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

                                   FORM 10-QSB

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

                For the Quarterly Period Ended September 30, 2005

        [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

              For the transition period from _________ to _________

                         Commission File Number: 0-25963

                              GPS INDUSTRIES, INC.
        (Exact name of small business issuer as specified in its charter)



           Nevada                               88-0350120
-------------------------------           ----------------------
(State or other jurisdiction of             (I.R.S. Employer
incorporation or organization)            Identification Number)


    5500 - 152nd Street, Suite 214, Surrey, British Columbia, Canada V3S-5J9
                    (Address of principal executive offices)

                    Issuer's telephone number: (604) 576-7442
              (Former name, former address and former fiscal year,
                         if changed since last report.)

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

As of November 14, 2005 the Company had 257,856,255 shares of common stock
issued and outstanding

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

Documents incorporated by reference: None.


<PAGE>

                      GPS INDUSTRIES, INC. AND SUBSIDIARIES




                                      INDEX

PART I.   FINANCIAL INFORMATION

  Item 1.  Financial Statements

    Consolidated Balance Sheet - September 30, 2005 (Unaudited)..............3

    Consolidated Statements of Operations (Unaudited) -
    Nine months ended September 30, 2005 and 2004............................4

    Consolidated Statements of Operations (Unaudited) -
    Three months Ended September 30, 2005 and 2004. .........................5

    Consolidated Statements of Cash Flows (Unaudited) -
    Nine months ended September 30, 2005 and 2004............................6

    Notes to Consolidated Financial Statements (Unaudited) -
    Nine months ended September 30, 2005 and 2004............................7

  Item 2.  Management's Discussion and Analysis or Plan of Operation........15

  Item 3.  Controls and Procedures..........................................24

PART II.  OTHER INFORMATION

  Item 1.  Legal proceedings................................................25

  Item 2.  Changes in Securities and Use of Proceeds........................25

  Item 3.  Defaults Upon Senior Securities..................................25

  Item 4.  Submission of matters to a vote of security holders..............25

  Item 5.  Other information................................................25

  Item 6.  Exhibits.........................................................25

SIGNATURES


                                       2

<PAGE>

ITEM 1. FINANCIAL STATEMENTS

                      GPS INDUSTRIES INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET

                                                              September 30, 2005
                                                                     (Unaudited)
                                                              ------------------
Assets

Current

     Cash                                                     $          52,501
     Accounts receivable                                                814,443
     Inventories                                                      1,624,629
     Prepaid expenses and other current assets                          163,223
          Total current assets                                        2,654,796

Property and equipment, net                                              75,800

Patents                                                               1,579,758

Deferred implementation costs                                           215,539
                                                              ------------------
                                                              $       4,525,893
                                                              ==================

Liabilities and Stockholders' Deficit

Current liabilities

     Bank indebtedness                                        $       2,538,912
     Bank loan                                                           20,987
     Deferred Revenue                                                   272,725
     Short term loans                                                 2,727,930
     Accounts payable and accrued liabilities                         3,615,259
     Liability associated with Optimal Golf acquisition               2,878,000
     Promissory notes - related parties                                 565,853
                                                              ------------------
                                                                     12,619,666
                                                              ------------------

     Liabilities related to discontinued operations
     (Chapter 7 proceedings filed in 2002)
     Promissory note payable                                          1,274,757
     Accounts payable and accrued liabilities                         1,442,152
     Loans payable to related parties                                   258,000
     Capital lease obligations ( in default)                             29,467
                                                                      3,004,376
                                                              ------------------
          Total current liabilities                                  15,624,042
                                                              ------------------


Convertible Debt, net of unamortized debt discounts and
 deferred interest of $1,843,014                                         16,987

Long Term debt - Related Party                                        2,252,357



Stockholders' deficit
     5% Convertible Preferred Shares, $.001 par value,
      50,000,000 authorized, 375,000 issued and outstanding             375,000
     Class A common stock, $.001 par value, 500,000,000
      authorized, 257,856,255 issued and outstanding                    257,856
     Accumulated other comprehensive income                             722,295
     Deferred compensation expense                                    ( 506,841)
     Deferred Financing Costs                                         ( 250,000)
     Additional paid-in capital                                      38,224,573
     Accumulated deficit                                           ( 52,190,376)

          Total Stockholder's Deficit                              ( 13,367,493)
                                                              ------------------
                                                              $       4,525,893
                                                              ==================




See accompanying notes to unaudited consolidated financial statements

                                        3

<PAGE>

                      GPS INDUSTRIES INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                       --------------------------------
                                                           For the Nine Months Ended
                                                                  September 30,
                                                               2005            2004
                                                           (Unaudited)     (Unaudited)
                                                       --------------------------------
<S>                                                    <C>               <C>
Revenue                                                $     4,039,278   $   1,723,018

Cost of Goods Sold                                           2,142,546       1,317,596

Installation Costs                                             618,616         254,985
                                                       --------------------------------
Gross Profit                                                 1,278,116         150,437
                                                       --------------------------------


Operating Expenses

      General and Administrative Expenses                    4,057,653       1,628,449
      Depreciation and amortization                            207,210          63,745
      Sales and marketing                                    1,439,274       1,155,942
      Engineering and Research and Development               1,454,659         886,510
                                                             7,158,796       3,734,646
                                                       --------------------------------
Loss Before Other Income (Expense)                         ( 5,880,680)    ( 3,584,209)
                                                       --------------------------------
Other Income (Expense)

      Finance costs                                          ( 603,835)      ( 224,129)
      Interest expense                                     ( 1,258,327)      ( 336,389)
      Gain (loss) on foreign exchange                            1,287        ( 54,799)
      Gain on extinguishment of debt                           244,292       1,741,756
                                                       --------------------------------
                                                           ( 1,616,583)      1,126,439
                                                       --------------------------------
Loss From Continuing Operations                            ( 7,497,263)    ( 2,457,770)

Loss From Discontinued Operations                                    -               -
                                                       --------------------------------
Net Loss Before Deemed Preferred Stock Dividend             (7,497,263)     (2,457,770)

      Deemed Preferred Stock Dividend                                -       ( 120,423)
                                                       --------------------------------
Net Loss                                               $   ( 7,497,263)  $ ( 2,578,193)
                                                       ================================

Loss per common share - basic and diluted
                                                              $ ( 0.03)       $ ( 0.02)
                                                       ================================


Weighted average number of common shares outstanding -
      basic and diluted                                    228,078,000     160,751,866
                                                       ================================
</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
                                                                  September 30,
                                                               2005             2004
                                                           (Unaudited)      (Unaudited)
                                                       ----------------------------------
<S>                                                    <C>               <C>
Revenue                                                $       810,766   $       722,784

Cost of Goods Sold                                             419,474           616,833

Installation Costs                                             209,565            80,706
                                                       ----------------------------------
Gross Profit                                                   181,727            25,245
                                                       ----------------------------------


Operating Expenses

      General and Administrative Expenses                      922,710           526,226
      Depreciation and amortization                             67,357            27,923
      Sales and marketing                                      348,237           454,237
      Engineering and Research and Development                 527,166           319,677
                                                       ----------------------------------
                                                             1,865,470         1,328,063
                                                       ----------------------------------
Loss Before Other Income (Expense)                         ( 1,683,743)      ( 1,302,818)
                                                       ----------------------------------
Other Income (Expense)

      Finance costs                                          ( 262,574)        ( 166,349)
      Interest expense                                       ( 285,485)        ( 203,259)
      Loss on foreign exchange                                   ( 860)        ( 123,928)
      Gain on extinguishment of debt                            56,839           637,017
                                                       ----------------------------------
                                                             ( 492,080)          143,481
                                                       ----------------------------------
Loss From Continuing Operations                            ( 2,175,823)      ( 1,159,337)

Loss From Discontinued Operations                                    -                 -
                                                       ----------------------------------
Net Loss Before Deemed Preferred Stock Dividend             (2,175,823)       (1,159,337)

      Deemed Preferred Stock Dividend                                -         ( 120,423)

Net Loss                                               $   ( 2,175,823)  $   ( 1,279,760)
                                                       ==================================

Loss per common share - basic and diluted
                                                       $        ( 0.01)  $        ( 0.01)
                                                       ==================================


Weighted average number of common shares outstanding -
      basic and diluted                                    256,458,508       172,053,872
                                                       ==================================
</TABLE>

                                        5

<PAGE>

                      GPS INDUSTRIES INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                  --------------------------------
                                                                     For the Nine Months Ended
                                                                           September 30,
                                                                         2005           2004
                                                                     (Unaudited)     (Unaudited)
                                                                  --------------------------------
Cash Flow From Operating Activities
<S>                                                               <C>  <C>        <C>   <C>
      Net loss from operations                                    $  ( 7,497,263) $   ( 2,457,770)

