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 March 31, 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 April 20, 2005 the Company had 225,641,419 shares of Class A 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 - March 31, 2005 (Unaudited).............3

         Consolidated Statements of Operations (Unaudited) -
          Three Months Ended March 31, 2005 and 2004.........................4

         Consolidated Statements of Cash Flows (Unaudited) -
          Three Months Ended March 31, 2005 and 2004.........................5

         Notes to Consolidated Financial Statements (Unaudited) -
          Three Months Ended March 31, 2005 and 2004.........................6

  Item 2.  Management's Discussion and Analysis or Plan of Operation........10

  Item 3.  Controls and Procedures..........................................14

PART II.  OTHER INFORMATION

  Item 1.  Legal proceedings................................................15

  Item 2.  Changes in Securities and Use of Proceeds........................15

  Item 3.  Defaults Upon Senior Securities..................................15

  Item 4.  Submission of matters to a vote of security holders..............15

  Item 5.  Other information................................................15

  Item 6.  Exhibits and Reports on Form 8-K.................................16

SIGNATURES


                                       2

<PAGE>

ITEM 1. FINANCIAL STATEMENTS

                      GPS INDUSTRIES INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET


                                                                  March 31, 2005
                                                                     (Unaudited)
--------------------------------------------------------------------------------

Assets

Current

     Cash                                                          $      2,310
     Accounts receivable                                                725,516
     Inventory                                                        1,639,598
     Prepaid expenses and other current assets                          214,419
                          Total Current Assets                        2,581,843

Property and equipment, net                                             101,222

Patents                                                               1,701,672

Deferred implementation costs                                           176,563
                                                                   -------------
                                                                   $  4,561,300
                                                                   =============

--------------------------------------------------------------------------------

Liabilities and Stockholders' Deficit

Current liabilities

     Bank indebtedness                                             $  3,084,549
     Bank loan                                                           25,121
     Deferred Revenue                                                   576,853
     Short term loans                                                 2,525,058
     Accounts payable and accrued liabilities                         2,466,672
     Term loan from investor                                          2,233,400
     Liability associated with Optimal Golf acquisition               2,980,000
     Convertible loans                                                  240,000
     Promissory notes - related parties                                 595,430
                                                                   -------------
                                                                     14,727,083

     Liabilities related to discontinued operations
     (Chapter 7 proceedings filed in 2002)
     Promissory note payable                                          1,274,757
     Accounts payable and accrued liabilities                         1,561,319
     Loans payable to related parties                                   258,000
     Capital lease obligations ( in default)                             29,467
                                                                      3,123,543
                                                                   -------------
     Total current liabilities                                       17,850,626
                                                                   -------------

Convertible debt                                                        354,604
                                                                   -------------


Stockholders' deficit

     Class A common stock, $.001 par value, 250,000,000
     authorized, 211,302,851 issued and outstanding                     211,303
     5% Convertible Preferred Shares, $.001 par value,
     25,000,000 authorized, 375,000 issued and
     outstanding; liquidation                                           375,000
     Accumulated other comprehensive income                             722,295
     Deferred compensation expense                                     (619,474)
     Deferred Financing Costs                                          (270,000)
     Additional paid-in capital                                      32,283,720
     Accumulated deficit                                            (46,346,774)
                                                                   -------------
                          Total Stockholder's Deficit               (13,643,930)
                                                                   -------------
                                                                   $  4,561,300
                                                                   =============


See accompanying notes to consolidated financial statements

                                       3

<PAGE>


                      GPS INDUSTRIES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>


                     For the Three Months Ended March 31      2005            2004
--------------------------------------------------------  (Unaudited)     (Unaudited)


<S>                                                      <C>             <C>
Revenue                                                  $ 1,118,616     $   840,310

Cost of Goods Sold                                           527,118         752,379

Installation Costs                                            85,534               -
                                                         ----------------------------
Gross Profit                                                 505,964          87,931
                                                         ----------------------------


