8-K

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

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.

Date of Report: October 31, 2006 (Date of earliest event reported)
QI Systems Inc. (Exact name of registrant as specified in its charter)
TX (State or other jurisdiction of incorporation)	000-30948 (Commission File Number)	20-5126146 (IRS Employer Identification Number)
609 Cheek Sparger Road; Suite 300 (Address of principal executive offices)		76034 (Zip Code)
817-485-8111 (Registrant's telephone number, including area code)
Not Applicable (Former Name or Former Address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

As of October 31, 2006 we issued a press release reporting our financial results for the quarter and year ended June 30, 2006.

Item 9.01. Financial Statements and Exhibits

(a) Financial statements:
            None
(b) Pro forma financial information:
            None
(c) Shell company transactions:
            None
(d) Exhibits
            99.1       Press Release of QI Systems Inc. dated October 31, 2006

SIGNATURE

      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.

Dated: October 31, 2006
QI SYSTEMS INC. By:  /s/ Robert McLean                    
     Robert McLean
     CFO

Exhibit Index
Exhibit No.	Description
99.1	Press Release of QI Systems Inc. dated October 31, 2006

EX-99 2 qisystemsinc8k17836.htm QI SYSTEMS PRESS RELEASE QI Systems Inc. Announces Fiscal 2006 Year-End Financial Results

DALLAS, TX and VANCOUVER, BC -- 10/31/2006 -- QI Systems Inc. (OTCBB: QIII), a leading developer and integrator of contact and contactless card payment, access control and tracking solutions, announced its financial results for its fiscal year ending June 30, 2006. The Company reported record annual revenue during the twelve months ended June 30, 2006 of $406,168 derived from the sale of smart card systems and ancillary products to the Company's client base, particularly within the parking industry. Sales of the Company's products increased 4% with respect to sales achieved in fiscal 2005. In fiscal 2006, QI recorded a net loss of $1,789,433, or $0.05 per share (Basic and Diluted) compared to a net loss of $1,059,038, or $0.04 per share (Basic and Diluted) during 2005. The increase in the net loss is attributed primarily to an increase in non-cash investor relations expenses in 2006 and an increase in legal fees to support the Company's change in domicile from British Columbia, Canada to the State of Delaware, United States of America. At the end of year, the Company had no long-term debt and net working capital of $98,668.

Steven R. Garman, President and Chief Executive Officer of QI Systems, stated, "Although QI ended the 2006 fiscal year with several important projects in development, the revenue from these opportunities won't be recognized until 2007, which left our 2006 results disappointing financially. However, we are pleased to report that during the year we took important steps in positioning our Company for significant growth over the next several years. The strategic relationships we have developed with companies like HID Corporation and SmartCentric Technologies International, Ltd., along with expanding roles with existing customers like Cale Systems, Inc., have allowed QI Systems to be uniquely positioned to take full advantage of the rapid growth in contactless payment applications. The introductions of QiWave™ readers and reload machines have been met with a great deal of interest which we expect to capitalize on in 2007 and beyond."

The Company's audited financial statements and the management discussion and analysis can be found on Canada's System for Electronic Document Analysis and Retrieval ("SEDAR") web site at http://www.sedar.com. The Company intends to file its audited results for 2006 on the SEC's EDGAR database on Form 20-F prior to its due date of December 31, 2006.

About QI Systems

QI Systems Inc. develops and markets innovative chip-based card payment and tracking solutions for a number of industries as well as national, state and local government agencies. QI's products and core competencies include smart-card and stored-value systems, security protocols, data communication software design and hardware manufacture. For more information about QI Systems Inc., visit http://www.qisystems.ca/.

Matters discussed in this press release are "forward-looking statements" and are subject to certain risks and uncertainties. Consider all risk factors carefully when evaluating forward-looking statements, as actual results may differ materially from current expectations. QI Systems undertakes no obligation to publicly update such forward-looking statements.

Corporate & Media Contact:
Steven R. Garman
President & CEO
(817) 485-8111
sgarman@qisystems.ca

Investor Relations Contact:
Robert I. McLean Jr.
CFO/COO
(817) 485-8111
rmclean@qisystems.ca

-----END PRIVACY-ENHANCED MESSAGE-----

EX-99

QI Systems Inc. Announces Fiscal 2006 Year-End Financial Results

DALLAS, TX and VANCOUVER, BC -- 10/31/2006 -- QI Systems Inc. (OTCBB: QIII), a leading developer and integrator of contact and contactless card payment, access control and tracking solutions, announced its financial results for its fiscal year ending June 30, 2006. The Company reported record annual revenue during the twelve months ended June 30, 2006 of $406,168 derived from the sale of smart card systems and ancillary products to the Company's client base, particularly within the parking industry. Sales of the Company's products increased 4% with respect to sales achieved in fiscal 2005. In fiscal 2006, QI recorded a net loss of $1,789,433, or $0.05 per share (Basic and Diluted) compared to a net loss of $1,059,038, or $0.04 per share (Basic and Diluted) during 2005. The increase in the net loss is attributed primarily to an increase in non-cash investor relations expenses in 2006 and an increase in legal fees to support the Company's change in domicile from British Columbia, Canada to the State of Delaware, United States of America. At the end of year, the Company had no long-term debt and net working capital of $98,668.

Steven R. Garman, President and Chief Executive Officer of QI Systems, stated, "Although QI ended the 2006 fiscal year with several important projects in development, the revenue from these opportunities won't be recognized until 2007, which left our 2006 results disappointing financially. However, we are pleased to report that during the year we took important steps in positioning our Company for significant growth over the next several years. The strategic relationships we have developed with companies like HID Corporation and SmartCentric Technologies International, Ltd., along with expanding roles with existing customers like Cale Systems, Inc., have allowed QI Systems to be uniquely positioned to take full advantage of the rapid growth in contactless payment applications. The introductions of QiWave™ readers and reload machines have been met with a great deal of interest which we expect to capitalize on in 2007 and beyond."

The Company's audited financial statements and the management discussion and analysis can be found on Canada's System for Electronic Document Analysis and Retrieval ("SEDAR") web site at http://www.sedar.com. The Company intends to file its audited results for 2006 on the SEC's EDGAR database on Form 20-F prior to its due date of December 31, 2006.

About QI Systems

QI Systems Inc. develops and markets innovative chip-based card payment and tracking solutions for a number of industries as well as national, state and local government agencies. QI's products and core competencies include smart-card and stored-value systems, security protocols, data communication software design and hardware manufacture. For more information about QI Systems Inc., visit http://www.qisystems.ca/.

Matters discussed in this press release are "forward-looking statements" and are subject to certain risks and uncertainties. Consider all risk factors carefully when evaluating forward-looking statements, as actual results may differ materially from current expectations. QI Systems undertakes no obligation to publicly update such forward-looking statements.

Corporate & Media Contact:
Steven R. Garman
President & CEO
(817) 485-8111
sgarman@qisystems.ca

Investor Relations Contact:
Robert I. McLean Jr.
CFO/COO
(817) 485-8111
rmclean@qisystems.ca