UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                        ________________________________

                                   FORM 10-QSB

(MARK ONE)

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

FOR THE QUARTERLY PERIOD ENDED June 30, 2007

OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934

                        COMMISSION FILE NUMBER: 000-30104
                            ------------------------

                              GPS INDUSTRIES, INC.
             (Exact name of registrant as specified in its charter)

                Nevada                                   88-0350120
  (State or other jurisdiction of             (IRS Employer Identification No.)
    incorporation organization)

                  5500 152nd Street, Suite 214
                      Surrey, B.C. Canada                       V3S 5J9
            (Address of principal executive offices)          (Zip Code)

                                 (604) 576-7442
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_].

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date. On August 10, 2007, there were
395,746,111 shares of common stock issued and outstanding.

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) Yes [ ] No [X]

Transitional Small Business Disclosure Format:  Yes [ ] No [X]

                                   ___________

<PAGE>

                              GPS INDUSTRIES, INC.
                       For the period ended June 30, 2007
                                   FORM 10-QSB


                                                                        PAGE NO.
                          PART I. FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements (unaudited):

            Consolidated Balance Sheet at June 30, 2007                    3

            Consolidated Statements of Operations for the six
                    months ended June 30, 2007 and 2006                    4

            Consolidated Statements of Operations for the three
                    months ended June 30, 2007 and 2006                    5

            Consolidated Statements of Cash Flows for the six
                    months ended June 30, 2007 and 2006                    6

            Notes to Consolidated Financial Statements                  7 to 13

Item 2.  Management's Discussion and Analysis or Plan of Operation     14 to 23

Item 3.  Controls and Procedures                                          24

                           PART II. OTHER INFORMATION

Item 2.  Unregistered Sales of Equity and Use of Proceeds                 24

Item 6.  Exhibits                                                         24

SIGNATURES                                                                25

<PAGE>

PART I

ITEM 1.  Consolidated Financial Statements (unaudited):

                      GPS INDUSTRIES INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                  June 30, 2007
                                   (Unaudited)

<TABLE>
<CAPTION>

Assets

Current
<S>                                                                               <C>
     Cash                                                                         $      8,591
     Accounts receivable                                                             2,800,633
     Subscription receivable - Preferred "B" Shares                                  2,000,000
     Inventories                                                                     2,935,439
     Prepaid expenses and other current assets                                         296,734
                                                                                ---------------
          Total current assets                                                       8,041,397

Long-term accounts receivable                                                          234,433

Property and equipment, net                                                            124,935

Patents                                                                              1,185,067

Deferred production costs                                                              459,244

Deferred implementation costs                                                          138,797

Deferred Acquisition Costs                                                             759,155

                                                                                ---------------
                                                                                  $ 10,943,028
                                                                                ===============

Liabilities and Stockholders' Deficit

Current liabilities

     Bank indebtedness                                                            $  1,696,634
     Deferred Revenue                                                                  475,347
     Short term loans                                                                  554,560
     Short term loan from related party                                              1,572,165
     Accounts payable and accrued liabilities                                        6,575,370
     Promissory notes - related parties                                                 12,297
                                                                                ---------------
                                                                                    10,886,373

     Liabilities related to discontinued operations
     (Chapter 7 proceedings filed in 2002)
     Promissory note payable                                                         1,274,757
     Accounts payable and accrued liabilities                                          545,720
     Loans payable to related parties                                                  258,000
     Capital lease obligations ( in default)                                            29,467
                                                                                ---------------
                                                                                     2,107,944
                                                                                ---------------
          Total current liabilities                                                 12,994,317
                                                                                ---------------

Stockholders' deficit
     5% Convertible Series A Preferred Shares, $.001 par value,
     15,000,000 authorized, Issued and outstanding - None                                    -
     Series B Convertible Preferred Shares, $10 par value, 4,000,000
     authorized, 3,124,089 issued and outstanding                                   31,240,890
     Class A common stock, $.001 par value, 1,600,000,000 authorized
     393,046,011 issued and outstanding                                                393,046
     Accumulated other comprehensive income                                            722,295
     Subscription Receivable                                                       ( 8,000,000)
     Additional paid-in capital                                                     69,448,079
     Accumulated deficit                                                          ( 95,855,599)
                                                                                ---------------
          Total Stockholder's Deficit                                              ( 2,051,289)
                                                                                ---------------
                                                                                  $ 10,943,028
                                                                                ===============
</TABLE>
     See accompanying notes to unaudited consolidated financial statements

                                       3

<PAGE>
                      GPS INDUSTRIES INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                       For the Six Months Ended June 30
                                                                       ---------------------------------
                                                                             2007             2006
                                                                       ---------------   ---------------
                                                                          (Unaudited)      (Unaudited)

<S>                                                                     <C>             <C>
Revenue                                                                 $   5,925,542   $   2,455,720

Cost of Goods Sold                                                          3,703,975       1,347,296

Installation Costs                                                            589,292         299,867

                                                                    ----------------------------------
Gross Profit                                                                1,632,275         808,557
                                                                    ----------------------------------


Operating Expenses

      General and Administrative Expenses                                   1,539,029       1,630,489
      Depreciation and amortization                                           183,723         166,668
      Sales and marketing                                                   2,407,650       1,176,709
      Operations, Engineering and Research & Development                    1,509,921       1,304,055
                                                                    ----------------------------------
                                                                            5,640,323       4,277,921
                                                                    ----------------------------------

Loss Before Other Income (Expense)                                        ( 4,008,048)    ( 3,469,364)
                                                                    ----------------------------------

Other Income (Expense)

      Finance costs                                                          ( 50,145)      ( 108,010)
      Interest expense                                                      ( 314,289)    ( 2,060,329)
      Derivative liabilities - Decrease in fair value                               -       3,209,667
      Gain/(Loss) on foreign exchange                                          10,913       ( 167,207)
      (Loss)/Gain on extinguishment of debt                                 ( 158,987)        238,854
                                                                    ----------------------------------
                                                                            ( 512,508)      1,112,975
                                                                    ----------------------------------

Net Loss Before Deemed Preferred Stock Dividend                         $ ( 4,520,556)  $ ( 2,356,389)

      Deemed Preferred Stock Dividend                                    ( 12,500,000)              -
                                                                    ----------------------------------
Net Loss                                                                $( 17,020,556)  $ ( 2,356,389)
                                                                    ==================================

Loss per common share - basic and diluted
                                                                        $      ( 0.05)  $      ( 0.01)
                                                                    ==================================
Weighted average number of common shares outstanding -
      basic and diluted                                                   373,405,002     293,554,966
                                                                    ==================================
</TABLE>
     See accompanying notes to unaudited consolidated financial statements
                                       4

<PAGE>

                      GPS INDUSTRIES INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                                  For the Three Months Ended June 30
                                                                                  ---------------------------------
                                                                                           2007             2006
                                                                                   ---------------   ---------------
                                                                                       (Unaudited)      (Unaudited)

<S>                                                                                     <C>              <C>
Revenue                                                                                 $ 3,668,655      $ 1,629,629

Cost of Goods Sold                                                                        2,270,511          914,039

Installation Costs                                                                          366,033          244,473

                                                                                  -----------------------------------
Gross Profit                                                                              1,032,111          471,117
                                                                                  -----------------------------------


Operating Expenses

      General and Administrative Expenses                                                   594,886          693,726
      Depreciation and amortization                                                          91,850           82,525
      Sales and marketing                                                                 1,150,669          531,115
      Operations, Engineering and Research and Development                                  516,758          656,829
                                                                                  -----------------------------------
                                                                                          2,354,163        1,964,195
                                                                                  -----------------------------------
Loss Before Other Income (Expense)                                                      ( 1,322,052)     ( 1,493,078)
                                                                                  -----------------------------------

Other Income (Expense)

      Finance costs                                                                        ( 28,510)        ( 53,898)
      Interest expense                                                                     ( 20,128)     ( 1,060,432)
      Derivative Liabilities - Decrease in fair value                                             -        1,947,252
      Loss on foreign exchange                                                              ( 2,593)       ( 166,917)
      (Loss)/Gain on extinguishment of debt                                               ( 267,186)         150,904
                                                                                  -----------------------------------
                                                                                          ( 318,417)         816,909
                                                                                  -----------------------------------

Net Loss Before Deemed Preferred Stock Dividend                                       $ ( 1,640,469)     $ ( 676,169)

      Deemed Preferred Stock Dividend                                                  ( 12,500,000)               -
                                                                                  -----------------------------------
Net Loss                                                                              $ (14,140,469)     $ ( 676,169)
                                                                                  ===================================

Loss per common share - basic and diluted
                                                                                      $      ( 0.04)     $    ( 0.00)
                                                                                  ===================================

Weighted average number of common shares outstanding -
      basic and diluted                                                                 378,324,414      268,547,360
                                                                                  ===================================
</TABLE>
     See accompanying notes to unaudited consolidated financial statements

                                       5

<PAGE>

                      GPS INDUSTRIES INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                       For the Six Months Ended June 30
                                                                       ---------------------------------
                                                                             2007             2006
                                                                       ---------------   ---------------
                                                                          (Unaudited)      (Unaudited)
Cash Flow From Operating Activities
<S>                                                                    <C> <C>        <C> <C>
     Net loss from operations                                          $ ( 4,520,556) $ ( 2,356,389)

     Adjustments to reconcile net loss to net cash used
     in operating activities:
         Depreciation and amortization                                       183,723        166,668
         Amortization of deferred compensation                               112,632        112,632
         Loss on extinguishment of debt                                      375,385         91,076
         Expenses paid by issuance of stock                                  117,600        128,880
         Expenses paid by issuance of stock options                           61,560              -
         Finance charges charged to equity                                         -         32,900
         Interest converted to stock                                          42,791         16,989
         Decrease in fair value of derivative liabilities                          -    ( 3,209,667)
         Amortization of debt discount                                             -      1,266,543
         Amortization of finance costs                                         3,348        155,092

     Changes in operating assets and liabilities:
         Inventories                                                     ( 1,461,894)     ( 348,068)
         Accounts receivable                                             ( 1,687,181)       170,433
         Subscription receivable - Preferred "B" Shares                    3,000,000              -
         Long-term accounts receivable                                        39,310         11,329
         Prepaid expenses and deposits                                        91,422      ( 304,457)
         Deferred implementation costs                                      ( 22,450)      ( 66,547)
         Deferred production costs                                         ( 459,244)             -
         Accounts payable and accrued liabilities                          1,147,041      1,087,747
         Discontinued operations - accounts payable and
         accrued liabilities                                               ( 200,771)     ( 329,933)
         Deferred Revenue                                                     47,973        762,017
                                                                     -------------------------------
Net Cash Used In Operating Activities                                    ( 3,129,311)   ( 2,612,755)
                                                                     -------------------------------
Cash Flow From Investing Activities
         Purchase of property and equipment                                 ( 74,270)      ( 60,183)
         Investment in Optimal Golf Solutions Inc.                         ( 806,652)             -
         Investments in Subsidiaries - Deferred acquisition costs          ( 234,155)
         Investment in Patents                                              ( 44,570)             -
                                                                     -------------------------------
Net Cash Flow Used In Investing Activities                               ( 1,159,647)      ( 60,183)
                                                                     -------------------------------
Cash Flow From Financing Activities

         Preferred Stock issued for cash (Net of costs)                   11,172,964              -
         Preferred Stock issued for debt                                   1,000,000              -
         Subscription receivable                                         ( 8,000,000)             -
         Proceeds (payments) - loans and bank indebtedness                 ( 689,135)     2,830,096
         Repayments of loans                                             ( 1,382,500)     ( 244,618)
                                                                     -------------------------------
Net Cash Flow Provided By Financing Activities                             2,101,329      2,585,478
                                                                     -------------------------------

Net Decrease In Cash                                                     ( 2,187,629)      ( 87,460)

Cash, Beginning Of Period                                                  2,196,220        131,174
                                                                     -------------------------------
Cash, End Of Period                                                    $       8,591  $      43,714
                                                                     ===============================
Supplemental disclosure of cash flow information:
     Cash paid for interest                                            $     308,879  $     267,773
                                                                     ===============================
     Cash paid for taxes                                               $      21,856  $           -
                                                                     ===============================

Non-Cash Investing And Financing Activities

     Common stock issued on conversion of convertible notes            $           -  $     467,863
                                                                     ===============================
     Common stock issued to settle debt                                $     715,000  $     107,241
                                                                     ===============================
     Common stock issued in settlement of accounts payable             $     262,500  $     699,740
                                                                     ===============================
     Common stock issued for investments                               $   2,178,329  $           -
                                                                     ===============================
     Deemed dividends on issuance of preferred stock                   $  12,500,000  $           -
                                                                     ===============================
</TABLE>
     See accompanying notes to unaudited consolidated financial statements

                                       6

<PAGE>

                      GPS Industries, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                     Six months ended June 30, 2007 and 2006
                                   (Unaudited)

1. Organization and Basis of Presentation

Basis of  Presentation  - The  consolidated  financial  statements  include  the
operations  of GPS  Industries,  Inc.  and its  wholly-owned  subsidiaries  (the
"Company").  All significant  intercompany  transactions  and balances have been
eliminated in consolidation.