      Adjustments to reconcile net loss to
        net cash used in operating activities:
           Depreciation and amortization                                 234,707           63,745
           Amortization of deferred compensation                         168,948          168,945
           Loss/ (Gain) on extinguishment of debt                        174,854      ( 1,741,756)
           Expenses paid by issuance of stock                          1,982,592          419,040
           Interest converted to stock                                   501,491           28,483
           Finance charges converted to stock                            168,550          134,286
           Amortization of finance costs                                 100,000           26,000

      Changes in operating assets and liabilities:
           Inventories                                                  (231,431)     ( 1,161,429)
           Accounts Receivable                                          (574,745)       ( 479,922)
           Prepaid expenses and deposits                                   7,310            5,676
           Deferred implementation costs                                (210,242)          98,087
           Accounts payable and accrued liabilities                    1,455,621          285,657
           Discontinued Accounts payable and accrued liabilities        (419,146)       1,139,586
           Deferred Revenue                                              153,877          125,636
                                                                  --------------------------------
Net Cash Used In Operating Activities                                ( 3,984,877)     ( 3,345,736)
                                                                  --------------------------------
Cash Flow From Investing Activities
           Purchase of property and equipment                            ( 7,672)       ( 121,097)
           Purchase of patents                                           ( 8,900)        ( 20,000)
           Investment in Optimal Golf                                  ( 300,000)               -
                                                                  --------------------------------
Net Cash Flow Used In Investing Activities                             ( 316,572)       ( 141,097)
                                                                  --------------------------------
Cash Flow From Financing Activities
           Common stock issued for cash                                1,225,000          200,000
           Convertible preferred stock issued for cash                         -          250,000
           Proceeds from loans                                         1,464,598        2,100,782
           Repayments of long term loan                                ( 267,643)               -
           Repayments of bank loan                                        (4,134)        ( 18,694)
           Borrowings under bank indebtedness                            229,504          962,648
           Repayments of loans from related parties                      (37,562)         ( 9,869)
           Borrowing on convertible loans                              1,571,095           20,036
                                                                  --------------------------------
Net Cash Flow From Financing Activities                                4,180,858        3,504,903
                                                                  --------------------------------


Net Increase (Decrease) In Cash                                        ( 120,591)          18,070

Cash, Beginning Of Period                                                173,092            3,367
                                                                  --------------------------------
Cash, End Of Period                                               $       52,501  $        21,437
                                                                  ================================

Supplemental disclosure of cash flow information:
      Cash paid for interest                                      $      756,836  $       364,872
                                                                  ================================

      Cash paid for taxes                                         $            -  $             -
                                                                  ================================

Non-Cash Investing And Financing Activities

      Common stock issued on conversion of convertible notes      $      726,000  $       160,000
                                                                  ================================

      Common stock issued to settle debt                          $      400,000  $       150,000
                                                                  ================================

      Common stock issued in settlement of accounts payable       $      143,425  $       436,060
                                                                  ================================
</TABLE>


                                        6

<PAGE>

GPS Industries, Inc. and Subsidiaries

Notes to Consolidated Financial Statements Nine Months Ended September 30, 2005
and 2004  (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
September 30, 2005, the results of operations for the nine months ended
September 30, 2005 and 2004, and the cash flows for the nine months ended
September 30, 2005 and 2004. The results of operations for the nine months ended
September 30, 2005 are not necessarily indicative of the results of operations
to be expected for the full fiscal year ending December 31, 2005.

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
disclosures contained in these financial statements are adequate to make the
information presented therein not misleading. For further information, refer to
the consolidated financial statements and notes thereto included in the
Company's Amended Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2004, as filed with the Securities and Exchange Commission.

Business - The Company develops and markets GPS and Wi-Fi wireless business
solutions for golf courses, golf residential communities and golf resorts. The
Company's management information system enables golf course owners and managers
to run their business more efficiently with pace-of-play monitoring, data
consolidation and reporting capabilities. Courses can generate more revenue with
advertising, tournament and point-of-purchase applications, reduce costs of
operations and retain more customers with customer relationship management
programs. The Company has developed both hand-held and cart-mounted products
using Differential Global Positioning Satellite ("DGPS") technology. These units
help attract and retain customers by delivering a better golf experience with
precise distance measurement, detailed color course maps, media streaming of
real-time sports scores and news headlines, food and beverage ordering,
electronic scoring, tournament play and emergency communication with the
clubhouse. At September 30, 2005, substantially all of the Company's assets and
operations were located in Canada.

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 labour and
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
"Engineering, Research and Development", all such costs are expensed as they are
incurred.

During the three months ended December 31, 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. During
the three months ended December 31, 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
GPSI. No pro-forma consolidated financial statements have been included in this
report as the results of Optimal are not material to the consolidated financial
statements of the Company.

                                       7

<PAGE>

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
working capital deficit at September 30, 2005 and December 31, 2004. 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 it's GPS systems
and payments from distributors and potential strategic partners. The Company's
independent certified public accountants, in their independent auditors' report
on the consolidated financial statements as of and for the year ended December
31, 2004, have expressed substantial doubt about the Company's ability to
continue as a going concern.

The Company is attempting to restructure its debt obligations and raise new
capital. To the extent that the Company is unable to successfully restructure
its debt obligations and/or 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, and may
consider a formal or informal restructuring or reorganization.

3. Summary of Significant Accounting Policies

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.

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 has adopted Statement of Financial Accounting Standards ("SFAS") No.
123, "Accounting for Stock-Based Compensation", which establishes a fair value
method of accounting for stock-based compensation plans.

The provisions of SFAS No. 123 allow companies to either record an expense in
the financial statements to reflect the estimated fair value of stock options or
warrants to employees, or to continue to follow the intrinsic value method set
forth in Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees", but to disclose on an annual basis the pro forma effect on
net income (loss) and net income (loss) per common share had the fair value of
the stock options and warrants been recorded in the financial statements. SFAS
No. 123 was amended by SFAS No. 148, which now requires companies to disclose in
interim financial statements the pro forma effect on net income (loss) and net
income (loss) per common share of the estimated fair market value of stock
options or warrants issued to employees. The Company has elected to continue to
account for stock-based compensation plans utilizing the intrinsic value method.
Accordingly, compensation cost for stock options and warrants is measured as the
excess, if any, of the fair market price of the Company's common stock at the
date of grant above the amount an employee must pay to acquire the common stock.
No stock options were issued to employees in the nine months ended September 30,
2005 or the nine months ended September 30, 2004.

                                       8

<PAGE>

In accordance with SFAS No. 123, the cost of stock options and warrants issued
to non-employees is measured at the grant date based on the fair value of the
award. The fair value of the stock-based award is determined using the
Black-Scholes option pricing model. The resulting amount is charged to expense
on the straight-line basis over the period in which the Company expects to
receive benefit, which is generally the vesting period.

Recent Accounting Pronouncements

In December 2004, the FASB finalized SFAS No. 123R "Share-Based Payment" ("SFAS
123R"), amending SFAS No. 123, effective December 15, 2005. SFAS 123R will
require the Company to expense stock options based on grant date fair value in
its financial statements. Further, adoption of SFAS No. 123R will require
additional accounting related to income tax effects and additional disclosure
regarding cash flow effects resulting from share-based payments arrangements.
The adoption of SFAS 123R will not affect the Company's cash flows or financial
position, but may have an adverse impact on results of operations if options are
granted in the future. In December 2004, the FASB issued SFAS No. 153,
"Exchanges of Nonmonetary Assets - an amendment for APB Opinion No. 29". This
statement amends APB Opinion No. 29 to eliminate the exception for nonmonetary
exchanges of similar productive assets and replaces it with a general exception
for exchanges of nonmonetary assets that do not have commercial substance. A
nonmonetary exchange has commercial substance if future cash flows of the entity
are expected to change significantly as a result of the exchange. The provisions
of SFAS No. 153 are effective for the Company's year ended December 31, 2006.
Management is currently evaluating the impact of the adoption of SFAS No. 153 on
the Company's consolidated financial position, liquidity, or results of
operations.

In April 2005, the Securities and Exchange Commission's Office of the Chief
Accountant and its Division of Corporation Finance released Staff Accounting
Bulletin (SAB) No.107 to provide guidance regarding the application of FASB
Statement No.123 (revised 2004), Share-Based Payment. Statement No. 123(R)
covers a wide range of share-based compensation arrangements including share
options, restricted share plans, performance-based awards, share appreciation
rights, and employee share purchase plans. SAB 107 provides interpretative
guidance related to the interaction between Statement No. 123R and certain SEC
rules and regulations, as well as the staff's views regarding the valuation of
share-based payment arrangements for public companies. SAB 107 also reminds
public companies of the importance of including disclosures within filings made
with the SEC relating to the accounting for share-based payment transactions,
particularly during the transition to Statement No. 123R.