Operating Expenses

      General and Administrative Expenses                    947,884         478,082
      Depreciation and amortization                           67,365          16,995
      Sales and marketing                                    554,830         262,142
      Engineering and Research and Development               359,473         249,836
                                                         ----------------------------
                                                           1,929,552       1,007,055
                                                         ----------------------------
Loss Before Other Income (Expense)                       ( 1,423,588)      ( 919,124)
                                                         ----------------------------
Other Income (Expense)

      Finance costs                                         ( 63,031)       ( 23,655)
      Interest expense                                     ( 328,740)       ( 41,244)
      Loss on foreign exchange                                     -           8,775
      Gain on extinguishment of debt                         161,701         243,889
                                                         ----------------------------
                                                           ( 230,070)        187,765
                                                         ----------------------------

Net Loss Applicable to Common Stockholders               $(1,653,658)    $ ( 731,359)
-------------------------------------------------------------------------------------

Loss per common share - basic and diluted                $    ( 0.01)    $    ( 0.00)
                                                         ----------------------------


Weighted average number of common shares outstanding -
      basic and diluted                                  207,216,257     152,248,110
-------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements

                                       4

<PAGE>


                      GPS INDUSTRIES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------

                                For the Three Months Ended March 31       2005             2004
                                                                      (Unaudited)      (Unaudited)
---------------------------------------------------------------------------------------------------

Cash Flow From Operating Activities

<S>                                                                 <C> <C>            <C> <C>
      Net loss from operations                                      $ ( 1,653,658)     $ ( 731,359)

      Adjustments to reconcile net loss to
           net cash used in operating activities:
           Depreciation and amortization                                   76,188           16,995
           Amortization of deferred compensation                           56,315           56,314
           Gain on extinguishment of debt                                 138,278        ( 243,889)
           Expenses paid by issuance of stock                             307,265          104,068
           Interest converted to stock                                     93,750            2,940
           Amortization of finance costs                                   80,000           13,000

      Changes in operating assets and liabilities:
           Inventories                                                   (246,400)       ( 171,298)
           Accounts Receivable                                           (485,818)       ( 236,124)
           Prepaid expenses and deposits                                  (43,886)          10,927
           Deferred implementation costs                                 (171,266)         105,985
           Accounts payable and accrued liabilities                       163,609          421,312
           Discontinued Accounts payable and accrued liabilities         (299,979)               -
           Deferred Revenue                                               458,005                -
                                                                    --------------     -------------

Net Cash Used In Operating Activities                                 ( 1,527,597)       ( 651,129)
                                                                    --------------     -------------
Cash Flow From Investing Activities
           Purchase of property and equipment                               ( 391)        ( 32,471)
           Purchase of patents                                            ( 5,000)              -
                                                                    --------------     -------------
Net Cash Flow Used In Investing Activities                                ( 5,391)        ( 32,471)
                                                                    --------------     -------------
Cash Flow From Financing Activities
           Common stock issued for cash                                       700                -
           Proceeds from loans                                            861,726          479,380
           Repayments of term loan                                      ( 286,600)               -
           Repayments of bank loan                                              -         ( 12,637)
           Borrowings under bank indebtedness                             775,141          262,739
           Repayments of loans from related parties                        (7,985)         ( 5,084)
           Borrowing on convertible loans                                  19,224           10,655
                                                                    --------------     -------------
Net Cash Flow From Financing Activities                                 1,362,206          735,053
                                                                    --------------     -------------


Net Increase (Decrease) In Cash                                         ( 170,782)          51,453

Cash, Beginning Of Period                                                 173,092            3,367
                                                                    --------------     -------------
Cash, End Of Period                                                 $       2,310      $    54,820
                                                                    ==============     =============

----------------------------------------------------------------------------------------------------

