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

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

                      For the Quarter ended AUGUST 31, 2003

                         Commission File Number 0-25753

                                POWER2SHIP, INC.

             (Exact name of Registrant as specified in its charter)

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


903 Clint Moore Road, Boca Raton, Florida                       33487
 (Address of principal executive offices)                     (Zip Code)

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

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Exchange Act during the past
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 [  ]

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which stock was sold, or
the average bid and asked prices of such stock, as of a specified date within
the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act
of 1934): $15,189,250 as of October 10, 2003.

ISSUERS INVOLED IN BANKRUPTCY PROCEEDING DURING THE PAST FIVE YEARS

Not applicable.

APPLICABLE ONLY TO CORPORATE REGISTRANTS

State the number of shares outstanding of each of the issuer's classes of common
stock as of August 31, 2003: 27,601,684 shares of common stock, par value $.001
per share (the "Common Stock")

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, August 31, 2003                       2

         Consolidated Statements of Operations, Three Months
         Ended August 31, 2003 and 2002                                    3

         Consolidated Statements of Cash Flows, Three Months
         Ended August 31, 2003 and 2002                                    4

         Selected Notes to Consolidated Financial Statements               5


Item 2.  Management's Discussion and Analysis or Plan of
         Operation                                                         11

Item 3.  Controls and Procedures                                           13

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                 14

Item 2.  Changes in Securities                                             14

Item 3.  Defaults Upon Senior Securities                                   14

Item 4.  Submission of Matters to a Vote of Security Holders               14

Item 5.  Other Information                                                 14

Item 6.  Exhibits and Reports on Form 8-K                                  14

         SIGNATURE                                                         15

         CERTIFICATIONS


<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                         [INDEX TO FINANCIAL STATEMENTS]

Consolidated Balance Sheet as of August 31, 2003 (unaudited)                2

Consolidated Statements of Operations for the three months ended
 August 31, 2003 and August 31, 2002 (unaudited)                            3

Consolidated Statements of Cash Flows for the three months ended
 August 31, 2003 and August 31, 2002 (unaudited)                            4

Selected Notes to Consolidated Financial Statements                         5





<PAGE>

                        POWER2SHIP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                 August 31, 2003
                                   (UNAUDITED)

ASSETS
Current assets:
   Cash and cash equivalents                                        $   341,577
   Receivables, net of allowance of $7,367                              371,498
   Subscriptions receivable                                              19,392
   Prepaid insurance                                                     23,403
                                                                 ---------------
        Total current assets                                            755,870

Furniture and equipment                                                 180,367
     Less accumulated depreciation                                      (41,515)
                                                                 ---------------
        Net furniture and equipment                                     138,852

Other assets                                                             80,869
                                                                 ---------------
Total assets                                                        $   975,591
                                                                 ===============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Notes payable - short term                                       $   185,000
   Accounts payable and accrued expenses                                387,614
                                                                 ---------------
       Total current liabilities                                        572,614
                                                                 ---------------

Long term debt:
Long term notes payable                                                  70,000
Convertible notes payable                                               175,000
Convertible note payable to related party                               135,000

Stockholders' equity :
   Series B convertible preferred stock, $.001 par value, 200,000
      shares authorized; 137,800  shares issued and outstanding             138
   Series C convertible preferred stock, $.001 par value, 10,000
      shares authorized; 10,000  shares issued and outstanding               10
   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; 27,601,684 shares issued and outstanding               27,602
   Additional paid-in capital                                         9,250,277
   Accumulated deficit                                               (9,255,237)
                                                                 ---------------
       Stockholders' equity                                              22,977
                                                                 ---------------
Total liabilities & stockholders' equity                            $   975,591
                                                                 ===============



   The accompanying notes are an integral part of these financial statements.
                                        2

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

<TABLE>
<CAPTION>
<S>                                                             <C>
                                                                Three months ended August 31,
                                                                         2003                2002
                                                             -----------------    ----------------
Revenue:
Access services                                                  $    105,000        $          -
Freight transportation                                                315,707                   -
                                                             -----------------    ----------------
       Total revenue                                                  420,707                   -

Operating expenses:
   Freight transportation                                             253,491                   -
   Selling, general and administrative:
        Salaries, benefits and consulting fees                        544,615             103,170
        Common stock and options issued for services                  119,264              25,500
        Other selling, general and administrative                     289,393              95,243
                                                             -----------------    ----------------
       Total operating expenses                                     1,206,763             223,913
                                                             -----------------    ----------------
       Loss from operations                                          (786,056)           (223,913)
                                                             -----------------    ----------------
Other income (expense):
   Interest income                                                        670                 125
   Interest expense                                                  (100,687)            (33,826)
                                                             -----------------    ----------------
       Total other income (expense)                                  (100,017)            (33,701)
                                                             -----------------    ----------------
Net loss                                                         $   (886,073)       $   (257,614)