In May 2005, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 154, "Accounting Changes and Error
Corrections-a replacement of APB Opinion No. 20 and FASB Statement No. 3" ("SFAS
154"). This Statement replaces APB Opinion No. 20, Accounting Changes, and FASB
Statement No. 3, Reporting Accounting Changes in Interim Financial Statements,
and changes the requirements for the accounting for and reporting of a change in
accounting principle. This Statement applies to all voluntary changes in
accounting principle. It also applies to changes required by an accounting
pronouncement in the unusual instance that the pronouncement does not include
specific transition provisions. When a pronouncement includes specific
transition provisions, those provisions should be followed.

APB Opinion No. 20 previously required that most voluntary changes in accounting
principle be recognized by including in net income of the period of the change
the cumulative effect of changing to the new accounting principle. This
Statement requires retrospective application to prior periods' financial
statements of changes in accounting principle, unless it is impracticable to
determine either the period-specific effects or the cumulative effect of the
change. When it is impracticable to determine the period-specific effects of an
accounting change on one or more individual prior periods presented, this
Statement requires that the new accounting principle be applied to the balances
of assets and liabilities as of the beginning of the earliest period for which
retrospective application is practicable and that a corresponding adjustment be
made to the opening balance of retained earnings (or other appropriate
components of equity or net assets in the statement of financial position) for
that period rather than being reported in an income statement. When it is
impracticable to determine the cumulative effect of applying a change in
accounting principle to all prior periods, this Statement requires that the new
accounting principle be applied as if it were adopted prospectively from the
earliest date practicable. This Statement shall be effective for accounting
changes and corrections of errors made in fiscal years beginning after December
15, 2005. The Company does not believe that the adoption of SFAS 154 will have a
significant effect on its financial statements.

Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies that do not require adoption until a future date
are not expected to have a material impact on the consolidated financial
statements upon adoption.

                                       9

<PAGE>

4. Debt

Bank Indebtedness

Effective June 27, 2003, the Company obtained a bank line of credit for
$1,425,000 to fund its operations. As of September 30, 2005, the Company had
borrowed approximately $1,518,000 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. was renewed until March 27, 2005 and subsequently to October 27, 2005 and
has now been renewed to September 30, 2006. As consideration for renewing the
standby bank letter of credit, the Company issued to Hansen Inc. a common stock
purchase warrant to purchase 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. $52,000, the fair value of this common stock purchase
warrant, calculated pursuant to the Black-Scholes option pricing model, was
charged to operations as finance costs for the nine months ended September 30,
2005. The Company has agreed to issue a further common stock purchase warrant to
Hansen Inc. to purchase 1,000,000 shares of the Company's common stock,
exercisable at $0.10 per share. 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 is payable. As of
September 30, 2005 this line was drawn approximately $1,017,000. The excess
represents the cash float arising from timing differences between when payments
are issued from this account and when they are presented for payment. The term
was for a period of 1 year from the date of the agreement. As consideration for
the security provided, the Company agreed to pay the Secured Party 15% per annum
of the maximum amount outstanding in the month, payable 50% in US$ 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. The Company has accrued this
consideration to September 30, 2005. 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 renewed until October 31, 2005 and subsequently renewed until
April 2006. These warrants have been valued at $72,000. An amount of $54,000 was
charged to operations, as finance costs, in 2004 and the remaining amount of
$18,000 in the first quarter of 2005. The value of the warrants was determined
with use of the Black-Scholes pricing model with the following factors: 3 year
life, risk free rate of return of approximately 1.9% and a volatility factor of
200%.

Short-Term Loan

As of September 30, 2005 the Company has $2,727,930 owing on short term notes.
These amounts are repayable on demand and bear interest at varying rates. The
largest of these, amounting to $1,555,000, is from a director and shareholder.

On June 8, 2005 the Company converted a convertible loan outstanding to the
Shaar Fund. The principal amount converted was $629,488 and accrued interest of
$100,089 was also converted to common stock of the Company. The total number of
shares issued to settle this liability was 9,119,714.

Purchase Order Financing

In April 2005 the Company borrowed funds under an agreement to obtain purchase
order financing on confirmed sales orders. The provider of this financing has
been issued 10,000,000 shares of the Company to be held as security against the
amounts advanced (the Collateral Shares). The provider of the financing is
required to return these shares to the Company once the term of the financing
line has expired and all amounts advanced under the line have been repaid.
Accordingly the issuance of these shares has not been recorded in the equity
section of the financial statements. As of September 30, 2005 the Company owed
$49,000 on this purchase order financing line of credit. The Company pays a
$1,500 per transaction fee to this lender for each advance, plus 17% per annum
interest for the period the advance is required. Additionally the lender
receives 100,000 shares per month as a standby fee as long as the facility is in
effect. The balance of $49,000 owing under this financing line was repaid on
October 4, 2005 and the provider informed the Company that the Collateral Shares
will be returned to the Company for cancellation. The $49,000 owed under this
agreement at September 30, 2005 is included in the balance of $2,727,930 owed on
Short Term Loans.

                                       10

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Liability Associated with Acquisition of Optimal Golf Solutions, Inc.

On November 19, 2004 GPSI 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% per annum 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 GPSI 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 GPSI using a minimum price of
$.25 per share. These shares can be sold after the effectiveness of a
registration statement and in accordance with a Leakage Agreement. The final
purchase price will vary based upon the performance of the Company's shares. The
obligation to pay the deferred purchase price was secured by a first security
interest in the Optimal patents.

The first stock payment of 9,000,000 shares can be sold (in accordance with the
Leakage Agreement) over 180 trading days. Any funds received from the sale of
those shares over $3,250,000 (i.e. $1,000,000 over the $2,250,000 target price
for the first share payment) will be deducted from the amount to be paid with
the second stock payment, for the remaining amount due of $1,900,000 (plus
interest). 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 is 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 the Company 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, which would be applied to the balance owing which was to be
settled with the second stock payment. 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.

Because the Company did not have the Registration Statement filed by September
30, 2005, it has 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 $0.10 on October 19, 2005.

On September 30, 2005 the Company recorded an additional $198,000 in the
liability associated with the Optimal acquisition due to the decrease in the
stock price from $.13, when the 9,000,000 shares was recorded to $.108 on
September 30, 2005.

Long-Term Debt -Related Party (Great White Shark Enterprises)

On December 3, 2004, GPSI entered into a Credit Agreement with Great White Shark
Enterprises, Inc. ("GWSE") for GWSE to provide a Term Loan of $3,000,000 to
GPSI. These funds were received by GPSI as follows: $1,000,000 on November 22,
2004 and the balance of $2,000,000 on December 3, 2004 (less outstanding service
fees owed by GPSI to GWSE on December 31, 2004 of $548,750 pursuant to a
Merchandising Agreement dated April, 2003). Collateral for the loan was (a) a
first priority security interest in (a) all of the shares of the capital stock
of Optimal, (b) a second security interest in the Optimal Patents and (c) a
first security interest in the Pinranger Patents acquired by GPSI pursuant to an
Agreement dated July 2, 2004 between GPSI and Pinranger (Australia) Pty. Ltd.
and PagiSat, LLC. The Pinranger Patents are registered in 13 countries in
Europe, Japan, and Australia.

The Term Loan may be repaid at any time prior to maturity without premium or
penalty, except that the total minimum interest to be paid must be $300,000
irrespective of when the loan is repaid. During the term of the loan, GPSI must
pay interest of 10% per annum on a monthly basis in cash or shares. If GWSE
chooses to receive shares, the interest rate will be adjusted to 15% for the
period selected and the shares will be priced at a 15% discount to market, using
the average daily close for the three trading days prior to the end of the
monthly period for which interest is due.

                                       11

<PAGE>

Repayment of the principal and interest due under the Credit Agreement has been
provided for by GPSI giving to GWSE (commencing December 4, 2004) all license
payments GPSI receives under all license agreements between Optimal as licensor
and its licensees. Once the Term Loan and accrued interest is paid in full, for
a period of two years from the repayment date, GWSE will receive 20% of the
license payments and thereafter 40% of the license payments for the remaining
life of the Patents. Any fees received in connection with enforcement of the
Optimal Patents will also be paid to GWSE in accordance with the above-mentioned
formula, except that GPSI must pay all legal costs to enforce the Optimal
Patents. Any fees received from infringement payments relating to the Pinranger
Patents will be shared on a 50/50 basis (net of legal costs) until the Term Loan
and accrued interest are fully repaid, after which GPSI will have no further
obligation to GWSE regarding the Pinranger Patents for any revenue they
generate, and GWSE will agree to have its security interest in the Pinranger
Patents removed by GPSI.

To the extent that, during any calendar year commencing January 1, 2005, the
total annual license payments received by GWSE do not total $500,000, then the
shortfall must be paid to GWSE in equal monthly payments over the next calendar
year, above and beyond the following year's minimum license payment. The
maturity date of the Term Loan is November 15, 2011, the termination of the life
of one of the key Optimal Patents.

