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

                                   FORM 10-QSB

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

     FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

                                       OR

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

                         Commission File Number 0-25753

                                POWER2SHIP, INC.
        (Exact name of small business issuer as specified in its charter)

            NEVADA                                             87-04496677
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)


903 CLINT MOORE ROAD, BOCA RATON, FLORIDA                       33487-2802
(Address of principal executive offices)                        (Zip Code)

                                 (561) 998-7557
                (Issuer's telephone number, including area code)

                                     MAY 31
    (Former name, former address and former fiscal year, if changed since last
                                     report)

     Indicate  by  check  mark  whether  the  issuer  (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  twelve months (or for such shorter period that the
registrant  was  required to file such reports) and (2) has been subject to such
filing  requirements  for  the  past  90  days.  Yes  [X]  No  [ ]

     As of May 14, 2004, the number of outstanding shares of the issuer's common
stock  was  36,462,525.

     Transitional  Small Business Disclosure Format (check one): Yes [ ] No [X]


<PAGE>

                                TABLE OF CONTENTS
                                -----------------


                                                                           Page
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited):

         Consolidated Balance Sheet, March 31, 2004                          3

         Consolidated Statements of Operations, Three and Nine
         Months Ended March 31, 2004 and 2003                                4

         Consolidated Statements of Cash Flows, Nine Months Ended
         March 31, 2004 and 2003                                             5

         Transition Period Ended December 31, 2003:

             Consolidated Balance Sheet, December 31, 2003                   6

             Consolidated Statement of Operations, One Month Period Ended
             December 31, 2003                                               7

             Consolidated Statement of Cash Flows, One Month Period Ended
             December 31, 2003                                               8

         Transition Period Ended June 30, 2003:

             Consolidated Balance Sheet, June 30, 2003                       9

             Consolidated Statement of Operations, One Month Period Ended
             June 30, 2003                                                  10

             Consolidated Statement of Cash Flows, One Month Period Ended
             June 30, 2003                                                  11

         Selected Notes to Consolidated Financial Statements for the
         Quarterly Period Ended March 31, 2004                              12

Item 2.  Management's Discussion and Analysis or Plan of Operation          19

Item 3.  Controls and Procedures                                            22

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                  23

Item 2.  Changes in Securities                                              23

Item 3.  Defaults Upon Senior Securities                                    23

Item 4.  Submission of Matters to a Vote of Security Holders                23

Item 5.  Other Information                                                  23

Item 6.  Exhibits and Reports on Form 8-K                                   24

<PAGE>

                          PART I. FINANCIAL INFORMATION
                          -----------------------------

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)


<TABLE>
<CAPTION>

                        POWER2SHIP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2004
                                   (UNAUDITED)


ASSETS
<S>                                                                <C>
Current assets:
   Cash and cash equivalents                                       $    524,527
   Receivables, net of allowance of $7,367                               89,857
   Prepaid insurance                                                     12,751
                                                                   -------------
        Total current assets                                            627,135

Furniture and equipment                                                 226,380
     Less: Accumulated depreciation                                     (61,584)
                                                                   -------------
        Net furniture and equipment                                     164,796


Deferred financing costs                                                350,511
Restricted cash for interest on debentures                               95,261
Other assets                                                            190,869
                                                                   -------------

Total assets                                                       $  1,428,572
                                                                   =============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
   Notes payable - short term                                      $     60,000

   Accounts payable and accrued expenses                                256,639
                                                                   -------------

       Total current liabilities                                        316,639
                                                                   -------------

Long term debt:
Long term notes payable                                                  35,000
Convertible notes payable                                             1,502,000
Convertible note payable to related party                               115,000

Stockholders' deficit:
Preferred stock, $.001 par value, 1,000,000 authorized:
   Series B convertible preferred stock, $.001 par value, 200,000
      shares authorized; 198,000  shares issued and outstanding             198
   Series C convertible preferred stock, $.001 par value, 10,000
      shares authorized; 10,832 shares issued and outstanding                11
   Series Y convertible preferred stock, $.001 par value, 87,000
      shares authorized; 87,000  shares issued and outstanding               87
Common stock, $.001 par value, 100,000,000 shares authorized;
  36,417,525 shares issued and outstanding                               36,418
Deferred compensation                                                  (173,675)
Additional paid-in capital                                           11,135,168
Accumulated deficit                                                 (11,538,274)
                                                                   -------------

       Total stockholders' deficit                                     (540,067)
                                                                   -------------

Total liabilities & stockholders' deficit                          $  1,428,572
                                                                   =============
</TABLE>

                             See accompanying notes

                                      -3-
<PAGE>

<TABLE>
<CAPTION>

                                      POWER2SHIP, INC. AND SUBSIDIARIES
                                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                                 (UNAUDITED)

                                                      Three months ended March 31, Nine months ended March 31,
                                                           2004          2003          2004          2003
                                                       ------------  ------------  ------------  ------------
<S>                                                    <C>           <C>           <C>           <C>
Revenue:
Access services                                        $    86,935   $         -   $   290,012   $    18,065
Freight transportation                                     409,518       215,511     1,052,326       329,243
Implementation services                                          -       141,320        23,925       448,995
                                                       ------------  ------------  ------------  ------------

       Total revenue                                       496,453       356,831     1,366,263       796,303

Operating expenses:
   Freight transportation                                  375,377       202,572       928,425       305,900
   Selling, general and administrative:
        Salaries, benefits and consulting fees             544,931       176,332     1,384,726       434,131
        Common stock and options issued for services       548,194       442,871     1,045,675       460,871
        Other selling, general and administrative          208,779       281,170       768,520       294,756
                                                       ------------  ------------  ------------  ------------

       Total operating expenses                          1,677,281     1,102,945     4,127,346     1,495,658
                                                       ------------  ------------  ------------  ------------

       Loss from operations                             (1,180,828)     (746,114)   (2,761,083)     (699,355)
                                                       ------------  ------------  ------------  ------------

Other income (expense):
   Litigation Settlement                                         -             -       (27,968)            -
   Interest income                                             183           273           846           775
   Interest expense                                        (56,935)      (37,356)     (246,576)     (107,466)
   Other income                                                  -        14,040             -        15,440
                                                       ------------  ------------  ------------  ------------

       Total other income (expense)                        (56,752)      (23,043)     (273,698)      (91,251)
                                                       ------------  ------------  ------------  ------------

Net loss                                               $(1,237,580)  $  (769,157)  $(3,034,781)  $  (790,606)
Less: Preferred stock dividend                                   -             -    (1,262,472)            -
                                                       ------------  ------------  ------------  ------------

Loss available to common shareholders                  $(1,237,580)     (769,157)  $(4,297,253)     (790,606)
                                                       ============  ============  ============  ============


Loss per share-basic and diluted                       $     (0.03)  $     (0.03)  $     (0.14)  $     (0.03)
                                                       ============  ============  ============  ============

Weighted average shares outstanding
      - basic and diluted                               36,558,571    24,397,595    31,778,682    24,211,381
                                                       ============  ============  ============  ============
</TABLE>


                             See accompanying notes

                                      -4-
<PAGE>

<TABLE>
<CAPTION>

                                POWER2SHIP, INC. AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                           (UNAUDITED)

