~2003

		(Note 2)
Assets
Current
Cash and cash equivalents	$ 96,~~040~~734,~~953~~590	$ 107,~~523~~354,~~062~~044
Short-term investments	-	1,918,977
Accounts receivable, net
Trade (net of allowance for doubtful accounts:
Trade(net of allowance for doubtful accounts:
September 30, 2003 and December 31, 2002 - $Nil)	987,325	1,209,722
March 31, 2004 and December 31, 2003 - $Nil)	1,548,665	3,002,297
Other	13,~~958~~857	67,~~511~~814
Prepaid expenses and deposits	~~149~~105,~~316~~668	~~137~~144,~~310~~878
Inventory	153,000	-
Inventory (Note 3)	248,063	257,520

Total current assets	108,~~344~~650,~~552~~843	1310,~~795~~766,~~582~~553
Capital assets, net	550,010	517,211
Property, plant and equipment, net	549,571	522,964

Total assets $ 109,~~894~~200,~~562~~414 $ 1411,~~312~~319,~~793~~517

Liabilities
Current
Accounts payable	$ ~~416~~217,~~240~~233	$ ~~187~~873,~~449~~824
Accrued liabilities	1483,~~413,991~~310	1,~~717~~235,~~069~~999
Deferred revenue	~~267~~536,~~295~~319	~~873~~464,~~436~~500

Total current liabilities 21,~~097~~236,~~526~~862 2,~~777~~574,~~954~~323

Commitments (Note 5)
Commitments (Note 6)
Shareholders’ equity
Capital stock (Note 3)
Capital stock (Note 4)
Preferred shares
Authorized: 100,000,000 without par value
Issued and outstanding: September 30, 2003 and December 31, 2002 - Nil
Issued and outstanding: March 31, 2004 and December 31, 2003 - Nil
Common shares
Authorized: 100,000,000 without par value
Issued and outstanding: September 30, 2003 and December 31, 2002 – 41,402,675	36,208,578	36,208,578
Issued and outstanding: March 31, 2004 – 41,407,875
Deficit	(27,411,542)	(24,673,739)
and December 31, 2003 – 41,402,675	36,739,395	36,736,977
Contributed surplus	2,547,005	2,424,174
Deficit	(31,322,848)	(30,425,957)

Total shareholders’ equity 87,~~797~~963,~~036~~552 118,~~534~~745,~~839~~194

Total liabilities and shareholders’ equity $ 109,~~894~~200,~~562~~414 $ 1411,~~312~~319,~~793~~517

Approved by the Board of Directors:

(Signed) Robert Heath

(Signed) David L. Baird

_____________________________

________________________

Robert Heath, Director

David L. Baird, Director

See accompanying Notes to the Consolidated Financial Statements.

TRIANT TECHNOLOGIES INC.

~~CONSOLIDATED~~Consolidated ~~STATEMENTS~~Statements OFof ~~OPERATIONS~~Operations

(Expressed in Canadian Dollars)

(Unaudited)

Three ~~months~~month period ended ~~September~~March 3031, ~~Nine~~2004 ~~months ended September 30,~~2003

2003 2002 2003 2002

		(Note 2)
Revenue
Licenses and products	$ 710,714	$ 849,787
Services and maintenance	351,475	219,581

Revenue
	1,062,189	1,069,368
Licenses and products	$ 1,708,344	$ 1,273,035	$ 3,927,103	$ 4,653,746
Cost of revenue	184,272	298,478
Services and maintenance	187,969	42,737	477,386	90,913

	1,896,313	1,315,772	4,404,489	4,744,659
Cost of revenue	511,716	305,480	1,139,064	1,189,945

Gross margin

877,917

770,890

Gross margin 1,384,597 1,010,292 3,265,425 3,554,714

Operating expenses
Research and development	771,584	996,156
Selling, general and administrative	945,266	874,747
Stock-based compensation (Note 2)	113,559	143,700

Operating expenses
Research and development	937,353	1,569,587	2,843,692	4,577,705
Selling, general and administrative	777,584	1,029,518	2,490,698	2,610,716

1,830,409

2,014,603

1,714,937 2,599,105 5,334,390 7,188,421

Loss from operations	(952,492)	(1,243,713)
Interest and other income	35,481	35,216
Foreign exchange gain (loss)	20,120	(593,086)

Loss from operations	(330,340)	(1,588,813)	(2,068,965)	(3,633,707)
Interest and other income	36,353	89,580	124,921	257,817
Foreign exchange (loss) gain	(36,598)	293,328	(793,759)	(19,569)

Net loss for the period

$ (896,891)

$ (1,801,583)

~~Net~~Loss ~~loss~~per ~~for~~common ~~the~~share ~~period~~ $ (~~330,585~~0.02) $ (~~1,205,905~~0.04) ~~$ (2,737,803) $ (3,395,459)~~

~~Loss~~Weighted ~~per~~average ~~common~~number ~~share~~of $common ~~(0.01)~~shares $outstanding ~~(0.03)~~41,405,975 ~~$ (0.07) $ (0.08)~~41,402,675

Weighted average number of
common shares outstanding	41,402,675	41,433,572	41,402,675	41,522,426

See accompanying Notes to the Consolidated Financial Statements.

