SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF ISSUER PURSUANT TO SECTION 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Month ~~EndedMay~~EndedJune 2001 Commission File Number0-26983

DYNAMIC DIGITAL DEPTH INC.
(Exact name of the registrant as specified in its charter)

ALBERTA, CANADA
(Jurisdiction of Incorporation or Organization)

2120 Colorado Ave., Suite 100, Santa Monica, CA 90404-3504
(Address of Principal Executive Offices)

Telephone (310) 566-3340

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 12g3-2(b) under the Securities Exchange Act of 1934.

YES

[ ]

[ X ]

If "Yes" is marked, indicated below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

NOTICE OF ANNUAL GENERAL AND SPECIAL MEETINGOF SHAREHOLDERS

AND

MANAGEMENT PROXY AND INFORMATION CIRCULAR

Dynamic Digital Depth Inc.

This Management Proxy and Information Circular is furnished in connection with the solicitation of proxies by management of Dynamic Digital Depth Inc. to be voted at the Annual General and Special Meeting of the shareholders of the Corporation to be held on Monday April 23, 2001 at the hour of 9:00 a.m. (Pacific Daylight Time) at 2120 Colorado Avenue, Suite 100, Santa Monica, California.

Dated: March 17, 2001

TABLE OF CONTENTS

SOLICITATION OF PROXIES......................................................-1-

APPOINTMENT AND REVOCATION OF PROXIES........................................-1-

ADVICE TO BENEFICIAL SHAREHOLDERS............................................-2-

VOTING OF PROXIES............................................................-2-

VOTING SHARES AND PRINCIPAL SHAREHOLDERS.....................................-2-

COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS.............................-3-
         Compensation of Directors...........................................-3-
         Compensation of Executive Officers..................................-3-
         Defined Benefit of Actuarial Plans..................................-6-
         Other Compensation..................................................-6-
         Composition of Compensation Committee...............................-6-

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS.............................-6-

INTERESTS OF INSIDERS IN MATERIAL TRANSACTIONS...............................-6-

PARTICULARS OF MATTERS TO BE ACTED UPON AT THE MEETING.......................-6-
         Election of Board of Directors......................................-6-
         Appointment of Auditor..............................................-7-
         Amendment to Articles...............................................-7-
         Amendment to Stock Option Plan......................................-8-
         Other Business......................................................-9-

CERTIFICATE OF THE CORPORATION..............................................-10-

DYNAMIC DIGITAL DEPTH INC.

~~NOTICE~~SCHEDULE ~~OF ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS~~A

~~MONDAY,~~Financial ~~APRIL 23, 2001~~Statements

TOSecond ~~THE~~Quarter ~~SHAREHOLDERS:~~Ended June 30, 2001

~~TAKE NOTICE that an Annual General and Special Meeting (the “Meeting”) of the Shareholders of~~ Dynamic Digital Depth Inc. (~~the~~Incorporated ~~“Corporation”)~~under ~~will be held at 2120 Colorado Avenue, Suite 100, Santa Monica, California, Monday, April 23, 2001 at~~ the ~~hour~~laws of ~~9:00am (Pacific Daylight Time~~Alberta) ~~for the following purposes:~~

1.CONSOLIDATED ToBALANCE ~~receive~~SHEETS [See ~~and~~Nature ~~consider the audited financial statements for the year ended June 30, 2000 and the report~~ of ~~the~~Business auditors thereon; 2. To fix the board of directors of the Corporation at seven (7) members; 3. To elect a board of directors of the Corporation for the ensuing year; 4. To appoint the auditors of the Corporation for the ensuing year and, toBasis ~~authorize the board~~ of ~~directors~~Presentation to- ~~fix~~Note the auditors' remuneration; 5. To consider and, if thought appropriate, approve a special resolution to amend the articles of the Corporation to increase the maximum number of directors permitted to comprise the board of directors, from time to time, to ten (10) members. 6. To consider and, if thought appropriate, approve an ordinary resolution to amend the stock option plan in the manner described in the Management Information Circular dated March 17, 2001 accompanying this notice; and 7. To transact any such other business as may properly be brought before the Meeting or any adjournment thereof.1]

Shareholders                                                       June who30,     December are31,
                                                         2001           2000
                                                         $CAD           $CAD
                                                    ----------------------------
ASSETS

Current unableassets
toCash                                                   4,568,076      2,506,994
Accounts attendreceivable                                      139,303         64,821
Security thedeposits Meetingand inprepayments                        125,096         87,032
                                                    ----------------------------
    Total personcurrent areassets                               4,832,475      2,658,847
                                                    ----------------------------

Building requestedunits toheld datefor andsale                             975,203      1,045,976
Capital signassets, thenet enclosed[note form3]                           2,073,375      2,696,642
ofPatents, Instrumentnet [note 4]                                    156,535        291,798
Restricted cash [note 5]                                 421,470        487,500
                                                    ----------------------------
    TOTAL ASSETS                                       8,459,058      7,180,763
                                                    ============================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
Accounts payable and accrued liabilities                 786,571        607,589
Current portion of Proxyobligations under capital
    leases [note 7]                                       87,780         84,931
Short-term debt [note 6]                                 425,920        464,643
                                                    ----------------------------
    Total current liabilities                          1,300,271      1,157,163
                                                    ----------------------------
Obligations under capital leases [note 7]                 49,870         93,703
                                                    ----------------------------
Commitments and returncontingencies it[note7]                        -              -
Shareholders' inequity
Share thecapital envelope[note provided8]                                35,441,829     30,482,617
Accumulated fordeficit                                  (27,876,584)   (24,277,755)
Cumulative thattranslation purpose.adjustment                       (456,328)      (274,965)
                                                    ----------------------------
    Total shareholders' equity                         7,108,917      5,929,897
                                                    ----------------------------
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY         8,459,058      7,180,763
                                                    ============================

~~DATED~~See ~~this~~accompanying ~~17th day of March, 2001.~~notes

BYOn ~~ORDER~~behalf OFof ~~THE~~the ~~BOARD~~Board: OF"N ~~DIRECTORS~~Speakman"Director ~~/s/~~"P ~~Christopher M. Yewdall Christopher M. Yewdall, Chief Executive Officer~~Kristensen"Director

IMPORTANT

It is desirable that as many shares as possible be represented at the meeting. If you do not expect to attend and would like your shares represented, please complete the enclosed Instrument of Proxy and return it as soon as possible in the envelope provided for that purpose. All proxies, to be valid, must be deposited at the office of the Registrar and Transfer Agent of the Corporation, Computershare Trust Company of Canada, Suite 600, Western Gas Tower, 530 - 8th Avenue S.W., Calgary, Alberta, T2P 3S8 at least forty-eight (48) hours prior to the meeting or any adjournment thereof.

-i-

Dynamic Digital Depth Inc.

~~ANNUAL~~CONSOLIDATED ~~GENERAL~~STATEMENTS ~~AND SPECIAL MEETING~~ OF ~~SHAREHOLDERS MONDAY,~~OPERATIONS ~~APRIL~~AND ~~23,~~ACCUMULATED ~~2001~~DEFICIT

MANAGEMENT                                                    Three-Months    Three-Months
                                                        Ended           Ended
                                                        June INFORMATION30,        June CIRCULAR30,
                                                         2001            2000
                                                         $CAD            $CAD
                                                --------------------------------
Revenue
Technology revenue                                      95,247          244,897
Interest income                                          9,322           30,811
Other                                                   62,232         (70,914)
                                                --------------------------------
    Total revenue                                      166,801          204,794
                                                ================================

Expenses
Depreciation and amortization                          260,982          166,304
Salaries and wages                                   1,079,622          872,916
General and administrative                             713,402        1,226,229
Marketing and promotional                               79,425            4,876
Interest                                                 8,308           11,218
                                                --------------------------------
    Total expenses                                   2,141,739        2,281,543
                                                --------------------------------
NET LOSS                                            (1,974,938)      (2,076,749)
                                                ================================

~~NOTE:~~See ~~Shareholders~~accompanying ~~who do not hold their shares in their own name as registered shareholders should read “Advice to Beneficial Shareholders” herein for an explanation of their rights.~~ notes

~~SOLICITATION~~Dynamic OFDigital ~~PROXIES~~Depth Inc.

~~This~~CONSOLIDATED ~~circular (“Management~~STATEMENTS ~~Information~~OF ~~Circular”)~~OPERATIONS isAND ~~provided~~ACCUMULATED ~~in connection with the~~DEFICIT ~~solicitation by management of Dynamic Digital Depth Inc.~~ (~~the “Corporation”~~CONTINUED) of proxies for the Annual General and Special Meeting of the shareholders of the Corporation (the “Meeting”) to be held on Monday, April 23, 2001, at 9:00 a.m. (Pacific Daylight Time) at 2120 Colorado Avenue, Suite 100, Santa Monica, California.