                                                                      Nine months ended March 31,
                                                                            2004         2003
                                                                        ------------  ----------
<S>                                                                     <C>           <C>
Cash flows from operating activities:
   Net loss                                                             $(3,034,781)  $(790,606)
   Adjustments to reconcile net loss to
      net cash used in operating activities:
        Depreciation                                                         26,440       3,378
        Issuance of stock options and warrants
          for services, compensation and conversion                         498,988      75,316
        Issuance of stock for services                                      546,687     397,555
        Changes in operating assets and liabilities:
            Decrease (increase) in receivables                              284,275    (305,556)
            Decrease (increase) in prepaid insurance                         17,068     (10,410)
            Increase in other assets                                       (108,000)    (10,000)
            Increase in deferred compensation                                34,735           -
            Increase (decrease) in accounts payable & accrued expenses      (17,216)     88,756
                                                                        ------------  ----------

               Net cash used in operating activities                     (1,751,804)   (551,567)
                                                                        ------------  ----------

Cash flows from investing activities:
   Purchases of property and equipment                                      (58,054)    (72,279)
                                                                        ------------  ----------

               Net cash used in investing activities                        (58,054)    (72,279)
                                                                        ------------  ----------

Cash flows from financing activities:
   Proceeds from convertible promissory notes net of costs of $269,071
     and $0, respectively                                                 1,257,929     217,000
   Repayments of promissory notes                                          (385,000)    (21,000)
   Proceeds from sale of preferred stock net of costs of $30,000
     and $0, respectively                                                 1,110,960     195,720
   Proceeds from sale of common stock net of costs of $430,767
     and $0, respectively                                                   287,178     400,000
                                                                        ------------  ----------

               Net cash provided by financing activities                  2,271,067     791,720
                                                                        ------------  ----------

               Net increase in cash and cash equivalents                    461,209     167,874

Cash and cash equivalents, beginning of period                               63,318       2,990
                                                                        ------------  ----------

Cash and cash equivalents, end of period                                $   524,527   $ 170,864
                                                                        ============  ==========
</TABLE>


                             See accompanying notes

                                      -5-
<PAGE>

<TABLE>
<CAPTION>

                        POWER2SHIP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                  ONE MONTH TRANSITION PERIOD DECEMBER 31, 2003
                                   (UNAUDITED)


ASSETS
<S>                                                                <C>
Current assets:
   Cash and cash equivalents                                       $    313,165
   Accounts receivable, net of allowance of $7,367                      156,342
   Prepaid insurance                                                     10,572
                                                                   -------------
        Total current assets                                            480,079

Furniture and equipment                                                 203,643
     Less: Accumulated depreciation                                     (52,486)
                                                                   -------------
        Net furniture and equipment                                     151,157

Other assets                                                            190,869
                                                                   -------------
Total Assets                                                       $    822,105
                                                                   =============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
   Notes payable - short term                                      $    350,000
   Accounts payable and accrued expenses                                185,347

       Total current liabilities                                        535,347
                                                                   -------------

Long term debt:
Long term notes payable                                                  50,000
Convertible notes payable                                               175,000
Convertible note payable to related party                               115,000

Stockholders' deficit:
Preferred stock, $.001 par value, 1,000,000 authorized:
   Series B convertible preferred stock, $.001 par value, 200,000
      shares authorized; 198,000  shares issued and outstanding             198
   Series C convertible preferred stock, $.001 par value, 10,000
      shares authorized; 10,832 shares issued and outstanding                11
   Series Y convertible preferred stock, $.001 par value, 87,000
      shares authorized; 87,000  shares issued and outstanding               87
Common stock, $.001 par value, 100,000,000 shares authorized;
  36,990,776 shares issued and outstanding                               36,991
Additional paid-in capital                                           10,210,166
Accumulated deficit                                                 (10,300,695)
                                                                   -------------

       Total stockholders' deficit                                      (53,242)
                                                                   -------------

Total liabilities & stockholders' deficit                          $     822,105
                                                                   =============

</TABLE>

                             See accompanying notes


                                      -6-
<PAGE>

<TABLE>
<CAPTION>

                POWER2SHIP, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENT OF OPERATIONS
       ONE MONTH TRANSITION PERIOD ENDED DECEMBER 31, 2003
                           (UNAUDITED)



<S>                                                    <C>
Revenue:
Access services                                        $    35,000
Freight transportation                                     123,155
                                                       ------------

       Total revenue                                       158,155

Operating expenses:
   Freight transportation                                  110,120
   Selling, general and administrative:
        Salaries, benefits and consulting fees             178,921
        Common stock and options issued for services       (36,000)
        Other selling, general and administrative           90,351
                                                       ------------

       Total operating expenses                            343,392
                                                       ------------

       Loss from operations                               (185,237)
                                                       ------------

Other income (expense):
   Interest income                                             161
   Interest expense                                       (100,043)
                                                       ------------

       Total other expense                                 (99,882)
                                                       ------------

Net loss                                               $  (285,119)
Less: Preferred stock dividend                             (14,472)
                                                       ------------

Loss available to common shareholders                  $  (299,591)
                                                       ============


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

Weighted average shares outstanding
      - basic and diluted                               36,990,776
                                                       ============
</TABLE>


                             See accompanying notes

                                      -7-
<PAGE>

<TABLE>
<CAPTION>

                   POWER2SHIP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF CASH FLOWS
          ONE MONTH TRANSITION PERIOD ENDED DECEMBER 31, 2003
                              (UNAUDITED)


<S>                                                                 <C>
Cash flows from operating activities:
   Net loss                                                         $(285,119)
   Adjustments to reconcile net loss to
      net cash used in operating activities:
        Depreciation                                                    2,961
        Issuance of stock for services                                 37,710
        Changes in operating assets and liabilities:
            Increase in receivables                                   (35,655)
            Decrease in prepaid insurance                               3,207
            Increase in other assets                                  (60,000)
            Increase in accounts payable & accrued expenses             3,285
                                                                    ----------

               Net cash used in operating activities                 (333,611)
                                                                    ----------

Cash flows from investing activities:
   Purchases of property and equipment                                 (5,617)
                                                                    ----------

               Net cash used in investing activities                   (5,617)
                                                                    ----------

Cash flows from financing activities:
   Proceeds from convertible promissory notes                         290,000
   Repayments of promissory notes                                      (5,000)
   Proceeds from sale of preferred stock                               21,960
   Proceeds from sale of common stock net of costs of $5,220           11,102
                                                                    ----------

               Net cash provided by financing activities              318,062
                                                                    ----------

               Net decrease in cash and cash equivalents              (21,166)

Cash and cash equivalents, beginning of period                        334,331
                                                                    ----------

Cash and cash equivalents, end of period                            $ 313,165
                                                                    ==========
</TABLE>


                             See accompanying notes

                                      -8-
<PAGE>

<TABLE>
<CAPTION>

                        POWER2SHIP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                    ONE MONTH TRANSITION PERIOD JUNE 30, 2003
                                   (UNAUDITED)


ASSETS
<S>                                                                <C>
Current assets:
   Cash and cash equivalents                                       $    63,318
   Accounts receivable, net of allowance of $7,367                     374,132
   Prepaid insurance                                                    29,819
                                                                   ------------
        Total current assets                                           467,269

Furniture and equipment                                                168,326
     Less: Accumulated depreciation                                    (35,144)
                                                                   ------------
        Net furniture and equipment                                    133,182

Other assets                                                            70,979
                                                                   ------------
Total Assets                                                       $   671,430
                                                                   ============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
   Notes payable - short term                                      $   368,000
   Accounts payable and accrued expenses                               282,965
                                                                   ------------

