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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2005



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
|- | --------------------------------------------------------------------------------------------

For the transition period from  to

Commission File No. 333-75791



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PATRIOT
MOTORCYCLE CORPORATION

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Nevada                                                         |  | 13-3961109                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)

1062 Calle Negocio, Suite E, San Clemente, CA 92673

(Address of principal executive offices) (Zip Code)

(949) 488-0434

(Issuers telephone number)



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

Indicate by checkmark whether the registrant is an accelerated filer
(as defined in Exchange A Rule 12b-2)    Yes ̈No  x

The number of shares outstanding of each of the registrants common stock as of September 30, 2006 was
10,375,719.

Transitional Small Business Disclosure Format (check one):    Yes ̈No  x

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



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##### Table of Contents

PATRIOT MOTORCYCLE CORPORATION AND SUBSIDIARIES

Index



|         |  |                                                                                                                                              |  |         
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------------------- |  | --------
|         |  |                                                                                                                                              |  | PAGE NO.
|PART I.  |  | FINANCIAL INFORMATION                                                                                                                        |  |         
|         |  |                                                                                                                                             
|Item 1.  |  | Unaudited Condensed Consolidated Financial Statements                                                                                        |  |         
|         |  |                                                                                                                                             
|         |  | Condensed Consolidated Balance Sheets-March 31, 2005 (Unaudited) and September 30, 2004                                                      |  | 3       
|         |  |                                                                                                                                             
|         |  | Condensed Consolidated Statements of Operations-three and six months ended March 31, 2005 and 2004 (unaudited)                               |  | 4       
|         |  |                                                                                                                                             
|         |  | Condensed Consolidated Statements of Shareholders Equity-six months ended March 31, 2005 (Unaudited) and the year ended September 30 , 2004 |  | 5       
|         |  |                                                                                                                                             
|         |  | Condensed Consolidated Statements of Cash Flows-six months ended March 31, 2005 and 2004 (Unaudited)                                         |  | 6       
|         |  |                                                                                                                                             
|         |  | Notes to Condensed Consolidated Financial Statements - March 31, 2005 (Unaudited)                                                            |  | 7-12    
|         |  |                                                                                                                                             
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                        |  | 13      
|         |  |                                                                                                                                             
|Item 3.  |  | Controls and Procedures                                                                                                                      |  | 18      
|         |  |                                                                                                                                             
|PART II. |  | OTHER INFORMATION                                                                                                                            |  |         
|         |  |                                                                                                                                             
|Item 1.  |  | Legal Proceedings                                                                                                                            |  | 18      
|         |  |                                                                                                                                             
|Item 2.  |  | Changes in Securities                                                                                                                        |  | 18      
|         |  |                                                                                                                                             
|Item 3.  |  | Defaults Upon Senior Securities                                                                                                              |  | 19      
|         |  |                                                                                                                                             
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                                                          |  | 19      
|         |  |                                                                                                                                             
|Item 5.  |  | Other Information                                                                                                                            |  | 19      
|         |  |                                                                                                                                             
|Item 6.  |  | Exhibits and Reports on Form 8-K                                                                                                             |  | 20      
|         |  |                                                                                                                                             
|         |  | Signature                                                                                                                                    |  | 21      



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##### Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

PATRIOT MOTORCYCLE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                          |  |                |            |   |                    |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | - | ------------------ | - | ---------- | -
|                                                                                                                                                                          |  | March 31, 2005 |            |   | September 30, 2004 |  
|                                                                                                                                                                          |  | (Unaudited)    |            |   |                    |  
|Assets                                                                                                                                                                    |  |                |            |   |                    |   |            |  
|Current Assets:                                                                                                                                                           |  |                |            |   |                    |   |            |  
|Cash                                                                                                                                                                      |  | $              | 1,459,382  |   |                    | $ | 378,287    |  
|Due from credit card processor                                                                                                                                            |  |                | 35,250     |   |                    |   |           |  
|Accounts receivable                                                                                                                                                       |  |                | 332,743    |   |                    |   |           |  
|Inventory                                                                                                                                                                 |  |                | 1,244,828  |   |                    |   | 57,195     |  
|Other current assets                                                                                                                                                      |  |                | 246,768    |   |                    |   | 43,542     |  
|                                                                                                                                                                          |  |                |            |   |                    |   |            |  
|Total current assets                                                                                                                                                      |  |                | 3,318,971  |   |                    |   | 479,024    |  
|                                                                                                                                                                          |  |               
|Property Plant & Equipment, net of accumulated depreciation of $ 2,921 and $ 0 at March 31, 2005 and September 30, 2004,
respectively                                     |  |                | 75,798     |   |                    |   |           |  
|                                                                                                                                                                          |  |               
|Other Assets:                                                                                                                                                             |  |                |            |   |                    |   |            |  
|Deposits                                                                                                                                                                  |  |                | 83,163     |   |                    |   |           |  
|Loan Receivable-shareholder/officer                                                                                                                                       |  |                |           |   |                    |   | 99,867     |  
|Intangible assets                                                                                                                                                         |  |                |           |   |                    |   | 102,800    |  
|                                                                                                                                                                          |  |                |            |   |                    |   |            |  
|TOTAL ASSETS                                                                                                                                                              |  | $              | 3,477,932  |   |                    | $ | 681,691    |  
|                                                                                                                                                                          |  |                |            |   |                    |   |            |  
|Liabilities & Shareholders Equity                                                                                                                                        |  |                |            |   |                    |   |            |  
|Current Liabilities:                                                                                                                                                      |  |                |            |   |                    |   |            |  
|Notes payable                                                                                                                                                             |  | $              | 25,000     |   |                    | $ | 25,000     |  
|Accounts payable and accrued expenses                                                                                                                                     |  |                | 305,490    |   |                    |   | 120,857    |  
|Loan Payable-shareholder                                                                                                                                                  |  |                | 133,102    |   |                    |   |           |  
|Income taxes payable                                                                                                                                                      |  |                | 10,914     |   |                    |   | 9,314      |  
|                                                                                                                                                                          |  |                |            |   |                    |   |            |  
|Total current liabilities                                                                                                                                                 |  |                | 474,506    |   |                    |   | 155,171    |  
|                                                                                                                                                                          |  |                |            |   |                    |   |            |  
|Commitments and contingencies                                                                                                                                             |  |                |            |   |                    |   |            |  
|                                                                                                                                                                          |  |               
|Shareholders Equity                                                                                                                                                      |  |                |            |   |                    |   |            |  
|Preferred stock, $.001 par value, 5,000,000 shares authorized, Series A Convertible $2.30 stated value, 400,000 shares authorized; none
outstanding                       |  |                |           |   |                    |   |           |  
|Common stock, $.001 par value, authorized - 50,000,000 shares, outstanding - 8,519,339 shares and 6,460,921 shares at March 31, 2005 and
September 30, 2004, respectively |  |                | 8,519      |   |                    |   | 6,461      |  
|Additional paid in capital                                                                                                                                                |  |                | 7,446,043  |   |                    |   | 3,564,304  |  
|Stock subscriptions receivable                                                                                                                                            |  |                | (25,500    | ) |                    |   |           |  
|Accumulated deficit                                                                                                                                                       |  |                | (4,425,636 | ) |                    |   | (3,044,245 | )
|                                                                                                                                                                          |  |                |            |   |                    |   |            |  
|TOTAL SHAREHOLDERS EQUITY                                                                                                                                                |  |                | 3,003,426  |   |                    |   | 526,520    |  
|                                                                                                                                                                          |  |                |            |   |                    |   |            |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                |  | $              | 3,477,932  |   |                    | $ | 681,691    |  
|                                                                                                                                                                          |  |                |            |   |                    |   |            |  