Less: Preferred stock dividend                                   $   (989,000)       $           -
                                                             -----------------    ----------------
Loss available to common shareholders                            $ (1,875,073)       $    (257,614)
                                                             =================    ================
Loss per share-basic and diluted                                 $      (0.07)       $     $ (0.01)
                                                             =================    ================
Weighted average shares outstanding
      - basic and diluted                                          27,251,851          24,729,712
                                                             =================    ================

</TABLE>


   The accompanying notes are an integral part of these financial statements.
                                        3


<PAGE>

                        POWER2SHIP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
<S>                                                                                   <C>
                                                                                      Three months ended August 31,
                                                                                              2003                2002
                                                                                   ----------------     ---------------
Cash flows from operating activities:
   Net loss                                                                             $ (886,073)        $  (257,614)
   Adjustments to reconcile net loss to
      net cash used in operating activities:
        Depreciation                                                                         8,009                 647
        Issuance of stock options and warrants
          for services, compensation and conversion                                         52,714              25,500
        Issuance of stock for services                                                     285,500                   -
        Changes in operating assets and liabilities:
            Decrease (ncrease) in receivables                                              (54,537)              4,088
            Decrease in prepaid insurance                                                    9,623                   -
            Increase in other assets                                                       (49,390)                  -
            Decrease in notes payable                                                      (13,000)             (6,069)
            Increase in accounts payable &accrued expenses                                  26,038              32,690
                                                                                   ----------------     ---------------
               Net cash used in operating activities                                      (621,116)           (200,758)
                                                                                   ----------------     ---------------
Cash flows from investing activities:
   Purchases of property and equipment                                                     (14,707)             (8,896)
                                                                                   ----------------     ---------------
               Net cash used in investing activities                                       (14,707)             (8,896)
                                                                                   ----------------     ---------------

Cash flows from financing activities:
   Proceeds from convertible promissory notes                                                    -              72,000
   Proceeds from sale of preferred stock net of costs of $30,000                           959,000                   -
   Proceeds from sale of common stock                                                            -             200,000
                                                                                   ----------------     ---------------
               Net cash provided by financing activities                                   959,000             272,000
                                                                                   ----------------     ---------------
               Net increase in cash and cash equivalents                                   323,177              62,346

Cash and cash equivalents, beginning of period                                              18,400              36,027
                                                                                   ----------------     ---------------
Cash and cash equivalents, end of period                                                $  341,577         $    98,373
                                                                                   ================     ===============
</TABLE>

   The accompanying notes are an integral part of these financial statements.
                                       4


<PAGE>


                        POWER2SHIP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - DESCRIPTION OF BUSINESS

Organization

Power2Ship, Inc. (the "Company"),  formerly Jaguar Investments, Inc. ("Jaguar"),
incorporated  in Nevada on October 28, 1987,  merged with Freight Rate,  Inc. on
March  11,  2003.  Freight  Rate,  Inc.  is now a  wholly  owned  subsidiary  of
Power2Ship,  Inc. and is its only operating  company.  Freight Rate,  Inc. is an
application service provider that offers an information and communication system
for companies  shipping full truckloads of freight to and from their  facilities
and the trucking companies that transport this freight.

The Company was in its development stage from its inception in 1999 until it
began providing services for its first customer in October 2002. The Company has
developed a system, named the P2S MobileMarket(TM), that collects and processes
current location and other transportation information related to the shipment of
freight. This information instantly is accessible to the Company's customers
through the Company's website enabling them to make better-informed decisions.
The Company's management believes that its system 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. Also, management believes it assists companies
shipping freight to reduce their transportation, warehouse operations 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.

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-month period ended August 31, 2003 are not necessarily indicative
of the results to be expected for the year ended May 31, 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 three months ended August
31, 2003 and 2002, the Company incurred losses from operations of $786,056 and
$223,913, respectively. During the three months ended August 31, 2003 and 2002,
the Company had negative cash flows from operations of $621,116 and $200,758,
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 by way of public and/or
private offerings. 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.

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.

                                       5
<PAGE>

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 reach their
destinations and the receiver 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 non-recurring and are expected to be insignificant as a percentage of total
revenue.

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 August 31, 2003, 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.

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 August 31, 2003, the Company's cash balances exceeded the insured limits by
$141,577. 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 August 31, 2003. A substantial
portion (91%) of the accounts receivable at August 31, 2003 was concentrated in
two customers. The Company maintains reserves for potential credit losses and
such losses historically have been within management's expectations.

                                       6
<PAGE>

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.

Recent Accounting Pronouncements

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." The standard requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value each period, and the
capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the obligation for its
recorded amount or incurs a gain or loss upon settlement. The standard is
effective for fiscal years beginning after June 15, 2002. The adoption of SFAS
No. 143 is not expected to have a material impact on the Company's consolidated
financial statements.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure - an Amendment of FASB Statement No.
123." SFAS No. 148 provides alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee
compensation. The Company does not currently intend to adopt the fair value
based method of measuring compensation associated with stock awards and grants.
As a consequence of continuing to utilize the intrinsic value method of
measuring such compensation, the Company will be required to provide additional
disclosures in its quarterly financial statements which will reflect the impact
on net income and earnings per share on a pro forma basis as if the Company had
applied the fair value method to stock-based employee compensation.