TRIANT TECHNOLOGIES INC.

~~CONSOLIDATED~~Consolidated ~~STATEMENTS~~Statements OFof ~~SHAREHOLDERS~~Shareholders’ ~~EQUITY~~Equity

(Expressed in Canadian Dollars)

(Unaudited)

Common Shares ~~Treasury Stock~~ Shares Amount ~~Shares~~Contributed ~~Amount~~Surplus Deficit Total

Balance at December 31, 2001	41,567,175	$ 36,341,337	-	$ -	$ (20,342,502)	$ 15,998,835
					(Note 2)
Issued for cash
Balance at December 31, 2002	41,402,675	$ 36,208,578	$ -	$ (27,038,200)	$ 9,170,378
Share Incentive Plan, options	25,000	13,750	-	-	-	13,750
Cumulative effect of change in accounting policy (Note 2)	-	528,399	1,836,062	-	2,364,461
Purchase of common shares	-	-	(189,500)	(146,509)	-	(146,509)
Stock based compensation (Note 2)	-	-	598,112	-	598,112
Cancellation of common shares	(189,500)	(146,509)	189,500	146,509	-	-
Net loss for the year	-	-	-	(3,387,757)	(3,387,757)
Net loss for the year	-	-	-	-	(4,331,237)	(4,331,237)

Balance at December 31, 2002	41,402,675	36,208,578	-	-	(24,673,739)	11,534,839
Balance at December 31, 2003	41,402,675	36,736,977	2,434,174	(30,425,957)	8,745,194
Net loss for the period	-	-	-	-	(2,737,803)	(2,737,803)
Issued for cash
Share Incentive Plan, options	5,200	2,418	(728)	-	1,609
Stock-based compensation (Note 2)	-	-	113,559	-	113,559
Net loss for the period	-	-	-	(896,891)	(896,891)

Balance at ~~September~~March 3031, ~~2003~~2004 41,~~402~~407,~~675~~875 $ 36,~~208~~739,~~578~~395 - $ -2,547,005 $ (2731,~~411~~322,~~542~~848) $ 87,~~797~~963,~~036~~552

See the accompanying Notes to the Consolidated Financial Statements.

TRIANT TECHNOLOGIES INC.

~~CONSOLIDATED~~Consolidated ~~STATEMENTS~~Statements OFof ~~CASH~~Cash ~~FLOWS~~Flows

(Expressed in Canadian Dollars)

(Unaudited)

Three ~~months~~month period ended ~~September~~March 3031, ~~Nine~~2004 ~~months ended September 30,~~2003

2003 2002 2003 2002

		(Note 2)
Operating activities
Net loss for the period	$ (896,891)	$ (1,801,583)
Items not affecting cash
Accrued interest on short-term investments	-	(7,038)
Amortization	40,558	39,118
Foreign exchange loss on short-term investments	-	133,512
Stock-based compensation (Note 2)	113,559	143,700
Changes in operating assets and liabilities (Note 5)	158,795	(665,732)

Operating activities
Net loss for the period	$ (330,585)	$ (1,205,905)	$ (2,737,803)	$ (3,395,459)
Items not affecting cash
Accrued interest on short-term investments	-	-	(7,195)	-
Gain on sale of short-term investments	-	(34,341)	-	(34,341)
Amortization	46,290	46,272	126,920	117,707
Foreign exchange loss (gain)
on short-term investment	-	(75,960)	133,512	7,700
Changes in operating assets and liabilities (Note 4)	842,882	193,152	(630,484)	551,725

Net cash used in operating activities

(583,979)

(2,158,023)

Net cash used in operating activities 558,587 (1,076,782) (3,115,050) (2,752,665)

Financing activity
Common shares issued for cash, net of issue costs	1,690	-

Financing activity
Common shares issued for cash, net of issue costs	-	-	-	13,750
Acquisition of treasury stock	-	-	-	(146,509)

Net cash provided by financing activity

1,690

Net cash used in financing activity - - - (132,759)

Investing activity
Acquisition of property, plant and equipment	(37,165)	(68,447)

Investing activities
Acquisition of short-term investments	-	-	-	(1,908,000)
Proceeds from disposition of short-term investments	-	94,096	1,792,660	2,159,096
Acquisition of capital assets	(58,565)	(126,280)	(159,719)	(223,078)