Management                                                     Six-Months      Six-Months
                                                        Ended           Ended
                                                       June of30,        June the30,
                                                         2001            2000
                                                         $CAD            $CAD
                                                --------------------------------
Revenue
Technology Corporationrevenue                                     225,368          245,679
Interest doesincome                                         38,725           80,315
Other                                                   88,013           10,746
                                                --------------------------------
    Total notrevenue                                      352,106          336,740
                                                --------------------------------

Expenses
Depreciation contemplateand aamortization                          527,754          341,130
Salaries solicitationand ofwages                                   1,910,458        1,488,470
General proxiesand administrative                           1,398,457        2,332,451
otherwiseMarketing thanand bypromotional                               92,747           23,642
Interest                                                21,519           31,930
                                                --------------------------------
    Total mail.  Theexpenses                                   3,950,935        4,217,623
                                                --------------------------------

NET costsLOSS                                            (3,598,829)      (3,880,883)

Accumulated thereofdeficit, willbeginning beof borneperiod           (24,277,755)     (15,456,273)
                                                --------------------------------
Accumulated bydeficit, theend Corporationof period                 (27,876,584)     (19,337,156)
                                                ================================
Loss per share                                           (0.16)           (0.20)
                                                ================================
Weighted average number of shares outstanding        22,404,978       19,625,212
                                                ================================

~~APPOINTMENT~~See ~~AND~~accompanying ~~REVOCATION OF PROXIES~~notes

ADynamic ~~shareholder~~Digital ~~has~~Depth the right to appoint a nominee (who need not be a shareholder) to represent him at the Meeting, other than the persons designated in the enclosed proxy form, by inserting the name of his chosen nominee in the space provided for that purpose on the form, or by completing another proper form of proxyInc. Such shareholder should notify the nominee of his appointment, obtain his consent to act as proxy and should instruct him on how the shareholder’s shares are to be voted. In any case, the form of proxy should be dated and executed by the shareholder or, where the form of proxy has been executed by an attorney of the shareholder, by the shareholder’s attorney authorized in writing, with proof of such authorization attached.

ACONSOLIDATED ~~form~~STATEMENTS ofOF ~~proxy~~CASH will not be valid for the Meeting or any adjournment thereof unless it is completed and delivered to the registrar and transfer agent of the Corporation, Computershare Trust Company of Canada, Suite 600, Western Gas Tower, 530 - 8th Avenue S.W., Calgary, Alberta, T2P 3S8, at least forty-eight (48) hours, excluding Saturdays and holidays, before the time of the Meeting or any adjournment thereof. FLOW

In                                                    Three-Months    Three-Months
                                                        Ended           Ended
                                                       June addition30,        June to30,
                                                         2001            2000
                                                         $CAD            $CAD
                                                --------------------------------

Cash revocationflows from operating activities:
inNet anyloss                                             (1,974,938)     (2,076,749)
Adjustments otherto mannerreconcile permittednet byloss law,to anet shareholdercash
  used whoin hasoperating givenactivities:
    Changes ain proxynon-cash mayoperating items:
revoke      Depreciation itand amortization                     260,982         166,304
      Loss anyon timedisposal beforeof itbuilding                                       22,967
      Write-off isof exercisedpatent costs capitalized
         in prior years, bynet                            109,112          92,697
      Write-off instrumentof inwebsite writingand executedother
         miscellaneous bycosts, net                       197,250
the    Changes shareholderin orassets:
      Accounts byreceivable                               (22,341)        (41,868)
      Security hisdeposits attorneyand authorizedprepayments                  (3,096)        112,167
    Changes in writingliabilities:
      Accounts payable and depositedaccrued eitherliabilities           36,913        (563,010)
                                                --------------------------------
Net atcash used in operating activities                (1,396,118)     (2,287,492)
the                                                --------------------------------

Cash registeredflows officefrom ofinvesting theactivities:
Acquisitions Corporationof atcapital anyassets                           (8,533)       (269,691)
Patent timecosts                                                           (265,684)
                                                --------------------------------
Net upcash toused andin includinginvesting theactivities                    (8,533)       (535,375)
last                                                --------------------------------
Cash businessflows dayfrom precedingfinancing theactivities:
Proceeds dayfrom issuance of theshare Meetingcapital               4,932,212       4,993,892
Payments oron anyshort-term adjournment thereofdebt                                            (530,921)
atPayments whichon theobligations proxyheld isunder tocapital belease        (14,854)         (5,819)
Restricted usedcash                                          91,661       (511,508)
                                                --------------------------------
Net orcash withprovided theby chairmanfinancing activities             5,009,019       3,945,644
                                                --------------------------------
Effect of theexchange Meetingrates on the daycash                         15,827         (42,980)
of                                                --------------------------------
Net theincrease Meetingin orcash                                  3,620,195       1,079,797

Cash, anybeginning adjournmentof thereof.period                               947,881       3,012,830
                                                --------------------------------
Cash, end of period                                   4,568,076       4,092,627
                                                ================================

~~-1-~~See accompanying notes

~~ADVICE~~Dynamic TODigital ~~BENEFICIAL~~Depth ~~SHAREHOLDERS~~Inc.

~~Shareholders~~CONSOLIDATED ~~who~~STATEMENTS doOF ~~not~~CASH ~~hold their~~FLOW ~~shares in their own name~~ (~~referred to herein as “Beneficial Shareholders”~~CONTINUED) are advised that only proxies from shareholders of record can be recognized and voted upon at the Meeting. Beneficial Shareholders who complete and return a proxy must indicate thereon the person (usually a brokerage house) who holds their shares as a registered shareholder. Every intermediary (broker) has its own mailing procedure, and provides its own return instructions, which should be carefully followed. The form of proxy supplied to registered shareholders is identical to that provided to Beneficial Shareholders. However, its purpose is limited to instructing the registered shareholder how to vote on behalf of the Beneficial Shareholder.

All                                                      Six-Months      Six-Months
                                                         Ended           Ended
                                                        June references30,        June 30,
                                                          2001            2000
                                                          $CAD            $CAD
                                                --------------------------------

Cash flows from operating activities:
Net loss                                             (3,598,829)     (3,880,883)
Adjustments to reconcile net loss to net cash
shareholders  used in  operating thisactivities:
    Changes Managementin Informationnon-cash Circularoperating items:
      Depreciation and theamortization                     527,754         341,130
      Loss accompanyingon formdisposal of building                                       22,967
      Write-off of proxypatent andcosts Noticecapitalized
         in prior years, net                            109,112          92,697
      Write-off of Meetingwebsite areand toother
         miscellaneous shareholderscosts, net                       197,250
    Changes in assets:
      Accounts receivable                               (74,482)        100,121
      Security deposits and prepayments                 (38,064)        112,363
    Changes in liabilities:
      Accounts payable and accrued liabilities          178,982        (203,131)
                                                --------------------------------
Net cash used in operating activities                (2,698,277)     (3,414,736)
                                                --------------------------------

Cash flows from investing activities:
Acquisitions of recordcapital unlessassets                          (27,529)     (1,477,537)
Patent specificallycosts                                                           (295,365)
stated                                                --------------------------------
Net otherwise.cash Whereused documentsin areinvesting statedactivities                   (27,529)     (1,772,902)
                                                --------------------------------

Cash toflows befrom availablefinancing foractivities:
Proceeds reviewfrom orissuance of share capital               4,959,212       7,820,527
inspectionRepayments on short-term debt                           (38,723)       (475,639)
Payments suchon itemsobligations willheld beunder showncapital uponlease        (40,984)        (76,161)
Restricted requestcash                                          66,030        (511,508)
                                                --------------------------------
Net tocash registeredprovided shareholdersby whofinancing activities             4,945,535       6,757,219
produce                                                --------------------------------
Effect proofof exchange rates on cash                       (158,647)        (15,271)
                                                --------------------------------
Net increase in cash                                  2,061,082       1,554,310

Cash, beginning of theirperiod                             2,506,994       2,538,317
                                                --------------------------------
Cash, identity.end of period                                   4,568,076       4,092,627
                                                ================================

~~VOTING~~See OFaccompanying ~~PROXIES~~notes

~~The~~Dynamic ~~persons~~Digital ~~named~~Depth ~~in the~~Inc. ~~enclosed~~NOTES ~~form~~TO ofCONSOLIDATD ~~proxy~~FINANCIAL ~~have~~STATEMENTS As ~~been~~of ~~selected~~June by30, ~~the~~2001 ~~directors of the Corporation~~ and ~~have~~December ~~indicated~~31, ~~their~~2000 ~~willingness~~and tofor ~~represent as proxy~~ the ~~shareholder~~Three ~~who appoints~~and ~~them.~~Six-Month ~~Each~~Periods ~~shareholder may instruct his proxy how to vote his shares by~~Ended ~~completing~~June ~~the~~30, ~~blanks~~2001 onand ~~the~~June ~~proxy~~30, ~~form.~~ 2000

Shares represented by properly executed proxy forms in favour of the person designated on the enclosed form will be voted or withheld from voting in accordance with the instructions given on the proxy forms1. NATURE InOF ~~the~~BUSINESS ~~absence~~AND ofBASIS ~~such instructions, such shares WILL BE VOTED FOR THE APPROVAL~~ OF ~~ALL RESOLUTIONS IDENTIFIED IN THIS MANAGEMENT INFORMATION CIRCULAR.~~ PRESENTATION

~~The~~Dynamic ~~enclosed~~Digital ~~form~~Depth ~~of proxy~~Inc. ~~confers discretionary authority upon~~ (the "Company"), through ~~persons~~its ~~named~~wholly ~~therein~~owned subsidiaries, Dynamic ~~with respect~~Digital toDepth ~~amendments~~Australia ~~and~~Pty ~~variations~~Ltd, toDynamic Digital ~~matters~~Depth ~~identified~~Research inPty ~~the~~Ltd, Dynamic Digital ~~Notice~~Depth ~~of Meeting~~USA Inc. and ~~with~~Dynamic Digital ~~respect~~Depth toTV ~~any~~Inc., specializes ~~other~~in ~~matters~~the ~~which~~business ~~may~~of ~~properly~~3D technology. Its ~~come~~patented technologies ~~before~~enable the ~~Meeting.~~ Atcreation ~~the~~and ~~time~~development of ~~printing~~2D ~~this~~compatible ~~Management~~3D ~~Information~~content; mass ~~Circular,~~distribution through the ~~management~~Internet, ofpersonal ~~the~~computer, ~~Corporation~~television ~~knows~~and ofmovies; noand ~~such~~the ~~amendments,~~integration ~~variations~~of or3D ~~other matters~~content towith ~~come~~glasses-free ~~before the Meeting~~displays.