In addition to the above-mentioned interest and security provided for the Term
Loan, GWSE also received an equity bonus of 3,000,000 restricted Common Shares
of GPSI and a three year Warrant dated December 3, 2004 to purchase 2,000,000
Common Shares of GPSI at an exercise price of $.15.

The Company has paid $319,072 of this liability during the nine months ended
September 30, 2005. As at September 30, 2005 the principal amount outstanding is
$2,680,928 which is offset by unamortized debt discount of $428,571, giving a
net balance of $2,252,357.

Convertible Debt

On September 20, 2005, the Company entered into a Securities Purchase Agreement
(the "Stock Purchase Agreement") with AJW Offshore, Ltd, AJW Partners, LLC, AJW
Qualified Partners, LLC and New Millennium Capital Partners II, LLC (the
Purchasers) providing for the issuance by the Company to the Purchasers of up to
$3,720,000 of secured convertible notes (the "Notes"). The Notes are convertible
into shares of the Company's Common Stock at the option of the holder. The
conversion price is the lesser of (i) the Variable Conversion Price (as defined)
and (ii) $.10 (subject, in each case, to equitable adjustments for stock splits,
stock dividends or rights offerings combinations, recapitalization,
reclassifications, extraordinary distributions and similar events). The
"Variable Conversion Price" means the Applicable Percentage (as defined)
multiplied by the Market Price. "Market Price" means the average of the lowest
three (3) Trading Prices (as defined) for the Common Stock during the twenty
(20) Trading Day period ending one Trading Day prior to the date the conversion
notice is sent by the applicable Holder to the Company. "Trading Price" means
the intraday trading price on the Over-the-Counter Bulletin Board.

The term of the Notes is three years from the date of issuance. The repayment of
the principal amount of the Notes is based on 124% of the subscription amount.

The Company may redeem the Notes upon at least 10 trading days notice in
accordance with the following. So long as the Common stock is trading at or
below $.15 per share, as such price may be adjusted for stock splits,
recapitalizations and similar events (the "Maximum Price") the Company has the
right to prepay all of the outstanding Notes in an amount in cash (the "Optional
Prepayment Amount") equal to (i) 125% (for prepayments occurring within 30 days
of the Issue Date), (ii) 130% for prepayments occurring between 31 and 60 days
of the Issue Date, or (iii) 135% (for prepayments occurring after the sixtieth
60th day following the Issue Date), multiplied by the sum of the then
outstanding principal amount of the applicable Note plus certain other amounts,
if any, required to be paid by the Company as a result of specified defaults
under the definitive agreements. If the stock is trading above the Maximum
Price, the Company may exercise its right to prepay the Notes by paying to the
Holders, in addition to the Optional Prepayment Amount, an amount equal to the
aggregate number of shares that such Holders would have received upon conversion
of the amount of the Note being prepaid multiplied by the difference between the
closing price of the Company's Common Stock on the Optional Prepayment Date less
the Conversion Price then in effect. In the event that the average daily price
of the Common Stock for each day of the month ending on any determination date
is below the Initial Market Price, the Company may, at its option, prepay a
portion of the outstanding principal amount of the Notes equal to 104% of the
principal amount hereof divided by 36 plus one month's interest. The term
"Initial Market Price" means the volume weighted average price of the Common
Stock for the five (5) Trading Days immediately preceding the Closing which is
$.08.

As a condition to the closing the Company's President entered into a Guaranty
and Pledge agreement (the "Pledge Agreement") pursuant to which he agreed to
pledge 6,371,306 shares as collateral. The Notes are also secured by the assets
of the Company pursuant to a Security Agreement and Intellectual Property
Security Agreement.

                                       12

<PAGE>

On September 20, 2005, pursuant to the Securities Purchase Agreement, the
Company sold to the Purchasers, pursuant to Section 4(2) of the Securities Act
of 1933, as amended (the "Securities Act"), and Rule 506 promulgated thereunder,
$1,860,000 in aggregate principal amount of Notes and issued Warrants to
purchase an aggregate of 3,000,000 shares at an exercise price of $0.25 per
share for an aggregate purchase price of $1,500,000. Lionheart Group, Ocean
Avenue Advisors and E.H. Winston Associates and Co. received commissions in the
aggregate amount of $150,000.

The principal amount of the note was $1,860,000 of which $360,000 represents
deferred interest at 8% p.a. over a three year term. This deferred interest has
been recorded as an offset against the principal amount of the notes to be
amortized over the term of the notes. In addition there were debt discounts
incurred on the issue of the Warrants and a Beneficial Conversion Factor arising
from the discount of the conversion price from the market price of the shares on
the date the Notes and Warrants were issued. The debt discount arising from the
issuance of the Warrants amounted to $161,870 and the Beneficial Conversion
Factor arising from the discounted conversion price amounted to $1,338,130. Both
of these discount amounts have been recorded as an offset against the principal
amount of the notes to be amortized over the term of the notes. For the period
ended September 30, 2005 amortization of these offsets amounted to $1,478 for
warrants, $12,221 for the beneficial conversion factor and $3,288 of deferred
interest, totaling $16,987.

Other Debt Related Activity

On September 11, 2005, the Company also entered into a Registration Rights
Agreement with the investors signatory thereto, which provides that on or prior
to 30 days after the closing, of which one occurred on September 20, 2005, the
Company shall prepare and file with the Securities and Exchange Commission a
registration statement ("Registration Statement") covering the resale of all of
the Registrable Securities (defined as the shares issuable upon conversion of
the Notes and the shares issuable upon exercise of the Warrants). If the
registration statement is not filed within 30 days or is, for any reason, not
declared effective within 90 days, the Registrant shall pay liquidated damages
to the investors. The Company filed the Registration Statement on October 20,
2005.

Upon filing of the Registration Statement and provided that the Company has
obtained from Great White Shark Enterprises ("GWSE") an agreement to share
ratably with Purchasers GWSE's interest in the 093 patent owned by a subsidiary
of the Company (the "GWSE Agreement"), the Purchasers are obligated to purchase
an additional $930,000 principal amount of Notes and additional warrants to
purchase 1,500,000 shares for $750,000, and upon effectiveness of the
Registration Statement, an additional $930,000 principal amount of notes and
warrants to purchase an additional 1,500,000 shares for an additional purchase
price of $750,000. This purchase was completed on October 28, 2005.

On October 28, 2005, pursuant to the Securities Purchase Agreement, the Company
sold to the Purchasers, pursuant to Section 4(2) of the Securities Act of 1933,
as amended (the "Securities Act"), and Rule 506 promulgated thereunder, $930,000
in aggregate principal amount of Notes and issued Warrants to purchase an
aggregate of 1,500,000 shares for an aggregate purchase price of $750,000.
Lionheart Group, Ocean Avenue Advisors and E.H. Winston Associates and Co.
received commissions in the aggregate amount of $75,000.

5. Liabilities Related to Discontinued Operations

During the three months ended December 31, 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. The Company has recorded
accounts payable and accrued liabilities of $904,343 with respect to this
discontinued operation, which are included in liabilities related to
discontinued operations in the accompanying consolidated balance sheet.

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. During
the three months ended December 31, 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. In conjunction with the ProShot
transaction, 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 $537,809. 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 nine months ended September 30, 2005 the Company wrote off trade
debts arising from discontinued operations amounting to $419,146. 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.

                                       13

<PAGE>

6. Legal Proceedings

At September 30, 2005, the Company was involved in the following legal
proceedings:

(a) The Company has been threatened with potential litigation for an amount of
approximately $155,000, which is included in accounts payable. The agreement is
that further negotiations will take place before any action is taken on this
balance.

(b) The Company's wholly-owned subsidiary, IGT, is a defendant in a number of
lawsuits principally arising from vendor debt, which in the aggregate are not
material or for which a provision has been recorded. Both IGT and ProShot have
filed Chapter 7 petitions under the United States Bankruptcy Code.

7. Capital Stock Transactions

On January 6, 2005, the Company issued 700,000 shares of common stock for cash
received of $700 upon exercise of an employee stock option.

On February 3, 2005 the Company issued 1,840,000 shares of common stock valued
at $266,800 to the Shaar Fund Ltd. for principal and accrued interest of $96,512
and $13,158 respectively, with respect to the $1,000,000 8% convertible
debenture due November 2, 2007.

On February 3, 2005, the Company issued 25,000 shares of common stock valued at
market value of $3,625 for services rendered.

On February 18, 2005, the Company issued 80,000 shares of common stock valued at
market value of $8,640 for services rendered.

On February 22, 2005, the Company issued 685,998 shares of common stock valued
at market value of $61,740 for payment of interest owed.

On March 29, 2005, the Company issued 450,000 shares of common stock valued at
market value of $45,000 for services rendered.