See accompanying notes to condensed consolidated financial statements.



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PATRIOT MOTORCYCLE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                    |  |                             |           |                           |      |   |           |  |   |            |   |  |   |          
|----------------------------------- |  | --------------------------- | --------- | ------------------------- | ---- | - | --------- |  | - | ---------- | - |  | - | ---------
|                                    |  | Three months ended March 31 |           | Six months ended March 31
|                                    |  | 2005                        |           |                           | 2004 |   | 2005      |  |   | 2004      
|Net Sales                           |  | $                           | 830,989   |                           |      | $ |          |  | $ | 1,774,061  |   |  | $ |         
|Cost of Goods Sold                  |  |                             | 638,207   |                           |      |   |          |  |   | 1,519,594  |   |  |   |         
|                                    |  |                             |           |                           |      |   |           |  |   |            |   |  |   |          
|Gross Profit                        |  |                             | 192,782   |                           |      |   |          |  |   | 254,467    |   |  |   |         
|                                    |  |                             |           |                           |      |   |           |  |   |            |   |  |   |          
|Operating Expenses:                 |  |                             |           |                           |      |   |           |  |   |            |   |  |   |          
|Selling                             |  |                             | 184,020   |                           |      |   |          |  |   | 316,260    |   |  |   |         
|General & Administrative            |  |                             | 720,798   |                           |      |   |          |  |   | 1,319,598  |   |  |   |         
|                                    |  |                             |           |                           |      |   |           |  |   |            |   |  |   |          
|Total Operating Expenses            |  |                             | 904,818   |                           |      |   |          |  |   | 1,635,858  |   |  |   |         
|                                    |  |                             |           |                           |      |   |           |  |   |            |   |  |   |          
|NET LOSS                            |  | $                           | (712,036  | )                         |      | $ |          |  | $ | (1,381,391 | ) |  | $ |         
|                                    |  |                             |           |                           |      |   |           |  |   |            |   |  |   |          
|Weighted Average Shares Outstanding |  |                             |           |                           |      |   |           |  |   |            |   |  |   |          
|Basic And Diluted                   |  |                             | 7,636,066 |                           |      |   | 4,893,425 |  |   | 7,168,730  |   |  |   | 4,893,425
|                                    |  |                             |           |                           |      |   |           |  |   |            |   |  |   |          
|Loss per share, basic and diluted   |  | $                           | (0.09     | )                         |      | $ |          |  | $ | (0.19      | ) |  | $ |         
|                                    |  |                             |           |                           |      |   |           |  |   |            |   |  |   |          

See accompanying notes to condensed consolidated financial statements.



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PATRIOT MOTORCYCLE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS
EQUITY

For the six months ended March 31, 2005 (unaudited) and the year ended September 30 , 2004



|                                    |  |                 |  |        |       |                           |   |                               |  |   |                    |   |  |                                        |            |   |  |   |            |  
|----------------------------------- |  | --------------- |  | ------ | ----- | ------------------------- | - | ----------------------------- |  | - | ------------------ | - |  | -------------------------------------- | ---------- | - |  | - | ---------- | -
|                                    |  | Common Stock    |  |        |       |                           |   |                               |  |   |                    |   | 
|                                    |  | Number ofShares |  | Amount |       | AdditionalPaid in Capital |   | Stock SubscriptionsReceivable |  |   | AccumulatedDeficit |   |  | Total ShareholdersEquity (Deficiency) |           
|Balance, October 1, 2003            |  | 4,893,425       |  | $      | 4,893 |                           | $ | 2,123,271                     |  | $ |                   |   |  | $                                      | (2,207,435 | ) |  | $ | (79,271    | )
|Net proceeds from issuance of stock |  | 1,237,996       |  |        | 1,238 |                           |   | 887,563                       |  |   |                   |   |  |                                        |           |   |  |   | 888,801    |  
|Stock issued for services           |  | 295,000         |  |        | 295   |                           |   | 470,705                       |  |   |                   |   |  |                                        |           |   |  |   | 471,000    |  
|Stock issued for domain name        |  | 34,500          |  |        | 35    |                           |   | 82,765                        |  |   |                   |   |  |                                        |           |   |  |   | 82,800     |  
|Net loss                            |  |                |  |        |      |                           |   |                              |  |   |                   |   |  |                                        | (836,810   | ) |  |   | (836,810   | )
|                                    |  |                 |  |        |       |                           |   |                               |  |   |                    |   |  |                                        |            |   |  |   |            |  
|Balance, September 30, 2004         |  | 6,460,921       |  |        | 6,461 |                           |   | 3,564,304                     |  |   |                   |   |  |                                        | (3,044,245 | ) |  |   | 526,520    |  
|Net proceeds from issuance of stock |  | 1,870,476       |  |        | 1,870 |                           |   | 3,567,560                     |  |   | (25,500            | ) |  |                                        |           |   |  |   | 3,543,930  |  
|Stock issued for services           |  | 187,942         |  |        | 188   |                           |   | 314,179                       |  |   |                   |   |  |                                        |           |   |  |   | 314,367    |  
|Net loss                            |  |                |  |        |      |                           |   |                              |  |   |                   |   |  |                                        | (1,381,391 | ) |  |   | (1,381,391 | )
|                                    |  |                 |  |        |       |                           |   |                               |  |   |                    |   |  |                                        |            |   |  |   |            |  
|Balance, March 31, 2005 (unaudited) |  | 8,519,339       |  | $      | 8,519 |                           | $ | 7,446,043                     |  | $ | (25,500            | ) |  | $                                      | (4,425,636 | ) |  | $ | 3,003,426  |  
|                                    |  |                 |  |        |       |                           |   |                               |  |   |                    |   |  |                                        |            |   |  |   |            |  

See accompanying notes to condensed consolidated financial statements.