The interim consolidated financial statements are unaudited,  but in the opinion
of  management of the Company,  contain all  adjustments,  which include  normal
recurring  adjustments,  necessary to present  fairly the financial  position at
June 30, 2007, the results of operations for the three and six months ended June
30, 2007 and 2006, and the cash flows for the six months ended June 30, 2007 and
2006. The results of operations for the three and six months ended June 30, 2007
are not  necessarily  indicative of the results of operations to be expected for
the full fiscal year ending December 31, 2007.

Certain  information  and footnote  disclosures  normally  included in financial
statements  that have been  presented  in  accordance  with  generally  accepted
accounting  principles have been condensed or omitted  pursuant to the rules and
regulations of the Securities  and Exchange  Commission  with respect to interim
financial  statements,  although  management  of the Company  believes  that the
financial  statements provide a fair presentation of the periods presented.  For
further  information,  refer to the consolidated  financial statements and notes
thereto  included in the  Company's  Annual Report on Form 10-KSB for the fiscal
year  ended  December  31,  2006,  as filed  with the  Securities  and  Exchange
Commission.

Business - The Company is a golf course management  technology  company. It owns
the rights to both a hand-held and cart mounted product using Global Positioning
Systems  ("GPS")  technology  that it markets  through it's sales offices in the
USA, and through sales distributors in the USA, UK and Europe, Australia,  South
Africa and Asia. It's portable product, the "Inforemer",  is connected through a
wireless link to golf course management information systems that are marketed as
part of its  golf  course  suite  of  products.  The  Inforemer  is  capable  of
exhibiting  continuously  updated  advertising.  The Company currently generates
most of its  revenues  from the sale and  installation  of its GPS and  wireless
products and software tools. To a lesser extent, it also generates revenues from
licensing  to third  parties  certain of the patents that it owns on golf course
technologies.  The Company's business plan is to establish a substantial base of
golf course clients  (either  through the sale of golf course systems or through
acquisitions of other companies) and to thereafter  generate  recurring revenues
from (i) selling  advertising for exhibition on the Informer units used at those
golf courses, and (ii) from other revenue generating golf course programs,  such
as the Fire At The Flag(TM) program. At June 30, 2007,  substantially all of the
Company's assets and operations were located in Canada.

In  December  2002,  the  Company's  wholly-owned  subsidiary,  Inforetech  Golf
Technology  2000 Inc.,  ceased  operations and filed a petition for relief under
Chapter 7 of the United States  Bankruptcy Code on December 19, 2002,  which was
subsequently granted (see Note 5).

The Company  acquired  100% of the equity of ProShot  Golf Inc.  ("ProShot")  on
January  12,  2001.  ProShot  was a  California-based  company  involved  in the
manufacture,  marketing,  leasing and  installation  of an integrated GPS system
that was  installed  directly on golf courses and provided  golfers with yardage
readings and  potential  shot  options  from any  location on a golf course.  In
December 2001,  ProShot ceased  operations and filed a petition for relief under
Chapter  7 of the  United  States  Bankruptcy  Code on May 31,  2002,  which was
subsequently granted (see Note 5).

As a result of these Chapter 7 bankruptcy filings, the remaining  liabilities of
such   discontinued   subsidiaries   have  been  classified  as  liabilities  of
discontinued   operations  in  the  accompanying  financial  statements.   These
liabilities  are being written off in accordance with the statute of limitations
in the jurisdiction in which they were incurred.

On November 19, 2004 GPS Industries, Inc. purchased 100% of the common shares of
Optimal Golf  Solutions,  Inc.  ("Optimal"),  the financial  results  (including
Patent  License  Fee  Revenues)  of which are  consolidated  into the  financial
statements of the Company.

2. Going Concern

Going  Concern  - The  consolidated  financial  statements  have  been  prepared
assuming that the Company will continue as a going concern,  which  contemplates
the  realization  of assets and the  satisfaction  of  liabilities in the normal
course of business.  The carrying amounts of assets and liabilities presented in
the consolidated financial statements do not purport to represent the realizable
or settlement values. The Company has incurred significant losses and had a

                                       7

<PAGE>

working  capital  deficit at June 30, 2007 and December 31, 2006.  The continued
commercialization  of the  Company's  technology  is dependent on the  Company's
ability to  successfully  finance its  working  capital  requirements  through a
combination of debt and equity financings, sales of its GPS systems and payments
from distributors and potential  strategic partners.  The Company's  independent
registered certified public accountants,  in their independent  auditors' report
on the consolidated  financial  statements as of and for the year ended December
31,  2006,  have  expressed  substantial  doubt about the  Company's  ability to
continue as a going concern.

The  Company  is  attempting  to raise new  capital  and has  obtained a written
commitment from its largest  stockholder to obtain $8,000,000 of additional cash
payments during the current fiscal year. However, to the extent that the Company
does not obtain all of the foregoing  $8,000,000 cash infusion,  or otherwise is
unable to obtain the capital necessary to fund its future cash requirements on a
timely basis and under  acceptable  terms and  conditions,  the Company will not
have sufficient cash resources to maintain operations.


The Company's  liquidity and capital resources were substantially  improved as a
result of two  financing  transactions  effected in  December  2006 and May 2007
between  the  Company  and Great White  Shark  Enterprises,  Inc.  ("GWSE")  and
Leisurecorp  LLC, and certain  principals of the Company.  In December 2006, the
Company completed a sale of $15,740,890 of newly authorized Series B Convertible
Preferred  Stock (the "Series B Shares")  and warrants to GWSE and  Leisurecorp,
along with the  concurrent  sale of the Series B Shares to Douglas Wood,  one of
the Company's directors,  in exchange for, and as payment for $3,000,000 of cash
loans he had previously  made to it. The $3,000,000 of loans were repaid through
the  issuance of 300,000  Series B Shares and  warrants  to purchase  49,180,328
shares of common stock to Mr. Wood. Also, on December 29, 2006 Robert C. Silzer,
the Company's Chief Executive Officer, cancelled $750,000 of obligations owed to
him in exchange for  12,295,082  shares of common stock and warrants to purchase
3,073,770  shares  of  common  stock.  A  portion  of the cash  proceeds  of the
foregoing sales of securities were used to reduce indebtedness,  and the balance
is being used for working capital to fund operations.

In May  2007,  the  Company  sold  additional  shares  of  Series B  Shares.  In
connection  with the  December  2006  purchase  of  Series B Shares  by GWSE and
Leisurecorp,  the Company  agreed to give GWSE and  Leisurecorp  each the right,
exercisable until the end of April 2007, to increase their  investment,  or make
an  additional  investment  in the shares of Series B Shares and warrants on the
same  terms  as the  securities  sold to them on  December  29,  2006.  GWSE and
Leisurecorp  timely  exercised the foregoing  option in April 2007 to purchase a
total of  $12,500,000 of additional  shares of Series B Stock and warrants,  and
the closing of the purchase of the  $12,500,000  additional  Series B Shares and
warrants was  consummated  on May 8, 2007.  Leisurecorp  purchased  its Series B
Shares and warrants by delivering a $10,000,000  interest-free  promissory  note
(the "Note") that is secured by the  securities  sold to  Leisurecorp,  and GWSE
purchased its Series B Shares and warrants in exchange for cash ($1,500,000) and
the  cancellation of $1,000,000 of outstanding  indebtedness the Company owed to
GWSE.  Leisurecorp  is required to repay the Note as follows:  $2,000,000  on or
before  June 30,  2007;  $4,000,000  on or  before  October  31,  2007;  and the
remaining  $4,000,000 on or before December 31, 2007. The first repayment of the
Note of $2,000,000  was received by the Company on July 9, 2007. The Company has
agreed to use  approximately  $5.5 million of the future Note  payments to repay
most of its  currently  outstanding  indebtedness  (other  than  trade  accounts
payable and accrued  operating  liabilities  incurred in the ordinary  course of
operations).


3. Summary of Significant Accounting Policies

Revenue  Recognition  - The  Company  recognizes  revenue  only when  persuasive
evidence of an  arrangement  exists,  delivery has occurred,  the sales price is
fixed or determinable,  and  collectibility is probable.  When other significant
obligations   remain  after  products  are  delivered,   associated  revenue  is
recognized  only  after  such  obligations  are  fulfilled.  Cost of Goods  Sold
represents  the  cost  of  physical  equipment  delivered  to the  customer  and
installed on the  customer's  site.  The cost of installing the equipment on the
customer's site, such as contract labour, travel and accommodation expenses, are
recorded as  Installation  Costs.  The cost of developing  the equipment and the
software  installed in the  equipment on the  customer's  site is recorded as an
operating  expense  in  the  category  "Operations,  Engineering,  Research  and
Development",  all such  costs are  expensed  as they are  incurred.  Production
expenses  incurred  prior  to  the  commercial   introduction  of  products  are
capitalized  as  "Deferred  Production  Costs"  and  amortized  over the  useful
economic life of the product.

Use of Estimates - The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and  assumptions  that affect the  reported  amounts of assets and  liabilities,
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements,  and the  reported  amounts  of  revenues  and  expenses  during the
reporting period. Actual results could differ from those estimates.

                                        8


<PAGE>

Derivative  Liabilities  - The  Company  accounts  for  its  liquidated  damages
pursuant to Emerging Issue Task Force ("EITF")  05-04,  View C, "The Effect of a
Liquidated Damages Clause on a Freestanding  Financial  Instrument",  subject to
EITF Issue No. 00-19,  "Accounting for Derivative Financial  Instruments Indexed
to, and Potentially Settled in, a Company's Own Stock".  Pursuant to EITF 05-04,
View C,  liquidated  damages  payable  in cash or stock are  accounted  for as a
separate derivative, which requires a periodical valuation of its fair value and
a corresponding recognition of liabilities associated with such derivative.  The
Company accounts for its embedded conversion features and freestanding  warrants
pursuant to SFAS No. 133,  "Accounting  for Derivative  Instruments  and Hedging
Activities",  which  requires  a  periodic  valuation  of their fair value and a
corresponding  recognition of liabilities associated with such derivatives.  The
recognition  of  derivative  liabilities  related to the  issuance  of shares of
common stock is applied first to the proceeds of such  issuance,  at the date of
issuance,  and the  excess  of  derivative  liabilities  over  the  proceeds  is
recognized  as  other  expense  in  the  accompanying   consolidated   financial
statements. The recognition of derivative liabilities related to the issuance of
convertible  debt is applied  first to the  proceeds of such  issuance as a debt
discount, at the date of issuance, and the excess of derivative liabilities over
the proceeds is  recognized as other  expense in the  accompanying  consolidated
financial  statements.  Any subsequent increase or decrease in the fair value of
the  derivative  liabilities  is  recognized  as other  expense or other income,
respectively.