Net cash (used in) provided by investing activities

(37,165)

(68,447)

Net cash provided by investing activities (58,565) (32,184) 1,632,941 23,018

Net cash outflow	(619,454)	(2,226,470)
Cash and cash equivalents, beginning of period	7,354,044	10,523,062

Net cash (outflow) inflow	500,022	(1,108,966)	(1,482,109)	(2,857,406)
Cash and cash equivalents, beginning of period	8,540,931	12,988,530	10,523,062	14,736,970

Cash and cash equivalents, end of period

$ 6,734,590

$ 8,296,592

Cash and cash equivalents, end of period $ 9,040,953 $ 11,879,564 $ 9,040,953 $ 11,879,564

Cash and cash equivalents are comprised of:
Cash	$ 3,583,925	$ 8,243,020
Cash equivalents	3,150,665	53,572

Cash and cash equivalents are comprised of:
Cash	$ 3,986,646	$ 7,704,659	$ 3,986,646	$ 7,704,659
Cash equivalents	5,054,307	4,174,905	5,054,307	4,174,905

$ 6,734,590

$ 8,296,592

$ 9,040,953 $ 11,879,564 $ 9,040,953 $ 11,879,564

See accompanying Notes to the Consolidated Financial Statements.

TRIANT TECHNOLOGIES INC.

Notes to the Interim Consolidated Financial Statements

~~September~~March 3031, ~~2003~~2004

(Expressed in Canadian Dollars)

(Unaudited)

BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include all information and footnote disclosures required under Canadian generally accepted accounting principles for interim financial statements. In the opinion of management, all adjustments (consisting primarily of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position, results of operations and cash flows as at ~~September~~March 3031, ~~2003~~2004, and for all periods presented, have been included.

The unaudited consolidated balance ~~sheet~~sheets, statements of operations and ~~shareholder~~shareholders’s equity and statements of cash flows have been prepared in accordance with Canadian generally accepted accounting principles for interim financial statements. These financial statements follow the same accounting policies and methods of applications as the most recent annual consolidated financial statements dated December 31, ~~2002~~2003, except as described in Note 2. These financial statements should be read in conjunction with the annual consolidated financial statements and notes thereto ~~included in the Company’s annual report~~ for the fiscal year ended December 31, ~~2002~~2003.

~~INVENTORY~~CHANGE IN ACCOUNTING POLICY

As atof ~~September~~January 301, ~~2003~~2004, ~~hardware~~the ~~inventory~~Company ofchanged ~~finished~~its ~~goods~~accounting ~~of $153~~policy,~~000~~ ~~(September~~retroactive 30to January 1, 2002, in accordance with recommendations of CICA 3870, Stock-based ~~$Nil)~~Compensation isand ~~valued~~Other atStock-based Payments. This section establishes standards for the ~~lower~~recognition, measurement and disclosure of ~~cost~~stock-based compensation and ~~estimated~~other ~~net~~stock-based ~~realizable~~awards ~~value~~made in exchange for goods and services. As permitted by CICA 3870, the Company has applied this change retroactively for new awards granted on or after January 1, 1995. The Company has adopted the fair value based method of accounting of stock-based compensation awards using the Black-Scholes option pricing model.

~~Where~~Using the fair value method for stock-based compensation, the Company ~~enters~~recorded ~~into~~an ~~arrangements~~additional ~~which~~charge ~~require~~to ~~customization~~earnings of ~~hardware~~$113,559 ~~bundled~~and ~~with software~~$143,700 for the ~~Company~~three ~~recognizes~~months ~~revenue~~ended ~~upon~~March ~~delivery~~31, 2004 and ~~acceptance~~2003, byrespectively, ~~the~~for ~~customer~~stock ~~where~~options ~~the~~granted ~~fee~~to isemployees ~~fixed~~and ordirectors. These ~~determinable~~amounts ~~and~~were ~~collection~~determined isusing ~~reasonably~~an ~~assured. If~~option ~~the~~pricing ~~fee~~model isassuming ~~not~~no ~~fixed~~dividends orwere ~~determinable~~paid, ~~due~~a toweighted average volatility of the ~~existence~~Company’s share price of ~~extended~~86% ~~payment~~(2003 ~~terms~~- 58%), ~~revenue~~a isweighted ~~recognized~~average ~~periodically~~expected aslife ~~payments~~of ~~become~~3 years ~~due,~~(2003 ~~provided~~- ~~all~~3 ~~other~~years) ~~conditions~~and ~~for~~a ~~revenue~~weighted ~~recognition~~average ~~are~~annual ~~met~~risk free rate of 3% (2003 - 3.75%). The option valuation produced by the model is $0.28 per share (2003 - $0.14 per share).