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PATRIOT MOTORCYCLE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                            |  |                            |            |   |      |   |  
|--------------------------------------------------------------------------- |  | -------------------------- | ---------- | - | ---- | - | -
|                                                                            |  | Six months ended March 31,
|                                                                            |  | 2005                       |            |   | 2004
|Cash flows from operating activities:                                       |  |                            |            |   |      |   |  
|Net loss                                                                    |  | $                          | (1,381,391 | ) |      | $ | 
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                            |            |   |      |   |  
|Depreciation and amortization                                               |  |                            | 13,561     |   |      |   | 
|Stock issued for services                                                   |  |                            | 314,367    |   |      |   | 
|Impairment of intangibles                                                   |  |                            | 97,660     |   |      |   | 
|Changes in operating assets and liabilities:                                |  |                            |            |   |      |   |  
|Due from credit card processor                                              |  |                            | (35,250    | ) |      |   | 
|Accounts receivable                                                         |  |                            | (332,743   | ) |      |   | 
|Inventory                                                                   |  |                            | (1,187,633 | ) |      |   | 
|Other current assets                                                        |  |                            | (203,226   | ) |      |   | 
|Accounts payable and accrued expenses                                       |  |                            | 184,633    |   |      |   | 
|Taxes payable                                                               |  |                            | 1,600      |   |      |   | 
|                                                                            |  |                            |            |   |      |   |  
|Net cash used in operating activities                                       |  |                            | (2,528,422 | ) |      |   | 
|                                                                            |  |                            |            |   |      |   |  
|Cash flows from investing activities:                                       |  |                            |            |   |      |   |  
|Expenditure for intangible asset                                            |  |                            | (5,500     | ) |      |   | 
|Increase in deposits                                                        |  |                            | (83,163    | ) |      |   | 
|Purchase of property and equipment                                          |  |                            | (78,719    | ) |      |   | 
|                                                                            |  |                            |            |   |      |   |  
|Net cash used in investing activities                                       |  |                            | (167,382   | ) |      |   | 
|                                                                            |  |                            |            |   |      |   |  
|Cash flows from financing activities:                                       |  |                            |            |   |      |   |  
|Loan from stockholder, net of repayments                                    |  |                            | 232,969    |   |      |   | 
|Proceeds from sale of common stock                                          |  |                            | 3,543,930  |   |      |   | 
|                                                                            |  |                            |            |   |      |   |  
|Net cash provided by financing activities                                   |  |                            | 3,776,899  |   |      |   | 
|                                                                            |  |                            |            |   |      |   |  
|Increase in cash and cash equivalents                                       |  |                            | 1,081,095  |   |      |   | 
|                                                                            |  |                           
|Cash and cash equivalents - beginning of period                             |  |                            | 378,287    |   |      |   | 
|                                                                            |  |                            |            |   |      |   |  
|Cash and cash equivalents - end of period                                   |  | $                          | 1,459,382  |   |      | $ | 
|                                                                            |  |                            |            |   |      |   |  
|Supplemental cash flow Information:                                         |  |                            |            |   |      |   |  
|Cash paid for:                                                              |  |                            |            |   |      |   |  
|Interest                                                                    |  | $                          | 9,009      |   |      | $ | 
|                                                                            |  |                            |            |   |      |   |  
|Income taxes                                                                |  | $                          |           |   |      | $ | 
|                                                                            |  |                            |            |   |      |   |  

See accompanying notes to condensed consolidated financial statements.



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PATRIOT MOTORCYCLE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2005 (UNAUDITED)

NOTE 1
DESCRIPTION OF BUSINESS

Patriot Motorcycle Corporation (the Company) was formed on October 25, 1999 in the state of California.

The Company incurred a net loss of $1,381,391 and a negative cash flow from operating activities of $2,528,422 for the six months ended March 31,
2005, and had an accumulated deficit of $4,425,636 at March 31, 2005. These conditions raise substantial doubt about the Companys ability to continue as a going concern. The Companys ability to continue as a going concern is
dependent upon it achieving profitability and generating sufficient cash flows to meet its obligations as they come due. Management believes that its plan to diversify and to control its overhead will enable it to achieve profitability. Management
is also pursuing additional capital financing. However, if the Company is not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to us, this could have a material adverse
effect on our business, results of operations, liquidity, and financial condition. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

At March 31, 2005, the Company had $1,459,382 in cash and cash equivalents. We believe that our current cash and cash equivalents on hand and cash we expect to
generate from operations will be sufficient to finance our anticipated capital and operating requirements for at least the next 12 months. The Company feels slower growth expectations would require fewer capital expenditures and fewer research and
development investments.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a
comprehensive presentation of financial position and results of operations. It is managements opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial
statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year. For further information, refer to the financial statements and footnotes for the year ended September 30, 2004
included in the Companys form 10-KSB

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary Patriot Manufacturing Corporation. Inter-company accounts, transactions and balances have been
eliminated in consolidation.

Use of Estimates

The
preparation of financial statements in accordance with accounting principles generally accepted in the United States of America 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.



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Accounts Receivable

The Company evaluates the collectibility of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customers inability to meet its financial obligations to the
Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad
debts, bad debt charges are recorded based on the Companys historical losses and an overall assessment of past due trade accounts receivable outstanding. The allowance for doubtful accounts and returns and discounts is established through a
provision for returns and discounts charged against sales. Receivables are charged off against the allowance when payments are received or products returned. The allowance for doubtful accounts and returns and discounts as of March 31, 2005 and
at September 30, 2004 was $-0-.