       Total current liabilities                                       650,965

Long term debt:
Convertible notes payable                                              175,000
Convertible note payable to related party                              135,000

Stockholders' deficit:
Preferred stock, $.001 par value, 1,000,000 authorized:
   Series B convertible preferred stock, $.001 par value, 200,000
      shares authorized; 9,000  shares issued and outstanding                9
   Series X convertible preferred stock, $.001 par value, 100,000
      shares authorized; 100,000  shares issued and outstanding            100
   Series Y convertible preferred stock, $.001 par value, 87,000
      shares authorized; 87,000  shares issued and outstanding              87
Common stock, $.001 par value, 100,000,000 shares authorized;
  27,345,184 shares issued and outstanding                              27,345
Additional paid-in capital                                           8,186,417
Accumulated deficit                                                 (8,503,493)
                                                                   ------------

       Total stockholders' deficit                                    (289,535)
                                                                   ------------

Total liabilities & stockholders' deficit                          $   671,430
                                                                   ============
</TABLE>

                             See accompanying notes


                                      -9-
<PAGE>

<TABLE>
<CAPTION>

                POWER2SHIP, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENT OF OPERATIONS
         ONE MONTH TRANSITION PERIOD ENDED JUNE 30, 2003
                           (UNAUDITED)



<S>                                                    <C>
Revenue:
Access services                                        $    35,000
Freight transportation                                      77,895
                                                       ------------

       Total revenue                                       112,895

Operating expenses:
   Freight transportation                                   39,254
   Selling, general and administrative:
        Salaries, benefits and consulting fees              51,032
        Common stock and options issued for services        23,700
        Other selling, general and administrative          116,274
                                                       ------------

       Total operating expenses                            230,260
                                                       ------------

       Loss from operations                               (117,365)
                                                       ------------

Other income (expense):
   Interest income                                             401
   Interest expense                                        (17,365)
                                                       ------------

       Total other expense                                 (16,964)
                                                       ------------

Net loss                                               $  (134,329)
Less: Preferred stock dividend                             (45,000)
                                                       ------------

Loss available to common shareholders                  $  (179,329)
                                                       ============


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

Weighted average shares outstanding
      - basic and diluted                               27,345,184
                                                       ============
</TABLE>


                             See accompanying notes

                                      -10-
<PAGE>

<TABLE>
<CAPTION>

                 POWER2SHIP, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENT OF CASH FLOWS
          ONE MONTH TRANSITION PERIOD ENDED JUNE 30, 2003
                            (UNAUDITED)


<S>                                                          <C>
Cash flows from operating activities:
   Net loss                                                  $(134,329)
   Adjustments to reconcile net loss to
      net cash used in operating activities:
        Depreciation                                             1,638
        Issuance of stock options and warrants
          for services, compensation and conversion             16,650
        Issuance of stock for services                         190,700
        Changes in operating assets and liabilities:
            Increase in receivables                            (57,171)
            Decrease in prepaid insurance                        3,207
            Decrease in other assets                           (39,500)
            Decrease in accounts payable & accrued expenses    (78,611)
                                                             ----------

               Net cash used in operating activities           (97,416)
                                                             ----------

Cash flows from investing activities:
   Purchases of property and equipment                          (2,666)
                                                             ----------

               Net cash used in investing activities            (2,666)
                                                             ----------

Cash flows from financing activities:
   Proceeds from convertible promissory notes                  100,000
   Proceeds from sale of preferred stock                        45,000
                                                             ----------

               Net cash provided by financing activities       145,000
                                                             ----------

               Net increase in cash and cash equivalents        44,918

Cash and cash equivalents, beginning of period                  18,400
                                                             ----------

Cash and cash equivalents, end of period                     $  63,318
                                                             ==========
</TABLE>


                             See accompanying notes

                                      -11-
<PAGE>

                        POWER2SHIP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - DESCRIPTION OF BUSINESS

ORGANIZATION
------------
Power2Ship, Inc. (the "Company"), formerly Jaguar Investments, Inc., was
incorporated in Nevada on October 28, 1987. On March 11, 2003, the Company
merged with Freight Rate, Inc. which became a wholly owned subsidiary and is
currently its sole operating entity. The Company is an application service
provider (ASP) that offers an information and communication system to the
freight transportation industry. This system, called the P2S MobileMarket(TM),
has the capability of collecting, processing, storing and displaying the
location and other critical information related to transportation assets along
with the freight on board these assets. This information, which instantly
becomes accessible through the Company's password-protected website, enables
users to make better-informed, cost-effective logistics decisions. The Company's
management believes that the P2S MobileMarket(TM) assists small and medium-sized
trucking companies, particularly those with less than 30 trucks, to compete more
effectively with larger carriers by improving their management and utilization
of transportation assets. Also, management believes its system helps companies
that need freight transported to or from their facilities to reduce their
transportation, warehousing and inventory carrying costs.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS

BASIS OF PRESENTATION
---------------------
For accounting purposes, the merger with Freight Rate, Inc. was treated as a
recapitalization of Freight Rate, Inc. and accounted for as a reverse
acquisition. Therefore, the financial statements reported herein and
accompanying notes thereto reflect the assets, liabilities and operations of
Freight Rate, Inc. as if it had been the reporting entity since inception.

Subsequent to the filing of the Company's prior 10-QSB for the period ended
November 30, 2003, the Company's board of directors authorized a change in the
Company's fiscal year from May 31 to June 30 in order to align the Company's
quarterly reporting obligations with calendar quarters, resulting in a more
traditional reporting pattern and thereby reducing potential confusion in the
marketplace. As a result, in addition to the customary presentation of the
Company's consolidated financial statements, this Form 10-QSB includes
consolidated financial statements for the transition periods associated with the
changed fiscal year which are the one month periods ended December 31, 2003 and
June 30, 2003.

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary. Certain amounts in the prior year's financial
statements have been reclassified to conform to the current year's presentation.

The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
as would be included in audited financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The results of operations
for the three and nine-month periods ended March 31, 2004 are not necessarily
indicative of the results to be expected for the year ended June 30, 2004. The
interim financial statements should be read in conjunction with the audited
financial statements and notes contained in the Company's Annual Report on Form
10-KSB for the year-ended May 31, 2003.

The accompanying consolidated financial statements are prepared assuming the
Company will continue as a going concern. During the nine months ended March 31,
2004 and 2003, the Company incurred losses from operations of $2,761,083 and
$699,355, respectively and had negative cash flows from operations of $1,751,804
and $551,567, respectively. While the Company is attempting to increase sales,
the growth has not been significant enough to support the Company's daily
operations. Management intends to continue raising additional funds with private
placements of its debt and equity securities to accredited investors. While the
Company believes in the viability of its strategy to improve sales volume and in
its ability to raise additional funds, there can be no assurances to that
effect. The financial statements do not include any adjustments that might
result from the outcome of these uncertainties.

                                      -12-
<PAGE>

CASH AND CASH EQUIVALENTS
-------------------------
The Company considers all unrestricted deposits and highly liquid investments,
readily convertible to known amounts, with an original maturity of three months
or less, to be cash equivalents.

FURNITURE AND EQUIPMENT
-----------------------
Furniture and equipment is stated at cost. Depreciation on furniture and
equipment is calculated using the straight-line method over the estimated useful
lives of the assets. Expenditures for major renewals and betterments that extend
the useful lives of the assets are capitalized. Expenditures for maintenance and
repairs of the assets are charged to expense as incurred.