Supplemental disclosure of cash flow information:
      Cash paid for interest                                        $      87,149      $    17,008
                                                                    ==============     =============
      Cash paid for taxes                                           $           -      $         -
                                                                    ==============     =============

Non-Cash Investing And Financing Activities

      Common stock issued on conversion of convertible notes        $     234,790      $         -
                                                                    ==============     =============

      Common stock issued to settle debt                            $           -      $   191,250
                                                                    ==============     =============

      Common stock issued for services                              $     307,265      $   104,068
                                                                    ==============     =============


</TABLE>

See accompanying notes to consolidated financial statements

                                       5

<PAGE>

                      GPS Industries, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                   Three Months Ended March 31, 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
March 31, 2005, the results of operations for the three months ended March 31,
2005 and 2004, and the cash flows for the three months ended March 31, 2005 and
2004. The results of operations for the three months ended March 31, 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 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, generate more revenue with
advertising, tournament and point-of-purchase applications, and to retain more
customers with customer relationship management programs. The Company has
developed both a hand-held and cart-mounted products using Global Positioning
Satellite ("GPS") 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 March 31, 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, 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 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.

                                       6

<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 March 31, 2005 and December 31, 2004. The
commercialization of the Company's technology is dependent on the Company's
ability to successfully finance its cash requirements through a combination of
equity financings, sales of it's GPS systems and payments from 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.

                                       7

<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 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.

4. Debt

Effective June 27, 2003, the Company obtained a bank line of credit for
$1,425,000 to fund its operations. As of March 31, 2005, the Company had
borrowed $2,085,791 under this line of credit. The line of credit bears interest
at prime plus 0.5%, is repayable in full on demand and is secured by a one year
standby bank letter of credit for $1,500,000 that was provided by a third party,
Hansen Inc. This standby letter of credit from Hansen Inc. has been renewed
until March 27, 2005 and subsequently to October 27, 2005. 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 three months ended March 31,
2005

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. As of March
31, 2005 this line was drawn down in the amount of $991,197. The term was for a
period of 1 year from the date of the agreement. As consideration for the
security provided the Company agreed to pay the Secured Party 15% per annum of
the maximum amount outstanding in the month, payable 50% in US$ 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 March 31, 2005. Additionally the Company agreed to issue
666,667 warrants to purchase common stock of the Company at US$0.15 per warrant.
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, has been renewed until October 31, 2005. 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%.

At March 31, 2005 the Company was also indebted on one of its bank accounts in
the amount of $7,561.

As at March 31, 2005 the Company has $ 2,525,028 owing on short term notes.
These amounts are repayable on demand and bear interest at varying rates.

                                       8

<PAGE>

One convertible loan was outstanding as at March 31, 2005, an amount due to The
Shaar fund of $ 594,604. Effective August 4, 2000, amended by agreement dated
October 29, 2002 the Company entered into a securities purchase agreement with
The Shaar Fund Ltd., relating to the sale of $1,000,000 in principal amount of
6% Convertible Debenture due November 2, 2007 and warrants to purchase up to
100,000 shares of Common Stock. Interest of 8% accrues on this debenture from
September 12, 2000 and is payable quarterly commencing September 30, 2000. The
exercise price of the warrants is $6.25 and they expire on September 12, 2005.
The amending agreement also added interest accrued as at the amendment date of
$166,000 to principal. As at March 31, 2005 the principal amount outstanding is
$ 629,488 which is offset by unamortized debt discount of $ 24,357 and
unamortized finance costs of $ 10,527, giving a net balance of $ 594,604. This
amount is due to be repaid at $20,000 plus accrued interest per month. Interest
has been accrued on this loan to March 31, 2005. $ 96,512 of the loan balance
was converted and interest payments of $ 32,010 were made in the three months
ended March 31, 2005.

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 $925,684 with respect to this
discontinued operation, which are included in liabilities related to
discontinued operations in the accompanying condensed 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 $635,636 All such
liabilities are included in liabilities related to discontinued operations in
the accompanying condensed 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.