Inventory

Inventory is stated at the lower of cost (first-in, first-out) or market. The following is a summary of inventory by component at March 31, 2005 and September 30, 2004:



|                      |  |                |           |                    |   |       
|--------------------- |  | -------------- | --------- | ------------------ | - | ------
|                      |  | March 31, 2005 |           | September 30, 2004
|                      |  | (Unaudited)    |           |                   
|Finished Goods        |  | $              | 1,211,000 |                    | $ | 57,195
|Parts and accessories |  |                | 33,828    |                    |   |      
|                      |  |                |           |                    |   |       
|Total Inventories     |  | $              | 1,244,828 |                    | $ | 57,195
|                      |  |                |           |                    |   |       

Net Loss per Share

Basic earnings (loss) per common share (EPS) are based on the weighted average number of common shares outstanding during each period. Diluted earnings per common share are based on shares outstanding (computed as under basic
EPS plus any potentially dilutive shares). As of March 31, 2005, the Company had granted stock options for 300,000 shares of common stock and warrants for 894,710 shares of common stock that are potentially dilutive common shares but are not
included in the computation of loss per share because their effect would be antidilutive.

Concentrations

The Companys cash balances on deposit with banks are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $100,000. The Company may be
exposed to risk for the amounts of funds held in one bank in excess of the insurance limit. In assessing the risk, the Companys policy is to maintain cash balances with high quality financial institutions. The Company had $1,470,952 in excess
of the $100,000 FDIC limit at March 31, 2005. Accounts receivable to two customers equaled 25% of gross outstanding receivables at March 31, 2005.

Reclassifications

Certain reclassifications have been made to the 2004 amounts to be consistent with the 2005 presentation with no effect
on net income or ending equity.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (FASB) issued a revision of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS
No. 123R). SFAS No. 123R supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance and eliminates the alternative to use Opinion 25s intrinsic value method of
accounting that was provided in Statement 123 as originally issued. Under Opinion 25, issuing



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stock options to employees at market value generally resulted in recognition of no compensation cost. SFAS No. 123R requires entities to recognize the
cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards (with limited exceptions). SFAS No. 123R is effective for the first annual reporting period that begins after
December 15, 2005, for small business issuers. The Company does not currently have a stock option plan in place; therefore we have not quantified the potential effect of adoption of SFAS No. 123R. However, we believe adoption of SFAS
No.123R will result in a decrease to our reporting earnings when a stock option plan is implemented.

In February 2006, FASB issued SFAS No. 155
Accounting for Certain Hybrid Financial Instruments, an amendment of FAS No. 133 and 140, which addresses the application of SFAS 133 to beneficial interests in securitized financial assets. SFAS 155 will become effective in 2007.
SFAS 155 requires that beneficial interests in securitized financial assets be analyzed to determine whether they are freestanding derivatives or hybrid instruments containing embedded derivatives that would require bifurcation. The FASB has
proposed to amend SFAS 155 that, if approved, would exempt securitized interest that only contain embedded derivatives linked to prepayment risk of the underlying assets and where the investor does not control acceleration of settlement. The Company
will adopt SFAS 155 in fiscal 2006 and its adoption is not expected to have a material effect on the Companys financial position, results of operations or cash flows.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the
information. This statement is effective for the Company beginning July 1, 2008. We are currently assessing the potential impact that the adoption of SFAS No. 157 will have on our financial statements.

In September 2006, the Securities and Exchange Commission (SEC) released Staff Accounting Bulletin No. 108, Considering the Effects of Prior
Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB 108). SAB 108 provides interpretive guidance on the SECs views on how the effects of prior year misstatements should be
considered in quantifying a current year misstatement for the purpose of a materiality assessment. The provisions of SAB 108 will be effective for the Company for the fiscal year ended December 31, 2006. The Company is currently evaluating the
impact of applying SAB 108 but does not believe that the application of SAB 108 will have a material effect on its financial position and results of operations.

NOTE 3 NOTE PAYABLE

During the year ended September 30, 2002, the Company entered into a note payable of $50,000 with an unrelated
party, secured by the personal guarantee of the Companys CEO, bearing interest at 12% per annum, with monthly payments of $5,000 through February 15, 2003. The note was in default as of March 31, 2005, and was fully paid in
November 2005.

NOTE 4 SHAREHOLDERS EQUITY

From
October 2004 through February 2005, the Company issued 1,099,245 shares of its common stock at a price of $1.50 per share for consideration of $1,511,625 (net of commissions) pursuant to a limited private placement. Warrants to purchase 268,813
shares of common stock at $3.50 per share were issued in conjunction with these transactions (see Note 5). No value has been recorded in relation to these warrants.

During November 2004, the Company issued 33,350 shares of its common stock at a price of $.75 per share for consideration of $25,000 pursuant to a limited private placement.



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In February and March 2005, the Company issued 709,506 shares of its common stock at a price of $3.00 per share for
consideration of $1,930,655 (net of commissions) pursuant to a limited private placement. Warrants to purchase 131,549 shares of common stock at $6.50 per share were issued in conjunction with these transactions (see Note 5). No value has
been recorded in relation to these warrants.

In March 2005, the Company issued 28,375 shares of its common stock at a price of $4.00 per share for
consideration of $102,150 (net of commissions) pursuant to a limited private placement. Warrants to purchase 4,256 shares of common stock at $9.00 per share were issued in conjunction with these transactions (see Note 5). No value has been
recorded in relation to these warrants.

During the six months ended March 31, 2005, the Company issued 187,942 shares of its common stock to six
individuals unrelated to the Company for providing services to the Company having a fair value of $314,367. Warrants to purchase 220,542 shares of common stock at $2.50 to $3.50 per share were issued in conjunction with these transactions. No
value has been recorded in relation to these warrants (see Note 5).