Foreign Currency Translation - Assets and liabilities of subsidiaries in foreign
countries are  translated  into United States dollars using the exchange rate in
effect at the balance sheet date or the historical rate, as applicable.  Results
of  operations  are  translated  using the  average  exchange  rates  prevailing
throughout the period.  The effects of exchange rate fluctuations on translating
foreign  currency assets and liabilities into United States dollars are included
in stockholders'  deficiency as accumulated other  comprehensive  income,  while
gains and losses  resulting from foreign  currency  transactions are included in
operations.

Net  Loss Per  Common  Share - Basic  loss per  common  share is  calculated  by
dividing net loss by the weighted  average  number of common shares  outstanding
during the period. Diluted loss per common share reflects the potential dilution
that would occur if dilutive  stock options and warrants were  exercised.  These
potentially dilutive securities were not included in the calculation of loss per
share for the periods  presented because the Company incurred a loss during such
periods and thus their effect would have been anti-dilutive.  Accordingly, basic
and diluted loss per common share is the same for all periods presented.


Stock-Based  Compensation  - The Company  periodically  issues  shares of common
stock for services rendered or for financing costs. Such shares are valued based
on the market price on the transaction date.

The Company  periodically  issues stock  options and  warrants to employees  and
non-employees in non-capital raising transactions for services and for financing
costs.

The  Company  expenses  stock  options  and  warrants  under the  provisions  of
Statement of Financial  Accounting  Standards ("SFAS") No. 123(R),  "Share-Based
Payment" (SFAS 123(R)).  Stock-based compensation represents the cost related to
stock-based  awards  granted to  employees  and  others.  The  Company  measures
stock-based  compensation  cost at grant date, based on the estimated fair value
of the award,  and recognizes the cost as expense on a straight-line  basis (net
of  estimated  forfeitures)  over the  requisite  service  period.  The  Company
estimates the fair value of stock options using a Black-Scholes valuation model.
The expense is recorded in the Consolidated Statements of Operations.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded  options  that have no vesting  restrictions  and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective assumptions including the expected stock price volatility.

Income Taxes - The Company records a valuation  allowance to reduce its deferred
tax assets arising from net operating loss  carryforwards  to the amount that is
more likely than not to be  realized.  In the event the Company was to determine
that it would be able to realize its deferred tax assets in the future in excess
of its  recorded  amount,  an  adjustment  to the  deferred  tax assets would be
credited to  operations  in the period such  determination  was made.  Likewise,
should the Company determine that it would not be able to realize all or part of
its deferred tax assets in the future,  an adjustment to the deferred tax assets
would be charged to operations in the period such determination was made.

Reclassifications  - Certain  reclassifications  of items in the prior  period's
financial   statements   have  been  made  to  conform  to  the  current  year's
presentation.

                                       9

<PAGE>

Recent Accounting Pronouncements

In June 2006, the Financial  Accounting  Standards Board (FASB) issued Financial
Interpretation  (FIN) No. 48,  "Accounting for Uncertainty in Income Taxes -- an
Interpretation  of FASB  Statement No. 109." FIN 48 addresses the accounting for
uncertainty in income taxes recognized in an enterprise's  financial  statements
in accordance with Statement of Financial  Accounting  Standards (SFAS) No. 109,
"Accounting  for Income  Taxes." FIN 48  prescribes  specific  criteria  for the
financial statement recognition and measurement of the tax effects of a position
taken or expected to be taken in a tax return. This interpretation also provides
guidance on de-recognition of previously recognized tax benefits, classification
of tax liabilities on the balance sheet, recording interest and penalties on tax
underpayments,  accounting in interim periods, and disclosure requirements.  FIN
48 is effective  for fiscal  periods  beginning  after  December  15, 2006.  The
Company is currently  evaluating the impact,  if any that the adoption of FIN 48
will have on its financial statements.

In  September  2006,  the FASB issued FASB  Statement  No. 157.  This  Statement
defines  fair  value,  establishes  a  framework  for  measuring  fair  value in
generally accepted  accounting  principles (GAAP), and expands disclosures about
fair  value   measurements.   This  Statement  applies  under  other  accounting
pronouncements that require or permit fair value measurements,  the Board having
previously  concluded in those  accounting  pronouncements  that fair value is a
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement  will change  current  practices.  This  Statement  is  effective  for
financial statements for fiscal years beginning after November 15, 2007. Earlier
application is permitted  provided that the reporting  entity has not yet issued
financial  statements for that fiscal year.  Management is currently  evaluating
the impact,  if any,  that the  adoption  of FAS 157 will have on its  financial
statements.

In December  2006, the FASB approved FASB Staff Position (FSP) No. EITF 00-19-2,
"Accounting for Registration Payment  Arrangements" ("FSP EITF 00-19-2"),  which
specifies  that the contingent  obligation to make future  payments or otherwise
transfer consideration under a registration payment arrangement,  whether issued
as a separate agreement or included as a provision of a financial  instrument or
other agreement, should be separately recognized and measured in accordance with
SFAS No. 5,  "Accounting  for  Contingencies".  FSP EITF 00-19-2  also  requires
additional   disclosure   regarding  the  nature  of  any  registration  payment
arrangements,  alternative  settlement methods,  the maximum potential amount of
consideration  and the current  carrying  amount of the  liability,  if any. The
guidance in FSP EITF 00-19-2  amends FASB  Statements No. 133,  "Accounting  for
Derivative  Instruments and Hedging  Activities",  and No. 150,  "Accounting for
Certain  Financial  Instruments  with  Characteristics  of both  Liabilities and
Equity", and FASB Interpretation No. 45, "Guarantor's  Accounting and Disclosure
requirement for  Guarantees,  Including  Indirect  Guarantees of Indebtedness of
Others", to include scope exceptions for registration payment arrangements.  FSP
EITF 00-19-2 is effective  immediately for registration payment arrangements and
the financial instruments subject to those arrangements that are entered into or
modified  subsequent  to the  issuance  date  of  this  FSP,  or  for  financial
statements  issued for fiscal years  beginning  after  December  15,  2006,  and
interim periods within those fiscal years, for registration payment arrangements
entered  into prior to the  issuance  date of this FSP. The Company is currently
evaluating the impact, if any, on the Company's financial  position,  results of
operations or cash flows.


In February  2007,  the FASB issued  SFAS No.  159,  "The Fair Value  Option for
Financial  Assets and Financial  Liabilities-including  an amendment of FAS 115"
(Statement 159).  Statement 159 allows entities to choose, at specified election
dates, to measure  eligible  financial assets and liabilities at fair value that
are not otherwise required to be measured at fair value. If a company elects the
fair value  option for an  eligible  item,  changes in that item's fair value in
subsequent  reporting periods must be recognized in current earnings.  Statement
159 is effective  for fiscal years  beginning  after  November 15, 2007.  We are
currently  evaluating  the  potential  impact of Statement  159 on our financial
statements. We do not expect the impact will be material.

4. Debt

Bank Indebtedness

Effective  June 27,  2003,  the  Company  obtained  a bank  line of  credit  for
$1,485,000 to fund its operations. As of June 30, 2007, the Company had borrowed
approximately  $1,696,634 under this line of credit.  The excess over the credit
available represents the cash float arising from timing differences between when
payments are issued from this account and when they are  presented  for payment.
The line of credit  bears  interest at prime plus 0.5%,  is repayable in full on
demand and is secured by a one year standby bank letter of credit for $1,500,000
that was provided by a third party,  Hansen Inc.  This standby  letter of credit
from Hansen Inc. has been renewed a number of times and is currently  renewed to
December  31,  2007.  As  consideration  for renewing the standby bank letter of
credit, the Company has issued to Hansen Inc. common stock purchase warrants to

                                        10

<PAGE>

purchase  1,500,000 shares of the Company's  common stock,  exercisable at $0.10
per share (a 15% discount to the then market price) for a period of three years.
In addition the Company  extended  2,000,000  previously  issued  warrants which
expired in 2006 to expire in 2008 at a price of $0.05.  $75,416,  the fair value
of  these  common  stock   purchase   warrants,   calculated   pursuant  to  the
Black-Scholes  option pricing model,  was charged to operations as finance costs
for the twelve months ended  December 31, 2006.  The Company also pays a standby
LOC fee to  Hansen  Inc.  of 2% per annum on a  quarterly  basis,  amounting  to
approximately $7,500 per quarter..

Effective  March 23, 2004, the Company  entered into a  Reimbursement  Agreement
with Douglas J. Wood, Daniel S. Wood and James Liken (the Secured Party) to have
them  secure  a new  $1,000,000  line of  credit  to be used  for  manufacturing
purposes.  The  security  provided  was a Letter of Credit from  Citicorp  North
America Inc. The Company's bankers, HSBC Bank Canada,  provided the Company this
new line of credit on April 29, 2004 based on the  security  provided,  on which
interest at prime plus one half of one percent interest was payable. On June 22,
2006 this Letter of Credit was increased to $1,400,000. As consideration for the
security provided,  the Company agreed to pay the Secured Party 15% per annum of
the  maximum  amount  outstanding  in the month,  payable  50% in US$ and 50% in
common  shares of the  Company,  issued at a 10% discount to market based on the
seven day  average  price prior to each  quarter  end.  Beginning  July 2006 the
consideration was 100% paid in cash. The Company has accrued this  consideration
to February 28, 2007.  Additionally the Company agreed to issue 666,667 warrants
to purchase  common stock of the Company at $0.15 per common share.  The Company
also  granted  the  Secured  Party a  security  interest  in all  the  Company's
inventory.   This  letter  of  credit,  along  with  its  related  Reimbursement
Agreement,  was subsequently  renewed until February 28, 2007, at which point it
expired and the line of credit was removed.

Short-Term Loans

As of June 30, 2007 the Company has $2,126,725 owing on short term notes.  These
amounts are repayable on demand and bear interest at varying rates.  The largest
of these, amounting to $1,572,165, is from a director and stockholder.

Purchase Order Financing

In January 2006 the Company  entered  into an  agreement  with Great White Shark
Enterprises to obtain purchase order financing on confirmed sales orders.  As of
June 30, 2007 the Company owed $354,560 on this purchase order financing line of
credit.  The Company  pays 18% per annum  interest for the period the advance is
required.  Additionally  the lender  receives  100,000  shares for each $250,000
advanced.  The balance of $354,560  owing under this  financing line at June 30,
2007 is included in the balance of $554,560 owed on Short Term Loans.

Liability Associated with Acquisition of Optimal Golf Solutions, Inc.


On November 19, 2004 the Company  acquired  100% of the common shares of Optimal
Golf Solutions,  Inc.  ("Optimal"),  a Texas corporation owned by Darryl Cornish
and Charles  Huston  ("Optimal  Shareholders"),  for a total of $5,250,000  plus
interest  of 4.75% on the  principal  balance  outstanding  payable as  follows:
$100,000  on  signing a Letter Of Intent on  November  8,  2004,  $1,000,000  on
closing,  a stock payment of 9,000,000  restricted  common shares of the Company
valued at  $2,250,000  using a minimum price of $.25 per share and a final stock
payment of $1,900,000  representing 7,600,000 common shares of the Company using
a  minimum  price of $.25 per  share.  These  shares  could  be sold  after  the
effectiveness  of a  registration  statement  and in  accordance  with a Leakage
Agreement.  The final purchase price may vary,  however,  depending on the price
that the Optimal  Shareholders  receive for the shares they sell. The obligation
to pay the deferred  purchase price was secured by a first security  interest in
the Optimal patents as described below.