On March 30, 2005 the Company issued 2,500,000 shares of common stock valued at
market value of $250,000 to a consultant for services rendered.

On March 31, 2005, the Company issued 366,828 shares of common stock valued at
market value of $53,190 for payment of interest owed.

On April 7, 2005 the Company issued 200,000 shares of common stock valued at
market value of $21,000 as a cost of obtaining inventory financing.

On April 7, 2005 the Company issued 10,000,000 shares of common stock valued at
market value of $1,050,000 as collateral against a purchase order financing Line
of Credit of up to $1,000,000. The provider of the financing is required to
return these shares to the Company once the term of the financing line has
expired and all amounts advanced under the line have been repaid. Accordingly
the issuance of these shares has not been recorded in the equity section of the
financial statements.

On April 12, 2005 the Company issued 1,750,000 shares of common stock valued at
market value of $189,000 to a consultant for services rendered.

On April 20, 2005, the Company issued 189,068 shares of common stock valued at
market value of $18,907 for payment of interest owed.

On May 31, 2005 the Company issued 400,000 shares of common stock valued at
market value of $48,000 to a consultant for services rendered.

On June 15, 2005, the Company issued 15,312,500 shares of common stock for a
series of private placements for cash consideration of $1,225,000.

On June 15, 2005 the Company issued 9,119,714 shares of common stock valued at
$729,577 to the Shaar Fund for principal and accrued interest of $629,488 and
$100,089 respectively, with respect to final conversion of the $1,000,000 8%
convertible debenture due November 2, 2007.

On June 15, 2005 the Company issued 5,294,444 shares of common stock valued at
$757,105 to the LTC Financial Partners for principal and accrued interest and
financing costs of $400,000 and $357,105 respectively, with respect to final
conversion of the debt.

On June 16, 2005 the Company issued 5,600,000 shares of common stock valued at
market value of $795,200 to consultants for services rendered.

On June 22, 2005 the Company issued 288,350 shares of common stock valued at
market value of $34,602 for services rendered.

                                       14

<PAGE>

On June 22, 2005 the Company issued 3,600,000 shares of common stock valued at
market value of $432,000 to a consultant for services rendered.

On June 27, 2005 the Company issued 1,500,000 shares of common stock valued at
market value of $180,000 in settlement of accounts payable incurred for the
provision of legal services.

On July 5, 2005 the Company issued 200,000 shares of common stock valued at
market value of $26,000 as a cost of obtaining inventory financing.

On July 7, 2005 the Company issued 132,500 shares of common stock valued at
market value of $17,225 for services rendered.

On August 16, 2005 the Company issued 5,900,000 shares of common stock valued at
market value of $643,100 to consultants for services rendered.

On August 17, 2005 the Company cancelled 3,600,000 shares of common stock valued
at market value of $511,200 which had previously been issued to consultants for
services rendered.

On September 17, 2005 the Company issued 300,000 shares of common stock valued
at market value of $26,700 to a consultant for services rendered.

On April 27, 2005 the Company's stockholders approved an increase in the
authorized share capital of the Company from 275,000,000 authorized shares
(250,000,000 common stock and 25,000,000 preferred stock) to 550,000,000 shares,
500,000,000 shares of common stock par value $.001 and 50,000,000 shares of
preferred stock with the series, rights, preferences privileges and restrictions
to be determined by the Board of Directors of the Company.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Cautionary Statement Pursuant to Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995:

This Quarterly Report on Form 10-QSB for the quarterly period ended September
30, 2005 contains "forward-looking" statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, including statements that include the
words "believes", "expects", "anticipates", or similar expressions. These
forward-looking statements include, among others, statements concerning the
Company's expectations regarding its working capital requirements, financing
requirements, its business, growth prospects, competition and results of
operations, and other statements of expectations, beliefs, future plans and
strategies, anticipated events or trends, and similar expressions concerning
matters that are not historical facts. The forward-looking statements in this
Quarterly Report on Form 10-QSB for the quarterly period ended September 30,
2005 involve known and unknown risks, uncertainties and other factors that could
cause the actual results, performance or achievements of the Company to differ
materially from those expressed in or implied by the forward-looking statements
contained herein.

Overview:

The Company is involved in the development and marketing of golf course
management technology using Differential Global Positioning Satellite (DGPS) and
Wi-Fi wireless business solutions. The Company's management information system
enables golf course owners and managers to run their business more efficiently
with pace-of-play monitoring, data consolidation and reporting capabilities.
Courses can generate more revenue with advertising, tournament and
point-of-purchase applications, reduce costs of operations and retain more
customers with customer relationship management programs. The Company has
developed both hand-held and cart-mounted products using GPS technology. These
units help attract and retain customers by delivering a better golf experience
with precise distance measurement, detailed colour course maps, media streaming
of real-time sports scores and news headlines, food and beverage ordering,
electronic scoring, tournament play and emergency communication with the
clubhouse. At September 30, 2005 and December 31, 2004, substantially all of the
Company's assets and operations were located in Canada. Sales offices are
located in Canada, USA and England.

The Company applies DGPS, radio frequency and a sophisticated integrated network
of wireless technology to information systems for the golf and recreational
industries. The Company's portable product, the "Inforemer", is the first
patented communications network that utilizes advanced internet protocols to
provide a wireless information system to enhance recreational value, increase
golf course profits and improve player safety. The Company's objective is to
obtain a leadership position as an international supplier of GPS golf wireless
products and become the leader in hand-held portable recreational devices
("PRDs") for applications worldwide.

                                       15

<PAGE>

The Company recorded sales revenue during the nine months ended September 30,
2005. 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 products delivered to the customer and installed on the
customer's site. The costs of installing the equipment on the customer's site,
such as labour and travel and accommodation expenses, are recorded as
Installation Costs. The cost of developing software installed in the equipment
on the customer's site is recorded as an operating expense in the category
"Engineering, Research and Development", all such costs are expensed as they are
incurred.

During the three months ended December 31, 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.

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. During
the three months ended December 31, 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.

As a result of these Chapter 7 bankruptcy filings, the liabilities of such
discontinued subsidiaries have been classified as liabilities of discontinued
operations in the accompanying financial statements.

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
GPSI.

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 working capital
deficit at September 30, 2005 and December 31, 2004. The continued
commercialization of the Company's technology is dependent on the Company's
ability to successfully finance its cash requirements through a combination of
debt and equity financings, sale of its GPS systems and payments from potential
distributors and other partners. The Company's independent certified public
accountants, in their independent auditors' report on the consolidated financial
statements as of and for the year ended December 31, 2004, have expressed
substantial doubt about the Company's ability to continue as a going concern.

The Company is attempting to restructure its debt obligations and raise new
capital. To the extent that the Company is unable to successfully restructure
its debt obligations and/or 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, and may
consider a formal or informal restructuring or reorganization.

Critical Accounting Policies:

The Company prepared the consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Management periodically evaluates the estimates and judgments made.
Management bases its estimates and judgments on historical experience and on
various factors that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates as a result of different
assumptions or conditions.

The following critical accounting policies affect the more significant judgments
and estimates used in the preparation of the Company's consolidated financial
statements.

                                       16

<PAGE>

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 products delivered to the customer and installed on the customer's
site. The cost of installing the equipment on the customer's site, such as labor
and 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
"Engineering, Research and Development", all such costs are expensed as they are
incurred.

Impairment of Long-Lived Assets:

The Company's long-lived assets consist of patents, property and equipment. In
assessing the impairment of these assets, the Company makes assumptions
regarding the estimated future cash flows and other factors to determine the
fair value of the respective assets. The Company did not record any impairment
charges for the nine months ended September 30, 2005. However, if these
estimates or the related assumptions change in the future, the Company may be
required to record impairment charges for these assets at such time.

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.

Results of Operations:

Nine months ended September 30, 2005 and 2004

Revenue - The Company recorded total revenue in the nine months ended September
30, 2005 of $4,039,278 as compared to $1,723,018 in the first nine months of
2004. This amounted to an increase of $2,316,260 or 134% in total revenue. The
Company recorded sales of its Inforemer product for the first time in the nine
months ended September 30, 2004 and this increase reflects the year over year
growth of the Company's sales from its startup position in 2004 and growing
acceptance of the Inforemer in the marketplace resulting in the Company's
greater penetration of its core market. This revenue is comprised of sales of
the Company's Inforemer product and related service contract fees, together with
fees payable by certain of its distributors for distributorship partnership fees
and purchase of promotional materials from the Company. Revenue also includes
patent licence fees received by the Company's subsidiary, Optimal Golf
Solutions, Inc. The total revenue from Inforemer products and service contract
fees amounted to $3,494,822 as compared to $1,602,018 in the first nine months
of 2004. Revenue from distributorship partnership fees amounted to $154,000
compared to $121,000 in 2004. Total patent licence revenue earned by Optimal
Golf Solutions amounted to $390,457 as compared to $0 in the first nine months
of 2004.