~~VOTING~~These ~~SHARES~~consolidated financial ~~AND~~statements ~~PRINCIPAL~~include ~~SHAREHOLDERS~~the consolidated accounts of all of the wholly owned subsidiaries.

AsThe ofaccompanying consolidated ~~the~~financial ~~effective~~statements ~~date~~have ~~of this~~been ~~Management~~prepared ~~Information~~on ~~Circular~~a going concern basis which iscontemplates ~~March~~the ~~17,~~realization ~~2001~~of ~~(the “Effective~~assets ~~Date”),~~and the ~~Corporation~~discharge ~~has~~of ~~22,402,492~~liabilities ~~issued and~~in ~~outstanding~~the ~~Common~~normal ~~Shares~~course ~~which~~of ~~are~~business ~~without~~for ~~nominal~~the orforeseeable ~~par value~~future. ~~Holders~~The ofCompany has ~~Common~~experienced ~~Shares~~significant ~~are~~operating ~~entitled~~losses toand ~~one~~cash ~~(1)~~outflows ~~vote~~from atoperations ~~the~~and has ~~Meeting~~a ~~for~~$27,876,584 ~~each~~accumulated ~~Common~~deficit ~~Share held.~~at June 30, 2001.

The ~~Corporation~~ability ~~is also authorized to issue an unlimited number~~ of ~~First Preferred Shares and an unlimited number of Second Preferred Shares, with~~ the ~~rights and restrictions~~Company ~~attached~~to ~~thereto~~continue as ~~determined~~a bygoing ~~the~~concern ~~Board~~is ofdependent ~~Directors~~on atobtaining ~~the~~additional ~~time~~capital ~~of issue.~~to Assupport atcontinuing ~~the~~development ~~Effective~~and ~~Date,~~commercialization noactivities. ~~First~~The ~~Preferred~~outcome ~~Shares~~of this ormatter ~~Second~~cannot ~~Preferred~~be ~~Shares are~~predicted ~~issued~~at ~~and~~this ~~outstanding~~time.

~~The~~These ~~Corporation will~~consolidated ~~prepare~~financial astatements ~~list~~do ofnot ~~shareholders~~give ofeffect ~~record at the close of business on March 17, 2001 (the “Record Date”). A holder of Common Shares named on that list will be entitled~~ to ~~vote~~any ~~the~~adjustment ~~Common Shares then registered in such holder’s name, except~~ to the ~~extent that: (a) the holder has transferred the ownership of~~classifications ~~any of his Common Shares after that date,~~ and ~~(b)~~amounts ~~the transferee~~ of ~~those~~assets ~~Common Shares produces properly endorsed share certificates, or otherwise establishes that he owns the shares,~~ and ~~demands~~liabilities ~~not later than the close of business, ten (10) days before the Meeting,~~ that ~~his~~might ~~name~~ be ~~included~~necessary inshould the ~~list of persons~~Company ~~entitled to vote at the Meeting, in which case the transferee will~~ be ~~entitled~~ unable to ~~vote~~continue ~~his~~as ~~Common~~a ~~Shares~~going ~~at the Meeting~~concern.

-2-. SIGNIFICANT ACCOUNTING POLICIES

ToThe ~~the~~consolidated ~~knowledge~~financial statements of the Company have been prepared in accordance with accounting ~~directors~~principles ~~and~~generally ~~senior~~accepted ~~officers~~in Canada. Because a precise determination of ~~the~~many assets ~~Corporation,~~and asliabilities atis ~~the~~dependent ~~Effective~~upon ~~Date~~future events, nothe preparation of ~~person,~~financial ~~firm~~statements orfor ~~corporation~~a ~~own,~~period ~~directly~~necessarily orinvolves ~~indirectly,~~the oruse ~~exercise~~of ~~control~~estimates orand ~~direction~~approximations ~~over~~that ~~voting~~have ~~securities~~been ~~carrying~~made ~~more~~using ~~than~~careful ~~ten~~judgment. ~~percent~~The ~~(10%)~~consolidated financial ofstatements ~~the voting~~have, ~~rights~~in ~~attached~~management’s toopinion, ~~any~~been ~~class~~properly ofprepared within ~~voting~~reasonable ~~securities~~limits of materiality and within the ~~Corporation, except~~framework ~~for~~of asthe accounting ~~indicated~~policies summarized below:.

Name and Municipality	Type of Ownership	Number of Common SharesOwned or Controlled at theEffective Date	Percentage ofOutstandingCommon Shares
CDS & Co.Toronto, Ontario	of record	5,984,668	26%
Westgate International, LPGrand Cayman, Cayman Islands	of record	3,740,792	16.7%
The Liverpool Limited PartnershipHamilton, Bermuda	of record	3,740,792	16.7%

Revenue Recognition

~~Note:~~Technology revenue from the ~~(1) The~~granting ~~Corporation~~of licenses and hardware sales is ~~not~~recognized ~~aware~~when; there is persuasive evidence of an agreement, delivery has occurred, the ~~beneficial~~fee ~~owner(s)~~is offixed ~~these~~or determinable ~~shares~~and collectibility is probable.

~~COMPENSATION~~Building OFUnits ~~EXECUTIVE~~Held ~~OFFICERS~~for ~~AND DIRECTORS~~Sale

~~(a) Compensation~~The building is carried in the accounts at the lower of ~~Directors~~cost or fair market value. No amortization is taken due to the intention to sell the building.

AsCapital at the date hereof the Corporation has six (6) directors. The aggregate cash compensation (including salaries, directors fees, commissions, bonuses paid for services rendered during the most recently completed fiscal year, bonuses paid during the most recently completed fiscal year for services rendered in a previous year, and any compensation other than bonuses earned during the most recently completed fiscal year the payment of which was deferred) paid to directors of the Corporation for services rendered in their capacities during the last fiscal year was nil. assets

~~Executive~~Capital ~~officers~~assets ofare ~~the~~carried ~~Corporation~~in ~~who also act as directors of~~ the ~~Corporation~~accounts doat ~~not~~cost ~~receive~~less ~~any additional~~depreciation ~~compensation~~and ~~for~~amortization. ~~services~~Depreciation ~~rendered in such capacities, other than as~~and ~~paid~~amortization byare ~~the~~calculated ~~Corporation~~on toa ~~such~~straight-line ~~executive~~basis ~~officers~~over in their ~~capacity~~estimated asuseful ~~executive~~lives ~~officers.~~as ~~See~~follows: ~~“Compensation of Executive Officers”.~~

(b) Compensation of Executive Officers

	Furniture and fixtures	4 to 7 years
	Office equipment	3 to 7 years
	Equipment under capital lease	3 to 7 years
	Technical equipment	3 to 7 years
	Automotive equipment	7 years
	Leasehold improvements	Over the lesser of the lease term or the useful life
	Website	3 years

~~During~~Leased ~~the~~assets ~~last~~that transfer substantially all ~~fiscal~~of ~~year ended June 30, 2000,~~ the ~~Corporation~~benefits ~~had~~and ~~three~~risks ~~(3)~~of ~~executive~~ownership related ~~officers,~~to ~~one~~the ~~(1) of~~leased ~~whom~~asset ~~was~~from ~~also~~the alessor ~~director.~~to the ~~The~~lessee ~~aggregate~~are ~~cash~~accounted ~~compensation~~for ~~(including salaries,~~as ~~fees,~~capital leases. Under ~~director’s~~a ~~fees,~~capital ~~commissions~~lease, the ~~bonuses~~asset ~~paid~~is ~~for~~capitalized ~~services rendered~~and ~~during~~ the ~~most~~present ~~recently~~value ~~completed~~of ~~fiscal~~the ~~year,~~related lease ~~bonuses~~payments ~~paid~~is ~~for services~~recorded ~~rendered~~as in a ~~previous~~liability. Amortization ~~year,~~of ~~and~~capitalized leased ~~any~~assets ~~compensation~~is ~~other~~computed ~~than~~using ~~bonuses earned during~~ the ~~most~~straight-line method ~~recently completed fiscal year~~ over the ~~payment~~lesser of ~~which~~the ~~was deferred)~~lease ~~paid~~term toor ~~executive officers by~~ the ~~Corporation~~useful ~~during~~life of the ~~fiscal~~asset. The ~~year ended~~lease agreements ~~June~~have ~~30,~~implicit interest ~~2000~~rates ~~was~~varying ~~CDN~~between ~~$704,500~~5.75 % and 11.68%.

~~-3-~~Patents, research and development costs

~~Summary~~Costs ~~Compensation~~relating to acquiring and establishing patents in 3D television and related areas, such as the conversion to 3D of existing 2D film and video material, auto-stereoscopic 3D computer displays, 3D video arcade game displays, 3D viewing glasses, 3D special effects software and 3D camera adaptors are recorded at cost and since July 1, 2000 are being amortized over five years. The Company has also adopted a policy of periodically reviewing its patent portfolio with a view to writing off the costs incurred in applying for and registering such patents where there is no reasonable prospect that the technology represented by the patents will be capable of producing revenues within the next succeeding twelve months. Any further expenditures on patents or applications where costs to date have already been written off will be expensed as they are incurred.