The first stock payment of 9,000,000  shares could be sold (in  accordance  with
the Leakage Agreement) over 180 trading days. If the former Optimal shareholders
sold their  shares and  received  less than the target  price of $.25 per share,
then  the  Company  was  required  to  issue  additional  shares  to make up the
difference (or cash under certain conditions).

The second  stock  payment was to be issued at a 15% discount to market price at
the time of issuance and can be sold into the market by the Optimal Shareholders
over a further 180 trading  days.  On May 28,  2005 the Company  entered  into a
First  Amendment to Stock  Purchase  Agreement  whereby it was granted up to six
months of additional time to have a Registration  Statement declared  effective.
As  consideration  for this  extension,  the Company  agreed to pay $100,000 per
month until the Registration  Statement was declared  effective,  which would be
applied  to the  balance  owing  which was to be settled  with the second  stock
payment.  The Company paid a total of $600,000 to the Optimal Shareholders under
this amendment.  However,  because the  Registration  Statement was not filed by
September 30, 2005, the Company lost the benefit of the reduction in the balance
of the second stock  payment and of any amounts  realized  from the sales of the
first stock payment over $3,250,000 (the "cap"),  which was to reduce the amount
to be paid in the second stock payment.

                                       11

<PAGE>

The Company agreed to use its best efforts to file and cause to have effective a
Registration  Statement  covering  the  resale  of  the  shares  issued.  If the
Registration  Statement  was not  effective  by June 30,  2005,  the Company was
obliged to pay cash of $2,250,000 plus interest over eight monthly  installments
of $250,000 each starting June 1, 2005. In that case, the first stock payment of
shares would be returned to the Company. If the Registration  Statement were not
effective  by  September  30,  2005,  then it would also pay cash to the Optimal
Shareholders  (in lieu of a second stock payment) of $1,900,000 plus interest in
eight monthly payments of $237,500 commencing on October 1, 2005.

Because the Company did not have the  Registration  Statement filed by September
30, 2005,  it agreed to register the resale of the  9,000,000  shares issued for
the first stock payment and an additional  31,000,000 shares to cover the shares
issuable for the second  stock  payment and the  additional  shares that must be
issued to cover  decrease  in the market  price of its common  stock which had a
closing  bid price of $0.065 on December  31,  2005.  The Company  filed the SB2
Registration  Statement  covering  these  shares on October  20, 2005 and it was
declared effective by the SEC on December 7, 2005.

Upon  receipt  of the first  $727,000  of net  proceeds  from the sale of shares
issued to the Optimal  Shareholders  for the second stock  payment,  this amount
will be forwarded to the Company's attorney to be held in escrow for a period of
18 months from  closing to  partially  secure the  shareholders  indemnification
obligations to the Company under the Agreement.

The trading period for the first stock payment expired on August 22, 2006. Based
upon the receipts  from the sale of the first stock  payment  during the trading
period the Company had a liability to the Optimal  Shareholders  for the balance
of the first stock  payment of  approximately  $1.65  million at that date.  The
Company also has a liability  to issue  approximately  30,400,000  shares to the
Optimal Shareholders to fund the second stock payment liability of approximately
$1.65  million.  Subsequent  to August 22,  2006 the  Company  paid the  Optimal
Shareholders $300,000 of the liability under the first stock payment and they in
turn agreed to sell the  remaining  balance of the unsold shares they still held
from the first stock payment and to apply the proceeds against the liability for
the balance due. These  subsequent  sales reduced the remaining  liability under
the first stock  payment to $806,852  which was paid in January 2007. On January
16, 2007 the Company issued  30,392,082 shares to satisfy the liability to issue
shares for the second stock payment.  Full  satisfaction  of this liability will
depend on the Optimal  Shareholders  receiving sufficient funds from the sale of
the second stock  payment  shares to pay down the  remaining  liability in full.
Based on the market price of the Company's  stock at June 30, 2007 the remaining
liability  would be satisfied in full from the sale of the shares issued for the
second stock payment.

Optimal was primarily engaged in the business of holding patents relating to GPS
technology  for the golf  industry.  Optimal held an important  U.S.  patent no.
5,364,093  which was issued on November 15, 1994 for a Golf  Distance  Measuring
System and Method.  They also owned U.S. Patent No.  5,751,244 which was for the
Method and Apparatus for Calibration of a GPS Receiver.  Optimal had also made a
Canadian  patent  application  no 2,134,737  entitled  Method and  Apparatus for
Message  Display  on a Golf  Course.  The 093 Patent  has been  licensed  to six
companies,  of which two  currently  pay  annual  licensing  fees.  All  license
payments received were required to be forwarded to Great White Shark Enterprises
until their loan in the amount of  $3,000,000,  plus  interest  owing of 10% per
annum,  was fully  repaid.  This  loan was  converted  to  Series B  Convertible
Preferred  Shares on December 29, 2006.  Great White Shark is entitled to 20% of
all patent license  payments  received  through December 31, 2008, at which time
their share of these fees will be increased to 40% for the remaining life of the
patents.  The Company has accrued this liability,  amounting to $82,344, to June
30, 2007. The Company expects to license the 093 Patent on a non-exclusive basis
to other GPS based golf system providers.

Other Debt Related Activity

Derivative Liabilities

During the year ended  December  31,  2005,  the Company  recognized  derivative
liabilities of approximately $9.5 million pursuant to the issuance of $3,720,000
in  Secured  Convertible  Notes  ("the  Notes")  and  the  granting  of  certain
registration  rights which provided for liquidated damages and a default premium
in the event of failure to timely  register or deliver the shares in  connection
with the  issuance of the Notes and the related  Warrants.  The  recognition  of
these derivative  liabilities is more fully described in the 10-KSB for the year
ended December 31, 2005.

The fair value of the  derivative  liabilities  recorded  at  December  31, 2005
amounted to $9,460,366. The fair value of the derivative liabilities at June 30,
2006 amounted to $6,250,699.  The decrease in the fair value of the  derivatives
in the period  amounting  to  $3,209,667  was  recorded as other  income for the
period.  The Company  repaid the Notes in  November  2006 which  eliminated  the
derivative  liabilities.  Accordingly there is no income or expense arising from
the fair value of the derivative liabilities in the period ended June 30, 2007.

                                       12

<PAGE>

5. Liabilities Related to Discontinued Operations

As a result of the  bankruptcy  of  Inforetech  Golf  Technology  2000 Inc.  the
Company has recorded  accounts payable and accrued  liabilities of $281,330 with
respect  to this  discontinued  operation,  which are  included  in  liabilities
related to  discontinued  operations in the  accompanying  consolidated  balance
sheet.

As a result of the Proshot  acquisition and subsequent  bankruptcy,  the Company
has recorded  loans  payable to related  parties of $258,000,  promissory  notes
payable of $1,274,757, capital leases in default of $29,467 and accounts payable
and accrued  liabilities  of  $264,390.  All such  liabilities  are  included in
liabilities related to discontinued operations in the accompanying  consolidated
balance sheet.

In accordance with GAAP the amounts are recorded on the books until the relevant
statutes of limitations expire, at which point they will be written off.

During the six months ended June 30, 2007 and 2006,  the Company wrote off trade
debts arising from  discontinued  operations  amounting to $200,771 and $329,933
respectively.  This was based upon  management's  belief that these debt holders
rights have expired under the statutes of  limitations  in the various States in
which the debt holders reside.

6. Legal Proceedings


On February 5, 2007 David Stratton,  a former employee,  filed a lawsuit against
the Company in the Supreme Court of British  Columbia,  Vancouver,  Canada.  Mr.
Stratton  entered into a written  employment  agreement with the Company on June
12, 2006 pursuant to which the Company  employed Mr. Stratton as Vice President,
Sales.  The  employment  agreement had a three-year  term,  renewable each year.
Under the employment,  Mr. Stratton was entitled to an annual base salary of CDN
$150,000,  options to  purchase  up to  1,500,000  shares of common  stock at an
exercise  price of $0.05 per share,  a signing bonus of 300,000 shares of common
stock,  certain  bonuses  (including  bonuses based on gross  sales),  and sales
commissions.  On November 8, 2006, Mr. Stratton's employment was terminated. Mr.
Stratton  has set forth his  claims in the  Statement  of Claims,  which  claims
principally consist of the following:  (i) a judgment equal to the amount of his
base salary that he would have  earned,  (ii) the  signing  bonus stock  options
referred to in the employment agreement, (iii) the 300,000 signing bonus shares,
(iv) special damages and punitive  damages,  and (v) legal fees. The Company has
filed a statement of defense denying the claims and intends to vigorously defend
this lawsuit.

The Company may occasionally become subject to legal proceedings and claims that
arise in the ordinary  course of business.  It is impossible to predict with any
certainty  the outcome of any disputes  that may arise,  and the Company  cannot
predict  whether  any  liability  arising  from  claims and  litigation  will be
material  in  relation  to the  consolidated  financial  position  or results of
operations.


7. Capital Stock Transactions

During the six month period ended June 30, 2007, the Company completed the sale
of the following securities:

Preferred Stock and Warrants: On May 8, 2007, for an aggregate purchase price of
$12,500,000, the Company sold a total of 1,250,000 shares of Series B Shares and
warrants  to  purchase up to  51,229,508  shares of common  stock to Great White
Shark Enterprises, Inc. and Leisurecorp LLC.

Common Stock:

o    On January 16, 2007 the Company  issued  30,392,082  shares of common stock
     valued at  $1,653,329  under the terms of a contract  for the  purchase  of
     certain patents.

o    On April 17,  2007 and June 26,  2007 the Company  issued an  aggregate  of
     920,000 shares valued at $117,600 for services rendered;

o    On June 11, 2007 the Company issued  2,907,530 shares valued at $305,291 in
     payment of interest and accrued interest;

o    On June 11, 2007 the Company issued  10,384,615 shares valued at $1,090,385
     in settlement of outstanding indebtedness;

o    On June 11, 2007 the Company issued  5,000,000 shares valued at $525,000 in
     relation to the acquisition of another  company.  This  acquisition was not
     completed at June 30, 2007 and the  associated  costs have been recorded as
     deferred acquisition costs.

                                       13

<PAGE>

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

The following  discussion and analysis  should be read in  conjunction  with the
consolidated  financial  statements and accompanying notes filed as part of this
report.

Forward-Looking Statements

The following  Management's  Discussion  and Analysis and Plan of Operation,  as
well as information contained elsewhere in this report,  contain statements that
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, and Section 21E of the Securities  Exchange Act of 1934.
These  statements  include  statements  regarding the intent,  belief or current
expectations  of us, our  directors or our officers with respect to, among other
things:  anticipated  financial or  operating  results,  financial  projections,
business  prospects,  future product  performance and other matters that are not
historical facts. The success of our business operations is dependent on factors
such   as   the   impact   of   competitive   products,   product   development,
commercialization and technology difficulties,  the results of financing efforts
and the  effectiveness  of our marketing  strategies,  general  competitive  and
economic  conditions.  Forward-looking  statements  are not guarantees of future
performance  and  involve  risks and  uncertainties.  Actual  results may differ
materially from those projected in the forward-looking statements as a result of
various factors.

Introductory Comment

Throughout  this Quarterly  Report on Form 10-QSB,  the terms "we," "us," "our,"
and "our company"  refer to GPS  Industries,  Inc., a Nevada  corporation,  and,
unless the context indicates otherwise, also includes our subsidiaries.