NOTE 5 STOCK WARRANTS

In conjunction with the issuances of stock for cash and services, the Company issued warrants to purchase 894,710 shares of common stock. The warrants expire in two
years. No value has been recorded in relation to these warrants. The following table summarizes the warrant activity for the six months ended March 31, 2005:



|                                                |  |         |  |   |     
|----------------------------------------------- |  | ------- |  | - | ----
|Warrants granted in fiscal 2004                 |  | 269,550 |  | $ | 1.47
|Warrants granted in six months ended March 2005 |  | 625,160 |  |   | 3.97
|                                                |  |         |  |   |     
|Balance, March 31, 2005                         |  | 894,710 |  | $ | 3.22
|                                                |  |         |  |   |     



|                        |  |                   |  |                                           |  |                   |  |                 |     
|----------------------- |  | ----------------- |  | ----------------------------------------- |  | ----------------- |  | --------------- | ----
|                        |  | Outstanding       |  | Exercisable                              
|Range of exercise price |  | Number ofWarrants |  | Average RemainingContractual Life (years) |  | Number ofWarrants |  | WeightedAverage
|$1.25                   |  | 244,875           |  | 1.33                                      |  | 244,875           |  | $               | 1.25
|$2.50                   |  | 200,000           |  | 1.75                                      |  | 200,000           |  | $               | 2.50
|$3.50-4.25              |  | 289,029           |  | 1.67                                      |  | 289,029           |  | $               | 3.52
|$6.50                   |  | 156,550           |  | 1.92                                      |  | 156,550           |  | $               | 6.50
|$9.00                   |  | 4,256             |  | 1.96                                      |  | 4,256             |  | $               | 9.00

NOTE 6 RELATED PARTY TRANSACTIONS

During the year ended September 30, 2004, the Company advanced $99,867 to its CEO. On December 15, 2004, the CEO deposited $312,000 with the Company in repayment of the advances and to provide the Company
with needed working capital funds. The Company is aware that the advances to its CEO were a violation of Sarbanes-Oxley Act of 2002, and has taken steps to prevent violations in the future.

In June 2004, the Company agreed to issue to its President and to its President of Sales and Marketing an aggregate of 200,000 shares of common stock for services to be
rendered from July 2004 to June 2005. On October 1, 2004 and January 1, 2005, the Company issued 50,000 shares for services, respectively, and recorded compensation of $277,500 related to these shares based on the closing price of the
stock on the dates issued.

During the six months ended March 31, 2005, the Company paid finders fees of $129,350 to the spouse of the Vice
President in connection with the sale of common stock raising proceeds of $1,293,500.



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NOTE 7 COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company may be involved from time to time in various claims, lawsuits, and disputes
with third parties or breach of contract actions incidental to the normal course of business operations. Except for the lawsuit discussed in Note 8, the Company is currently not involved in any other litigation or any pending legal proceedings that
it believes could have a material adverse effect on the financial position or results of operations. (See Note 8 with regard to subsequent trademark infringement lawsuit). A suit by an investment banker is deemed without merit and is being disputed
by the Company; no loss is expected at this time. In conjunction with Patriots maintaining its quality standards, Patriot has rejected certain products previously provided by the manufacturer. The Company is in discussion with the manufacturer
regarding steps needed to be taken to replace or repair such defective product.

The suit brought about by an investment banker was settled during 2006 for
a payment of $30,000.

NOTE 8 SUBSEQUENT EVENTS

Issuance of Stock

From April 2005 through December 31, 2006, the Company issued 158,800 shares of stock sold for $4.00 per
share and 96,050 shares for services to various individuals, including 25,000 shares to the President of Sales & Marketing.

Purchase of
Inventory and Vehicles

Effective July 1, 2005, the Company issued 100,000 shares of stock and paid $100,000 for certain motorcycle parts and
vehicles from a specialty motorcycle manufacturer for the purpose of providing the Companys manufacturing partners with product to reverse engineer. In addition, the Company will pay $1,000 per motorcycle sold which will be manufactured based
on the parts to be reverse engineered, up to $485,000.

Trademark Infringement Lawsuit

In October 2006, the Company was served with a lawsuit alleging trademark infringement. As a result of a settlement of a lawsuit, the Company agreed to abandon related
branding of the Yamoto trademark. Earlier expenditures for domain names of $97,660 after amortization of $10,640 were written off during the six months ended March 31, 2005, and are in 2004, and included in general and administrative expenses
as impairment losses.

Related Party Transactions

In August 2005, the President was terminated. As a condition of the termination, the Company facilitated the acquisition and resale of the Presidents 100,000 shares of restricted stock to a number of outside accredited investors. The
Company advanced the funds in the amount of $300,000, to an independent third party escrow trust account, and was repaid in full in March 2006.

From
September 2005 to December, 2005, the Company advanced funds totaling $330,000 to its Vice President of Sales for his use in purchasing the Companys stock on the open market. The advances may be a violation of Sarbanes-Oxley Act of 2002.
Subsequent to December 31, 2005, the Vice President of Sales repaid the balance to the Company. The Company has initiated policies and procedures to prevent this and other weaknesses in the future.



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In November 2005, the Company entered into an agreement to lease a motor home on a month-to-month basis from its Vice
President to be used for support of the film crew of Patriot Productions and marketing departments. Terms of the rental are payments of $1,872 per month, and the agreement can be cancelled upon 30 days notice. In October 2006, the agreement was
terminated.

Decrease in sales

As a result of the need to rebrand the off-road products and lack of support from the manufacturer, sales in the 4thquarter of fiscal 2006 decreased significantly. The Company is currently evaluating alternate products expected to be brought to market in spring 2007. Also as part of the product revaluation, in
December 2005 the Company wrote down the value of the off-road inventory by approximately $224,000 to its current market value.



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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following
presentation of Managements Discussion and Analysis of Financial Condition has been prepared by internal management and should be read in conjunction with the Financial Statements and notes thereto included in Item 1 of this Quarterly
Report on Form 10-QSB. Except for the historical information contained herein, the discussion in this report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities and Exchange Act of 1934 that involve risks and uncertainties, such as statements of our business plans, objectives, expectations and intentions as of the date of this filing. One generally can identify forward-looking statements by the
use of forward-looking terminology such as believes, may, will, expects, intends, estimates, anticipates, plans, seeks, or
continues, or the negative thereof, or variations thereon, or similar terminology. These statements include statements regarding our intent, belief or current expectations, and those of members of our management team, as well as the
assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially
from those contemplated by such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us throughout this Report, as well as in our other reports filed with the Securities and Exchange
Commission. Important factors currently known to Management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed
assumptions, the occurrence of unanticipated events or changes in future operating results over time. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made
that actual results of operations or the results of any future activities will not differ materially from our assumptions.

General

Patriot Motorcycle Corporation (us, we, our, or the Company) was incorporated on October 25, 1999 under the laws
of the State of California as Patriot Manufacturing Corporation. On May 21, 2001, we closed a reverse merger under a Share Exchange Agreement with Royal Financial Corporation (Royal), a publicly reporting company
pursuant to which we exchanged all of our then issued and outstanding capital common stock, and received, as consideration, 84% of the issued and outstanding capital common stock of Royal (the Transaction). As a result of this
Transaction, we became a wholly-owned subsidiary of Royal. The Transaction resulted in a change of control of our Company, and accordingly, was accounted for as a recapitalization. Although Royal is deemed our legal acquirer, we are deemed the
accounting acquirer and our historical results of operation prior to the Transaction are the historical results of operation of the resultant public Company. Subsequently, in 2001, Royal changed its name to Patriot Motorcycle Corporation.