~~The~~Research ~~following~~costs table (presented in accordance with the Regulations made under the Securities Act (British Columbia) (the “Regulation”) sets forth all annual and long term compensation for services in all capacities to the Corporation and its subsidiaries for the fiscal years ended June 30, 1998, 1999 and 2000, in respect of the individual(s) who were, at such dates, acting in a capacity similar to a Chief Executive Officer and the three most highly compensated Executive Officers whose compensation was greater than $100,000 (the “Named Executive Officers”). All dollar amounts are ~~referenced~~expensed inas ~~Canadian dollars~~incurred.

~~SUMMARY~~Financial COMPENSATION TABLE Annual Compensation Long Term Compensation Awards Payouts Restricted Securities Shares or Under Restricted Other Annual Options Share LTIP(2) All other Name and Principal Salary Bonus Compensation Granted Units Payouts Compensation Position Year ($)(3) ($) ($) (#) ($) ($) ($) Robert Baker (2) June 30, 2000 81,484 Nil 35,226 Nil Nil Nil Nil CEO and President June 30, 1999 183,730 Nil 88,456 Nil Nil Nil Nil June 30, 1998 175,503 Nil 80,666 Nil Nil Nil Nil Neil W. Speakman (3) June 30, 2000 281,250 Nil 17,000 500,000 Nil Nil Nil Chairman, CEO and June 30, 1999 281,250 Nil Nil Nil Nil Nil Nil President June 30, 1998 Nil Nil Nil Nil Nil Nil Nil Christopher M. June 30, 2000 250,000 Nil Nil 200,000 N/A N/A Nil Yewdall (4) June 30, 1999 156,250 Nil Nil 200,000 N/A N/A Nil CEO, President June 30, 1998 N/A N/A N/A N/A N/A N/A N/A Mark N. Schwartz, June 30, 2000 156,250 Nil Nil 400,000 N/A N/A Nil CFO June 30, 1999 N/A N/A N/A N/A N/A N/A N/A June 30, 1998 N/A N/A N/A N/A N/A N/A N/A instruments

~~Notes:~~Financial instruments of the Company consist mainly of cash, accounts receivable, security deposits and prepayments, restricted cash, accounts payable and accrued liabilities, capital lease obligations and short-term debt. As at June 30, 2001 and December 31, 2000, there are no significant differences between the carrying amounts of these instruments, and their estimated fair values.

(1)	“LTIP” or “long term incentive plan” means any plan which provides compensation intended to serve as an incentive for performance to occur over a period longer than one financial year, but does not include option or stock appreciation right plans or plans for compensation through restricted shares or restricted share units.
(2)	Mr. Baker was the President and CEO of the Corporation from October 1995 to December 1999 when he ceased to be the President.
(3)	Mr. Speakman served as the CEO and President from December 1999 to July 18, 2000.
(4)	Mr. Yewdall became the President and CEO of the Corporation on July 18, 2000, prior to which he was the President and CEO of the Corporation’s subsidiary, Dynamic Digital Depth USA, Inc.
(5)	Mr. Schwartz became the CFO on November 1, 1999.
(6)	No other executive officer received compensation in excess of $100,000.

Foreign exchange

The Company's Australian and USA subsidiaries are deemed self-sustaining foreign operations for foreign currency translation purposes. Accordingly, assets and liabilities of the subsidiaries are translated at the year-end exchange rate and revenues and expenses are translated at average exchange rates. Gains and losses arising from the translation of the financial statements of the subsidiaries are recorded in a "Cumulative Translation Adjustment" account within shareholders' equity. Gains and losses arising from foreign currency transactions are recognized in the Statement of Operations as general and administrative expenses. For the three and six-month periods ended June 30, 2001 and 2000, these amounted to ($489), ($23,260), ($4,591) and ($9,182), respectively.

Taxation

The Company follows the asset and liability method of accounting for income taxes. Under this method, the Company records income taxes to give effect to temporary differences between the carrying amount and the tax basis of the Company's assets and liabilities. Temporary differences arise when the realization of an asset or the settlement of a liability would give rise to either an increase or decrease in the Company's income taxes payable for the year or later periods. Future income taxes are recorded at the income tax rates that are expected to apply when the future tax liability is settled or the future tax asset is realized. When necessary, valuation allowances are established to reduce future income tax assets to the amount expected to be realized. Income tax expense is the tax payable for the period and the change during the period in future income tax assets and liabilities.

Concentrations of credit risk

The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash, accounts receivable and security deposits and prepayments. The Company's cash is placed with high quality major Australian, Canadian and American banking institutions, limiting its exposure to credit risk. At the balance sheet dates presented herein, the accounts receivable and security deposits and prepayments balances consist of a number of various miscellaneous items.

Loss per share

Basic loss per share is determined by dividing the net loss by the weighted average number of common shares outstanding during the period. The effect on loss per share of the exercise of options and warrants is anti-dilutive.

Stock options

The Company has a stock option plan which is described in Note 8. No compensation expense is recognized for this plan when stock options are issued to employees. Any consideration paid by employees on exercise of stock options is credited to share capital.

3. CAPITAL ASSETS

                                               As at June 30, 2001
                                   ---------------------------------------------
                                                       Accumulated     Net Book
                                         Cost         Amortization       Value
                                         $CAD             $CAD           $CAD
                                   ---------------------------------------------

Furniture and fixtures                175,922            52,268          123,654
Office equipment                      136,313            88,811           47,502
Equipment under capital lease         226,574            86,353          140,221
Technical equipment                 1,608,456           879,440          729,016
Automotive equipment                   77,635            38,336           39,299
Leasehold improvements              1,360,535           385,111          975,424
Website                                22,755             4,496           18,259
                                   ---------------------------------------------
                                    3,608,190         1,534,815        2,073,375
                                   =============================================

                                               As at December 31, 2000
                                   ---------------------------------------------
                                                       Accumulated     Net Book
                                         Cost         Amortization       Value
                                         $CAD             $CAD           $CAD
                                   ---------------------------------------------
Furniture and fixtures                165,963            39,382          126,581
Office equipment                      136,313            70,594           65,719
Equipment under capital lease         239,632            68,216          171,416
Technical equipment                 1,635,575           691,667          943,908
Automotive equipment                   77,635            32,444           45,191
Leasehold improvements              1,360,535           246,052        1,114,483
Website                               268,142            38,798          229,344
                                   ---------------------------------------------
                                    3,883,795         1,187,153        2,696,642
                                   ---------------------------------------------

4. PATENTS

                       As at June 30, 2001       As at December 31, 2000
                   --------------------------- ---------------------------
                                  Accumulated                 Accumulated
                        Cost     Amortization      Cost      Amortization
                        $CAD        $CAD           $CAD        $CAD
                   ------------- ------------- ------------- -------------
Patents                230,340       73,805       339,452       47,654
Net book value                156,535                     291,798
                   --------------------------- ---------------------------

At June 30, 2001, after reviewing the patent portfolio and in light of the new policy direction referred to in Note 2, the Company has written off an amount of $109,112 (December 31, 2000: $340,058) in expenditures (net of accumulated amortization) previously incurred and capitalized.

5. RESTRICTED CASH

This represents cash held in a deposit account by way of security in association with the lease of Dynamic Digital Depth USA, Inc.‘s office premises as per an agreement dated September 17, 1999. Interest is being earned on the amount deposited at the prevailing bank rate of 3.89% (December 31, 2000: 6.306%) over the term of the lease.

6. SHORT-TERM DEBT

The short-term debt is collateralized by a first mortgage over the building and registered fixed and floating charge over the assets of Dynamic Digital Depth Australia Pty Ltd. The debt is fully repayable on demand upon the sale of the building units. Interest is charged at the Bank Bill Discount Rate of 5.75% plus 1.50% per annum (December 31, 2000: 6.99% plus 1.50% per annum).

7. COMMITTMENTS AND CONTINGENCIES

Leases

The following is a schedule of future minimum lease payments under the capital leases:

                                                                       As at
                                                  As at June 30,    December 31,
                                                      2001             2000
                                                      $CAD             $CAD
                                                ---------------- ---------------
2001                                                 50,005         100,009
2002                                                 74,829          74,829
2003                                                 24,451          24,451
                                                ---------------- ---------------
Total minimum lease payments                        149,285         199,289
Less: amount representing interest                  (11,635)        (20,655)
                                                ---------------- ---------------
Present value of minimum lease payments             137,650         178,634
Less: current portion                               (87,780)        (84,931)
                                                ---------------- ---------------
                                                     49,870          93,703
                                                ---------------- ---------------

The following is a schedule of future minimum lease payments under the operating leases which include leases of motor vehicles, computers and technical equipment:

                                                           As at June 30,
                                                                2001
                                                                $CAD
                                                           ----------------
2001                                                               242,024
2002                                                               523,372
2003                                                               560,716
2004                                                               445,857
2005                                                               144,892
2006                                                               152,137
2007                                                               159,744
2008                                                               167,731
2009                                                               124,026
                                                           ----------------
Total minimum lease payments                                     2,520,499
                                                           ----------------

Litigation

In January 1999, Angus Duncan Richards (“Richards”) served a notice of dispute on the Company relating to the terms of a Consulting Agreement between the Company and Richards. The dispute is subject to arbitration that is ongoing. The Company refutes all of the allegations and is vigorously defending this matter. In the event that Richards was to succeed in his claim, the Company would be exposed to a liability to pay Richards $CAD187,510 together with further payments not exceeding $CAD158,840 per annum contingent upon the extent to which the Company derives revenue and capital from commercial exploitation of certain technologies which Richards assisted to develop.