Overview

We are a golf course management  technology company. We own the rights to both a
hand-held and cart mounted  product  using Global  Positioning  Systems  ("GPS")
technology  that we market  through  our sales  offices in the USA,  and through
sales distributors in the USA, UK and Europe, Australia,  South Africa and Asia.
Our portable product,  the "Inforemer",  is connected through a wireless link to
golf course management information systems that are marketed as part of our golf
course suite of products.  The Inforemer is capable of  exhibiting  continuously
updated  advertising.  We currently  generate most of our revenues from the sale
and  installation  of our GPS and wireless  products and  software  tools.  To a
lesser extent, we also generate revenues from licensing to third parties certain
of the patents that we own on our golf course technologies. Our business plan is
to establish a substantial  base of golf course clients (either through the sale
of our golf course systems or through  acquisitions  of other  companies) and to
thereafter   generate  recurring  revenues  from  (i)  selling  advertising  for
exhibition on the Informer  units used at those golf courses,  and (ii) from our
other revenue generating golf course programs,  such as our Fire At The Flag(TM)
program.  In 2007, we initiated a new two-tier  price  structure for the sale of
our Inforemer golf course system,  which pricing structure offers purchasers the
ability to  purchase  our golf  course  management  package at a lower  price in
exchange for granting us the right to (i) provide  advertising  on the Inforemer
units  used at their  golf  course  and (ii)  operate  our Fire At The  Flag(TM)
program at their golf course.

Critical Accounting Policies

Management's  discussion and analysis of our financial  condition and results of
operations are based on our consolidated  financial statements,  which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States. The preparation of these financial statements requires management
to make  estimates  and  judgments  that affect the reported  amounts of assets,
liabilities, revenues and expenses, and related disclosures of contingent assets
and  liabilities.  On an ongoing  basis,  management  evaluates  its  estimates,
including  those related to impairment of long-lived  assets,  including  finite
lived intangible assets,  accrued liabilities and certain expenses.  We base our
estimates on  historical  experience  and on various other  assumptions  that we
believe to be reasonable under the circumstances,  the results of which form the
basis for making  judgments  about the carrying values of assets and liabilities
that are not readily  apparent  from other  sources.  Actual  results may differ
materially from these estimates under different assumptions or conditions.

Our significant accounting policies are summarized in Note 3 of our consolidated
financial statements for the period ended June 30, 2007.

     Results of Operations

Comparison  of Three and Six Months Ended June 30, 2007 vs. Three and Six Months
Ended June 30, 2006

Revenue - Revenue  during both the three- and six month  periods  ended June 30,
2006 (the "2006 fiscal periods") and the three- and six month periods ended June
30, 2007 (the "2007 fiscal  periods") were comprised of (i) sales generated from

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<PAGE>

our Inforemer product, (ii) service contract fees we received in connection with
the sale of the  Inforemer,  and (iii) patent  license  fees  received by us and
Optimal Golf  Solutions,  Inc.,  one of our  subsidiaries,  for the right to use
certain  of our  patented  technologies.  Revenue  for the three- and six- month
periods  in 2007  increased  by 125% and 141%  compared  to the same  periods in
fiscal 2006 due to the increase in the number of sales and  installations of our
Inforemer  products and related golf  management  system.  The increase in sales
reflects  increased  marketing and sales efforts,  the growing reputation of our
system and our changed pricing and sales structure. During 2007, we instituted a
two-tiered  pricing structure for our golf course sales, which structure was not
in  effect  during  the 2006  fiscal  periods.  The new price  structure  offers
purchasers  of our products  the ability to purchase our golf course  management
package at two  different  prices.  The lower price is  available to golf course
operators who grant us the right to provide  advertising on the Inforemer  units
used at their  golf  course and the right to  operate  our Fire At The  Flag(TM)
program at their golf course (we refer to this lower price sales  program as our
wholesale  program).  Although we generate less revenue from each sale under the
wholesale  program,  it is our goal to generate  longer term recurring  revenues
from  these  sales by  selling  advertising  for  those  Inforemer  units and by
operating  the Fire At The  Flag(TM)  program  at those  courses.  We are  still
implementing  both the advertising and Fire At The Flag(TM) program and have not
yet generated material revenues from these sources. However, our plan is to make
these   recurring   revenues  a  material   portion  of  our  future   revenues.
Approximately one half of the sales during the six-month 2007 fiscal period were
sales under the wholesale  program at the lower price.  These lower priced sales
reduced our current  sales  revenues and decreased  our gross  margins,  but are
expected to provide longer term financial returns.  In the three- and six- month
periods in fiscal 2007, we also realized $198,582 and $397,163, respectively, of
revenue of  license  payments;  in the three- and six- month  periods in 2006 we
received $146,082 and $292,163,  respectively, in license payments. We currently
anticipate  that  revenues  will  increase in the  remaining  periods of current
fiscal year ending December 31, 2007 compared to last fiscal year as a result of
our prior marketing  efforts that are generating an increase in Inforemer orders
and as a  result  of our  new  advertising  and  Fire  At The  Flag(TM)  program
initiatives.

Cost of  Goods  Sold - Cost of  goods  sold  represents  the cost we pay for our
Inforemer  products.  Cost of  goods  sold  for  each  Inforemer  unit  remained
substantially  the same in the 2007 fiscal  periods  compared to the 2006 fiscal
periods.  However,  because a majority  of our sales were under our lower  price
wholesale  program (and the sales price of each  Inforemer  units was  therefore
less),  as a percentage of revenues cost of goods sold increased from 56% in the
three months ended June 30, 2006 to 62% in the three months ended June 30, 2007,
and increased  from 55% to 63% during the six month periods ending June 30, 2006
to June  30,  2007,  respectively.  We  currently  anticipate  that  our cost of
manufacturing  the Inforemer  will improve in the current fiscal year due to our
anticipated increase in sales and our improved financial  condition,  which will
allow us to obtain better terms from our vendors.

Installation Costs - These costs represent our cost of delivering and installing
our equipment at our customers' sites and costs of third party services we incur
in the  installation of systems that we sell to our customers.  Since we install
our system in various countries,  we often need the assistance of local licensed
trades to install those systems.  We are improving our  installation  procedures
and have lowered both our in-house and our third party installation costs in the
2007 fiscal period compared to the 2006 fiscal period. As a percentage of sales,
installation  costs  decreased  from 12% in the six month period ending June 30,
2006 to 10% for the six month period ending June 30, 2007.

General  and  Administrative  Expenses  - General  and  administrative  expenses
decreased  14% and 6% in the three and six month  periods  ending  June 30, 2007
compared to the comparable 2006 fiscal periods. The decreases in the general and
administrative expenses was due to significant decreases in consulting fees paid
to  third  party  consultants,  as  well as a  decrease  in  stock  compensation
expenses.  However, the foregoing decreases were partially offset by an increase
in the three- and six month  periods  ending  June 30,  2007 in our  general and
administrative   personnel   and   personnel   administration   expenses  as  we
significantly increased the number of our employees. Our personnel headcount has
increased in 2007 over 2006 as we hired additional  personnel in anticipation of
increased sales and operations.

Depreciation and  Amortization - Depreciation and amortization  increased by 11%
and 10% in the three- and six month periods ending June 30, 2007 compared to the
2006  fiscal  periods  as a  result  of  an  increase  in  the  equipment  being
depreciated.  Our patents are being  amortized  over the  remaining  life of the
patents.

Selling and  Marketing  Expenses - Selling and marketing  expenses  increased by
117% and 105% in the  three-  and six- month  periods  of 2007  compared  to the
comparable  2006  fiscal  periods  due to a  significant  increase  in sales and
marketing  initiatives and activities.  Major increases in these expenses in the
six-month  period  ending June 30, 2007  compared to the six month period ending
June 30,  2006  included a $211,000  increase in sales and  marketing  personnel
costs and a $433,000 increase in advertising and marketing expenses and fees and
expenses for trade shows.  Our sales  commissions  (payable to both in-house and
outside

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sales  representative)  also  increased by $384,000 in the six month 2007 fiscal
period  compared to the 2006  fiscal  period as sales  increased  over the prior
year.

Operations,   Engineering,   Research  &  Development   Expenses  -  Operations,
engineering,  research and development  expenses for the six-month period ending
June 30, 2007  increased by $205,866 (or 16 %) over the 2006 fiscal  period as a
result of an increase in the engineering and continuing  development cost of the
Inforemer product, which included increased costs in personnel,  consultants and
computer software development. Service costs as a result of the increased number
of Inforemer  systems  installed also  increased  during the six month period of
2007. We are currently completing major improvements in the functionality of our
Inforemer,  including  upgrading the computing power of our Inforemer units, the
visual  appearance  of the units,  the ability of the units to stream  video and
play sound,  and the  ability to remotely  accept  charge card  payments.  These
improvements  are expected to enhance the  advertising  that can be exhibited on
the Inforemer units and, thereby,  to increase the amount of advertising we will
be able to sell for exhibition on those units. However, operations, engineering,
research and  development  expenses for the  three-month  period ending June 30,
2007  decreased  by $140,000  (or 21%) from the  comparable  three-month  fiscal
period in 2006 as certain  development  projects  related to our technology were
completed and production costs related to those projects were capitalized.

Loss from  Operations - Despite a $824,000  increase in gross profits in the six
month fiscal period of 2007, our loss from  operations  increased by $539,000 in
the 2007 fiscal period over the loss from operations in the comparable six month
2006 fiscal period.  The increase in loss from  operations in the 2007 six month
period was due  primarily  to the lower  gross  margins as a result of the lower
sales price of our products under our newly instituted  wholesale  program.  The
$1,231,000  increase  in  sales  and  marketing  and the  $206,000  increase  in
Operations,  Engineering  and Research &  Development  also  contributed  to the
increased loss.  However,  our loss from  operations for the three-month  period
ending June 30, 2007 was $171,000 (or 11%) less than the loss from operations in
the same  three-month  period  of 2006 due the  $140,000  (or 21%)  decrease  in
operations,  engineering,  research and development expenses and the $99,000 (or
14%) decrease in general & administrative  costs compared to three-month  period
ending June 30, 2006. We currently anticipate that our revenues will increase in
the fiscal year ended  December 31, 2007 and that our  engineering  and research
and development costs will, by the end of the year, decrease,  thereby improving
our results of operations.

Finance Costs - Finance costs represent expenses  recognized related to warrants
we have issued.  The value of the warrants is recorded as a discount on the debt
financing raised or as a deferred  financing cost and is amortized over the term
of the  respective  debt or term of service.  Financing  costs also include fees
paid to a provider of a Line of Credit to the company.  Finance costs  decreased
47% and 54% in the three and six month periods  ending June 30, 2007 as a result
of a reduction in financing  costs  (including  warrants  issued) in the current
fiscal periods.

Interest Expense - Interest  expense  decreased by 98% in the three month period
ending June 30, 2007  compared to the  comparable  three month period last year,
and by 85 % in the six-month  2007 fiscal period  compared to the six-month 2006
fiscal period as a result of a decrease in the amount interest-bearing debt that
we were carrying.  In September 2005, we issued  $3,720,000 of Callable  Secured
Convertible  Notes (the "Callable Notes") that bore interest at a rate of 8% per
annum. The Callable Notes created a derivative liability,  which in turn created
a debt discount of  $3,720,000,  or 100% against the Callable  Notes.  This debt
discount  was  amortized  over the term of the loan and also against any interim
conversions of the Callable Notes.  This  amortization  amounted to $595,867 and
$1,244,000 in the three- and six month periods  ending June 30, 2006,  which was
included in interest  expense.  We repaid the Callable  Notes in November  2006.
Accordingly,  during the 2007  fiscal  period we did not incur  interest  on the
Callable  Notes.  In  addition,  in  December  2006  we  completed  the  sale of
$15,740,890  of our preferred  stock,  which  proceeds were also used to further
reduce  our  interest  bearing  indebtedness,  and  cancelled  $3.75  million of
outstanding  debt held by certain of our officers and  directors in exchange for
the issuance securities.  In addition, in May 2007, we (i) received $1.5 million
from the sale of  additional  Series B Shares  and  warrants  (which was used to
repay   outstanding   debt),  and  (ii)  cancelled  $1  million  of  outstanding
indebtedness in consideration  for the issuance of Series B Shares and warrants.
As a result of the May 2007 cash infusion and debt  cancellation,  the amount of
outstanding debt accruing interest was significantly  reduced during the balance
of the three- and six month  periods  ending June 30, 2007  compared to the same
periods in 2006.  Because  our  indebtedness  has been  reduced,  and because we
anticipate  receiving  $8,000,000 of additional  funding as part of the May 2007
transaction  (a  significant  portion of which  funds we are  required to use to
repay indebtedness), our future interest expenses are expected to remain low.