The Company has applied the new provisions retroactively with the restatement of prior periods. As a result, a cumulative adjustment to opening deficit, share capital and contributed surplus has been recorded on January 1, 2003 to reflect the retroactive impact of adopting the new provisions as follows:

Increase as at

January 1, 2003

Share capital	$ 528,399
Contributed surplus	1,836,062
Deficit	(2,364,461)

~~CAPITAL STOCK~~INVENTORY

~~The~~As ~~Company~~at ~~discloses~~March ~~stock~~31, 2004, finished goods inventory of $120,000 (December 31, 2003 -~~based~~ ~~awards~~$123,000) tois ~~employees~~valued at the lower of cost and ~~directors~~estimated net realizable value, and work-in-progress inventory of $128,063 (December 31, 2003 - $134,520) is valued on a percentage of completion basis based on cost.

The following pro forma financial information presents the net loss and net loss per share had the Company recognized stock-based compensation using a fair value based accounting method:

Three months ended September 30, Nine months ended September 30,

2003 2002 2003 2002

Net loss
As reported	$ 330,585	$ 1,205,905	$ 2,737,803	$ 3,395,459
Less: Additional employee compensation expense under the fair value method	147,066	142,170	441,197	426,510

Pro forma $ 477,651 $ 1,348,075 $ 3,179,000 $ 3,821,969

Net loss per share
As reported	$ (0.01)	$ (0.03)	$ (0.07)	$ (0.08)
Pro forma	(0.01)	(0.03)	(0.08)	(0.09)

The weighted-average fair value of stock options granted in the three months and nine months ended September 30, 2003 were $0.20 and $0.16, whereas the fair value of stock options granted in the three months and nine months ended September 30, 2002 were $0.27 and $0.47. The Company uses the Black-Scholes option pricing model to estimate the value of the options at each grant date under the following weighted average assumptions:

Three months ended September 30, Nine months ended September 30,

2003 2002 2003 2002

Dividend yield	0%	0%	0%	0%
Annualized volatility	68%	86%	63%	90%
Risk-free interest rate	2.99%	3.68%	3.37%	4.29%
Expected life (years)	3	3	3	3

As at September 30, 2003, there were 4,750,250 options issued and outstanding at exercise prices ranging from $0.26 to $2.15 with remaining contractual lives ranging from 0.8 to 4.8 years.

As at October 16, 2003, there were 41,402,675 common shares issued and outstanding and 4,745,750 options issued and outstanding at exercise prices ranging from $0.26 to $2.15 with remaining contractual lives ranging from 0.7 to 4.7 years.

CAPITAL STOCK

As at March 31, 2004, there were 5,152,500 options issued and outstanding at exercise prices ranging from $0.26 to $2.15 with remaining contractual lives ranging from 0.3 to 4.8 years.

As at April 12, 2004, there were 41,407,875 common shares issued and outstanding and 5,152,500 options issued and outstanding at exercise prices ranging from $0.26 to $2.15 with remaining contractual lives ranging from 0.2 to 4.7 years.

CHANGES IN OPERATING ASSETS AND LIABILITIES

The effect on cash flows from changes in operating assets and liabilities is as follows:

Three months ended ~~September~~March 3031, ~~Nine~~2004 ~~months ended September 30,~~2003

2003 2002 2003 2002

Accounts receivable
Trade	$ 1,453,632	$ 623,913
Other	(6,043)	(33,063)
Prepaid expenses and deposits	39,210	558
Inventory	9,457	(180,600)
Accounts payable	(656,591)	44,273
Accrued liabilities	(752,689)	(445,707)
Deferred revenue	71,819	(674,106)

Accounts receivable
Trade	$ 543,299	$ 83,352	$ 222,397	$ (185,640)
Other	3,872	(38,581)	(7,447)	(81,325)
Prepaid expenses and deposits	(35,048)	(95,699)	(12,006)	(131,991)
Inventory	12,000	-	(153,000)	-
Accounts payable	260,750	(167,529)	228,791	19,716
Accrued liabilities	81,726	382,130	(303,078)	254,444
Deferred revenue	(23,717)	29,479	(606,141)	676,524

$ 158,795

$ 665,732

$ 842,882 $ 193,152 $ (630,484) $ 551,728

COMMITMENTS

At September 30, 2003, aggregate minimum future payments under operating leases for the years ended December 31 are as follows:

2003	$ 133,223
2004	402,891
2005	233,242
2006	162,065
2007	40,516

COMMITMENTS

At March 31, 2004, aggregate minimum future payments under operating leases for the years ended December 31 are as follows:

2004	$ 248,903
2005	233,346
2006	162,216
2007	40,554

SEGMENTED AND OTHER INFORMATION

The Company operates in one segment for developing, marketing and supporting equipment health monitoring, advanced fault detection and sophisticated data analysis technology. Since the Company operates in one segment, all financial segment information can be found in the consolidated financial statements.