In December 1998, Angus Duncan Richards (“Richards”) commenced litigation in Alberta, Canada seeking monetary damages for $CAD227,500 plus interest and court costs. Richards alleges the Company failed to permit him to exercise options to purchase 182,000 common shares at an exercise price of $1.25 per share based upon the determination that the options had expired (amounts based on post reverse stock split). The Company filed a Statement of Defense in February 1999. The Company refutes all of the allegations and intends to vigorously defend this matter. Richards sought leave of the Court to amend his statement of claim on January 10, 2001. The Court, apart from adding Mr. P Kristensen, a director of the Company, to the action, rejected the application. The Company intends to file an additional statement of defense seeking additional security for costs. The Company believes that Richard’s claim is without merit.

8. SHARE CAPITAL

Authorized
Unlimited number of voting common shares
Unlimited number of non-voting first and second preferred shares, issuable in series

Issued - Common Shares

                                                      Number of
                                                       Shares           $CAD
                                                     ---------------------------
Balance at December 31, 2000 - common voting shares   22,382,492      30,482,617

Issued on exercise of stock options                       20,000          27,000

Issued for cash through a private placement            1,742,025       4,897,212

Issued on exercise of stock options                       28,000          35,000
                                                     ---------------------------
Balance at June 30, 2001 - common voting shares       24,172,517      35,441,829
                                                     ---------------------------

Stock Options

~~The~~On ~~Corporation~~February ~~has~~6, a2000, ~~Stock~~the ~~Option~~Company ~~Plan~~established ~~(the~~a ~~“Existing~~stock ~~Plan”)~~option ~~dated~~plan ~~February~~for 6its directors, ~~2000~~management, ~~which was~~employees ~~approved~~and byconsultants. This plan amended all earlier plans and allows the ~~shareholders~~Company to grant options for up to twenty per cent of the ~~Corporation~~issued onand ~~February~~outstanding 1shares of the Company to a maximum of 4,480,498 ~~2000~~common shares. ~~Pursuant~~There tohave been no changes ~~the~~in ~~Existing~~original ~~Plan~~terms and conditions of options issued. Under the plan, the ~~Board~~exercise price of ~~Directors~~each ~~may~~option ~~allocate~~shall ~~non-transferrable~~be ~~options~~not less than the price permitted by the stock toexchange ~~purchase~~on ~~Common~~which ~~Shares~~the common shares are then listed. No participant shall be granted an option that exceeds five per cent of the ~~Corporation~~issued and outstanding shares of the Company. The option period is not to ~~directors,~~exceed ~~officers,~~ten ~~employees~~years from the date the option is granted. An option shall vest and ~~consultants~~may ofbe exercised during the option ~~Corporation~~period ~~and~~in ~~its~~such ~~subsidiaries~~manner as the Board of Directors may fix by resolution.

The                                          Six-months Existingended PlanJune is
administered30, by2001          Six-months theended BoardJune of30, Directors2000
                                          Number of        Weighted theAverage      Number Corporation.of        Weighted UnderAverage
                                           Options          Exercise thePrice        Options          Exercise ExistingPrice
Plan,                                                                 $CAD                                   $CAD
                                     ---------------------------------------------------------------------------------
Outstanding at thebeginning time of granting the optionsperiod             2, the aggregate number of Common Shares610,000         3.80                1,148,770          1.72
to be delivered upon exercise of all options granted thereunder and theGranted                                        1,321,000         3.20                1,520,000          8.57
aggregateExercised                                       (48,000)         1.29                (117,770)          1.36
Forfeited                                       (25,000)         7.11                        -           -
                                     --------------------                     -----------------
Outstanding numberat ofend Common Shares to be delivered upon exercise of the optionsperiod                   3,858,000         3.60                2,551,000          5.82
to any one individual granted thereunder may not exceed the maximum number                                     --------------------                     -----------------
permittedExercisable byat anyend stockof exchange on which the Common Shares may be listed or by
any other regulatory body having jurisdictionperiod                   1,658,250         3. 44                1,084,230          8.73
                                     --------------------                     -----------------

~~-4-~~The following table summarizes information about stock options outstanding at June 30, 2001:

                                              Options issuedOutstanding                          Options pursuant toExercisable
the                                                 Weighted-Average   Weighted-Average        Number          Weighted-Average
Range Existingof PlanExercise willPrices   Number haveOutstanding     Remaining anLife     Exercise exercisePrice     Exercisable priceat       Exercise as determined by the Board ofPrice
Directors          $CAD              at ofJune the30, Corporation2001         in providedYears             $CAD           June that30, the2001          $CAD

      0.00 exerciseto price2.99               629,000               2.03               1.91              507,000             1.83

      3.00 shallto not5.99             3,119,000               4.19               3.68            1,096,250             3.80

      6.00 beto less8.99                30,000               3.61               7.11               15,000             7.11
than
     9.00 theto price12.99                80,000               3.75              12.58               40,000            12.58
------------------------- permitted---------------------- by----------------- any------------------- stock------------------ exchange------------------
         TOTALS                3,858,000               3.82               3.60            1,658,250             3.44
------------------------- on---------------------- which----------------- the------------------- Common------------------ Shares are------------------
then listed.

~~The Corporation granted stock options to acquire an aggregate of 1,100,000 Common Shares during the Corporation’s last fiscal year ended June 30, 2000 to Named Executive Officers.~~ Warrants

~~The~~During ~~following~~the ~~table~~six ~~sets~~months ended ~~forth~~June 30, in2001, ~~accordance with~~ the ~~Regulation~~Company toissued ~~the Securities Act (British Columbia)~~1,738,025 ~~information~~Units inat ~~respect~~a ofprice ~~each exercise~~ of ~~options~~$2.80 ~~and~~per ~~freestanding~~Unit. ~~SARs,~~Each ifUnit ~~any,~~comprises ~~during~~one ~~the~~common ~~Corporation’s~~share ~~fiscal~~and ~~year~~one-half ~~ended June 30~~warrant, ~~2000,~~with ~~and~~each whole ~~six~~warrant ~~month~~exercisable ~~fiscal~~into ~~period~~one ~~ended~~common ~~December~~share ~~31,~~at ~~2000,~~an ~~and~~exercise ~~the~~price ~~value~~ of ~~unexercised~~$3.50. These ~~options~~warrants ~~and~~expire ~~SARs~~in asJune ~~at such dates~~2003.

~~AGGREGATED~~During ~~OPTION/SAR~~the ~~EXERCISES~~six ~~DURING~~months ~~THE~~ended December ~~FISCAL YEAR ENDED JUNE 30~~31, 2000, ~~AND~~the ~~VALUE~~Company ~~OF UNEXERCISED OPTIONS~~issued ~~AND~~581,230 ~~SARs~~share ASpurchase ATwarrants ~~SUCH DATES~~with ~~Value~~options ofto ~~Unexercised~~purchase ~~"in-the- Securities Unexercised~~common ~~Options/SARs~~shares ~~at money"~~on ~~Options/SARs~~a at1:1 ~~Fiscal Acquired~~basis ~~on Aggregate~~at ~~Value June~~a ~~30,~~price ~~2000 Year~~of ~~End Name~~$CAD5.50 ~~and Title Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable~~per ~~Neil W~~share. ~~Speakman N/A N/A 520,000 0 Chairman,~~All ~~CEO~~of ~~and~~these ~~CFO -------------------------~~options ~~------------------ ------------------~~expire ~~--------------------------------~~on ~~------------------------------- Christopher~~October ~~M. Yewdall N/A N/A 400~~10,~~000 $2,040,000 CEO,~~ ~~President ------------------------- ------------------ ------------------ -------------------------------- ------------------------------- Mark N~~2002. Schwartz, N/A N/A 400,000 $888,000 CFO ========================= ================== ================== ================================ ===============================

~~Long~~During ~~Term~~the ~~Incentive~~fiscal ~~Plans~~year ended June 30, 2000, the Company issued 1,000,000 share purchase warrants with options to purchase common shares on a 1:1 basis at a price of $CAD5.50 per share. 140,000 of these warrants expire on December 21, 2001 and the balance expires on February 1, 2002.

~~The~~In ~~Corporation~~connection ~~currently~~with issue of ~~has~~share nopurchase ~~long~~warrants ~~term~~during ~~incentive~~the ~~plans~~fiscal year ended June 30, ~~other~~2000, ~~than~~the ~~stock~~Company, by ~~options~~way ~~granted~~of ~~from~~a ~~time~~financial toadvisor’s fee, issued 20,000 share purchase warrants ~~time~~with byoptions ~~the~~to ~~Board~~purchase ofcommon ~~Directors~~shares ~~under~~on ~~the~~a ~~provisions~~1:1 basis at a price of ~~the~~$CAD5.50 ~~Corporation’s~~per ~~Stock~~share. ~~Option~~These ~~Plan~~warrants expire on February 1, 2002.

~~Stock~~During ~~Appreciation~~the ~~Rights~~fiscal ~~and~~year ended ~~Restricted~~1999, ~~Shares~~the Company issued 1,500,000 share purchase warrants with options to purchase common shares on a 1:1 basis at a price of $CAD3.50 from June 17, 1999 to June 17, 2000, or $CAD4.50 from June 17, 2000 to June 17, 2001, or $CAD 5.50 from June 17, 2001 to June 17, 2002.