Plan of Operation

Prior to August 2004, we were not
engaged in any commercial sale or distribution of our products, as our primary business objective was to raise initial operating capital, and identify a product which could be marketed profitably. Accordingly, we have no comparable sales, cost of
sales, and gross profits against which we can compare our results of operations for the period covered by this Quarterly Report.

In September 2004, we
commenced the sale and distribution of off-road dirt bikes and ATVs under the brand name Yamoto. Our management believes that the establishment of a network of dealers serving a broad range of markets will be essential to the commercial
success of our off-road products. Accordingly, over the next twelve months following the end of the period covered by this report, March 31, 2005, our Management focused our efforts on establishing a network of domestic dealers through which we
intend to market and distribute our products. As a result of these efforts, as of the date of the filing of this Quarterly Report, approximately 450 domestic dealers have enlisted in our dealer network.

In addition to the establishment of a dealer network, our Management has focused its efforts on establishing business relationships with the manufacturer of our
Yamoto and other products, as well as seeking



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financing to fund our working capital needs. To this end, during the six months ended March 31, 2005, we closed the private placement of restricted
shares of our common stock pursuant to which we issued 1,870,476 restricted shares of our common stock at purchase prices of $1.50 to $4.00 per share, at an aggregate purchase price of $3,569,430 (net of commissions).

RESULTS OF OPERATIONS

For the three months ended March 31,
2005, we had sales of $830,989, compared to $-0- for the three months ended March 31, 2004. This amount is primarily attributable to sales of both dirt bikes and ATVs in the ordinary course of business. The 11.9% decrease from the first quarter
is a result of the seasonality subsequent to the end of the holiday consumer purchasing. Cost of sales approximated 76.8%, generating a gross margin of $192,782 or 23.2%. For the six months ended March 31, 2005, sales were $1,774,061 compared
to $-0- for the six months ended March 31, 2004. Gross margin for the six month period ending March 2005 was 14.3%.



|                                    |  |                            |          |   |                          |       |   |                |   |   |                |      |   |  |   |            |   |  |       |   |  |   |   |  |      |  
|----------------------------------- |  | -------------------------- | -------- | - | ------------------------ | ----- | - | -------------- | - | - | -------------- | ---- | - |  | - | ---------- | - |  | ----- | - |  | - | - |  | ---- | -
|                                    |  | Unaudited                  |         
|                                    |  | For the Three Months Ended |          |   | For the Six Months Ended |      
|                                    |  | March 31, 2005             |          |   | March 31, 2004           |       |   | March 31, 2005 |   |   | March 30, 2004 |     
|Net Sales                           |  | $                          | 830,989  |   |                          | 100.0 | % |                | $ |  |                | 0.00 | % |  | $ | 1,774,061  |   |  | 100.0 | % |  | $ |  |  | 0.00 | %
|Cost of Sales                       |  |                            | 638,207  |   |                          | 76.8  | % |                |   |  |                | 0.00 | % |  |   | 1,519,594  |   |  | 85.7  | % |  |   |  |  | 0.00 | %
|                                    |  |                            |          |   |                          |       |   |                |   |   |                |      |   |  |   |            |   |  |       |   |  |   |   |  |      |  
|Gross Profits                       |  |                            | 192,782  |   |                          | 23.2  | % |                |   |  |                | 0.00 | % |  |   | 254,467    |   |  | 14.3  | % |  |   |  |  | 0.00 | %
|                                    |  |                            |          |   |                          |       |   |                |   |   |                |      |   |  |   |            |   |  |       |   |  |   |   |  |      |  
|Operating Expenses                  |  |                            |          |   |                          |       |   |                |   |   |                |      |   |  |   |            |   |  |       |   |  |   |   |  |      |  
|Selling Expenses                    |  |                            | 184,020  |   |                          | 22.1  | % |                |   |  |                | 0.00 | % |  |   | 316,260    |   |  | 17.8  | % |  |   |  |  | 0.00 | %
|General and Administrative Expenses |  |                            | 720,798  |   |                          | 86.8  | % |                |   |  |                | 0.00 | % |  |   | 1,319,598  |   |  | 74.4  | % |  |   |  |  | 0.00 | %
|                                    |  |                            |          |   |                          |       |   |                |   |   |                |      |   |  |   |            |   |  |       |   |  |   |   |  |      |  
|Total Operating Expenses            |  |                            | 904,818  |   |                          | 108.9 | % |                |   |  |                | 0.00 | % |  |   | 1,635,858  |   |  | 92.2  | % |  |   |  |  | 0.00 | %
|                                    |  |                            |          |   |                          |       |   |                |   |   |                |      |   |  |   |            |   |  |       |   |  |   |   |  |      |  
|Net Loss                            |  | $                          | (712,036 | ) |                          | -85.7 | % |                | $ |  |                | 0.00 | % |  | $ | (1,381,391 | ) |  | -77.9 | % |  | $ |  |  | 0.00 | %
|                                    |  |                            |          |   |                          |       |   |                |   |   |                |      |   |  |   |            |   |  |       |   |  |   |   |  |      |  

Operating expenses for the three months ended March 31, 2005 included selling costs of $184,020 for the
purpose of developing a branding program for the Patriot dirt bikes and ATVs. Administrative expenses of $720,438 are primarily for payroll to build and train sales, warehouse and administrative staff capable of supporting the level of sales
anticipated within the next 12 months, and the expenses to support the staff including facility costs, IT expenditures and administrative services. Additional general expenditures include product liability and casualty insurance and legal and
professional fees.

Operating expenses for the six months ended March 31, 2005 included selling costs of $316,260, primarily for the purpose of
developing an advertising and marketing program to attract viable dealers. Administrative expenses of $1,319,598 are primarily for payroll to build a sales, warehouse and administrative staff capable of supporting the level of sales anticipated
within the next 12 months, the write off of expenditure for the domain name which was abandoned later in the year and the expenses associated with the raising of working capital. Additional general expenditures include facility costs for the office
and warehouse, product liability and casualty insurance and legal and professional fees. There were no expenditures for the 2004 period.