Derivative  Liabilities  -  Our  derivative  financial  instruments  consist  of
embedded  derivatives  related  to the  issuance  of  the  Callable  Notes.  The
accounting treatment of derivative financial instruments requires that we record
the  derivatives  at their fair  values and record them at fair value as of each
subsequent  balance  sheet  date.  Any  change  in fair  value  is  recorded  as
non-operating,  non-cash  income or expense at each reporting  date.  During the

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<PAGE>

three- and six month fiscal period of 2006 we recorded $1,947,000 and $3,210,000
of non-operating,  non-cash income, respectively. Because we repaid the Callable
Notes in November  2006, we did not record any of this income in the 2007 fiscal
period.

Loss/Gain on  Extinguishment  of Debt - We incurred losses on  extinguishment of
debt in both of the 2007 fiscal  periods,  whereas we recognized  gains from the
extinguishment  of debt during both the three- and six month periods ending June
30, 2006. The losses during the fiscal 2007 periods is due to stock issuances in
settlement of loans partially offset by a gain on  extinguishment of debt on the
write-off of accounts payable from discontinued operations.

Deemed  Preferred  Stock  Dividend  - At June  30,  2007 we  recorded  a  Deemed
Preferred  Stock  Dividend  of $12.5  million.  This  deemed  dividend  does not
represent  an  actual  dividend  paid on  shares  but is the  result of the GAAP
accounting  rules as applied to the issuance of the Series B Shares and warrants
for the cash equity and debt conversion investment that occurred on May 8, 2007.
Under GAAP, a portion of the cash received and debt converted is assigned to the
fair market  valuation  of the  warrants  issued  with the Series B Shares.  The
remaining  portion is compared  to the fair market  value of the Series B Shares
acquired.  Any difference  arising from this comparison,  together with the fair
market  value of the  warrants,  is treated as a deemed  dividend  issued on the
Series B Shares.  We did not issue any shares of preferred  stock in 2006 fiscal
period that would have given rise to a deemed dividend in that fiscal period.

Net Loss - Net loss was  $17,021,000  for the six months  ending  June 30,  2007
primarily  as a result  of the  $12,500,000  Deemed  Preferred  Stock  Dividend.
Excluding  the effect of the  accounting  entry for the Deemed  Preferred  Stock
Dividend,  net loss for the 2007 six month period was  $4,521,000,  a $2,164,000
increase from the net loss of in the six-month  fiscal period in 2006.  However,
but for a non-cash accounting adjustments related to derivative liabilities that
resulted in a financial  statement gain of $3,210,000 in the 2006 fiscal period,
the net loss in the 2006 fiscal period would have been greater than the net loss
before the Deemed  Preferred Stock Dividend in the 2007 fiscal period.  Although
we  expect  our  interest  expenses  to  further  decrease  as  our  outstanding
indebtedness  is paid  down  and  our  revenues  to  increase  due to  increased
additional sales,  decreasing the amount of our net losses will be significantly
dependent  upon the  success  of our new  advertising  and Fire At The  Flag(TM)
initiatives.

Liquidity And Capital Resources

To date, we have incurred  significant  losses from  operations.  As of June 30,
2007, we had a working capital deficit of $4,953,000.  Our operations  currently
do not generate  sufficient  cash to internally  fund our working capital needs.
Accordingly,  to date,  our operating  deficits have had to be  supplemented  by
outside  sources of funding,  including funds raised from (i) the sale of shares
of our common stock and preferred stock, (ii) the issuance of debentures,  (iii)
the  issuance  of  shares  as  payment  for  services  and  in  satisfaction  of
indebtedness,  (iv) bank lines of credit, and (v) short-term loans made to us by
our affiliates and by third parties.

Our liquidity and capital resources were substantially  improved on December 29,
2006 by the  sale of  $15,740,890  of  newly  authorized  Series  B  Convertible
Preferred  Stock (the  "Series B Shares")  and  warrants  to Great  White  Shark
Enterprises, Inc. ("GWSE") and Leisurecorp LLC and by the concurrent sale of the
Series B Shares to Douglas Wood, one of our  directors,  in exchange for, and as
payment for  $3,000,000  of cash loans he had  previously  made to us. Also,  on
December  29, 2006 Robert C.  Silzer,  our Chief  Executive  Officer,  cancelled
$750,000 of obligations we owed to him in exchange for 12,295,082  shares of our
common  stock and  warrants  to purchase  3,073,770  shares of common  stock.  A
portion of the cash proceeds of the foregoing  sales of securities  were used to
reduce our  indebtedness,  and the balance is being used for working  capital to
fund our losses from operations.

In  connection  with the  foregoing  purchase  of  Series  B Shares  by GWSE and
Leisurecorp,  we agreed to give GWSE and Leisurecorp each the right, exercisable
until the end of April  2007,  to  increase  their  investment  in our shares of
Series B Shares and warrants on the same terms as the securities sold to them on
December 29, 2006. GWSE and Leisurecorp timely exercised the foregoing option in
April 2007 to purchase a total of $12,500,000  of additional  shares of Series B
Stock and warrants,  and the closing of the  $12,500,000  purchase of additional
Series B  Shares  and  warrants  was  consummated  on May 8,  2007.  Leisurecorp
purchased  its Series B Shares and warrants by  delivering  to us a  $10,000,000
interest-free  promissory note (the "Note") that is secured by the securities we
sold to  Leisurecorp,  and GWSE  purchased  its Series B Shares and  warrants in
exchange for cash ($1,500,000) and the cancellation of $1,000,000 of outstanding
indebtedness that we owed to GWSE.  Leisurecorp is required to repay the Note as
follows:  $2,000,000 on or before June 30, 2007; $4,000,000 on or before October
31, 2007; and the remaining $4,000,000 on or before December 31, 2007. The first
repayment of this Note, amounting to $2,000,000 was received on July 9, 2007. We
have agreed to use  approximately  $5.5  million of the future Note  payments to
repay most of our currently outstanding  indebtedness (other than trade accounts
payable and accrued  operating  liabilities  incurred in the ordinary  course of

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<PAGE>

operations).  Our ability to repay our  accounts  payable and other  outstanding
indebtedness is significantly  dependent upon our receipt of the $8,000,000 Note
payments due from Leisurecorp in October and December 2007.

As a result of the new two-tier  pricing  structure we have  implemented to sell
our Inforemer golf course management systems, revenues from certain sales of our
systems initially is reduced, thereby temporarily reducing the liquidity benefit
otherwise  obtained from the sale and  installation of a golf course system.  We
anticipate  that the decrease in cash  proceeds  received  from the sales of the
lower priced golf course systems will be offset by higher  advertising and other
revenues  that we will  shares with the golf  course  owners in the future.  Our
on-going future liquidity therefore is significantly dependent on our ability to
generate  significant  advertising  and  Fire At The  Flag(TM)  revenues  in the
future.

Operating  Activities - During the 2007 fiscal period,  our operations  utilized
cash of $3,129,000  as compared to  $2,613,000  during the six months ended June
30, 2006.  The increase in cash utilized in operations in the 2007 fiscal period
as compared to the 2006 fiscal  period was primarily a result of the increase in
the loss from  operations,  adjusted  for  non-cash  items,  plus  increases  in
accounts  receivable and inventory,  partially offset by an increase in accounts
payable,  a  reduction  in  accounts  receivable  for  share  subscriptions  and
increases in deferred revenue and a reduction of prepaid expenses.

Investing  Activities - Net cash used in investing  activities was $1,160,000 in
the 2007 fiscal period,  consisting of the purchase of equipment and patents and
payments relating to the purchase of Optimal Golf Solutions, Inc.

Financing  Activities - Net cash provided by financing activities was $2,101,329
for the 2007  fiscal  period as a result of receipt of equity  investment  funds
partially offset by repayment of loans.

We do not believe that  inflation  has had a material  impact on our business or
operations.

We are not a party to any off-balance  sheet  arrangements  and do not engage in
trading activities involving non-exchange traded contracts. In addition, we have
no financial  guarantees,  debt or lease agreements or other  arrangements  that
could trigger a requirement  for an early payment or that could change the value
of our assets.


Lines of Credit

We currently have a bank line of credit for  $1,485,000  available to us to fund
our operations. As of June 30, 2007, we had borrowed $ 1,696,634 under this line
of credit.  The excess represents the cash float arising from timing differences
between when  payments are issued from this account and when they are  presented
for payment.  The line of credit bears interest at prime plus 0.5%, is repayable
in full on demand and is secured by a one year standby bank letter of credit for
$1,500,000  that was provided by a third party,  Hansen Inc. This standby letter
of credit from Hansen Inc.  has been  renewed a number of times and is currently
renewed to December 31,  2007.  As  consideration  for renewing the standby bank
letter of credit,  we issued to Hansen Inc.  common stock  purchase  warrants to
purchase 1,500,000 shares of common stock, exercisable at $0.10 per share (a 15%
discount to the then market price) for a period of three years. In addition,  we
extended 2,000,000 previously issued warrants which expired in 2006 to expire in
2008 at a price of $0.05.  We also pay a standby  letter of credit fee to Hansen
Inc.  equal to 2% per annum on a quarterly  basis,  amounting  to  approximately
$7,500 per quarter.

On  February  28,  2007,  a line of  credit  that was  available  to us under an
agreement  with Douglas J. Wood,  Daniel S. Wood and James Liken  expired and is
now no longer  available  to us. This  $1,400,000  line of credit from HSBC Bank
Canada was used for funding our manufacturing costs.

In January 2006 we entered into an agreement with Great White Shark  Enterprises
to obtain purchase order financing on confirmed sales orders. GWSE has agreed to
make up to a maximum  $1,250,000  of such  advances  available  to us at any one
time.  Advances are made to us against firm purchase  orders that we receive for
sales and installations of our golf course GPS products,  and all funds advanced
are to be used to fulfill the identified  purchase order.  The advances are then
repaid at the time that the payments are made by our clients  under the purchase
order.  As of June 30, 2007 we owed $ 354,560 on this purchase  order  financing
line of credit.  We pay interest on advances made to us under this facility at a
rate of 18% per annum.  Additionally  we have agreed to issue 100,000  shares of
our common stock to GWSE for each $250,000  advanced to us under this  facility.
The  balance of $ 354,560  owing under this  financing  line at June 30, 2007 is
included in the balance of $ 554,560 owed on short term loans.

Based on our  currently  projected  revenues,  the foregoing  existing  lines of
credit,  and the  $8,000,000  of proceeds  to be received  during 2007 under the
Note,  we  believe  that we  have  sufficient  capital  resources  to  fund  our
anticipated  working  capital  needs  through  December 31, 2007.  As previously

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disclosed, our goal is to acquire one or more third party businesses in order to
(i) obtain  additional  technologies  that  compliment or supplement our current
products, and (ii) increase the number of golf courses that utilize our products
and services.  Depending on the terms of any such acquisitions and the amount of
funds needed to integrate and fund the acquired  operations,  these acquisitions
could materially impact our anticipated future working capital needs.