INCOME TAXES
------------
Under the asset and liability method of FASB Statement 109, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities, and their respective tax bases and operating loss and tax
credit carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Deferred
tax assets are reduced by a valuation allowance, when in the Company's opinion
it is likely that some portion or the entire deferred tax asset will not be
realized.

REVENUE RECOGNITION
-------------------
The Company recognizes freight transportation revenue when shipments of goods
reach their destinations and the receiver of the goods acknowledges their
receipt by signing a bill of lading. Revenue from access fees is recognized in
the month that access to our P2S MobileMarket(TM) is provided to customers.
Revenue generated from implementation services, pursuant to software development
contracts with customers, is recognized on the percentage of completion basis
for each deliverable provided for in the contract. Revenue from implementation
services are expected to be insignificant as a percentage of total revenue in
the foreseeable future.

FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
The carrying amounts reported in the balance sheet for cash, receivables,
accounts payable, notes payable and accrued expenses approximate their fair
market value based on the short-term maturity of these instruments.

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 and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

IMPAIRMENT OF LONG-LIVED ASSETS
-------------------------------
The Company evaluates the recoverability and carrying value of its long-lived
assets at each balance sheet date, based on guidance issued in SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." Among other
factors considered in such evaluation is the historical and projected operating
performance of business operations, the operating environment and business
strategy, competitive information and market trends. At March 31, 2004, the
Company had no assets which were considered to be impaired.

STOCK BASED COMPENSATION
------------------------
The Company uses SFAS No. 123, "Accounting for Stock-Based Compensation," which
permits entities to recognize as expense over the vesting period the fair value
of all stock-based awards on the date of grant. Alternatively, SFAS No. 123 also
allows entities to continue to apply the provision of APB Opinion No. 25 and
provide pro forma net income and pro forma earnings per share disclosures for
employee stock option grants as if the fair-value-based method defined in SFAS
No. 123 has been applied. The Company has elected to continue to apply the
provisions of APB Opinion No. 25 and provide the pro forma disclosure provisions
of SFAS No. 123 and SFAS No. 148.

                                      -13-
<PAGE>

CONCENTRATIONS OF CREDIT RISK
-----------------------------
Financial assets that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash and cash equivalents and
accounts receivable. The Company's investment policy is to invest in low risk,
highly liquid investments. The Company does not believe it is exposed to any
significant credit risk in its cash investments.
The Company maintains its cash balances at financial institutions that are
insured by the Federal Deposit Insurance Corporation up to $100,000 per account.
At March 31, 2004, the Company's cash balances exceeded the insured limits by
$348,909. The Company has not experienced any losses in such accounts and
believes it is not exposed to any significant credit risk on cash on deposit.
The Company performs on-going credit evaluations of its customer base including
those that represent its accounts receivable at March 31, 2004. Two customers
accounted for 77% of the Company's accounts receivable at March 31, 2004. The
Company maintains reserves for potential credit losses and such losses
historically have been within management's expectations.

LOSS PER COMMON SHARE
---------------------
Basic loss per common share is based upon the weighted average number of common
shares outstanding during the year. Diluted earnings (loss) per common share
include the effects of potential dilution that would occur if securities (such
as warrants) or other contracts (such as options) to issue common stock were
exercised or converted into common stock. Such instruments that are convertible
into common stock are excluded from the computation in periods in which they
have an anti-dilutive effect. Potential common shares included in the
computation are not presented in the consolidated financial statements, as their
effect would be anti-dilutive.

NOTE 3 - NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

On March 9 and March 31, 2004, the Company issued $1,157,000 and $170,000,
respectively, of its Series A Convertible Debentures to 23 accredited investors
and paid commissions and expenses of $173,810 that were accounted for as
deferred financing costs to be amortized over the terms of the Debentures. The
Debentures mature on December 31, 2006, and earn interest of 14.25% per annum
payable semi-annually in arrears on June 30 and December 31. The Debentures may
be converted by the holders at any time into common stock at a conversion price
equal to the lesser of $.80 per share or 90% of the average closing bid price of
the common stock for the ten trading days immediately preceding the date that a
registration statement registering the shares of common stock underlying the
Debentures becomes effective. The Company may redeem the Debentures, with
fifteen days notice at any time, by paying a premium of up to 20% of their
original purchase price in a combination of cash and common stock. For the nine
and three months ended March 31, 2004, the accrued interest on the Debentures
was $9,618 and amortization of deferred financing costs was $4,466. The Company
has provided the Debenture holders with a security interest in its tangible and
intangible assets, subject to automatic subordination to most traditional
asset-based loans, to secure the prompt payment of principal

In December 2003 and January 2004, the Company issued a total of $340,000 of 18%
short-term promissory notes to six individuals, paid commissions associated with
the placement of such notes of $34,000 and issued the lenders a total of 185,458
shares of the Company's restricted common stock valued at $81,383. Interest
expense for the nine months ended March 31, 2004 on the notes was $14,790. The
total of commissions, value of the common stock and interest of $130,173 was
recorded as interest expense for the nine months ended March 31, 2004. The notes
were repaid on March 9, 2004. Several of these lenders chose to invest a total
of $150,000 of the proceeds from the repayment of their notes into the Company's
Series A convertible debentures.

On July 15, 2003, the Company issued a promissory note in the amount of $170,000
for licenses to use certain logistics software. The note bears no interest and
required the Company to pay $30,000 upon issuing the note followed by 22
consecutive payments of $5,000 on the first of each month beginning on August 1,
2003 for a total of $140,000. If all the aforementioned payments are made on or
before their applicable due dates, or within their permitted grace periods, the
$30,000 balance remaining of the note will be waived. At March 31, 2004, the
outstanding balance on the note was $95,000 of which $35,000 was accounted for
as long term notes payable and $60,000 as notes payable - short term.

On March 10, 2003, the Company issued a $125,000 convertible promissory note to
a private investor that also was a non-affiliated Company shareholder. On June
5, 2003, the Company issued a $225,000 promissory note to the same investor upon
receipt of $100,000 and the cancellation of the $125,000 note. On July 22, 2003,
the Company made a $100,000 principal payment on the $225,000 note and, on
September 18, 2003, repaid the $125,000 outstanding balance of the note, plus
accrued interest thereon, with 25,800 shares of its Series B preferred stock
convertible at $0.25 per share. This conversion provision represents a
beneficial conversion feature, the value of which is calculated by subtracting
the conversion price of $0.25 from the market price of the common stock on the
date the preferred shares were issued. In this case, since the beneficial
conversion feature is valued at more than the conversion price, the total value
of the shares or $129,000 has been recognized as preferred dividends during the
fiscal quarter ended November 30, 2003.

                                      -14-
<PAGE>

NOTE 4 - STOCKHOLDERS' EQUITY

SERIES B CONVERTIBLE PREFERRED STOCK
------------------------------------
During the nine months ended March 31, 2004, the Company sold 172,800 shares of
its Series B convertible preferred stock for $864,000 and issued 25,800 shares
as repayment of a promissory note and accrued interest thereon (see Note 3). The
shares are convertible into the Company's common stock at $0.25 per share, are
entitled to receive annual dividends of 10% and have preferred registration
rights.  This conversion provision represents a beneficial conversion feature,
the value of which is calculated by subtracting the conversion price of $0.25
from the market price of the common stock on the date the preferred shares were
issued. The value of this beneficial conversion feature in the amount of
$816,000 was recognized as preferred dividends. This offering has been
completed.