Information related to geographic areas is as follows:

Three months ended ~~September~~March 3031, ~~Nine~~2004 ~~months ended September 30,~~2003

2003 2002 2003 2002

Revenue
Asia	$ 960,611	$ 1,051,672
United States	76,224	17,474
Europe	25,354	222

Revenue
Asia	$ 1,145,110	$ 520,746	$ 2,936,730	$ 1,605,798
United States	724,038	696,668	802,119	2,796,557
Europe	27,165	98,358	665,640	342,304

$ 1,062,189

$ 1,069,368

$The ~~1,896,313~~Company $attributes ~~1,315,772~~revenue $among 4geographical areas based on the location of its customers. Long-lived assets consist of property,~~404,489~~ $plant 4and equipment,~~774,659~~ substantially all of which are located in Canada.

~~The Company attributes revenue among geographical areas based on the location of its customers~~8. ~~Long-lived assets consist of capital assets, substantially all of which are located in Canada.~~

UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

These consolidated financial statements have been prepared in accordance with Canadian GAAP which, in the case of these financial statements, conforms in all material respects with U.S. GAAP except as follows:

~~Statements~~Consolidated ofBalance ~~operation~~Sheets

~~Three~~March ~~months ended September 30~~31, ~~Nine~~2004 ~~months~~December ~~ended September 30~~31, 2003

2003 2002 2003 2002

		(Note 2)

Total shareholders’ equity under Canadian GAAP	$ 7,963,552	$ 8,745,194
Severance expense (a)	-	302,165

Net loss under Canadian GAAP	$ (330,585)	$ (1,205,905)	$ (2,737,803)	$ (3,395,459)
Consulting expense (a)	-	-	-	(6,475)

Total shareholders’ equity under U.S. GAAP

$ 7,963,552

$ 9,047,359

~~Net~~Consolidated ~~loss~~Statements ~~under~~of ~~U.S. GAAP $ (330,585) $ (1,205,905) $ (2,737,803) $ (3,401,934)~~Operations

Basic and diluted loss per share
Canadian GAAP	$ (0.01)	$ (0.03)	$ (0.07)	$ (0.08)

	Three months ended March 31,
	2004	2003

Basic and diluted loss per share
		(Note 2)
U.S. GAAP	$ (0.01)	$ (0.03)	$ (0.07)	$ (0.08)
Net loss under Canadian GAAP	$ (896,891)	$ (1,801,583)
Severance expense (a)	(302,165)	-

~~Weighted~~Net ~~average~~loss ~~number of common shares outstanding~~ under ~~Canadian and~~ U.S. GAAP ~~41,402,675~~$ 41(1,~~433~~199,~~572~~056) ~~41,402,675~~$ 41(1,~~522~~801,~~426~~583)

Basic and diluted loss per share under Canadian GAAP

$ (0.02)

$ (0.04)

Basic and diluted loss per share under U.S. GAAP

$ (0.03)

$ (0.04)

(a)

InUnder ~~accordance with the provisions of SFAS No~~U.S. ~~123~~GAAP, ~~Accounting for Stock-based Compensation,~~ the ~~Company~~liability ~~applies~~for ~~APB~~a ~~Opinion~~cost ~~No.~~associated ~~25,~~with ~~Accounting~~an ~~for~~exit ~~Stock~~or ~~Issued~~disposal toactivity ~~Employees~~should ~~and~~be ~~related~~recognized ~~interpretations~~at ~~in accounting for~~ its ~~stock-based~~fair ~~awards~~value towhen ~~employees,~~the ~~and~~liability ~~accordingly~~is ~~does~~incurred ~~not~~in ~~generally~~accordance ~~recognize~~with ~~compensation~~SFAS ~~expense~~No. ~~The~~ ~~Company~~145, ~~has~~Accounting ~~adopted~~for ~~the~~Costs ~~disclosure~~Associated ~~only~~with ~~provisions~~Exit ofor ~~SFAS~~Disposal ~~No.~~of ~~123~~Activities. Under ~~Compensation~~Canadian ~~costs~~GAAP, ~~related~~these tocosts ~~stock-based~~should ~~awards~~be torecognized ~~non-employees~~as ~~are~~a ~~recognized~~liability ~~under~~and ~~U.S.~~expense ~~GAAP~~when asthe anevent ~~expense~~that inobligates the ~~period~~Company ~~incurred~~occurs. ~~During~~In the ~~years~~fourth ~~ended~~quarter ~~December~~of ~~31,~~fiscal ~~2000 and 1998~~2003, the Company’s ~~issued~~management ~~options~~decided to ~~individuals~~restructure ~~other~~its ~~than~~operations ~~employees~~to ~~and~~reduce ~~directors~~operating ~~which~~expenses. The ~~under~~Company ~~SFAS~~reduced ~~123~~its ~~resulted~~overall inhead ~~consulting~~count ~~expense: for~~and ~~the~~provided ~~three~~affected ~~months~~employees ~~ended~~with ~~September~~severance ~~30,~~packages. This ~~2003~~decision ofwas ~~$Nil~~not ~~(2002~~communicated -to ~~$Nil); and for~~ the ~~nine~~affected ~~months~~employees ~~ended~~until ~~September~~after December 3031, 2003 ~~of $Nil (2002 - $6,475)~~. These ~~Under~~severance ~~U.S.~~costs ~~GAAP,~~were ~~amendments~~fully topaid ~~the~~during ~~terms of options, which extend~~ the ~~expiration~~first ~~date~~quarter ~~and/or~~of ~~reduce the exercise price, may also result in stock-based compensation expense~~2004.