6. Legal Proceedings

At March 31, 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. Fund Ltd. for principal and accrued interest of
$96,512 and $13,158 respectively, with respect to a $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.

                                       9

<PAGE>

8. Subsequent Events

On April 27, 2005 the Company's shareholders 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.

In April 2005 the Company borrowed funds under an agreement to obtain inventory
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 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.

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 March 31,
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 March 31, 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 Global Positioning Satellite (GPS) 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,
generate more revenue with advertising, tournament and point-of-purchase
applications, and to retain more customers with customer relationship management
programs. The Company has developed both a hand-held and cart-mounted products
using Global Positioning Satellite ("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
March 31, 2005 and December 31, 2004, substantially all of the Company's assets
and operations were located in Canada. Sales offices are located in Florida, USA
and England.

The Company applies GPS, 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.

The Company recorded sales revenue in the three months ended March 31, 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, 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 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.

                                       10

<PAGE>

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 March 31, 2005 and December 31, 2004. The commercialization of the
Company's technology is dependent on the Company's ability to successfully
finance its cash requirements through a combination of equity financings, sale
of its GPS systems and payments from 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.

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.

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, 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 three months ended March 31, 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.

                                       11

<PAGE>

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:

Three months ended March 31, 2005 and 2004

Revenue - The Company recorded total revenue in the three months ended March 31,
2005 of $1,118,616 as compared to $840,310 in the first quarter of 2004. 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 $846,322 as compared to $739,310
in the first quarter of 2004. Revenue from distributorship partnership fees
amounted to $174,000 compared to $101,000 in 2004. Total patent licence revenue
earned by Optimal Golf Solutions amounted to $98,294 as compared to $0 in the
first quarter 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 three months ended March 31, 2005
was $612,652 of which $527,118 represents costs of goods sold and $85,534
represents installation costs. In the first quarter of 2004 Cost of Goods Sold
was $752,379, comprised of cost of goods sold of $606,361 and installation costs
of $146,018.

Selling and Marketing Expenses - Selling and marketing expenses were $554,830
for the three months ended March 31, 2005, as compared to $262,142 for the three
months ended March 31, 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.

General and Administrative Expenses - General and administrative expenses were
$947,884 for the three months ended March 31, 2005, as compared to $478,082 for
the three months ended March 31, 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.

Engineering, Research and Development Expenses - Engineering, research and
development expenses increased to $359,473 for the three months ended March 31,
2005 from $249,836 for the three months ended March 31, 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.

Depreciation and Amortization - Depreciation and amortization increased by
$50,370 or 296% to $67,365 in the first quarter of 2005, as compared to $16,995
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 $1,423,588 for the three
months ended March 31, 2005, as compared to a loss from operations of $919,124
for the three months ended March 31, 2004. The increase was due to substantially
higher legal and administrative expenses and sales and marketing expenses
incurred in the period. Engineering and R&D expenses incurred in the period also
increased.

Interest Expense - Interest expense increased by $287,496 to $328,740 in 2005,
as compared to $41,244 in 2004, as a result of a increase of interest-bearing
debt, particularly the loan from Great White Shark Enterprises obtained to
enable purchase of the Company's patents, and drawdowns on bank operating lines
of credit.

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 $63,031 in first
quarter of 2005 as compared to $23,655 in the respective 2004 period.

                                       12

<PAGE>

Gain on Extinguishment of Debt - Gain on extinguishment of debt decreased to
$161,701 in the three months ended March 31, 2005 from $243,889 for the three
months ended March 31, 2004. This gain was comprised of a gain of $299,979
relating to the write off of debt guarantees of discontinued operations and a
loss amounting to $138,278 arising from the issuance of stock in settlement of
debt.