FACTORS THAT MAY AFFECT OUR BUSINESS AND OUR FUTURE RESULTS

We face a number  of  substantial  risks.  Our  business,  financial  condition,
results of operations and stock price could be harmed by any of these risks. The
following  factors should be considered in connection with the other information
contained in this Quarterly Report on Form 10-QSB.

Risks Related To Our Business

We have a history  of  losses,  and our  auditors  have  issued a going  concern
opinion.

We have  incurred  operating  losses since our inception and no assurance can be
given that we will ever become  profitable.  Our auditors  have included a going
concern  opinion  on our  financial  statements  because  we have not  generated
sufficient cash flows to meet our  obligations  and sustain our operations.  Our
operating losses are  attributable to the developing  nature of our business and
have resulted primarily from:

o    significant costs associated with the development of our products;

o    marketing and distribution costs of our products; and

o    limited sales history of our recently developed products.

Although we currently believe that our revenues will  significantly  increase by
the end of the fiscal year ended  December  31, 2007 and that our balance  sheet
will be significantly improved on December 31, 2007, we believe that our ability
to generate  profits over the longer term is dependent  upon a number of factors
including   our  ability  to  increase   sales  as  projected  and  to  complete
complementary acquisitions,  and on our ability to generate significant revenues
from our advertising  initiative and our Fire At The Flag(TM) program. If any of
the projected  events do not occur as we currently  anticipate,  our  operations
will  continue  to operate at a loss and with a  negative  cash flow.  If we are
unable to continue as a going concern,  you could lose your entire investment in
us.

We may need  additional  financial  support in order to  continue to operate and
grow, and cannot be certain that additional  funds will be available when needed
on satisfactory terms, if at all.

Our internal  business plan assumes that we will acquire one or more  businesses
during 2007 and  significantly  increase  our sales to golf  courses  (including
sales at under  our low  margin  ACE  program  to  establish  a future  base for
advertising venues). Depending on the acquisitions that we complete, if any, and
the terms or purchase and the cost of integrating and operating those additional
business,  it is likely  that we will have to obtain  additional  debt or equity
financing.  If we cannot obtain the amount of additional  financing that we will
need to support our  operations  or to fully  implement our business  plan,  our
future  operations  will be  severely  hindered,  and our ability to sustain our
operations and growth will be jeapordized.

We depend on GPS technology  owned and  controlled by others.  If we do not have
continued access to GPS technology and satellites,  we will be unable to deliver
our services and our revenues will decrease.

Our services  rely on signals from GPS  satellites  built and  maintained by the
U.S. Department of Defense.  GPS satellites and their ground support systems are
subject to  electronic  and  mechanical  failures and  sabotage.  If one or more
satellites  malfunction,  there  could be a  substantial  delay  before they are
repaired  or  replaced,  if at all,  and our  services  may cease  and  customer
satisfaction would suffer.

In  addition,  the U.S.  government  could decide not to continue to operate and
maintain GPS  satellites  over a long period of time or to charge for the use of
GPS.  Furthermore,  because of ever-increasing  commercial  applications of GPS,
other U.S.  government agencies may become involved in the administration or the
regulation  of the use of GPS signals in the future.  If the  foregoing  factors
affect GPS, such as by affecting the availability and pricing of GPS technology,
our business will suffer.

Our GPS technology depends on the use of radio frequency spectrum  controlled by
others.

Our GPS  technology  is dependent on the use of radio  frequency  spectrum.  The
assignment of spectrum is controlled by an international  organization  known as
the International  Telecommunications  Union or ITU. The Federal  Communications

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Commission  or  FCC  is   responsible   for  the   assignment  of  spectrum  for
non-government use in the United States in accordance with ITU regulations.  Any
ITU or FCC reallocation of radio frequency  spectrum,  including  frequency band
segmentation or sharing of spectrum, could cause interference with the reception
of GPS  signals  and  may  materially  and  adversely  affect  the  utility  and
reliability  of our products,  which would,  in turn,  cause a material  adverse
effect on our operating  results.  In addition,  emissions from mobile satellite
service and other equipment  operating in adjacent frequency bands or inband may
materially  and adversely  affect the utility and  reliability  of our products,
which could result in a material adverse effect on our operating results.

On May 11, 2000,  the FCC issued a Notice of Proposed  Rulemaking  that proposes
rules for the operation of  Ultra-Wideband or UWB radio devices on an unlicensed
basis in the  frequency  bands  allocated  to GPS. If the FCC issues final rules
authorizing  such  operation,  UWB  devices  might cause  interference  with the
reception of GPS signals. Such interference could reduce demand for GPS products
in the future. Any resulting change in market demand for GPS products could have
an adverse effect on our financial results.

Speculative Nature of Business.

The  profits  of an  enterprise  involved  in the golf  industry  are  generally
dependent upon many  variables.  Our customer  appeal depends upon factors which
cannot be  reliably  ascertained  in advance  and over which we have no control,
such as unpredictable critic reviews and appeal to the public.

In  order  for our  products  to be  successful,  we need  to  establish  market
recognition quickly, following the introduction of our products

We believe it is  imperative  to our success that we obtain  significant  market
share for our products quickly, before other competitors establish a significant
market share.  We believe that, if a market for products like ours develops,  an
early  entrant that gains  significant  market  share will  dominate the market,
significantly reducing opportunities for competitors. We have limited experience
conducting  marketing  campaigns,  and  we  may  fail  to  generate  significant
interest.  We cannot  be  certain  that we will be able to expand  our brand and
capitalize on the commercial acceptance of our products.

Government  regulations  and standards may harm our business and could  increase
our costs or reduce our opportunities to earn revenues.

In addition to regulations  applicable to businesses in general,  we may also be
subject to direct  regulation by  governmental  agencies,  including the FCC and
Department of Defense.  A number of legislative  and regulatory  proposals under
consideration  by federal,  state,  provincial,  local and foreign  governmental
organizations  may lead to laws or  regulations  concerning  various  aspects of
wireless  communications and GPS technology.  Additionally,  it is uncertain how
existing laws governing issues such as taxation,  intellectual property,  libel,
user  privacy  and  property  ownership,  will be applied to our  services.  The
adoption  of new laws or the  application  of  existing  laws may  expose  us to
significant  liabilities and additional  operational  requirements,  which could
decrease the demand for our services and increase our cost of doing business.

We depend on  intellectual  property  rights and development of new products and
the  inability  to obtain  patents or develop new  products  may have an adverse
effect on our ability to be profitable.

Our success is partly dependent upon our intellectual property rights. Effective
protection may not be available for these rights. There can be no assurance that
a patent will provide adequate protection for the underlying  technology.  While
we have patents covering our technology, there is no assurance that such patents
will be able to prevent other  companies from developing  substantially  similar
products. In addition,  litigation may be necessary in the future to enforce the
intellectual   property   rights.   Such  litigation,   whether   successful  or
unsuccessful,  could result in  substantial  costs and  diversions of resources,
either of which could negatively affect our business.

Our future success is dependent upon our ability to retain key management.

Our success is dependent upon the continued  services of Robert C. Silzer,  Sr.,
our chief Executive  Officer and Chairman of the Board of Directors and upon the
skills,  experience  and  efforts  of our key  marketing  and  other  management
personnel.  The loss of the continued services of any of these individuals could
have a negative effect on our business.

Conflicts of Interest.

We have engaged in  transactions  with our management in the past, and we can be
expected  to  engage in such  transactions  in the  future.  In each  case,  the
transactions  are approved by our Board of Directors  and are  considered  to be
fair to and in the best interests of the company.

                                       20

<PAGE>

Competition.

We face  competition  in all aspects of our  business.  We compete for customers
with  other   electronics   and  recreation   companies,   many  of  which  have
substantially  greater  assets  and  resources.   Our  primary  competitors  are
companies such as Prolink Holdings Corp. and UpLink Corp. Our ability to compete
successfully in the future will depend on several factors, including:

o    the cost effectiveness,  quality,  price,  service and market acceptance of
     our products;

o    response  to the  entry  of new  competitors  or  the  introduction  of new
     products by competitors;

o    ability to keep pace with changing technology and customer requirements;

o    timely development or acquisition of new or enhanced products; and

o    timing of new product introductions by the Company or our competitors.

Acquisitions  of companies may disrupt our business and distract  management due
to difficulties in assimilating personnel and operations.

Provided that we have sufficient  financing,  we may consider  purchasing  other
businesses that could complement or supplement our current product offerings. If
we acquire any other company,  we could face  difficulties in assimilating  that
company's  personnel  and  operations.  Acquisitions  also  involve the need for
integration  into  existing  administration,  services  marketing,  and  support
efforts.  These acquisitions and investments could disrupt our ongoing business,
distract  management and employees and increase our expenses.  In addition,  key
personnel of the acquired company may decide not to work for us.

We may not be able  to  implement  Section  404 of the  Sarbanes-Oxley  Act on a
timely basis.

The SEC, as directed by Section 404 of the  Sarbanes-Oxley  Act,  adopted  rules
generally requiring each public company to include a report of management on the
company's  internal  controls over  financial  reporting in its annual report on
Form 10-KSB that contains an assessment  by management of the  effectiveness  of
the company's internal controls over financial reporting.  This requirement will
first  apply to our annual  report on Form  10-KSB for the  fiscal  year  ending
December 31, 2007.

We have not yet developed a complete Section 404 implementation plan. We have in
the past  discovered,  and may in the  future  discover,  areas of our  internal
controls  that  need  improvement.  We expect  that we will need to hire  and/or
engage additional personnel and incur incremental costs in order to complete the
work  required  by  Section  404.  We can not assure you that we will be able to
complete a Section 404 plan on a timely basis. Additionally,  upon completion of
a Section 404 plan,  we may not be able to conclude  that our internal  controls
are effective,  or in the event that we conclude that our internal  controls are
effective,  our independent  accountants  may disagree with our assessment.  Any
failure  to  implement  required  new  or  improved  controls,  or  difficulties
encountered  in their  implementation,  could  negatively  affect our  operating
results or cause us to fail to meet our reporting obligations.

RISKS RELATED TO OUR COMMON STOCK

Our common stock is traded on the OTC Bulletin  Board,  and a shareholder may be
unable to sell at or near ask prices or at all if the shareholder  needs to sell
his shares to raise money or otherwise desire to liquidate his shares.

Our Common  Stock is  currently  listed for trading on the OTC  Bulletin  Board.
Shares  listed for trading on the OTC  Bulletin  Board often are thinly  traded,
meaning the number of persons interested in purchasing the shares at or near ask
prices at any given time may be relatively small or non-existent. This situation
may apply to our shares and is  attributable  to a number of factors,  including
the fact that we are a small public company which is relatively unknown to stock
analysts,  stock brokers,  institutional  investors and others in the investment
community that generate or influence sales volume. In addition,  even if we came
to the  attention  of such  persons,  they tend to be  risk-averse  and would be
reluctant to follow a company of our size and  expanding  into a relatively  new
line of  business as we are in, or purchase  or  recommend  the  purchase of our
shares until such time as we became more seasoned and proven.  As a consequence,
there may be periods of several days or more when trading activity in our shares
is minimal or  non-existent,  as compared to a seasoned issuer which has a large
and steady volume of trading  activity that will  generally  support  continuous
sales without an adverse effect on share price. We cannot give you any assurance
that a broader or more active  public  trading  market for our Common Stock will
develop or be sustained,  or that current trading levels will be sustained.  Due
to these conditions,  we can give you no assurance that you will be able to sell
your  shares  at or near ask  prices  or at all if you need  money or  otherwise
desire to liquidate your shares.

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<PAGE>

The  holders  of our  outstanding  Series B Shares  have the right to approve or
disapprove  certain corporate action,  which could materially affect the holders
of our common stock. Currently, the rights of the Series B Shares are controlled
by Leisurecorp LLC.