SERIES C CONVERTIBLE PREFERRED STOCK
------------------------------------
During the nine months ended March 31, 2004, the Company sold 10,832 shares of
its Series C convertible preferred stock for $324,960 less commissions of
$30,000. These shares are convertible into 1,083,200 shares of the Company's
common stock at $0.30 per share, are entitled to receive annual dividends of
10%, include warrants to purchase 541,600 shares of common stock at $1.00 per
share for a period of three years and have preferred registration rights. This
transaction was effected under Rule 506 of Regulation D of the Securities Act of
1933. The conversion provision for these securities represents a beneficial
conversion feature, the value of which is calculated by subtracting the
conversion price of $0.30 from the market price of the common stock on the date
the preferred shares were issued. The value of this beneficial conversion
feature in the amount of $317,742 was recognized as preferred dividends.

SERIES X CONVERTIBLE PREFERRED STOCK
------------------------------------
During the nine months ended March 31, 2004, the Company issued 5,700,000 shares
of common stock in exchange for its 100,000 shares of Series X convertible
preferred stock.

COMMON STOCK
------------
During the nine months ended March 31, 2004, the Company:

- granted 1,280,666 shares of common stock to vendors, employees, lenders and
consultants and recorded the shares at their fair market value of $667,464 at an
average price of $.52 per share.

- sold 1,143,400 shares of common stock to individual investors residing outside
of the United States for $717,945 less offering costs and discounts of $430,767
netting $287,178.

- issued 887,475 shares of common stock pursuant to anti-dilution agreements
with respect to the issuance of common stock to the holders of the Company's
Series X convertible preferred stock. This figure restates the 2,143,000 common
shares reported as being issued related to anti-dilution provisions in the
Company's 10-QSB for the period ended November 30, 2003 and resulted in a $1,256
decrease in common stock par value; and

- issued 60,800 shares of common stock pursuant to a settlement agreement with a
former consulting company and recorded the shares at the fair market value of
$27,968.

                                      -15-
<PAGE>

OPTIONS AND WARRANTS
--------------------
The Company's board of directors has the authority to determine when and to whom
it grant options and warrants to purchase shares of the Company's common stock.
In addition, the board determines the number of options and warrants to be
granted and all other terms and conditions related to these securities such as
the recipients' vesting schedules, expiration dates, exercise prices and
restrictions.

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"), encourages, but does not require, companies to
record compensation cost for stock-based employee compensation plans at fair
value. The Company has chosen to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees", and related Interpretations.
Accordingly, compensation cost for stock options and warrants 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. The
Company has adopted the "disclosure only" alternative described in SFAS 123 and
SFAS 148, which require pro forma disclosures of net income and earnings per
share as if the fair value method of accounting had been applied.

The following table presents pro forma net loss and per share amounts as if the
fair value method had been applied to employee stock options and warrants
granted:

<TABLE>
<CAPTION>


                                                           Nine months ended March 31,
                                                          ------------------------------
                                                               2004           2003
                                                          ------------  ----------------
<S>            <C>                               <C>
Loss available to common shareholders:      As reported   $(4,297,253)   $(790,606)
                                                          ============  ================

                                            Pro forma     $(4,471,106)   $(907,123)
                                                          ============  ================

Loss per share, basic and diluted:          As reported   $(0.14)        $(0.03)
                                                          ============  ================

                                            Pro forma     $(0.14)        $(0.04)
                                                          ============  ================

</TABLE>

For purposes of the pro forma calculations, the fair value of each option was
estimated on the date of the grant using the Black-Scholes option-pricing model
with the following assumptions used:

                                                  2004         2003
                                                 -----        -----

Dividend yield                                    None         None
Expected volatility factor                      0 - 58 %        0%
Approximate risk free interest rates              3%            3%
Expected lives, in years                         1-30         3 - 5

The determination of fair values for all stock options and warrants is based on
the assumptions described in the preceding paragraph, and because additional
option grants are expected to be made each year, the above pro forma disclosures
are not representative of pro forma effects on reported net income or loss for
future years.

STOCK OPTIONS
-------------
In November 2003, in connection with a twelve-month Business Advisory Agreement,
the Company granted Newbridge Securities Corporation an option to purchase
500,000 shares of its common stock at a price of $.01 per share.

In December 2003, the Company granted options to purchase 71,500 of common stock
to certain employees and directors of the Company. The options expire in three
to five years from the grant date. The options are exercisable at prices ranging
from $.40 to $.52 per share which were the fair values of the common stock at
the respective grant dates. Accordingly, under APB 25, no compensation was
recognized.

                                      -16-
<PAGE>

A summary of the stock option activity for the nine months ended March 31, 2004
is as follows:

<TABLE>
<CAPTION>

                                               Weighted
                                               Average
                                               Exercise     Number     Exercise Price
                                                Price     of Options     Per Option
                                             ---------    -----------   --------------
<S>                              <C>                         <C>
Outstanding options at June 30, 2003           $0.40       14,486,679    $0.38 - $1.01
Granted                                        $0.06          571,500    $0.01 - $.052
Expired                                        $0.75          (29,793)           $0.75
                                                          ------------

Outstanding options at March 31, 2004          $0.39       15,028,386    $0.01 - $1.01
                                                          ============

Exercisable options at March 31, 2004          $0.38       13,195,428    $0.01 - $0.75
                                                          ============

</TABLE>

The following table summarizes information concerning stock options outstanding
at March 31, 2004.

<TABLE>
<CAPTION>

                                                 Weighted         Weighted
                                                 average          average
                        Number of Options      remaining          exercise
Range of Exercise Price   Outstanding        life in years         price
------------------------  -----------        -------------         ------
<S>                       <C>          <C>            <C>

0.01 - 0.40               13,520,610              3.25             $ 0.36
0.50 - 0.75                1,207,776              1.57             $ 0.55
1.01                         300,000              3.54             $ 1.01
                          -----------
                         15,028,386
                          ===========
</TABLE>


WARRANTS
--------
The Company charged to expense the fair value of the instruments granted for
services using the Black-Scholes option model. During the nine months ended
March 31, 2004, the Company granted the warrants to purchase shares of the
Company's common stock as follows:

- 541,600 shares at $1.00 per share of which 500,000 expire on July 14, 2006 and
41,600 expire on December 8, 2006 to the investors in the Company's of Series C
convertible preferred stock and 100,000 shares at $2.00 per share that expire on
July 14, 2006 to the sales agent responsible for the private placement;

- 500,000 shares at prices ranging from $0.54 to $1.29 per share which expire on
November 4, 2006 to a consulting company providing the Company with various
financial services for a period of one year;

- 395,200 shares at prices ranging from $0.53 to $0.78 per share which expire
three years from their grant dates to various employees; and

- 244,050 shares at prices ranging from $0.46 to $0.58 per share which expire
three years from the date granted to vendors and consultants.