LIQUIDITY AND
CAPITAL RESOURCES

Our net cash position was $1,459,382 at March 31, 2005 and $378,287 at September 30, 2004. For the six months ended
March 31, 2005, cash flows used in operating activities amounted to $2,528,422. The primary use of these funds resulted from the net loss of $1,351,391 and from the increase in accounts receivable of $332,743, funds to build inventory in the
amount of $1,187,633 and an increase in other current assets of $203,226. For the six months ended March 31, 2004, cash flow used in operating activities amounted to $-0-.



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Cash used in investing activities resulted totaled $167,382, and included an increase in deposits of $83,163 and the
purchase of equipment of $ 78,719 for the six months ended March 31, 2005. Cash provided by investing activities was $-0- for the six months ended March 31, 2004.

Cash provided by financing activities included the net proceeds on a loan from a stockholder of $232,969 the sale of common stock in the amount of $3,543,930 for the six months ended March 31, 2005, and totaled
$-0- in the six months ended March 31, 2004.

The working capital was $2,844,464 and $323,853 at March 31, 2005 and September 30, 2004,
respectively. We believe that our current cash and cash equivalents on hand and cash we expect to generate from operations will be sufficient to finance our anticipated capital and operating requirements for at least the next 12 months. We also may
utilize cash from time to time to acquire other businesses, technologies or product lines that complement our existing business, although we have no present commitments or agreements to do so.

GOING CONCERN

The Companys financial statements for the year
ended September 30, 2005 had a going concern uncertainty in its auditors report. The Company incurred a net loss of $1,381,391 and a negative cash flow from operating activities of $2,528,422 for the six months ended March 31, 2005,
and had an accumulated deficit of $4,425,636 at March 31, 2005. These conditions raise substantial doubt about the Companys ability to continue as a going concern. The Companys ability to continue as a going concern is dependent
upon it achieving profitability and generating sufficient cash flows to meet its obligations as they come due. Management believes that its plan to diversify and to control its overhead will enable it to achieve profitability. Management is also
pursuing additional capital financing. However, if the Company is not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to us, this could have a material adverse effect on
our business, results of operations, liquidity, and financial condition. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Companys cash requirements over the next 12 months are expected to include expenditures in connection with: (i) increasing investment in research and
development, (ii) hiring additional personnel, if and as necessary; and (iii) implementing an integrated accounting software package. At March 31, 2005, the Company had $1,459,382 in cash and cash equivalents. The Company believes
that its current cash and cash equivalents on hand and cash expected to be generated from operations will be sufficient to finance anticipated capital and operating requirements for at least the next 12 months. The Company feels slower growth
expectations would require fewer capital expenditures and fewer research and development investments.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Managements discussion and analysis of financial condition and results of operations, as well as disclosures included elsewhere in this report
are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. Preparing these consolidated financial statements requires our management to make
estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingencies. We believe that the critical accounting policies that most impact the consolidated financial statements are
as described below.

In applying these policies, estimates and judgments affect the amounts at which accounts receivable, inventory, and certain
liabilities are recorded and the useful lives of property and equipment. We apply our accounting policies on a consistent basis. As circumstances change, they are considered in our estimates and judgments. Future changes in circumstances could
result in changes in amounts at which assets and liabilities are recorded. Future changes could also affect the estimated useful levels of property and equipment, which could result in changes in depreciation expense or write offs or write downs of
such assets.



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Revenue Recognition.The Company recognizes revenue from the sale of motorcycles and ATVs when risk of loss
and title is transferred to the customer, and collection is reasonably assured, which usually occurs when the motorcycle or ATV is delivered.

Inventory.Inventory is stated at the lower of cost (first-in, first-out) or market.

Property and Equipment.Property and equipment
are stated at cost less accumulated depreciation. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, principally on a straight-line basis. Estimated service lives
of property and equipment are as follows:



|                        |  |             
|----------------------- |  | ------------
|Machinery and equipment |  | 3 to 5 years
|Furniture               |  | 5 to10 years
|Vehicles                |  | 3 years     

The straight-line method of depreciation is followed for substantially all assets for financial reporting
purposes.

Intangible Assets.Intangible assets consist of the Companys website development and are amortized over their estimated useful
lives of five years. Earlier expenditures for domain names of $97,660 after amortization of $10,640, were impaired and written off during the six months ended March 31, 2005, and included in general and administrative expenses, as a result of a
settlement of a lawsuit served on the Company in October, 2005 which required the Company to abandon related branding of the Yamoto trademark.

Impairment of Long-Lived Assets. Intangible assets are evaluated for impairment whenever events or conditions indicate that the carrying value of an asset may not be recoverable. If the sum of the expected undiscounted cash flows is
less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. Such analyses necessarily involve significant judgment. The
impairment losses recorded in fiscal 2005 are described in the previous paragraph. There were no impairment losses in 2004.

Stock-Based Compensation.The Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards (SFAS) No. 148, Accounting for Stock-Based Compensation  Transition and Disclosures (SFAS 148)as
well as those outlined in SFAS No. 123, Accounting for Stock-Based Compensation (SFAS 123). As permitted by SFAS 148 and SFAS 123, the Company continues to apply the provisions of Accounting Principles Board Opinion
(APB) No. 25, Accounting for Stock issued to Employees and related interpretations in accounting for the Companys stock options. Accordingly, compensation cost for stock options is measured as the excess, if any,
of the estimated fair value of the Companys stock at the date of the grant, over the amount an employee must pay to acquire the stock. Stock based awards for non-employees are accounted for at fair value equal to the excess of the estimated
fair value of the Companys stock over the option price using an estimated interest rate to calculate the fair value of the option.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial Accounting Standards Board (FASB) issued a revision of
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS No. 123R). SFAS No. 123R supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and its
related implementation guidance and eliminates the alternative to use Opinion 25s intrinsic value method of accounting that was provided in Statement 123 as originally issued. Under Opinion 25, issuing



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stock options to employees at market value generally resulted in recognition of no compensation cost. SFAS No. 123R requires entities to recognize the
cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards (with limited exceptions). SFAS No. 123R is effective for the first annual reporting period that begins after
December 15, 2005, for small business issuers. The Company does not currently have a stock option plan in place; therefore we have not quantified the potential effect of adoption of SFAS No. 123R. However, we believe adoption of SFAS
No.123R will result in a decrease to our reporting earnings when a stock option plan is implemented.