No9. LOSS ~~stock~~CARRY appreciation rights or restricted shares were granted by the Corporation to any of the Named Executive Officers of the Corporation during the last fiscal year ended June 30, 2000 and no stock appreciation rights were exercised.FORWARD

~~Stock~~The ~~Option~~Company ~~and~~has ~~SAR Re~~non-~~Pricing~~capital accumulated losses carried forward for income tax purposes amounting to $26,966,863, the benefit of which has not been reflected in the accounts. These tax losses are as set out in the table below:

The                                                         Year               $CAD
   Carried Corporationforward didlosses notof Canadian Parent
make   Company anywhich downwardmust re-pricingbe ofutilized stockby optionsJune or30:            2002           $127,878
                                                         2003            199,320
                                                         2004            371,867
                                                         2005            446,852
                                                         2006            625,758
                                                         2007          1,349,183
   utilized stockby appreciationDecember rights31:                              2008            556,241
during                                                                        2009            239,064
   Carried theforward fiscallosses yearof endedUnited States
   subsidiary which must be utilized by June 30:         2013            195,518
                                                         2014          1,760,141
                                                         2015          2,520,731
   utilized 2000by orDecember prior31:                              2016          2,503,452
                                                         2017          2,234,871
   Carried thereto.forward losses of Australian
   subsidiaries that may be carried forward
   indefinitely subject to certain tests being met:                   13,835,987
                                                        ------------------------
   Total                                                             $26,966,863
                                                        ------------------------

~~Pension~~10. GEOGRAPHIC ~~and Retirement Plans and Payments Made Upon Termination of Employment~~SEGMENTS

The Corporation does not
have any pension or retirement plan which is applicable to the Named Executive                                        Australia        USA          Canada      Eliminations    Consolidated
Officers.Six-months Theended CorporationJune has not provided compensation30, monetary or otherwise2001            $CAD          $CAD           $CAD           $CAD            $CAD
------------------------------------------------------------------------------------------------------------------
Revenue                                    358,100       234,175             -          (240,169)       352,106
during the preceding fiscal year                                      ----------------------------------------------------------------------------
Loss                                    (1, to any person who now or previously has acted124,897)   (2,234,871)     (239,061)                -     (3,598,829)
as                                      ============================================================================
Identifiable a Named Executive Officer of the Corporationassets                      1, in connection with or related708,614    10,746,153    31,026,297       (35,022,006)     8,459,058
to                                      ----------------------------------------------------------------------------
Capital the retirementassets                             408, termination or resignation of such person and the Corporation186     1,665,189             -                 -      2,073,375
has                                      ============================================================================


                                        Australia        USA          Canada      Eliminations     Consolidated
Six-months providedended noJune compensation30, to such persons as a result of change of control of2000            $CAD          $CAD           $CAD           $CAD             $CAD
the Corporation------------------------------------------------------------------------------------------------------------------
Revenue                                    275, its subsidiaries or affiliates. The Corporation is not party to185        61,321           234                 -        336,740
any compensation plan or arrangement with the Named Executive Officers resulting                                      ----------------------------------------------------------------------------
fromLoss                                    (1,539,497)   (1,719,880)     (621,506)                -     (3,880,883)
                                      ============================================================================
Identifiable the resignationassets                      2,749,982     6,299,648    23,792,553       (23,714,814)     9,127,369
                                      ----------------------------------------------------------------------------
Capital retirement or termination of employment of such persons. assets                             569,012     1,964,291             -                 -      2,533,303
                                      ============================================================================

~~-5-~~The Company operates in one industry segment, that being the research, development and commercialization of 3D technologies.

~~(c) Defined~~11. INCOME ~~Benefit of Actuarial Plans~~TAXES

The ~~Corporation~~respective ~~does~~local ~~not~~income tax ~~have~~laws ~~any~~govern ~~defined~~the ~~benefit~~subsidiaries orin ~~actuarial~~all ~~plan~~geographical ~~under~~regions ~~which~~with ~~benefits~~statutory ~~are~~tax rates ~~determined~~ranging from 0% to 44%. No current or future tax expenses for operations ~~primarily~~in byall ~~final~~geographical ~~compensation~~locations ~~and~~were ~~years~~recognized ofin ~~service~~any periods.

~~(d) Other~~A ~~Compensation~~reconciliation of income taxes computed at the statutory rate to the effective income tax provision of nil is as follows:

Other                                                Three-Months       Three-Months         Six-Months            Six-Months
                                               Ended thanJune as30,     Ended setJune forth
herein30,       Ended theJune Corporation30,       Ended didJune not30,
                                                   2001               2000                2001                 2000
                                                    $CAD               $CAD                $CAD                 $CAD
Prima payfacie anyincome additionaltax compensationbenefit to(at the executiverates
officersapplicable orin directorsthe (includingcountry personalof benefitsoperation)
on andlosses securitiesfrom ornormal propertiesactivities                     (789,976)          (830,700)          (1,439,533)        (1,552,353)
paidDecrease orin distributedtax whichbenefit compensationresulting wasfrom:
     Future nottax offeredasset onvaluation theallowance
                                                      789,976            830,700            1,439,533          1,552,353
                                            ------------------ same------------------ terms-------------------- to all------------------
fullIncome timetax employees)benefit                                          -                  -                    -                  -
                                            ================== during================== the==================== last completed fiscal year. ==================

~~(e) Composition~~Future tax assets and liabilities reflect the net tax effects of ~~Compensation~~temporary ~~Committee~~differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the Company’s future tax assets and liabilities are as follows:

As                                            June of30, the2001      December Effective Date31, the2000
                                                $CAD                  $CAD
Future Corporationtax doesassets:
     Net notoperating haveloss acarry Compensationforwards        11,150,633              9,711,102

Valuation Committee.allowance                          (11,150,633)            (9,711,102)
                                            ------------------------------------
Net future income tax assets                           -                      -
                                            ====================================
Future tax liabilities                                 -                      -
                                            ====================================

~~INDEBTEDNESS~~The OFCompany ~~DIRECTORS~~has ~~AND~~provided ~~EXECUTIVE~~a valuation ~~OFFICERS~~allowance for the full amount of net future income tax assets in light of its history of operating losses since its inception.

~~No director, executive officer or any of their respective associates or affiliates is, or was at end of the last completed fiscal year, indebted to the Corporation or any of its subsidiaries~~12. RELATED PARTY TRANSACTIONS

~~INTERESTS~~Legal OFfees ~~INSIDERS~~for INthe six-months ~~MATERIAL~~ended ~~TRANSACTIONS~~June 30, 2001 of $30,232 were paid by the Company to an entity, one of whose partners is a director of the Company or one of its subsidiaries.

The Corporation is not aware of any material interests, direct or indirect, by way of beneficial ownership of securities or otherwise, of any directors, senior officers, any shareholder who beneficially owns directly or indirectly more than 10% of the issued and outstanding Common Shares or any known associate or affiliates of such persons in any transaction within the last fiscal year or any proposed transaction which has materially affected or would materially affect the Corporation13. COMPARATIVES

~~PARTICULARS~~Certain OFprior ~~MATTERS~~period figures TOhave BEbeen ~~ACTED~~reclassified ~~UPON~~to ATconform ~~THE~~to ~~MEETING~~the financial statement presentation of the current year.

~~1. Election~~SCHEDULE ofB: SUPPLEMENTARY ~~Board of Directors~~INFORMATION

~~There~~1. GENERAL ~~are~~AND ~~presently~~ADMINISTRATVE ~~six (6) directors of the Corporation and management will be proposing that the number of directors to be elected at the Meeting be fixed at seven (7).~~ EXPENSES

Unless                                                     Six-Months otherwiseEnded
                                                       June directed30, 2001
it                                                     ----------------
         Occupancy isExpense                               $315,231
         Office theExpense                                   116,095
         Communication intentionExpense                            244,616
         Insurance ofExpense                                 35,522
         Travel managementand toEntertainment                         129,264
         Information voteTechnology proxiesExpense                                   42,988
         Professional inFees favourand of the election asExpenses                                  121,055
directors         Legal of the seven (7) nominees hereinafter set forth in Table Fees                                                      186,065
         Other                                            207,621
                                                        ---------
              TOTAL                                    $1 below. ,398,457
                                                        ---------

~~Management does not contemplate that any such nominees will be unable to serve as directors~~2. ~~However,~~ RELATED ifPARTY for any reason any of the proposed nominees do not stand for election or are unable to serve as such, the persons named in the form of proxy reserve the right to vote for any other nominee in their sole discretion. TRANSACTIONS

Legal fees for the six-6-months ended June 30, 2001 of $30,232 were paid by the Company to an entity, one of whose partner's is a director of the Company or of one of its subsidiaries.

~~Information~~3. (A) ~~regarding~~SECURITIES ~~the persons~~ISSUED ~~nominated~~DURING ~~for~~THE ~~election as directors, including the number of voting securities of the Corporation over which each exercises control or direction is as follows:~~ PERIOD

Table 1

Date	Type of Security	Type of Issue	Number	Price	Total Proceeds	Consideration	Comm. Paid
March `01	Common Shares	Option Exercise	20,000	$1.35	$27,000	Cash	Nil
April `01	Common Shares	Option Exercise	20,000	1.25	25,000	Cash	Nil
May `01	Common Shares	Option Exercise	8,000	1.25	10,000	Cash	Nil
June `01	Common Shares	Private Placement	1,742,025	2.80	4,897,212	Cash	Nil

Name and Number of Shares Percentage Municipality of Position in the Beneficially of Common Residence Corporation Principal Occupation for the Last Five Years Owned (1B) ~~Shares --------------------- ----------------- --------------------------------------------~~ ~~-------------------~~OPTIONS ~~------------- Neil~~GRANTED ~~Speakman Chairman,~~DURING ~~Chief Chairman~~THE and Chief Financial Officer of the 353,104 1.5% Santa Monica, CA Financial Officer Corporation and Director since March 1, 1994 Paul G. Jeffrey (2) Director since Independent Businessman 20,000 0.08% Toronto, Ontario March 1, 1994 Ian Macintosh (2) Director since Independent Businessman 150,000 0.6% Toronto, Ontario April 26, 1994 Paul Kristensen (2) Director since Managing Director of Capital Technologies Pty. 305,205 1.4% Perth, Western May 6, 1996 Ltd. Australia Eric Edward Dillon Director since Independent Businessman since June 1999; Senior 293,255 1.3% Mercer Island, June 21, 2000 Vice President of Smith Barney, Seattle, Washington Washington from January 1994 to June 1999 Geoffrey Roman Director since Corporate Vice President of Motorola BCS since Nil Nil New Hope, PA September 1, January 2000; Senior and Executive Vice President 2000 of General Instrument Corporation since 1994 Christopher Yewdall CEO and CEO and President of the Corporation since July, 10,000 0.04% Santa Monica, CA President since 2000; CEO and President of Dynamic Digital July 18, 2000 Depth USA, Inc. from September 1998 to July 2000; VP of Business Development of C-Dilla Limited from September 1997 to September 1998 PERIOD

Notes:

Date	Number	Position	Exercise Price	Expiry Date
February `01	36,000	Employees	$3.15	February `06
May `01	1,285,000	Employees	3.20	May `06

(1)	The information as to shares beneficially owned, not being within the knowledge of the Corporation has been furnished by the respective nominees.
(2)	Members of the audit committee.