In December 2006 and May 2007 we issued the Series B Shares to three  investors.
Under the terms of the Series B Shares,  we may not, without first obtaining the
prior  approval of the holders of a majority  of the then  outstanding  Series B
Shares,  voting  separately as a class, take any of the following  actions:  (i)
amend our Articles of  Incorporation  or Bylaws if such action  would  adversely
affect the rights,  preferences,  privileges,  or  restrictions  of the Series B
Shares;  (ii) authorize or issue any class or series of our capital stock or any
rights,  options,  warrants or other  securities  that are  convertible  into or
exchangeable  for any of our  capital  stock,  having any right,  preference  or
privilege  superior  to or on parity  with the  Series B Shares  in any  respect
whether  by   reclassification   or  otherwise;   (iii)  pay  any  dividends  or
distributions  on any  shares  of  our  capital  stock;  (iv)  amend  any of the
provisions of the Certificate of Designation of the Series B Shares;  (v) redeem
or declare a dividend  with respect to any  security;  (vi) increase or decrease
the  authorized  number of shares  of  Series B Shares;  (vii)  effect a merger,
consolidation,  or  business  combination  or other  acquisition  involving  the
Company  (other than  solely for the  purposes  of  reincorporation);  or (viii)
increase  or  decrease  the  authorized  number  of  directors  on our  Board of
Directors. The foregoing voting provisions shall remain in effect so long as one
holder of our Series B Shares, Leisurecorp LLC, is the owner of record of 25% or
more of the number of Series B Shares that it purchased on December 2006 and May
2007..  As a result of its  investment  in the  Series B Shares  and the  voting
agreements  contained in a shareholders  agreement  Leisurecorp has entered into
with the other holders of the Series B Shares,  Leisurecorp LLC owns or controls
the vote of approximately  90% of the currently issued and outstanding  Series B
Shares.

The  holders of the Series B Shares  have the ability to elect a majority of our
Board of Directors,  and we are prohibited from taking certain corporate actions
without the approval of the directors elected by Series B Share holders.

The  holders of a majority  of the  outstanding  Series B Shares have the right,
voting as a separate  class,  to elect three of our five members of our board of
directors,  of which two shall be designated by the holders of a majority of the
outstanding Series B Shares as the "Reviewing Preferred Directors." Our Board of
Directors may not take certain actions,  and none of such actions shall be valid
and  constitute  an action  of the  Board of  Directors  unless  such  action is
approved by a majority of the Board of Directors,  which  majority shall include
at least one of the  Reviewing  Preferred  Directors.  The actions  that must be
approved  by at least one  Reviewing  Preferred  Director  are as  follows:  (i)
reorganize  the  Company  or  voluntarily  liquidate,  dissolve  or  wind up the
Company,  (ii) incur any new indebtedness or refinance any existing indebtedness
for borrowed  money other than trade payables and accrued  expenses  incurred in
the  ordinary  course of  business  and  indebtedness  not to exceed at any time
$500,000 in the aggregate, (iii) approve, adopt or amend our annual budget, (iv)
incur any capital or operating  expenditures  (other than purchases of inventory
purchased solely for, and specifically to fill signed purchase orders) in excess
of $50,000 in one or a series of related expenditures,  or in excess of $250,000
in the aggregate  unless  included in our annual budget approved by the Board of
Directors (including one of the Reviewing Preferred Directors), (v) hire or fire
our Chief Executive Officer,  the Chief Financial  Officer,  or any of our other
officer or  employee  who,  at the time,  earns or is  expected to earn a salary
(excluding  bonuses) of $100,000  or more per year,  (vi)  acquire any assets or
equity  securities  of any other  business or entity,  or sell any of our assets
(other than in the ordinary course of business), in each case if the transaction
value of such acquisition or disposition is greater than $2,000,000, (vii) issue
options  or  securities  except  under  our stock  compensation,  bonus or other
compensation  plan,  (viii)  amend  our  stock  compensation,   bonus  or  other
compensation  plan,  or (ix) enter into a transaction  with a stockholder  or an
affiliate of ours or of a stockholder of ours. The foregoing  restrictions  will
remain in effect until the earlier of (a) the date on which  Leisurecorp  is the
owner of  record  of less  than 25% of the  number  of  Series B Shares  that it
purchased  on  December  29,  2006 and May 8, 2007  pursuant  to the  Securities
Purchase Agreement,  or (b) we meet or exceed the approved annual budget for two
consecutive fiscal years.  Under a shareholder  agreement entered into by, among
others,  the holder of approximately 90% of our currently  outstanding  Series B
Shares,  Leisurecorp  LLC has the right to designate  both  Reviewing  Preferred
Directors.

Our Board of  Directors  has the right to issue  additional  series of preferred
stock, the terms of which could adversely affect the value of our common stock.

Under our  articles  of  incorporation,  our board of  directors  has the power,
without  further  action by the holders of our common  stock,  to designate  the
relative  rights  and  preferences  of the  preferred  stock,  and to issue  the
preferred  stock in one or more series as  designated by our board of directors.
The  designation  of rights and  preferences  could  include  preferences  as to
liquidation, redemption and conversion rights, voting rights, dividends or other
preferences,  any of which may be dilutive of the interest of the holders of our

                                       22

<PAGE>

common  stock or the  preferred  stock of any  other  series.  The  issuance  of
preferred  stock  may have the  effect of  delaying  or  preventing  a change in
control of our company  without  further  stockholder  action and may  adversely
affect the rights and powers,  including  voting  rights,  of the holders of our
common stock.

If securities  or industry  analysts do not publish  research  reports about our
business, our stock price and trading volume could decline.

Small, relatively unknown public companies can achieve visibility in the trading
market  through  research  and  reports  that  industry or  securities  analysts
publish.  However, to our knowledge,  no analysts cover our company. The lack of
published reports by independent securities analysts could limit the interest in
our stock and negatively affect our stock price. We do not have any control over
research and reports these analysts publish or whether they will be published at
all.  If any  analyst who does cover us  downgrades  our stock,  our stock price
would likely decline.  If any analyst  initiates and then ceases coverage of our
company or fails to regularly publish reports on us, we could lose visibility in
the  financial  markets or never  achieve such  visibility,  which in turn could
cause our stock price or trading volume to stagnate or decline.

You may have  difficulty  selling  our shares  because  they are  deemed  "penny
stocks."

Since our Common  Stock is not listed on the Nasdaq Stock Market or any national
securities exchange, if the trading price of our Common Stock is below $5.00 per
share,  trading in our Common  Stock  will be  subject  to the  requirements  of
certain rules promulgated under the Securities  Exchange Act of 1934, as amended
(the   "Exchange   Act").   These  rules  require   additional   disclosures  by
broker-dealers  in  connection  with any trades  involving a stock  defined as a
penny  stock.  Such  rules  require  the  delivery,  prior  to any  penny  stock
transaction,  of a disclosure schedule explaining the penny stock market and the
risks  associated  therewith and impose various sales practice  requirements  on
broker-dealers who sell penny stocks to persons other than established customers
and accredited  investors  (generally defined as an investor with a net worth in
excess of  $1,000,000  or  annual  income  exceeding  $200,000  individually  or
$300,000  together  with  a  spouse).  For  these  types  of  transactions,  the
broker-dealer  must make a special  suitability  determination for the purchaser
and have received the purchaser's  written  consent to the transaction  prior to
the sale. The  broker-dealer  also must disclose the commissions  payable to the
broker-dealer,  current bid and offer quotations for the penny stock and, if the
broker-dealer  is the sole market maker,  the  broker-dealer  must disclose this
fact and the broker-dealer's  presumed control over the market. Such information
must be provided to the customer orally or in writing before or with the written
confirmation  of trade sent to the  customer.  Monthly  statements  must be sent
disclosing  recent price information for the penny stock held in the account and
information  on the  limited  market in penny  stocks.  The  additional  burdens
imposed upon broker-dealers by such requirements could discourage broker-dealers
from effecting  transactions in our common stock, which could severely limit the
market  liquidity  of the common  stock and the ability of holders of the common
stock to sell their shares.

The  market  price of our  Common  Stock  may be  adversely  affected  by market
volatility.

The  market  price of our  Common  Stock is  likely  to be  volatile  and  could
fluctuate widely in response to many factors, including:

o    announcements  of the results of our  operations  or the  operations of our
     competitors,

o    developments with respect to intellectual property rights,

o    announcements of technological innovations by us or our competitors,

o    announcements  of new  services,  products  or new  contracts  by us or our
     competitors,

o    actual or anticipated  variations in our operating results due to the level
     of development expenses and other factors,

o    changes in financial estimates by securities analysts,  if any, and whether
     our earnings meet or exceed such estimates,

o    new accounting standards,

o    general economic, political and market conditions and other factors, and

o    the  occurrence  of  any  of  the  risks  described  in  this  registration
     statement.

                                       23

<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

We maintain  disclosure controls and procedures that are designed to ensure that
information required to be disclosed in the reports that we file with, or submit
to, the  Securities  and Exchange  Commission  (the "SEC") under the  Securities
Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms and that
such  information is accumulated and  communicated to our management,  including
our principal  executive and financial  officers,  as appropriate,  to allow for
timely  decisions  regarding  required  disclosure.  As  required  by  SEC  Rule
15d-15(b),  we carried out an  evaluation,  under the  supervision  and with the
participation of our management, including our principal executive and financial
officers,  of the  effectiveness  of the design and operation of our  disclosure
controls and procedures as of the end of the most recent fiscal quarter  covered
by this report.  Based on the foregoing,  our principal  executive and financial
officers concluded that our disclosure  controls and procedures are effective to
ensure that the  information  required to be disclosed  in our reports  filed or
submitted under the Exchange Act is recorded,  processed and reported within the
time periods specified in the SEC's rules and forms and that such information is
accumulated  and  communicated  to  our  management,   including  our  principal
executive and financial officers, as appropriate,  to allow for timely decisions
regarding required disclosure.

There has been no change in our internal control over financial reporting during
our most recent fiscal  quarter that has materially  affected,  or is reasonably
likely to materially affect, our internal control over financial reporting.

PART II.  OTHER INFORMATION

Item 2.    Unregistered Sales of Equity and Use of Proceeds

Common Stock: We issued the following shares of common stock in the quarter
ended June 30, 2007

o    920,000 shares valued at $117,600 for services rendered;

o    2,907,530  shares  valued at $305,291  in payment of  interest  and accrued
     interest;

o    10,384,615  shares  valued  at  $1,090,385  in  settlement  of  outstanding
     indebtedness;

o    5,000,000  shares  valued at $525,000 in  relation  to the  acquisition  of
     another  company.  This  acquisition was not completed at June 30, 2007 and
     the associated costs have been recorded as deferred acquisition costs.

All such securities were issued pursuant to an exemption from the registration
requirements of the Securities Act of 1933, as amended, under Section 4 (2) and
regulation D.


ITEM 6. Exhibits


Exhibit Number          Description
--------------          -----------

10.1                    Letter agreement dated June 7, 2007 between the Company
                        and Global Golf Advisors Inc.

31.1                    Certification of the Chief Executive Officer pursuant to
                        Section 302 of the Sarbanes-Oxley Act

31.2                    Certification of the Chief Financial Officer pursuant to
                        Section 302 of the Sarbanes-Oxley Act

32.1                    Certification of the Chief Executive Officer pursuant to
                        Section 906 of the Sarbanes-Oxley Act

32.1                    Certification of the Chief Financial Officer pursuant to
                        Section 906 of the Sarbanes-Oxley Act

                                       24

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                      GPS INDUSTRIES, INC.

Date:  August 14, 2007                By:    /s/ ROBERT C. SILZER, SR.
                                             -------------------------
                                             Robert C. Silzer, Sr.,
                                             Chief Executive Officer


Date:  August 14, 2007                By:    /s/ JOSEPH MILLER
                                             -----------------
                                             Joseph Miller
                                             Chief Financial Officer

                                       25