In February 2006, FASB issued SFAS No. 155
Accounting for Certain Hybrid Financial Instruments, an amendment of FAS No. 133 and 140, which addresses the application of SFAS 133 to beneficial interests in securitized financial assets. SFAS 155 will become effective in 2007.
SFAS 155 requires that beneficial interests in securitized financial assets be analyzed to determine whether they are freestanding derivatives or hybrid instruments containing embedded derivatives that would require bifurcation. The FASB has
proposed to amend SFAS 155 that, if approved, would exempt securitized interest that only contain embedded derivatives linked to prepayment risk of the underlying assets and where the investor does not control acceleration of settlement. The Company
will adopt SFAS 155 in fiscal 2006 and its adoption is not expected to have a material effect on the Companys financial position, results of operations or cash flows.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the
information. This statement is effective for the Company beginning July 1, 2008. We are currently assessing the potential impact that the adoption of SFAS No. 157 will have on our financial statements.

In September 2006, the Securities and Exchange Commission (SEC) released Staff Accounting Bulletin No. 108, Considering the Effects of Prior
Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB 108). SAB 108 provides interpretive guidance on the SECs views on how the effects of prior year misstatements should be
considered in quantifying a current year misstatement for the purpose of a materiality assessment. The provisions of SAB 108 will be effective for the Company for the fiscal year ended December 31, 2006. The Company is currently evaluating the
impact of applying SAB 108 but does not believe that the application of SAB 108 will have a material effect on its financial position and results of operations.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have no debt subject to interest rate fluctuation, nor any activity subject
to foreign currency fluctuations.

OFF BALANCE SHEET ARRANGEMENTS

We do not have nor do we maintain any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our investors.



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ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures.

Our management evaluated, with the participation of our Chief Executive and Financial Officer, the effectiveness of our disclosure controls and procedures as of the end
of the period covered by this Quarterly Report on Form 10-QSB, March 31, 2005. Based on this evaluation, our Chief Executive and Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act)) are ineffective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms. We are developing a plan to ensure that all information will be recorded, processed, summarized and reported on a timely basis. This plan is dependent, in part, upon reallocation of
responsibilities among various personnel, possibly hiring additional personnel and additional funding. It should also be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

(b) Changes in Internal Controls.

During the period covered by the Quarterly Report on Form 10-QSB, there were no significant changes in our
internal controls over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company may be involved from time to time in various claims, lawsuits, and disputes with
third parties or breach of contract actions incidental to the normal course of business operations. Except for the lawsuit discussed in Note 8 of the financial statements, the Company is currently not involved in any other litigation or any pending
legal proceedings that it believes could have a material adverse effect on the financial position or results of operations. (See Note 8 with regard to subsequent trademark infringement lawsuit). A suit by an investment banker is deemed without merit
and is being disputed by the Company; no loss is expected at this time. In conjunction with Patriots maintaining its quality standards, Patriot has rejected certain products previously provided by the manufacturer. The Company is in discussion
with the manufacturer regarding steps needed to be taken to replace or repair such defective product.

The suit brought about by an investment banker was
settled during 2006 for a payment of $30,000.

ITEM 2. CHANGES IN SECURITIES

From October 2004 through February 2005, the Company issued 1,099,245 shares of its common
stock at a price of $1.50 per share for consideration of $1,511,625 (net of commissions) pursuant to a limited private placement. Warrants to purchase 268,813 shares of common stock at $3.50 per share were issued in conjunction with these
transactions. No value has been recorded in relation to these warrants.

During November 2004, the Company issued 33,350 shares of its common stock at
a price of $.75 per share for consideration of $25,000 pursuant to a limited private placement.



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In February and March 2005, the Company issued 709,506 shares of its common stock at a price of $3.00 per share for
consideration of $1,930,655 (net of commissions) pursuant to a limited private placement. Warrants to purchase 131,549 shares of common stock at $6.50 per share were issued in conjunction with these transactions. No value has been recorded
in relation to these warrants.

In March 2005, the Company issued 28,375 shares of its common stock at a price of $4.00 per share for consideration of
$102,150 (net of commissions) pursuant to a limited private placement. Warrants to purchase 4,256 shares of common stock at $9.00 per share were issued in conjunction with these transactions. No value has been recorded in relation to these
warrants. We believe the issuance of these shares was exempt from the registration requirements pursuant to Regulation D or Section 4(2) of the Securities Act of 1933, as amended (the Securities Act).

In June 2004, we entered into an agreement with our President and President of Sales and Marketing pursuant to which we are obligated to issue up to 200,000 restricted
shares of our common stock, of which we issued 50,000 shares in June 2004. These shares were issued as consideration for services to be rendered by our President and our President of Sales and Marketing from July 2004 to September 2004. On
October 1, 2004 and January 1, 2005, we issued the second and third installments, respectively, of the shares due to our President and our President of Sales and Marketing under this Agreement in the aggregate amount of 50,000 restricted
common stock shares. At March 31, 2005, total shares issued to our President and our President of Sales and Marketing pursuant to this Agreement was 150,000 shares. We believe the issuance of these shares was exempt from the registration
requirements pursuant to Regulation D or Section 4(2) of the Securities Act.

During the six months ended March 31, 2005, the Company issued
87,942 shares of its common stock to six individuals unrelated to the Company for providing services to the Company. Warrants to purchase 220,542 shares of common stock at $2.50 to $3.50 per share were issued in conjunction with these
transactions. No value has been recorded in relation to these warrants.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

During the three month period ended March 31, 2005, there have been no
material defaults in the payment of principal, interest, a sinking or purchase fund installment, or any other material default not cured within 30 days, with respect to any of our indebtedness exceeding 5% of our total assets.

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

No matters were submitted to a vote of our security holders
during the six month period ended March 31, 2005.

ITEM 5. OTHER INFORMATION

N/A



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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:



|     |  |                                                                                                                                    
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------
|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 and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



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SIGNATURE

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

February 9, 2007



|                               |  |                            
|------------------------------ |  | ---------------------------
|PATRIOT MOTORCYCLE CORPORATION
|                               | 
|By:                            |  | /s/ Michel Attias          
|                               |  | Michel Attias              
|                               |  | CEO, President and Director
|                               | 
|                               |  | /s/ David M. Gernak        
|                               |  | David M. Gernak            
|                               |  | CFO and Treasurer          



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