4. (A) DESCRIPTION OF OUTSTANDING OPTIONS

Number of options outstanding at             Exercise Price
         June 30, 2001                           $CAD                Expiry Date
--------------------------------------------------------------------------------
   40,000                                   1.35               November 27, 2001
  155,000                                   1.30               December 20, 2002
  200,000                                   1.50               September 7, 2003
  200,000                                   2.        Appointment80               June of7, Auditor2004
   34,000                                   2.47               July 7, 2004
  166,000                                   5.66               October 28, 2004
  400,000                                   5.03               January 14, 2005
   30,000                                   7.11               February 8, 2005
   48,000                                   4.55               March 22, 2005
  700,000                                   3.20 (1)           March 24, 2005
   80,000                                  12.58               March 30, 2005
  436,000                                   3.91               July 7, 2005
   48,000                                   3.15               December 28, 2005
   36,000                                   3.15               February 5, 2006
1,285,000                                   3.20               May 18, 2006

~~Unless otherwise directed, it~~ (1) isAt ~~management’s intention to vote~~ the ~~proxies~~last ~~in favour of an ordinary resolution to appoint the firm of Ernst & Young, Chartered Accountants, as auditor of the Corporation to hold office until the close of the next~~ Annual General Meeting ofheld ~~Shareholders~~on orApril ~~until Ernst & Young~~23, ~~Chartered Accountants~~2001, isa ~~removed~~resolution ~~from office or resigns as provided by law by the~~was ~~Corporation’s~~passed by~~-laws;~~ ~~and to authorize~~ the ~~directors~~shareholders ofamending the ~~Corporation~~exercise ~~to fix~~price ~~the remuneration~~ of ~~Ernst & Young~~700,000 ~~Chartered~~stock ~~Accountants, as auditors of~~options ~~the~~issued ~~Corporation.~~on ~~Ernst~~March ~~& Young~~24, ~~Chartered~~2000 ~~Accountants,~~down ~~has~~from ~~been~~$11.48 ~~the~~to ~~Auditor of the Corporation since August 12, 1994~~$3.20.

~~3. Amendment~~ (B) toDESCRIPTION ~~Articles~~OF WARRANTS OUTSTANDING

The articles of the Corporation currently permit the board of directors of the Corporation to be comprised of a minimum of three (3) and a maximum of seven (7) directors. To permit the Corporation greater freedom and access to additional directors, a special resolution seeking shareholder approval to amend the articles of the Corporation to increase the maximum number of directors permitted to comprise the board of directors to ten (10) members will be presented for approval at the Meeting.

Number of warrants outstanding at March 31, 2001	Exercise Price $CAD	Expiry Date
1,500,000	$5.50 between June, 17 2001 and June 17, 2002	June 16, 2002
140,000	$5.50	December 21, 2001
880,000	$5.50	February 1, 2002
581,230	$5.50	October 10, 2002
869,013	$3.50	June 30, 2003

~~-7-~~5. List of Current Directors

To Neil beW. ~~effective~~Speakman, aDirector, ~~special resolution~~Chairman ~~must be approved by a majority~~ of ~~not less than two-thirds of~~ the Board ~~votes~~ Christopher ~~cast~~M. byYewdall, ~~the~~Director, ~~shareholders~~President ~~present~~and ~~whether~~Chief inExecutive ~~person~~Officer Paul orKristensen, ~~by proxy and~~Director ~~entitled~~ Paul ~~to vote on that resolution~~G. ~~The~~Jeffrey, ~~complete~~Director Ian ~~text~~Macintosh, ofDirector Geoff ~~the~~Roman, ~~proposed special~~Director ~~resolution~~ Eric toEdward ~~approve~~Dillon, ~~this amendment to the articles is as follows:~~ Director

~~"BE~~SCHEDULE ITC: ~~RESOLVED~~MANAGEMENT ASDISCUSSION A& ~~SPECIAL RESOLUTION OF THE CORPORATION THAT:~~ANALYSIS

	(1)	the articles of the Corporation be amended pursuant to Section 167(1)(k) of the Business Corporations Act (Alberta), to increase the maximum number of directors permitted to comprise the board of directors to ten (10) members;
	(2)	the shareholders of the Corporation hereby expressly authorize any director or officer of the Corporation to exercise their discretion as circumstances may require to revoke this resolution before it is acted upon without requiring the further approval of the shareholders of the Corporation in that regard; and
	(3)	any director or officer of the Corporation is hereby authorized and directed to prepare and file the aforementioned amendments to the articles of the Corporation with Alberta Registries, and to update the corporate records accordingly.”

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Unless~~Description ~~it is otherwise indicated in the proxy, it is management’s intention to vote the proxies in favour~~ of ~~the special resolution approving the amendment to the articles of the Corporation.~~ Business

4. ~~Amendment~~The Company’s principal business is the development and sale of software and hardware products and services to ~~Stock~~enable ~~Option~~the ~~Plan~~viewing of 3D without the need for special eyewear or headgear. 3D TV without glasses has become possible through advances in technology over the last few years. These developments have made 3D viewing a more viable and marketable proposition and the Company’s longer-term strategic goal is to bring 3D TV to the mass market.

As Since inception, ~~previously~~we ~~stated~~have ~~under the~~incurred ~~heading~~operating ~~“Executive~~losses ~~Compensation,”~~of approximately $27.9 million related to the ~~Corporation~~development ~~currently~~of ~~has~~our ~~a Stock~~technologies. ~~Option~~We ~~Plan~~anticipate ~~which~~the ~~has~~launch ~~been~~of significant ~~established~~second toand ~~provide~~third ~~incentive~~generation todevelopments ~~quality~~of previously successful ~~parties~~commercialized toproducts ~~increase~~through ~~their~~the ~~proprietary~~remainder ~~interest~~of in2001 ~~the~~which ~~Corporation~~will generate revenue and ~~thereby encourage~~continue ~~their~~our ~~continuing~~expansion ~~association~~as ~~with~~a ~~the~~technology-based ~~Corporation~~marketing, licensing and distribution company. ~~Pursuant~~The torate ~~the policies~~at ofwhich ~~the~~this ~~Canadian~~expansion ~~Venture~~will ~~Exchange,~~occur ~~the~~is dependent ~~maximum~~on a number of ~~shares~~factors, ~~that~~many ~~may be~~of ~~reserved~~which ~~for~~are beyond our control. These include the ~~issuance~~willingness of ~~shares~~production ~~pursuant~~companies to ~~the~~make ~~exercise~~their ofcontent ~~stock options~~available ~~granted~~in ~~pursuant~~3D, to the ~~plan,~~willingness isof ~~20%~~broadcasters ofand ~~the~~cable ~~issued~~system ~~and~~operators ~~outstanding.~~to ~~The~~invest ~~Stock~~in ~~Option~~our ~~Plan~~technologies, ~~currently~~and ~~specifies~~the awillingness ~~maximum~~ of ~~3,634,952~~consumers ~~shares~~to ~~issuable~~buy ~~pursuant to~~and use the ~~plan.~~ancillary equipment Asneeded ofto ~~the~~view ~~Effective~~3D ~~Date,~~images ~~the~~using ~~Corporation~~our ~~has 22~~technologies,~~402,492~~ ~~Common~~such as LCD shutter ~~Shares~~or ~~issued~~red/blue ~~and~~anaglyph ~~outstanding~~glasses.

~~To ensure maximum~~ The ~~flexibility~~Consolidated ofFinancial ~~retaining~~Statements ~~and~~include ~~encouraging~~ the ~~continuing~~accounts ~~association~~ of ~~qualified parties~~Dynamic ~~with~~Digital ~~the~~Depth Inc. ~~Corporation,~~and ~~the~~our ~~shareholders~~wholly ~~will~~owned besubsidiaries. ~~asked~~All tosignificant ~~approve~~inter-company anaccounts ~~ordinary~~and ~~resolution~~transactions tohave ~~amend~~been ~~the~~eliminated. ~~Stock~~Our ~~Option~~research ~~Plan~~and todevelopment ~~specify~~operations are alocated ~~maximum~~in ~~of 4~~Perth,~~480,498~~ ~~Common~~Australia. ~~Shares~~We ~~issuable~~are ~~upon~~incorporated ~~exercise~~under ofthe ~~stock~~laws ~~options~~of ~~granted pursuant~~Canada toand ~~the~~prepare ~~plan,~~our ~~which~~financial ~~number~~statements ~~represents~~in ~~20%~~Canadian ofdollars ~~the~~and ~~22,402,492~~in ~~Common~~accordance ~~Shares issued~~with ~~and~~Canadian ~~outstanding~~Generally asAccepted ofAccounting ~~the~~Principles. ~~Effective~~Reference ~~Date.~~should ~~Disinterested~~be ~~shareholder~~made ~~approval,~~to ~~being~~ the ~~approval~~accompanying offinancial ~~the~~statements, ~~majority~~including of the ~~votes~~notes, ~~cast~~when byreading ~~all~~ the ~~shareholders of~~ ~~the~~following ~~Meeting,~~discussion ~~excluding~~and ~~the~~analysis ~~insiders~~ of the ~~Corporation~~Company’s ~~or the associates, shall be sought for this resolution~~operations.