Cost of Goods Sold - Cost of Goods Sold represents the cost of Inforemer
products and related equipment delivered to the customer and installed on the
customer's site. Cost of Goods Sold for the nine months ended September 30, 2005
was $2,761,162 of which $2,142,546 represents costs of goods sold and $618,616
represents installation costs. In the first nine months of 2004 Cost of Goods
Sold was $1,572,581 comprised of cost of goods sold of $1,317,596 and
installation costs of $254,985.

Selling and Marketing Expenses - Selling and marketing expenses were $1,439,274
for the nine months ended September 30, 2005, as compared to $1,155,942 for the
nine months ended September 30, 2004. The increase was attributable to increased
sales and marketing personnel, sales commissions, creation of marketing and
promotional materials, attendance at trade shows, travel, accommodation,
advertising and various promotional costs to introduce the Inforemer product to
the marketplace.

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General and Administrative Expenses - General and administrative expenses were
$4,057,653 for the nine months ended September 30, 2005, as compared to
$1,628,449 for the nine months ended September 30, 2004. This increase was
attributable to an increase in personnel, professional fees and consulting fees
in connection with enforcement of the Company's recently acquired patents,
financing costs and stock based compensation compared to 2004. In particular the
Company incurred significant costs in seeking additional financing
opportunities; these costs were primarily paid by stock issuance. The sum of
expenses in this category which were satisfied by stock issuances rather than
cash payments amounted to $1,982,592 or 49% of total general and administrative
expenses.

Engineering, Research and Development Expenses - Engineering, research and
development expenses increased to $1,454,659 for the nine months ended September
30, 2005 from $886,510 for the nine months ended September 30, 2004. This
increase was attributable to the engineering and continuing development cost of
the Inforemer product. These costs comprised personnel costs, consultants,
computer software development costs and service costs of the increased number of
Inforemer systems installed.

Depreciation and Amortization - Depreciation and amortization increased by
$143,465 or 225% to $207,210 in the first nine months of 2005, as compared to
$63,745 in 2004. The Company acquired the rights to certain North American and
international GPS patents in the year ended December 31, 2004. These patents are
being amortized over the remaining life of the patents. The increase in
depreciation and amortization is due to the amortization charged against these
patents.

Loss from Operations - The loss from operations was $5,880,680 for the nine
months ended September 30, 2005, as compared to a loss from operations of
$3,584,209 for the nine months ended September 30, 2004. The increase was due to
substantially higher legal, financing and administrative expenses and sales and
marketing expenses in the period. Engineering and R&D expenses in the period
also increased.

Interest Expense - Interest expense increased by $921,938 to $1,258,327 in 2005,
as compared to $336,389 in 2004, as a result of an increase of interest-bearing
debt, particularly the loan from Great White Shark Enterprises obtained to
enable purchase of the Company's patents, drawdowns on bank operating lines of
credit and short term financing loans. Of this total, $501,491 was paid in stock
issuances rather than cash payments.

Finance Costs - Finance costs relate to warrants issued in conjunction with the
Company's debt financings and fees paid to third parties who assist in raising
capital for the Company. The value of these warrants is recorded as a discount
on the convertible debentures and is being amortized over the term of the
respective convertible debenture. Finance costs increased to $603,835 in first
nine months of 2005 as compared to $224,129 in the respective 2004 period. Of
this total, $168,550 was paid by stock issuances.

Gain on Extinguishment of Debt - Gain on extinguishment of debt decreased to
$244,292 in the nine months ended September 30, 2005 from $1,741,756 for the
nine months ended September 30, 2004. This gain was comprised of a gain of
$419,146 relating to the write-off of debt guarantees of discontinued operations
and a loss amounting to $ 174,854 arising from the issuance of stock in
settlement of debt.

Net Loss - Net loss was $7,497,263 for the nine months ended September 30, 2005,
as compared to a net loss of $2,578,193 for the nine months ended September 30,
2004. This increase is a reflection of the increased expenses incurred in
bringing the Inforemer product to market, financing costs and setting up a sales
and distribution organization, which have partially been offset by the gain on
extinguishment of debt and net sales revenue for the period. The Company
incurred significant costs in seeking additional financing opportunities, these
costs were primarily paid by the issuance of stock and are included under the
General and Administrative Expense category. Total expenses paid by stock
issuances in the period amounted to $2,625,933.

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Liquidity and Capital Resources - September 30, 2005:

The Company is continuing its efforts to raise new capital during the remainder
of 2005.

The Company's limited cash and working capital resources, and the uncertainty
with respect to the Company's ability to fund its operations, have raised
substantial doubt about the Company's ability to continue as a going concern
(see "Going Concern" above). The Company will require a substantial input of
capital, either through debt or equity capital or a combination thereof, to
continue operations. To the extent of the inability of the Company to raise such
capital the Company may have to cease or curtail operations or seek protection
from it's creditors under the bankruptcy laws.

Operating Activities - The Company's operations utilized cash of $3,984,877
during the nine months ended September 30, 2005, as compared to $3,345,736
during the nine months ended September 30, 2004. The increase in cash utilized
in operations in 2005 as compared to 2004 was primarily a result of an increase
in inventories, deferred implementation costs and accounts receivable, combined
with the increase in net loss for the period.

At September 30, 2005, cash decreased by $120,591 to $52,501, as compared to
$173,092 at December 31, 2004.

The Company had a working capital deficit of $12,969,246 at September 30, 2005,
as compared to a working capital deficit of $14,210,188 at December 31, 2004. At
September 30, 2005 and December 31, 2004, $3,004,376 and $3,423,522 respectively
of the Company's current liabilities consisted of liabilities with respect to
discontinued operations.

Investing Activities - Net cash used in investing activities was $316,572 and
$141,097 for the nine months ended September 30, 2005 and 2004, respectively,
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 $4,180,858
for the nine months ended September 30, 2005, as compared to $3,504,903 for the
nine months ended September 30, 2004. During the nine months ended September 30,
2005, the Company made payments on loans of $271,777 and loans from related
parties of $37,562. During the nine months ended September 30, 2005, the Company
received proceeds from borrowing on convertible loans of $1,571,095 and proceeds
from bank borrowings and short term loans of $1,694,102. During the nine months
ended September 30, 2005 the Company issued common stock for cash consideration
of $1,225,000.

Lines of Credit

Effective June 27, 2003, the Company obtained a bank line of credit for
$1,425,000 to fund its operations. As of September 30, 2005, the Company had
borrowed $1,517,792 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. was
renewed until March 27, 2005 and subsequently to October 27, 2005 and has now
been renewed to September 30, 2006.. As consideration for renewing the standby
bank letter of credit, the Company issued to Hansen Inc. a common stock purchase
warrant to purchase 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. $52,000, the fair value of this common stock purchase warrant, calculated
pursuant to the Black-Scholes option pricing model, was charged to operations as
finance costs for the nine months ended September 30, 2005. The Company has
agreed to issue a further common stock purchase warrant to Hansen Inc. to
purchase 1,000,000 shares of the Company's common stock, exercisable at $0.10
per share. 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

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interest at prime plus one half of one percent interest is payable. As of
September 30, 2005 this line was drawn down in the amount of $1,017,313. The
term was for a period of 1 year from the date of the agreement. As consideration
for the security provided, the Company agreed to pay the Secured Party 15% per
annum of the maximum amount outstanding in the month, payable 50% in US$ 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. The Company has accrued this
consideration to September 30, 2005. 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 renewed until October 31, 2005 and subsequently renewed until
April 2006. These warrants have been valued at $72,000. An amount of $54,000 was
charged to operations, as finance costs, in 2004 and the remaining amount of
$18,000 in the first quarter of 2005. The value of the warrants was determined
with use of the Black-Scholes pricing model with the following factors: 3 year
life, risk free rate of return of approximately 1.9% and a volatility factor of
200%.

Acquisition of Optimal Golf Solutions, Inc.

On November 19, 2004 GPSI 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% per annum 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 GPSI 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 GPSI using a minimum price of
$.25 per share. These shares can be sold after the effectiveness of a
registration statement and in accordance with a Leakage Agreement. The final
purchase price will vary based up the performance of the Company's shares. The
obligation to pay the deferred purchase price was secured by a first security
interest in the Optimal patents.

The first stock payment of 9,000,000 shares can be sold (in accordance with the
Leakage Agreement) over 180 trading days. Any funds received from the sale of
those shares over $3,250,000 (i.e. $1,000,000 over the $2,250,000 target price
for the first share payment) will be deducted from the amount to be paid with
the second stock payment, for the remaining amount due of $1,900,000 (plus
interest). 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 is 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 the Company 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, which would be applied to the balance owing which was to be
settled with the second stock payment. 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.