- 600,000 shares at $0.75 per share which expire on March 31, 2007 to a
consulting company providing the Company with financial services for a period of
one year;

- 723,125 shares at prices ranging from $0.45 to $0.80 per share which expire on
March 9, 2007 to the placement agent for the Series A Convertible Debentures

                                      -17-
<PAGE>

- 106,250 shares at prices ranging from $0.45 to $0.80 per share which expire on
March 31, 2007 to the placement agent for the Series A Convertible Debentures

- 578,500 shares at $0.45 per share which expire on March 9, 2007 to the holders
of the Company's Series A Convertible Debentures

- 85,000 shares at $0.45 per share which expire on March 31, 2007 to the holders
of the Company's Series A Convertible Debentures

A summary of the warrant activity for the nine months ended March 31, 2004 is as
follows:

<TABLE>
<CAPTION>


                                           Weighted
                                          Average
                                          Exercise    Number of   Exercise Price
                                            Price      Warrants      Per Warrant
                                          --------    -----------   --------------
<S>                              <C>                                  <C>
Outstanding warrants at June 30, 2003      $0.56        4,053,904    $0.75 - $2.00
Granted                                    $0.72        3,873,725    $0.45 - $2.00
Expired                                    $0.56         (454,089)   $0.75 - $1.51
                                                      ------------

Outstanding warrants at March 31, 2004     $0.77        7,473,540    $0.45 - $2.00
                                                      ============

Exercisable warrants at March 31, 2004     $1.56        6,923,540    $0.45 - $2.00
                                                      ============

</TABLE>


The following table summarizes information concerning warrants outstanding at
March 31, 2004.

<TABLE>
<CAPTION>



                                                      Weighted          Weighted
                                                       average          average
                                                      remaining         exercise
Range of Exercise Price   Number of Warrants        life in years        price
------------------------  ------------------        -------------        ------
<S>                       <C>                 <C>            <C>
0.45  -  0.80                     6,155,255              2.10          $ 0.67
1.00  -  1.30                     1,050,769              2.00          $ 1.07
1.50  -  2.00                       267,516              1.34          $ 1.81
                          ------------------
                                  7,473,540
                          =================

</TABLE>

NOTE 5 - SUBSEQUENT EVENTS

On April 30, 2004, the Company issued $420,000 of its Series A Convertible
Debentures to 15 accredited investors and paid commissions and expenses of
$54,600 that was accounted for as deferred financing costs to be amortized over
the terms of the Debentures. See Note 3 of these financial statements for a
further description of these debentures.

                                      -18-
<PAGE>

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

The following discussion of our financial condition and results of operations
should be read in conjunction with our unaudited consolidated financial
statements and notes thereto contained elsewhere in this quarterly report.

FORWARD-LOOKING INFORMATION

This quarterly report on Form 10-QSB, including the discussion and analysis of
our financial condition and results of operations and our disclosures about
market risk, contain certain "forward-looking statements." These statements
represent our expectations, beliefs, intentions, or strategies concerning future
events and by their nature involve risks and uncertainties. Forward-looking
statements include, among others, statements about our future performance, the
continuation of historical trends, the sufficiency of our sources of capital for
future needs, the expected impact of recently issued accounting pronouncements,
and the outcome or effects of litigation. Risks that could cause actual results
to differ materially from our current expectations include changes in market
demand and pricing for our services, the impact of competition, changes in
relationships with our customers, our ability to obtain sufficient carrier
capacity at competitive rates to transport freight, our ability to retain
shippers willing to have us move their freight, the risks associated with
litigation and insurance coverage, the impacts of war on the economy, and
changing economic conditions. Therefore, actual results may differ materially
from our expectations based on these and other risks and uncertainties.

CRITICAL  ACCOUNTING  POLICIES

The discussion and analysis of our financial condition and results of operations
is  based  upon our financial statements, which have been prepared in accordance
with  accounting  principles  generally  accepted  in  the  United  States.  The
preparation  of these financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue
and  expenses.  On  an  on-going  basis,  management  evaluates these estimates,
including  those  related  to  inventories,  depreciation,  amortization,  asset
valuation  allowances,  contingencies  and  litigation.  Management  bases  its
estimates  on  historical  experience  and  on various other assumptions that it
believes to be reasonable under the circumstances, the results of which form the
basis  for  making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these  estimates  under  different  assumptions  or  conditions.

Note  2  to the Company's consolidated financial statements include a summary of
the  significant  accounting policies and methods used in the preparation of our
consolidated  financial  statements.  Management  believes  that  the  following
critical accounting policies affect the more significant judgments and estimates
used  in  the  preparation  of  the  Company's  financial  statements.

Revenue Recognition.  Revenue consists of the total dollar value of goods and
services purchased from us by our customers. We recognize revenue as these
services are rendered and goods are delivered. Upon delivery, the receiver of
the goods acknowledges their receipt by signing a bill of lading and our
collection of receivables is reasonably assured. Emerging Issues Task Force
Issue No, 99-19, "Reporting Revenue Gross as a Principal versus Net as an Agent"
establishes the criteria for recognizing revenue on a gross versus net basis. We
record nearly all transactions in our freight brokerage business at the gross
amount we charge our customers for our goods and services. In these
transactions, we are the primary obligor, we have all credit risk, and we
perform a portion of the service ordered by our customers. Revenue from access
fees is recognized in the month that access to the P2S MobileMarket(TM) is
provided to customers. Revenue from implementation services, pursuant to
software development or similar contracts, typically is recognized on the
percentage of completion method unless otherwise specified in the contract.

Stock  Based  Compensation.  The  Company  uses  SFAS  No.  123, "Accounting for
Stock-Based  Compensation,"  which permits entities to recognize as expense over
the  vesting  period  the  fair  value  of all stock-based awards on the date of
grant. Alternatively, SFAS No. 123 also allows entities to continue to apply the
provision  of  APB Opinion No. 25 and provide pro forma net income and pro forma
earnings  per  share  disclosures  for  employee  stock  option grants as if the
fair-value-based  method  defined  in SFAS No. 123 has been applied. The Company
has  elected  to  continue  to  apply  the  provisions of APB Opinion No. 25 and
provide  the  pro  forma disclosure provisions of SFAS No. 123 and SFAS No. 148.

                                      -19-
<PAGE>

DESCRIPTION OF BUSINESS

The Company, through its wholly owned subsidiary Freight Rate, Inc., operates as
an application service provider (ASP) offering an information and communication
system used by companies that require full truckloads of goods to be moved to or
from their facilities and the trucking companies that transport these goods.
This system, named the P2S MobileMarket(TM), collects and processes location and
other transportation information related to its customer's freight while in
transit and their trucking assets at all times. This information instantly
becomes accessible through the Company's website, http://www.power2ship.com,
enabling the Company's customers to make better-informed logistics decisions.

The Company also offers trucking companies the opportunity to lease or purchase
its proprietary wireless tracking and communication devices that automatically
track their trucks, communicate this location information to the P2S
MobileMarket(TM) and enable two-way wireless communication with the truck
driver. These devices are a vehicle locator device with a built-in modem that
utilizes global positioning system (GPS) technology to track the latitude and
longitude of the truck and a handheld personal digital assistant (PDA) that
connects to the vehicle locator device.

The Company's management believes that the P2S MobileMarket(TM) assists small
and medium-sized trucking companies, particularly those with less than 30
trucks, compete more effectively with larger carriers by improving their
management and utilization of transportation assets. Further, management
believes its system helps companies needing to have freight transported to
reduce their transportation, warehousing and inventory carrying costs.