As of January 1, 2002, the Company adopted the standard in Section 3870, Stock-based Compensation and Other Stock-based Payments, of the Canadian Institute of Chartered Accountants Handbook.

(b)

~~Under~~Prior ~~U.S.~~to ~~GAAP~~2003, ~~costs~~the ~~incurred~~Company inaccounted for stock-based compensation plans under the ~~development~~recognition and measurement provisions of ~~products~~APB ~~are~~Opinion ~~expensed~~No. as25, ~~incurred~~Accounting ~~until~~for ~~the~~Stock ~~product~~Issued isto ~~established~~Employees asand ~~technologically~~related ~~feasible~~Interpretation, inand ~~accordance~~the ~~with~~disclosure provisions of SFAS No. 86123, Accounting for Stock-Based Compensation. Effective January 1, 2004, the ~~Costs~~Company ofadopted ~~Computer~~the ~~Software~~fair tovalue berecognition ~~Sold,~~provisions ~~Leased,~~of orSFAS ~~Otherwise~~No. ~~Marketed~~123 for stock-based employee compensation. ~~Under~~All ~~Canadian~~prior ~~GAAP,~~periods ~~these~~presented ~~costs~~have ~~may~~been berestated ~~capitalized~~ to reflect the ~~extent~~compensation cost that ~~they~~would ~~meet~~have ~~specified~~been ~~criteria~~recognized ~~for~~had ~~recoverability. For~~the ~~all~~recognition ~~periods~~provisions ~~presented,~~of ~~there~~SFAS isNo. 123 nobeen ~~difference~~applied ~~relating~~ to ~~the~~all ~~treatment~~awards ofgranted ~~product~~to ~~development~~employees ~~costs~~after ~~under~~January ~~Canadian~~1, ~~and U~~1995.~~S. GAAP.~~

As described in Note 2, the Company has adopted the fair value based approach to stock-based compensation and other stock-based payments, under the provisions of CICA 3870 and SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure. The method of adoption applied by the Company is permissible under both Canadian and U.S. GAAP and, as such, no difference will arise. The total unamortized deferred stock-based compensation as at March 31, 2004 is $3,069,864.

(c)

Under U.S. GAAP, costs incurred in the development of products are expensed as incurred until the product is established as technologically feasible in accordance with SFAS No. 86, Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed. Under Canadian GAAP, these costs may be capitalized to the extent that they meet specified criteria for recoverability. For all periods presented, there is no difference relating to the treatment of product development costs under Canadian and U.S. GAAP.

(d)

Under Canadian GAAP, the Company includes in income, gains and losses resulting from the translation of the accounts of its foreign subsidiary. Under U.S. GAAP, where an entity’s functional currency is a foreign currency, the translation adjustment resulting from the process of translating the entity’s financial statements into the reporting currency is reported separately as a component of equity. For all periods presented, there is no material difference relating to the translation of the foreign subsidiary’s financial statements under Canadian and U.S. GAAP.

Under Canadian GAAP, the Company includes gains and losses from its foreign currency transactions in the determination of income. Under U.S. GAAP, a change in exchange rates between the functional currency and the currency in which the transaction is denominated results in a transaction gain or loss that is included in income, unless the transactions are designated as effective hedges against foreign currency investments or commitments. For all periods presented, there is no difference relating to foreign currency transactions under Canadian and U.S. GAAP.

(d)

Under U.S. GAAP, SFAS No. 109, Accounting for Income Taxes, the Company would calculate its future income taxes using only enacted tax rates. This differs from Canadian GAAP which uses substantively enacted tax rates. Since any change in the carrying value of the Company’s future income tax assets would be offset by a 100% valuation allowance, there would be no effect on the Company’s financial position or results of operations.