Net Loss - Net loss was $1,653,658 for the three months ended March 31, 2005, as
compared to a net loss of $731,359 for the three months ended March 31, 2004.
This increase is a reflection of the increased expenses incurred in bringing the
Inforemer product to market and setting up a sales and distribution
organization, which have partially but not entirely been offset by the gain on
extinguishment of debt and net sales revenue for the period.

Liquidity and Capital Resources - March 31, 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 $1,527,597
during the three months ended March 31, 2005, as compared to $651,129 during the
three months ended March 31, 2004. The increase in cash utilized in operations
in 2005 as compared to 2004 was primarily a result of an increase in inventories
and accounts receivable, combined with the increase in net loss for the period.

At March 31, 2005, cash decreased by $170,782 to $2,310, as compared to $173,092
at December 31, 2004.

The Company had a working capital deficit of $15,268,783 at March 31, 2005, as
compared to a working capital deficit of $14,210,188 at December 31, 2004. At
March 31, 2005 and December 31, 2004, a substantial portion of the Company's
current liabilities consist of loans in default and liabilities with respect to
discontinued operations.

Investing Activities - Net cash used in investing activities was $5,391 and
$32,471 for the three months ended March 31, 2005 and 2004, respectively,
consisting of the purchase of property and equipment.

Financing Activities - Net cash provided by financing activities was $1,362,206
for the three months ended March 31, 2005, as compared to $735,053 for the three
months ended March 31, 2004. During the three months ended March 31, 2005, the
Company made payments on loans of $286,600 and loans from related parties of
$7,985. During the three months ended March 31, 2005, the Company received
proceeds from borrowing on convertible loans of $19,224 and proceeds from bank
borrowings and short term loans of $1,636,867. During the three months ended
March 31, 2005 the Company issued common stock for cash consideration of $700.

Effective June 27, 2003, the Company obtained a bank line of credit for
$1,425,000 to fund its operations. As of March 31, 2005, the Company had
borrowed $2,085,791 under this line of credit. The line of credit bears interest
at prime plus 0.5%, is repayable in full on demand and is secured by a 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 to March 27,
2005 and subsequently to October 27, 2005. 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 three months ended March 31, 2005

                                       13

<PAGE>

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. As of March
31, 2005 this line was drawn down in the amount of $991,197.  The term was for a
period  of one year from the date of the  agreement.  As  consideration  for the
security provided the Company agreed to pay the Secured Party 1.25% per month of
the  maximum  amount  outstanding  in the month,  payable  50% in US$ 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 March  31,  2005.  Additionally  the  Company  agreed to issue
666,667 warrants to purchase common stock of the Company at US$0.15 per warrant.
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,  has been renewed  until October 31, 2005.  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%.


Off Balance Sheet Arrangements.

The Company had no Off Balance Sheet arrangements for the three months ended
March 31, 2005, or for the three months ended March 31, 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.



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.

                                       14

<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

During the three months ended March 31, 2005 the Company issued a total of
6,280,998 shares of common stock, valued at a market value of $636,505. Of
these, 3,055,000 shares were issued for services rendered valued at a market
value of $307,265; 906,755 shares were issued to pay interest of $93,750;
1,619,243 shares were issued in payment of convertible debt valued at a market
value of $234,790 and 700,000 shares were issued for cash consideration of $700.

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

There were no matters submitted to a vote of security holders during the quarter
ended March 31, 2005.

On April 27, 2005 the Company's shareholders 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 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(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.

                                       15

<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 Financial 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 Financial Officer pursuant
                   to Section 906 of the Sarbanes Oxley Act of 2002

                                       16

<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)





                                       /s/ ROBERT C. SILZER, SR.
Date:  May 16, 2005               By:  ___________________________
                                       Robert C. Silzer, Sr.
                                       Chief Executive Officer
                                       (Duly Authorized Officer)



                                       /s/ GEORGE DORIN
Date:  May 16, 2005               By:  ___________________________
                                       George Dorin
                                       Chief Financial Officer
                                       (Duly Authorized Officer)