NINE MONTHS ENDED MARCH 31, 2004 COMPARED TO THE NINE MONTHS ENDED MARCH 31,
2003

RESULTS OF OPERATIONS

REVENUE
Total revenue during the nine months ended March 31, 2004 was $1,366,263, an
increase of $569,960 or approximately 72%, compared with revenue of $796,303
during the same nine-month period of fiscal year 2003. The revenue increase
during the nine months ended March 31, 2004 consisted of the following:

-    Freight transportation revenue of $1,052,326 which represented an increase
     of $723,083 or approximately 220% compared with $329,243 generated during
     the comparable nine-month period of fiscal year 2003. This increase
     partially was due to the Company providing a greater amount of freight
     transportation services to more customers in the 2004 period than in the
     2003 period. Also, this increase was due to the Company providing freight
     transportation services for the entire nine-month period in fiscal year
     2004 compared with only approximately the last five months of the
     comparable 2003 period prior to which the Company was in its development
     stage.

-    Revenue from providing access services of $290,012 which represented an
     increase of $271,947 or approximately 1505% versus $18,065 generated during
     the comparable nine-month period of fiscal year 2003. This increase was due
     to the Company providing access services for more than eight months during
     the nine-month period ended March 31, 2004 compared with less than one
     month during the comparable nine-month period in 2003 prior to which the
     Company was in its development stage.

-    Revenue from providing implementation services of $23,925 which represented
     a decrease of $425,070 or approximately 95% from $448,995 generated during
     the comparable nine-month period of fiscal year 2003. This decrease
     occurred as a result of the Company completing substantially all of the
     work associated with its sole implementation services contract during the
     nine-month period ended March 31, 2003.

OPERATING EXPENSES
Total operating expenses in the nine months ended March 31, 2004 were
$4,127,346, which represented an increase of $2,631,688 or approximately 176%
versus operating expenses of $1,495,658 incurred during the nine-month period
ended March 31, 2003. This increase was attributed to higher freight
transportation costs as a result of the increase in revenue generated from
providing freight transportation services as well as to an increase in selling,
general and administrative expenses primarily associated with the additional
compensation paid to personnel required to implement the Company's business
plan.

                                      -20-
<PAGE>

Freight transportation costs incurred during the nine months ended March 31,
2004 were $928,425 which represented an increase of $622,525 or approximately
204%, versus $305,900 incurred during the comparable nine-month period of fiscal
year 2003. This increase partially was due to the costs incurred by the Company
in providing a greater amount of freight transportation services to more
customers in the 2004 period than in the 2003 period. Also, this increase was
due to the Company providing freight transportation services for the nine-month
period ended March 31, 2004 versus only approximately the last 5 months of the
comparable nine-month period in fiscal year 2003 prior to which the Company was
in its development stage.

Selling, general and administrative expenses during the nine months ended March
31, 2004 were $3,198,921 which represented an increase of $2,009,163 or 169%,
from $1,189,758 during the comparable nine-month period in fiscal year 2003.
Most of this increase was attributed to salaries, fringe benefits and consulting
fees of $1,384,726 which represented an increase of $950,595 or approximately
219% from $434,131 during the comparable nine-month period in fiscal year 2003.
This increase primarily was due to an increase in the number of people working
for the Company from 17 at March 31, 2003 to 27 at March 31, 2004. Also, the
compensation level of many of these people, which was below industry average
compensation levels in 2003 while the Company was a development stage company,
was raised in 2004.

Other categories of selling, general and administrative expenses with notable
increases during the nine months ended March 31, 2004 versus the comparable
nine-month period in fiscal year 2003 were as follows:

-    Professional fees increased by $100,082 or approximately 121% to $183,051
     in the nine months ended March 31, 2004 from $82,969 during the same
     nine-month period during fiscal year 2003. This increase resulted from
     higher legal and accounting fees related to public reporting requirements,
     litigation and other matters incurred in the ordinary course of business in
     the 2004 period compared with the 2003 period.

-    Rent expense increased by $71,255 or approximately 310% to $94,278 in the
     nine months ended March 31, 2004 from $23,023 in the comparable nine-month
     period in fiscal year 2003 as a result of the Company's move to a much
     larger facility in Boca Raton, Florida in June 2003 to accommodate its
     growth in personnel and operations.

-    Travel, meals and entertainment expenses increased by $50,339 or
     approximately 57% to $139,015 in the nine months ended March 31, 2004 from
     $88,676 in the comparable nine-month period in fiscal year 2003 as a result
     of additional travel to customers, vendors and potential investors.

-    Advertising and marketing expenses, including convention and trade show
     expenses, increased by $44,698 or approximately 596.0% to $52,198 in the
     nine months ended March 31, 2004 from $7,500 in the comparable nine-month
     period in fiscal year 2003 as the Company began participating in
     conventions and trade shows to introduce its products and services to its
     target markets during fiscal year 2004. It did not participate in any trade
     shows in the nine months ended March 31, 2003 as it was in its development
     stage during that time period.

OTHER EXPENSES
Other expenses increased by $182,447 or approximately 200% to $273,698 in the
nine months ended March 31, 2004 from $91,251 in the comparable nine-month
period of fiscal year 2003. This increase primarily was attributed to an
increase in interest expense of $139,110 or approximately 129% to $246,576 in
the nine-month period in fiscal year 2004 versus $107,466 in the comparable
nine-month period of fiscal year 2003. Also, the Company incurred litigation
settlement expenses of $27,968 in the nine-month period ended March 31, 2004
versus $0 in the comparable nine-month period in fiscal year 2003.

LIQUIDITY AND CAPITAL RESOURCES

The Company has experienced losses and negative cash flow from operations since
its inception. As of March 31, 2004, the Company had an accumulated deficit of
$11,538,274, stockholders' deficit of $540,067, cash and cash equivalents of
$524,527 and a working capital surplus of $310,496.

                                      -21-
<PAGE>

During  the  nine  months  ended  March  31,  2004,  the  Company's cash balance
increased  by  $461,209.  This  increase was the result of the Company receiving
$2,271,067  from  financing  activities  offset  by $1,751,804 used in operating
activities  and  $58,054  used  to  purchase  property  and  equipment.

Cash  flow  used in operating activities consisted of the net loss of $3,034,781
offset  by  $1,045,675  in  non-cash compensation of stock, options and warrants
issued or granted for services and $210,862 in cash provided by operating assets
and  liabilities  during  the  nine-month  period  ended  March  31,  2004.

Cash  flow  provided by financing activities included $1,257,929 in net proceeds
from  the  issuance  of  Series  A  convertible debentures and promissory notes,
$1,110,960  in net proceeds from the issuance of shares of Series B and Series C
preferred  stock  and  $287,178  in  net proceeds from the issuance of shares of
common  stock  less  $385,000  in  repayments  of  promissory  notes  during the
nine-month  period  ended  March  31,  2004.

The Company's future capital requirements depend primarily on the rate at which
it can decrease its use of cash to fund operations. Cash used for operations
will be affected by numerous known and unknown risks and uncertainties
including, but not limited to, the Company's ability to successfully market its
products and services, the degree to which competitive products and services are
introduced to the market, and its ability to attract key personnel as it grows.
As long as the Company's cash flow from operations remains insufficient to
completely fund its operations, it will continue depleting its financial
resources and seeking additional capital through equity and/or debt financing.