(e)

Under U.S. GAAP, SFAS No. ~~115~~109, Accounting for ~~Certain~~Income ~~Investments in Debt and Equity Securities~~Taxes, the Company would ~~have~~calculate ~~classified~~ its ~~short-term~~future ~~securities~~income astaxes ~~held-to-~~using ~~maturity~~only enacted tax rates. ~~Investments~~This ~~classified~~differs asfrom ~~held-to-maturity~~Canadian ~~securities~~GAAP ~~are~~which ~~stated~~uses atsubstantively ~~amortized~~enacted ~~cost~~tax ~~with~~rates. Since ~~corresponding~~any ~~premiums~~change orin ~~discounts~~the ~~amortized~~carrying ~~against~~value ~~interest~~of the Company’s future income ~~over~~tax ~~the~~assets ~~life~~would ofbe ~~the~~offset ~~investment. For~~by ~~all~~a ~~periods~~100% ~~presented~~valuation allowance, there iswould be no effect on the Company’s financial position or results of operations.

(f)

Under U.S. GAAP, SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, the Company would have classified its short-term securities as held-to- maturity. Investments classified as held-to-maturity securities are stated at amortized cost with corresponding premiums or discounts amortized against interest income over the life of the investment. For all periods presented, there is no effect on the Company’s financial position or results of operations.

(g)

Recent accounting pronouncements

In November 2002, the FASB issued Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (“FIN 45”). FIN 45 requires a company, at the time it issues a guarantee, to recognize an initial liability for the fair value of obligations assumed under the guarantee and elaborates on existing disclosure requirements related to guarantees and warranties. The initial recognition requirements of FIN 45 are effective for guarantees issued or modified after December 31, 2002. The adoption of this Statement ~~does~~did not have a material impact on the Company’s financial statements.

In ~~December~~April ~~2002~~2003, the FASB issued SFAS No. ~~148~~149, ~~Accounting~~Amendment ~~for~~of ~~Stock-Based~~Statement ~~Compensation~~133 -on ~~Transition~~Derivative Instruments and ~~Disclosure~~Hedging Activities. SFAS No. ~~148~~149 amends ~~SFAS~~and ~~No.~~clarifies ~~123,~~the ~~Accounting~~accounting for ~~Stock-Based~~derivative ~~Compensation~~instruments, toincluding ~~provide~~certain ~~alternative~~derivative ~~methods~~instruments ofembedded ~~transition~~in other contracts, and for anhedging ~~entity~~activities ~~that~~under ~~voluntarily~~SFAS ~~changes~~No. to133. In ~~the~~particular, ~~fair~~SFAS ~~value~~No. ~~based~~149 (1) ~~method~~clarifies under what circumstances a contract with an initial net investment meets the characteristic of ~~accounting~~a ~~for~~derivative ~~stock-based~~as ~~compensation~~discussed in SFAS No. 133, It(2) ~~also~~clarifies when a derivative contains a financing component, (3) amends the ~~disclosure~~definition ~~provisions~~ of ~~that~~an ~~statement~~underlying derivative to conform it to the language used in FASB Interpretation No. ~~The~~ ~~disclosure~~45, ~~provisions~~Guarantor Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of ~~this~~Indebtedness ~~statement~~of ~~are~~Others, ~~effective~~and (4) ~~for~~amends ~~financial~~certain ~~statements~~other ~~issued~~existing pronouncements. SFAS No. 149 is generally effective for ~~fiscal~~contracts ~~periods~~entered ~~beginning~~into or modified after ~~December~~June 1530, ~~2002~~2003. The adoption of this Statement ~~does~~did not have a material impact on the Company’s financial statements.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. Some of the provisions of this statement are consistent with the current definition of liabilities in FASB Concepts Statement No. 6, Elements of Financial Statements. This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of this Statement did not have a material impact on the Company’s financial statements.

In December 2003, the FASB issued Interpretation No. 46-Revised (“FIN 46-R”), Consolidation of Variable Interest Entities, an interpretation of ARB 51 (revised December 2003), which replaces FIN 46. FIN 46-R incorporates certain modifications of FIN 46 adopted by the FASB subsequent to the issuance of FIN 46, including modifications to the scope of FIN 46. For all non-special purpose entities (“SPE”) created prior to February 1, 2003, public entities will be required to adopt FIN 46-R at the end of the first interim or annual reporting period ending after March 15, 2004. For all entities (regardless of whether the entity is an SPE) that were created subsequent to January 31, 2003, public entities are already required to apply the provisions of FIN 46, and should continue doing so unless they elect to adopt the provisions of FIN 46-R early as of the first interim or annual reporting period ending after December 15, 2003. If they do not elect to adopt FIN 46-R early, public entities would be required to apply FIN 46-R to those post-January 31, 2003 entities as of the end of the first interim or annual reporting period ending after March 15, 2004.