~~The~~Discussion ~~text~~ of ~~the~~Operations ~~ordinary~~and ~~resolution~~Financial ~~approving the amendment to the Stock Option Plan to be considered at the Meeting will be substantially as follows:~~Condition

~~"BE~~ Our results ITof ~~RESOLVED~~operations ASreflect ANa ~~ORDINARY~~continuing ~~RESOLUTION~~focus OFon ~~THE~~our ~~CORPORATION~~research ~~THAT:~~and development program together with an expansion of marketing activities as our technologies continue to be developed and further commercialized.

~~(1) Section 3 of the Stock Option Plan dated February 6, 2000 be amended to reference 4,480,498 as the maximum number of shares which may be reserved for exercise of options under the plan;~~ Revenues

~~-8-~~ We are still attempting to consistently achieve substantial revenues from the commercialization of our technologies. This reflects our policy to focus on the development of the technologies in order to bring them to the level of sophistication and marketability required for their successful commercialization and the rapid pace of change in market expectations.

	(2)	All stock options granted pursuant to the Stock Option Plan be and are hereby ratified, confirmed and approved; and
	(3)	Any director or officer be and is hereby authorized to execute and deliver all such deeds and other documents as may be necessary in order to give effect to the revisions to the plan and the board of directors of the Corporation from time to time, be authorized to grant options in the capital stock of the Corporation pursuant to and in accordance with the provisions of the Stock Option Plan as revised.”

Technology revenue represent amounts received from services performed related to conversion of 2D content into 3D and sales of hardware pursuant to agreements entered into with third parties who were, or are considered to be, potentially long-term customers.

~~Unless~~ Conversion services ~~otherwise~~represent ~~indicated~~amounts received from several customers for work undertaken in ~~the~~converting ~~proxy,~~2D itmaterial isinto ~~management’s~~3D ~~intention~~using totechnologies ~~vote~~and ~~the~~techniques ~~proxies~~that inwere developed ~~favour~~by of the ~~ordinary~~Company. ~~resolution~~Conversion ~~approving~~services ~~the~~have ~~revision~~primarily tobeen purchased by customers in the ~~Stock~~location ~~Option~~based ~~Plan~~entertainment industry, such as theme parks.

5. ~~Other~~Hardware sales ~~Business~~represent sales of equipment using technologies that were developed by the Company. To date, our hardware sales have been made to one customer, Karl Storz Imaging. The hardware provided to that company modifies the video image produced by medical imaging products and converts it to 3D.

~~While~~ Interest ~~there~~ is noearned ~~other business~~from ~~other~~cash ~~than~~balances ~~that~~invested ~~mentioned~~ in ~~the~~cash ~~Notice~~management ofaccounts. Interest ~~Meeting~~income todecreased beduring ~~presented for~~the ~~consideration~~six-months byended ~~the~~June ~~shareholders at the Meeting~~30, it2001 iscompared ~~intended~~to ~~that~~ the ~~proxies~~ ~~hereby~~six-months ~~solicited~~ended ~~will~~June be30, ~~exercised~~2000 ~~upon~~due ~~any~~to ~~other~~the ~~matters~~fact ~~and proposals~~ that ~~may properly come before~~ the ~~Meeting,~~average orcash ~~any~~balance ~~adjournment~~was ~~or adjournments~~lower ~~thereof,~~and inthe ~~accordance~~rate ~~with~~at ~~the~~which ~~discretion~~such ofaccounts ~~the~~yield ~~persons~~interest ~~authorized~~has ~~to act thereunder~~declined.

~~-9-~~ Other income principally consists of rental income earned from the rental of units in our building units that are held for sale.

~~DATE: March~~Operating ~~17, 2001~~Expenses

~~CERTIFICATE~~ Depreciation and OFamortization ~~THE~~of ~~CORPORATION~~capital assets increased during the six-months ended June 30, 2001 due to higher levels of capital expenditures for technical equipment and the development of a company website compared to the six-months ended June 30, 2000.

~~The~~ Salaries and ~~foregoing~~wages ~~contains~~have noincreased ~~untrue statement~~during ofthe asix-months ~~material~~ended ~~fact~~June ~~and~~30, ~~does~~2001 ~~not~~compared ~~omit~~ to the ~~state~~six-months aended ~~material~~June ~~fact~~30, ~~that~~2000 ~~is required~~due to beadditional ~~stated~~employees orhired ~~that~~to issupport the ~~necessary~~marketing toand ~~make~~commercialization aof ~~statement~~the ~~not~~Company’s ~~misleading~~products in and the practice ~~light~~ of ~~the~~employing ~~circumstances~~personnel inon ~~which~~a itfull-time isbasis ~~made~~to perform duties that were previously outsourced.

ON General and ~~BEHALF~~administrative OFexpenses ~~THE~~decreased ~~MANAGEMENT~~during OFthe ~~DYNAMIC~~six-months ~~DIGITAL~~ended ~~DEPTH~~June ~~INC~~30, 2001 compared to the six-months ended June 30, 2000 primarily due to lower legal and professional fees. In addition, there was a reduction in consultants and sub-contractors costs as a result of the Company’s continuing practice of employing personnel on a full-time basis to perform duties previously outsourced.

~~/s/~~ Marketing and ~~Mark~~promotional N.expenses ~~Schwartz~~are ~~Mark~~incurred N.primarily ~~SchwartzChief~~on ~~Financial~~the ~~Officer~~services ~~/s/~~of ~~Christopher~~marketing consultants, M.attendance ~~Yewdall~~at ~~Christopher~~trade Mshows and on activities associated with obtaining greater exposure of the Company’s technologies. ~~YewdallChief~~These ~~Executive~~expenses increased ~~Officer~~during the six-months ended June 30, 2001 compared to the six-months ended June 30, 2000 due to the occurrence of several trade shows and other related activities.

Interest expense on short-10term debt and capital leases has decreased during the six-months ended June 30, 2001 compared to the six-months ended June 30, 2000 due to reductions in the level of short-term debt and capital leases coupled with the fact that interest rates have declined.

Salaries and wages have increased this quarter compared to last year’s quarter due to additional employees hired to support the marketing and commercialization of the company’s products and the practice of employing personnel on a full time basis to perform duties previously outsourced.

Other matters

Details of transactions with related parties are provided in Note 12 of the financial statements contained herein.

Details of legal proceedings and any contingent liabilities are provided in Note 7 of the financial statements contained herein.

There have been no special resolutions passed by the shareholders during the six-months ended June 30, 2001.

Subsequent Events

Subsequent to June 30, 2001, there have been no events or transactions of a material or significant nature.

Financings

There were no material differences in the actual use of proceeds from the previous disclosure by the Company regarding its intended use of proceeds.

Liquidity and Solvency

For six and three-months ended June 30, 2001 we incurred a net loss of approximately $3.62 million and $2.0 million, respectively, with an operating cash flow deficit averaging approximately $501,000 and $457,000 per month. The net losses principally reflect a continuing focus on our research and development program together with an expansion of marketing activities as our technologies continue to be developed and further commercialized. As of June 30, 2001, we had net working capital of approximately $510,000, including a cash balance of approximately $3.5 million. Through June 30, 2001, we had an accumulated deficit of approximately $27.9 million.

During the six-months ended June 30, 2001 we have continued to make significant progress towards full commercial operation. Product introductions and expanded marketing will require significant additional expenditures through the balance of 2001. As a result, it can be expected that short-term operating losses could accelerate from those previously experienced. In addition, we expect to require approximately $253,000 in capital expenditures during the remainder of 2001.

Historically, we have met our working capital requirements through financing transactions involving the private placement of equity securities or equity equivalents.

During the six-months ended June 30, 2001, the Company raised approximately $4.9 million through a private placement and $35,000 through the exercise of stock options.

We intend on selling the building units held for sale during 2001. In the event that sales have not been finalized by the end of the year, our short-term loan facility will be renegotiated to cover the outstanding loan balance.

We do not believe that our available cash resources and cash flow from operations will be sufficient to meet our liquidity needs through June 30, 2002. We expect that we will require additional financing thereafter which may take the form of private placements of debt or equity securities with financing sources or from development partners. We are in discussions with a number of potential financing sources, including investment banking firms and strategic partners, regarding transactions that would provide us with sufficient resources to meet our working capital requirements for the next twelve months. However, these discussions have not resulted in any definitive agreements. Accordingly, there can be no assurance that such financing will be available on attractive terms to us, if at all. If we are unsuccessful in obtaining financing, we may be required to seek to license our technologies to third parties who are financially better able to exploit the technologies or we may be required to curtail operations.

DYNAMIC DIGITAL DEPTH INC.

SIGNATURES

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

DYNAMIC DIGITAL DEPTH INC. Dated:~~____________~~ September 10, 2001 By:~~__________________________________________~~ /s/ Mark N. Schwartz Mark N. Schwartz, Chief Financial Officer

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