Management estimates that its cash on hand at March 31, 2004 plus $376,700 in
net proceeds received in April 2004 from the issuance of Series A convertible
debentures notes will be sufficient to fund its projected use of cash for
operating activities until approximately July 1, 2004. The Company presently
does not have any commitments for additional capital and there is no assurance
that it will be able to obtain additional funding when needed, or that such
funding, if available, can be obtained on acceptable terms. If it cannot obtain
funds when required, it may be forced to modify its business plan and curtail or
cease its expansion and development plans. Further, such subsequent equity
financing(s) will cause existing shareholders to be diluted and the issuance of
any additional debt securities may contain restrictive covenants that may have
an adverse affect on its operations and encumber its assets.

ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure and procedures

Within 90 days prior to this report, with the participation of management, the
Company's principal executive officer and principal financial officer evaluated
our disclosure controls and procedures. Based on this evaluation, the principal
executive officer and principal financial officer concluded that the disclosure
controls and procedures are effective in timely alerting him to material
information required to be disclosed in periodic reports filed with the
Securities and Exchange Commission. It should 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

Subsequent to March 31, 2004 through the date of filing this Form 10-QSB, there
have been no significant changes in the Company's internal controls or in other
factors that could significantly affect those controls, including any
significant deficiencies or material weaknesses of internal controls that would
require corrective action.

                                      -22-
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In  March  2004, the Company waived service of summons related to a civil action
filed  in  November 2003 in the U.S. District Court for the Southern District of
New  York  (Davimos  et  al  v. Halle et al, Case No. 03CV9199). The Company was
named  as  one  of  a  number  of  defendants  in a complaint by two individuals
claiming that in 2000 they each were induced by parties unrelated to the Company
into  making  an  investment  of  $100,000,  based  on  false  and  misleading
information,  in  an  entity  that allegedly was controlled by an individual who
sold  his corporation to the Company in April 2001. Management believes that the
claim  is  without  merit as it pertains to the Company and will file responsive
pleadings  in  the  near  future.

In April 2004, the Company filed a petition in the Supreme Court of the State of
New  York,  County of Kings, (Power2Ship, Inc. v. Flow Capital Advisors, Inc. et
al,  Index  No.  11495/04)  against a consulting company formerly engaged by the
Company  and  a  former  Company  director (collectively, the "Respondents") and
obtained  a  temporary order restraining Respondents from transferring or in any
manner  encumbering  any  securities  of  the  Company  held by them. The former
consulting  company  currently owns 779,155 shares of the Company's common stock
and  an option to purchase 200,000 shares of the Company's common stock received
by  it  pursuant  to  two  consulting  agreements  with the Company. The Company
alleges  that  the  first consulting agreement represents a wrongful usurping of
corporate  opportunity  by  the  principal  shareholder of the former consulting
company  and  that both consulting agreements were fraudulently obtained through
material  omissions  and  misrepresentations  made prior to, and after, entering
into  the  consulting  agreements.  The Company is pursuing these claims through
arbitration  in  Florida under the rules of the American Arbitration Association
and  has  dropped  its  New  York  action.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

During the three months ended March 31, 2004, the Company issued:

-     205,000 shares of its common stock to vendors and consultants and recorded
the shares at their fair market value of $172,125. Inasmuch as these vendors and
consultants were sophisticated investors, could bear the economic risk of the
common stock and had access to applicable information pertaining to the Company,
the transactions were deemed to be exempt from registration pursuant to Section
4(2) of the Securities Act of 1933;

-     27,274 shares of its common stock to a lender in consideration for a
$50,000 loan and recorded the shares at their fair market value of $12,273.
Inasmuch as this lender was an accredited investor, could bear the economic risk
of the common stock and had access to applicable information pertaining to the
Company, the transaction was deemed to be exempt from registration pursuant to
Section 4(2) of the Securities Act of 1933;

- $1,327,000 of its Series A convertible debentures to 23 accredited investors
and paid commissions and expenses of $173,810 that were accounted for as
deferred financing costs to be amortized over the terms of the debentures. This
issuance was deemed to be exempt from registration pursuant to Rule 506 of
Regulation D of the Securities Act of 1933. The proceeds from the sale of these
securities are being used primarily to fund the Company's projected negative
cash flow from operations. Further details of this security may be found in note
3 to the consolidated financial statements herein.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None.

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

     None.

ITEM 5. OTHER INFORMATION

     None.

                                      -23-
<PAGE>

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 Chief Financial
     Officer Pursuant to 18 U.S.C. Section 1350.

(b)   Reports on Form 8-K:

On March 12, 2004, the Company filed a report on Form 8-K containing information
under Item 5 (Regulation FD) disclosing that it had completed the initial phase
of a private financing of secured convertible debentures. Also, under Item 8 of
this report, the Company disclosed that its board of directors had authorized a
change in the Company's fiscal year from May 31 to June 30 intended to align the
Company's quarterly reporting obligations with calendar quarters, resulting in a
more traditional reporting pattern and thereby reducing potential confusion in
the marketplace.

                                      -24-
<PAGE>

                                    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.


Date:  May 17, 2004
     POWER2SHIP, INC.

By    /s/ Richard Hersh
    -------------------
       Richard Hersh
       Chief Executive Officer


                                      -25-
<PAGE>

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, Richard Hersh, certify that:

1. I have reviewed this Quarterly Report on Form 10-QSB of Power2Ship, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the issuer as of,
and for, the periods presented in this report;

4. The issuer's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) for the issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the issuer, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

(b) Evaluated the effectives of the issuer's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and

(c) Disclosed in this report any change in the issuer's internal control over
financial reporting that occurred during the period covered by the Quarterly
Report that has materially affected, or is reasonably likely to materially
affect, the issuer's internal control over financial reporting; and

5. The issuer's other certifying officer(s) and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
issuer's auditors and the audit committee of the issuer's board of directors (or
persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the issuer's ability to record, process, summarize
and report financial information; and

(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the issuer's internal control over
financial reporting.



                                     /s/ Richard Hersh
                                    -------------------------
                                    Chief Executive Officer


May 17, 2004

<PAGE>

EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, Richard Hersh, certify that:

1. I have reviewed this Quarterly Report on Form 10-QSB of Power2Ship, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the issuer as of,
and for, the periods presented in this report;

4. The issuer's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) for the issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the issuer, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

(b) Evaluated the effectives of the issuer's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and

(c) Disclosed in this report any change in the issuer's internal control over
financial reporting that occurred during the period covered by the Quarterly
Report that has materially affected, or is reasonably likely to materially
affect, the issuer's internal control over financial reporting; and

5. The issuer's other certifying officer(s) and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
issuer's auditors and the audit committee of the issuer's board of directors (or
persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the issuer's ability to record, process, summarize
and report financial information; and

(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the issuer's internal control over
financial reporting.



                                     /s/ Richard Hersh
                                    -------------------------
                                     Chief Financial Officer


May 17, 2004

<PAGE>

EXHIBIT 32.1

      CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Report on Form 10-QSB of Power2Ship, Inc.
for the period ended March 31, 2004, I, Richard Hersh, Chairman, Chief Executive
Officer and Chief Financial Officer, hereby certifies pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, to the best of my knowledge and belief, that:

1. Such Report on Form 10-QSB for the quarter ended March 31, 2004, fully
complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and

2. The information contained in such Report on Form 10-QSB for the quarter ended
March 31, 2004, fairly presents, in all material respects, the financial
condition and results of operations of Power2Ship, Inc.

                                POWER2SHIP, INC.



Dated: May 17, 2004                      By: /s/  Richard Hersh
                                      -------------------------
                                Name: Richard  Hersh, Chairman
                               Title: Chief  Executive Officer and
                                      Chief Financial Officer

<PAGE>