Because the Company did not have the Registration Statement filed by September
30, 2005, it has 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 $0.10 on October 19, 2005.

Loan From Great White Shark Enterprises

On December 3, 2004, GPSI entered into a Credit Agreement with Great White Shark
Enterprises, Inc. ("GWSE") for GWSE to provide a Term Loan of $3,000,000 to
GPSI. These funds were received by GPSI as follows: $1,000,000 on November 22,
2004 and the balance of $2,000,000 on December 3, 2004 (less outstanding service
fees owed by GPSI to GWSE to December 31, 2004 of $548,750 pursuant to a
Merchandising Agreement dated April, 2003). Collateral for the loan was (a) a
first priority security interest in (a) all of the shares of the capital stock
of Optimal, (b) a second security interest in the Optimal Patents and (c) a
first security interest in the Pinranger Patents acquired by GPSI pursuant to an
Agreement dated July 2, 2004 between GPSI and Pinranger (Australia) Pty. Ltd.
and PagiSat, LLC. The Pinranger Patents are registered in 13 countries in
Europe, Japan, and Australia.

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<PAGE>

The Term Loan may be repaid at any time prior to maturity without premium or
penalty, except that the total minimum interest to be paid must be $300,000
irrespective of when the loan is repaid. During the term of the loan, GPSI must
pay interest of 10% per annum on a monthly basis in cash or shares. If GWSE
chooses to receive shares, the interest rate will be adjusted to 15% for the
period selected and the shares will be priced at a 15% discount to market, using
the average daily close for the three trading days prior to the end of the
monthly period for which interest is due.

Repayment of the principal and interest due under the Credit Agreement has been
provided for by GPSI giving to GWSE (commencing December 4, 2004) all license
payments GPSI receives under all license agreements between Optimal as licensor
and its licensees. Once the Term Loan and accrued interest is paid in full, for
a period of two years from the repayment date, GWSE will receive 20% of the
license payments and thereafter 40% of the license payments for the remaining
life of the Patents. Any fees received in connection with enforcement of the
Optimal Patents will also be paid to GWSE in accordance with the above-mentioned
formula, except that GPSI must pay all legal costs to enforce the Optimal
Patents. Any fees received from infringement payments relating to the Pinranger
Patents will be shared on a 50/50 basis (net of legal costs) until the Term Loan
and accrued interest are fully repaid, after which GPSI will have no further
obligation to GWSE regarding the Pinranger Patents for any revenue they
generate, and GWSE will agree to have its security interest in the Pinranger
Patents removed by GPSI.

To the extent that, during any calendar year commencing January 1, 2005, the
total annual license payments received by GWSE do not total $500,000, then the
shortfall must be paid to GWSE in equal monthly payments over the next calendar
year, above and beyond the following year's minimum license payment. The
maturity date of the Term Loan is November 15, 2011, the termination of the life
of one of the key Optimal Patents.

In addition to the above-mentioned interest and security provided for the Term
Loan, GWSE also received an equity bonus of 3,000,000 restricted Common Shares
of GPSI and a three year Warrant dated December 3, 2004 to purchase 2,000,000
Common Shares of GPSI at an exercise price of $.15.

The Company has paid $319,072 of this liability during the nine months ended
September 30, 2005. As at September 30, 2005 the principal amount outstanding is
$2,680,928 which is offset by unamortized debt discount of $428,571, giving a
net balance of $2,252,357.

Equity Offering

Pursuant to the terms of Securities Purchase Agreements, in June 2005, the
Company sold 15,312,500 shares for a cash purchase aggregate amount of
$1,225,000.

Sale of Convertible Notes

On September 20, 2005, the Company entered into a Securities Purchase Agreement
(the "Stock Purchase Agreement") with AJW Offshore, Ltd, AJW Partners, LLC, AJW
Qualified Partners, LLC and New Millennium Capital Partners II, LLC (the
Purchasers) providing for the issuance by the Company to the Purchasers of up to
$3,720,000 of secured convertible notes (the "Notes"). The Notes are convertible
into shares of the Company's Common Stock at the option of the holder. The
conversion price is the lesser of (i) the Variable Conversion Price (as defined)
and (ii) $.10 (subject, in each case, to equitable adjustments for stock splits,
stock dividends or rights offerings combinations, recapitalization,
reclassifications, extraordinary distributions and similar events). The
"Variable Conversion Price" means the Applicable Percentage (as defined)
multiplied by the Market Price. "Market Price" means the average of the lowest
three (3) Trading Prices (as defined) for the Common Stock during the twenty
(20) Trading Day period ending one Trading Day prior to the date the conversion
notice is sent by the applicable Holder to the Company. "Trading Price" means
the intraday trading price on the Over-the-Counter Bulletin Board.

The term of the Notes is three years from the date of issuance. The repayment of
the principal amount of the Notes is based on 124% of the subscription amount.

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<PAGE>

The Company may redeem the Notes upon at least 10 trading days notice in
accordance with the following. So long as the Common stock is trading at or
below $.15 per share, as such price may be adjusted for stock splits,
recapitalizations and similar events (the "Maximum Price") the Company has the
right to prepay all of the outstanding Notes in an amount in cash (the "Optional
Prepayment Amount") equal to (i) 125% (for prepayments occurring within 30 days
of the Issue Date), (ii) 130% for prepayments occurring between 31 and 60 days
of the Issue Date, or (iii) 135% (for prepayments occurring after the sixtieth
60th day following the Issue Date), multiplied by the sum of the then
outstanding principal amount of the applicable Note plus certain other amounts,
if any, required to be paid by the Company as a result of specified defaults
under the definitive agreements. If the stock is trading above the Maximum
Price, the Company may exercise its right to prepay the Notes by paying to the
Holders, in addition to the Optional Prepayment Amount, an amount equal to the
aggregate number of shares that such Holders would have received upon conversion
of the amount of the Note being prepaid multiplied by the difference between the
closing price of the Company's Common Stock on the Optional Prepayment Date less
the Conversion Price then in effect. In the event that the average daily price
of the Common Stock for each day of the month ending on any determination date
is below the Initial Market Price, the Company may, at its option, prepay a
portion of the outstanding principal amount of the Notes equal to 104% of the
principal amount hereof divided by 36 plus one month's interest. The term
"Initial Market Price" means the volume weighted average price of the Common
Stock for the five (5) Trading Days immediately preceding the Closing which is
$.08.

As a condition to the closing the Company's President entered into a Guaranty
and Pledge agreement (the "Pledge Agreement") pursuant to which he agreed to
pledge 6,371,306 shares as collateral. The Notes are also secured by the assets
of the Company pursuant to a Security Agreement and Intellectual Property
Security Agreement.

On September 20, 2005, pursuant to the Securities Purchase Agreement, the
Company sold to the Purchasers, pursuant to Section 4(2) of the Securities Act
of 1933, as amended (the "Securities Act"), and Rule 506 promulgated thereunder,
$1,860,000 in aggregate principal amount of Notes and issued Warrants to
purchase an aggregate of 3,000,000 shares at an exercise price of $0.25 per
share for an aggregate purchase price of $1,500,000. Lionheart Group, Ocean
Avenue Advisors and E.H. Winston Associates and Co. received commissions in the
aggregate amount of $150,000.

The principal amount of the note was $1,860,000 of which $360,000 represents
deferred interest at 8% p.a. over a three year term. This deferred interest has
been recorded as an offset against the principal amount of the notes to be
amortized over the term of the notes. In addition there were debt discounts
incurred on the issue of the Warrants and a Beneficial Conversion Factor arising
from the discount of the conversion price from the market price of the shares on
the date the Notes and Warrants were issued. The debt discount arising from the
issuance of the Warrants amounted to $161,870 and the Beneficial Conversion
Factor arising from the discounted conversion price amounted to $1,338,130. Both
of these discount amounts have been recorded as an offset against the principal
amount of the notes to be amortized over the term of the notes. For the period
ended September 30, 2005 amortization of these offsets amounted to $1,478 for
warrants, $12,221 for the beneficial conversion factor and $3,288 of deferred
interest, totaling $16,987.

On September 11, 2005, the Company also entered into a Registration Rights
Agreement with the investors signatory thereto, which provides that on or prior
to 30 days after the closing, of which one occurred on September 20, 2005, the
Company shall prepare and file with the Securities and Exchange Commission a
registration statement ("Registration Statement") covering the resale of all of
the Registrable Securities (defined as the shares issuable upon conversion of
the Notes and the shares issuable upon exercise of the Warrants). If the
registration statement is not filed within 30 days or is, for any reason, not
declared effective within 90 days, the Registrant shall pay liquidated damages
to the investors. The Company filed the Registration Statement on October 20,
2005.