TRIANT TECHNOLOGIES INC.

~~CORPORATE~~Corporate ~~DIRECTORY~~Directory

Other Information

~~September~~March 3031, ~~2003~~2004

BOARD OF DIRECTORS Robert Heath Chairman and Chief Executive Officer Paul O’Sullivan President and Chief Operating Officer David Baird (1)(2) Brian Harrison (1)(2) Frank Judge (2)(3) Brian Piccioni (1)(2) Richard Deiniger (1) (1) Member of Audit Committee (2) Member of Corporate Governance Committee (3) Lead Director	All dollar amounts in this Interim Report are in Canadian dollars and in accordance with Canadian generally accepted accounting principles unless stated otherwise. This Interim Report contains forward-looking statements that are subject to various risks and uncertainties. The Company’s actual results could differ materially from those anticipated in such forward-looking statements as a result of numerous factors that may be beyond the Company’s control. Forward-looking statements are based on the expectations and opinions of the Company’s management on the date the statements are made. TRADEMARKS Triant and ModelWare are registered trademarks of Triant Technologies Inc. UPM and C-RAS are trademarks of Triant Technologies Inc.
BOARD OF DIRECTORS David Baird (1)(3) Richard Deininger (2) Brian Harrison (2)(3) CHAIRMAN OF THE BOARD Robert Heath CHIEF EXECUTIVE OFFICER Paul O’Sullivan PRESIDENT AND CHIEF OPERATING OFFICER Brian Piccioni (2)(4) (1) CHAIRMAN OF AUDIT COMMITTEE (2) MEMBER OF AUDIT COMMITTEE (3) CHAIRMAN OF CORPORATE GOVERNANCE COMMITTEE (4) MEMBER OF CORPORATE GOVERNANCE COMMITTEE	All dollar amounts in this Interim Report are in Canadian dollars and in accordance with Canadian generally accepted accounting principles unless stated otherwise. This Interim Report contains forward-looking statements that are subject to various risks and uncertainties. The Company’s actual results could differ materially from those anticipated in such forward-looking statements as a result of numerous factors that may be beyond the Company’s control. Forward-looking statements are based on the expectations and opinions of the Company’s management on the date the statements are made. TRADEMARKS Triant and ModelWare are registered trademarks of Triant Technologies Inc. UPM and C-RAS are trademarks of Triant Technologies Inc.
OFFICERS Robert Heath Chairman and Chief Executive Officer Paul O’Sullivan President and Chief Operating Officer Mark Stephens Chief Financial Officer and Corporate Secretary Francis St-Pierre Vice President, Worldwide Sales & Marketing
OFFICERS(5) Brian Harrison (6) CHAIRMAN OF THE BOARD Robert Heath CHIEF EXECUTIVE OFFICER Paul O’Sullivan PRESIDENT AND CHIEF OPERATING OFFICER Mark Stephens CHIEF FINANCIAL OFFICER AND CORPORATE SECRETARY Francis St-Pierre VICE PRESIDENT, WORLDWIDE SALES & MARKETING (1) SUBSEQUENT TO THE END OF THE FIRST QUARTER OF 2004, THE BOARD OF DIRECTORS OF THE COMPANY APPOINTED DON GAYTON (VICE PRESIDENT, ENGINEERING OF THE COMPANY SINCE APRIL 10, 2002) AS AN OFFICER OF THE COMPANY. (2) NON-EXECUTIVE OFFICER
AUDITORS Deloitte & Touche LLP Vancouver, Canada
BANKERS Bank of Montreal Vancouver, Canada
SOLICITORS Koffman Kalef Vancouver, Canada	REGISTERED AND RECORDS OFFICE 19th Floor, 885 West Georgia Street Vancouver, British Columbia, Canada V6C 3H4
REGISTRAR AND TRANSFER AGENT Computershare Investor Services Inc. Vancouver, Canada	SHARE LISTINGS Toronto Stock Exchange (TSX), Symbol: TNT OTC Bulletin Board (OTCBB), Symbol: TNTTF
REGISTERED AND RECORDS OFFICE 19th Floor, 885 West Georgia Street Vancouver, British Columbia, Canada V6C 3H4
SHARE LISTINGS Toronto Stock Exchange (TSX), Symbol: TNT OTC Bulletin Board (OTCBB), Symbol: TNTTF

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 6-K and that it has duly caused and authorized the undersigned to sign this Interim Report on its behalf.

TRIANT TECHNOLOGIES INC.

By: (~~Signed~~signed) ~~Mark Stephens___________________~~

MARK A. STEPHENS

Chief Financial Officer and Corporate Secretary

Date: ~~October~~April 2930, ~~2003~~2004

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