Upon filing of the Registration Statement and provided that the Company has
obtained from Great White Shark Enterprises ("GWSE") an agreement to share
ratably with Purchasers GWSE's interest in the 093 patent owned by a subsidiary
of the Company (the "GWSE Agreement"), the Purchasers are obligated to purchase
an additional $930,000 principal amount of Notes and additional warrants to
purchase 1,500,000 shares for $750,000, and upon effectiveness of the
Registration Statement, an additional $930,000 principal amount of notes and
warrants to purchase an additional 1,500,000 shares for an additional purchase
price of $750,000. This purchase was completed on October 28, 2005.

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On October 28, 2005, pursuant to the Securities Purchase Agreement, the Company
sold to the Purchasers, pursuant to Section 4(2) of the Securities Act of 1933,
as amended (the "Securities Act"), and Rule 506 promulgated thereunder, $930,000
in aggregate principal amount of Notes and issued Warrants to purchase an
aggregate of 1,500,000 shares for an aggregate purchase price of $750,000.
Lionheart Group, Ocean Avenue Advisors and E.H. Winston Associates and Co.
received commissions in the aggregate amount of $75,000.

Off Balance Sheet Arrangements.

The Company had no Off Balance Sheet arrangements for the nine months ended
September 30, 2005, or for the nine months ended September 30, 2004

Recent Accounting Pronouncements:

In December 2004, the FASB finalized SFAS No. 123R "Share-Based Payment" ("SFAS
123R"), amending SFAS No. 123, effective December 15, 2005. SFAS 123R will
require the Company to expense stock options based on grant date fair value in
its financial statements. Further, adoption of SFAS No. 123R will require
additional accounting related to income tax effects and additional disclosure
regarding cash flow effects resulting from share-based payments arrangements.
The adoption of SFAS 123R will not effect the Company's cash flows or financial
position, but may have an adverse impact on results of operations if options are
granted in the future.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets
- an amendment for APB Opinion No. 29". This statement amends APB Opinion No. 29
to eliminate the exception for nonmonetary exchanges of similar productive
assets and replaces it with a general exception for exchanges of nonmonetary
assets that do not have commercial substance. A nonmonetary exchange has
commercial substance if future cash flows of the entity are expected to change
significantly as a result of the exchange. The provisions of SFAS No. 153 are
effective for the Company's year ended December 31, 2006. Management is
currently evaluating the impact of the adoption of SFAS No. 153 on the Company's
consolidated financial position, liquidity, or results of operations.

In April 2005, the Securities and Exchange Commission's Office of the Chief
Accountant and its Division of Corporation Finance has released Staff Accounting
Bulletin (SAB) No.107 to provide guidance regarding the application of FASB
Statement No.123 (revised 2004), Share-Based Payment. Statement No. 123(R)
covers a wide range of share-based compensation arrangements including share
options, restricted share plans, performance-based awards, share appreciation
rights, and employee share purchase plans. SAB 107 provides interpretative
guidance related to the interaction between Statement No. 123R and certain SEC
rules and regulations, as well as the staff's views regarding the valuation of
Share-based payment arrangements for public companies. SAB 107 also reminds
public companies of the importance of including disclosures within filings made
with the SEC relating to the accounting for share-based payment transactions,
particularly during the transition to Statement No. 123R.

In May 2005, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 154, "Accounting Changes and Error
Corrections-a replacement of APB Opinion No. 20 and FASB Statement No. 3" ("SFAS
154"). This Statement replaces APB Opinion No. 20, Accounting Changes, and FASB
Statement No. 3, Reporting Accounting Changes in Interim Financial Statements,
and changes the requirements for the accounting for and reporting of a change in
accounting principle. This Statement applies to all voluntary changes in
accounting principle. It also applies to changes required by an accounting
pronouncement in the unusual instance that the pronouncement does not include
specific transition provisions. When a pronouncement includes specific
transition provisions, those provisions should be followed.

Opinion 20 previously required that most voluntary changes in accounting
principle be recognized by including in net income of the period of the change
the cumulative effect of changing to the new accounting principle. This
Statement requires retrospective application to prior periods' financial
statements of changes in accounting principle, unless it is impracticable to
determine either the period-specific effects or the cumulative effect of the
change. When it is impracticable to determine the period-specific effects of an
accounting change on one or more individual prior periods presented, this
Statement requires that the new accounting principle be applied to the balances
of assets and liabilities as of the beginning of the earliest period for which
retrospective application is practicable and that a corresponding adjustment be
made to the opening balance of retained earnings (or other appropriate
components of equity or net assets in the statement of financial position) for
that period rather than being reported in an income statement. When it is
impracticable to determine the cumulative effect of applying a change in
accounting principle to all prior periods, this Statement requires that the new
accounting principle be applied as if it were adopted prospectively from the
earliest date practicable. This Statement shall be effective for accounting
changes and corrections of errors made in fiscal years beginning after December
15, 2005. The Company does not believe that the adoption of SFAS 154 will have a
significant effect on its financial statements.

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Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies that do not require adoption until a future date
are not expected to have a material impact on the consolidated financial
statements upon adoption.

ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports filed or submitted under the Exchange
Act of 1934 is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the Securities and Exchange
Commission. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed in the reports filed under the Exchange Act of 1934 is accumulated and
communicated to management, including its principal executive and financial
officers, as appropriate, to allow timely decisions regarding required
disclosure.

The Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's principal
executive and financial officer, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures as of the end of
the period covered by this report. Based upon and as of the date of that
evaluation, the Company's principal executive and financial officer concluded
that the Company's disclosure controls and procedures are effective to ensure
that information required to be disclosed in the reports the Company files and
submits under the Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms.

(b) Changes in Internal Controls

There were no changes in the Company's internal controls or in other factors
that could have significantly affected those controls subsequent to the date of
the Company's most recent evaluation.

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                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

During the nine months ended September 30, 2005 the Company issued a total of
52,834,402 shares of common stock, valued at a market value of $5,321,911. Of
these, 18,125,850 shares were issued for services rendered valued at a market
value of $ 1,982,592; 4,361,000 shares were issued to pay interest of $ 501,491;
1,250,000 were issued for financing costs valued at a market value of $ 168,550:
9,487,849 shares were issued in payment of convertible debt valued at a market
value of $864,279; 4,297,203 shares were issued in other debt settlement valued
at a market value of $580,000 and 15,312,500 shares were issued for cash
consideration of $1,225,000.

On July 5, 2005 the Company issued 200,000 shares of common stock valued at
market value of $26,000 as a cost of obtaining inventory financing.

On July 7, 2005 the Company issued 132,500 shares of common stock valued at
market value of $17,225 for services rendered.

On August 16, 2005 the Company issued 5,900,000 shares of common stock valued at
market value of $643,100 to consultants for services rendered.

On August 17, 2005 the Company cancelled 3,600,000 shares of common stock valued
at market value of $511,200 which had previously been issued to consultants for
services rendered.

On September 17, 2005 the Company issued 300,000 shares of common stock valued
at market value of $26,700 to a consultant for services rendered

On September 20, 2005, pursuant to Securities Purchase Agreements, the Company
sold to AJW Offshore, Ltd, AJW Partners, LLC, AJW Qualified Partners, LLC and
New Millennium Capital Partners II, LLC, pursuant to Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"), and Rule 506
promulgated thereunder, $1,860,000 in aggregate principal amount of Notes and
issued Warrants to purchase an aggregate of 3,000,000 shares at an exercise
price of $0.25 per share for an aggregate purchase price of $1,500,000.
Lionheart Group, Ocean Avenue Advisors and E.H. Winston Associates and Co.
received commissions in the aggregate amount of $150,000.

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 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

(a) Exhibits

A list of exhibits required to be filed as part of this report is set forth in
the Index to Exhibits, which immediately precedes such exhibits, and is
incorporated herein by reference.

                                       25

<PAGE>

                                INDEX TO EXHIBITS



Exhibit Number                      Title

31.1              Certification of Chief Executive Officer pursuant
                    to Section 302 of the Sarbanes Oxley Act of 2002

31.2              Certification of Chief Accounting Officer pursuant
                   to Section 302 of the Sarbanes Oxley Act of 2002

32.1              Certification of Chief Executive Officer pursuant
                   to Section 906 of the Sarbanes Oxley Act of 2002

32.2              Certification of Chief Accounting Officer pursuant
                   to Section 906 of the Sarbanes Oxley Act of 2002



                                       26


<PAGE>




                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                              GPS INDUSTRIES, INC.
                                  (Registrant)






Date:  November 14, 2005        By:  /s/ ROBERT C. SILZER, SR.
                                     ---------------------------
                                     Robert C. Silzer, Sr.
                                     Chief Executive Officer
                                     (Duly Authorized Officer)




Date:  November 14, 2005         By:  /s/ MICHAEL MARTIN
                                      ---------------------------
                                      Michael Martin
                                      Chief Accounting Officer
                                      (Duly Authorized Officer)