NOTE 3 - NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

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 August 31, 2003, the
outstanding balance on the note was $130,000.of which $70,000 was accounted for
as long term notes payable and $60,000 as notes payable - short term.

On March 10, 2003, the Company issued a convertible promissory note in the
amount of $125,000 to an unaffiliated Company shareholder. The interest rate of
the note was 5% per annum and it had a maturity date of April 10, 2004. The
holder of the note had the right to convert the outstanding principal balance of
the note and interest accrued thereon into the Company's common stock at $0.40
per share. On June 5, 2003, upon receiving an additional $100,000 from the same
shareholder, the Company replaced this note with a new convertible promissory
note in the amount of $225,000. The new note bears interest of 5% per annum, has
a maturity date of December 5, 2003 and has a conversion price of $0.79 per
share. Also, the note holder received warrants to purchase 75,000 shares of
common stock at a price of $0.79 per share until June 5, 2004. Further, the new
note has a prepayment provision requiring certain amounts of the principal and
interest accrued thereon to be repaid upon the Company receiving capital in
excess of specified amounts during each month of the term of the note. On July
23, 2003, the Company repaid $100,000 of the note leaving a balance of $125,000
which was accounted for as notes payable - short term. On August 29, 2003, the
Company issued 125,000 shares of Common Stock in consideration for the note
holder agreeing to cancel the prepayment provision contained in the note. See
"Note 11 - Subsequent Events" for further information related to this note.

                                       7
<PAGE>

NOTE 4 - STOCKHOLDERS' EQUITY

Series B Convertible Preferred Stock

During the three months ended August 31, 2003, the Company sold 137,800 shares
of its Series B convertible preferred stock for $689,000. 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. In this
case, since the beneficial conversion feature is valued at more than the
conversion price, the total value of the shares issued or $689,000 was
recognized as preferred dividends. This offering is expected to continue until
the remaining 62,200 shares of Series B convertible preferred stock that were
authorized have been sold.

Series C Convertible Preferred Stock

During July, 2003, the Company sold 10,000 shares of its Series C convertible
preferred stock for $300,000 less commissions of $30,000. The shares are
convertible into the Company's common stock at $0.30 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 $0.30 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 issued or $300,000 was
recognized as preferred dividends. This offering has been closed.

Common Stock

During the three months ended August 31, 2003, the Company granted 420,000
shares of common stock to lenders, employees and consultants which were recorded
at their fair market value of $285,500.

During the three months ended August 31, 2003, the Company sold 66,500 shares of
common stock for $48,480 less commissions of $29,088. The net proceeds of
$19,392 were accounted for as subscriptions receivable since payment for the
shares was not received by the Company until September 5, 2003.

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 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 granted:

<TABLE>
<CAPTION>
<S>                                                               <C>

                                                                   Three months ended August 31,
                                                                   2003                     2002
                                                                   ----                     ----
   Loss available to common shareholders   As reported       $  (1,875,073)             $  (257,614)
                                                              ==============             ============

                                           Pro forma         $  (1,889,782)             $  (369,860)
                                                              ==============             ============

   Loss per share, basic and diluted:      As reported             $ (0.07)                 $ (0.01)
                                                                    ========                 ========

                                           Pro forma               $ (0.07)                $ (0.01)
                                                                    ========                 ========
</TABLE>


                                       8
<PAGE>


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:
<TABLE>
<CAPTION>
<S>                                                                              <C>                   <C>
                                                                                 2003                  2002
                                                                                 ----                  ----
             Dividend yield                                                      None                  None

             Expected volatility factor                                          0-64%                .0001%

             Approximate risk free interest rates                                   3%                 2.94%

             Expected lives, in years                                             1-5                     3
</TABLE>

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
During the three months ended August 31, 2003, the Company granted no stock
options and none were exercised.

A summary of the stock option activity for the three months ended August 31,
2003 is as follows:
<TABLE>
<CAPTION>
<S>                                                                 <C>             <C>                <C>

                                                                    Weighted                           Exercise
                                                                    Average                             Price
                                                                    Exercise         Number of           Per
                                                                     Price            Options           Option
                                                                   ----------      ------------      -------------

       Outstanding options at May 31, 2003..............             $0.40           14,486,679       $0.38 -$1.01
           Granted......................................                 -                    -                  -
           Expired......................................             $0.75              (26,483)             $0.75
                                                                                    ------------

       Outstanding options at August 31, 2003...........             $0.40           14,460,196       $0.38 -$1.01
                                                                                    ============

       Exercisable options at August 31, 2003...........             $0.39           11,478,093       $0.38 -$0.75
                                                                                    ============
</TABLE>


The following table summarizes information concerning stock options outstanding
at August 31, 2003.
<TABLE>
<CAPTION>

<S>    <C>                     <C>                            <C>              <C>
                                                              Weighted         Weighted
                                                               Average          Average
        Range of               Number of Options              Remaining         Exercise
     Exercise Price               Outstanding               Life in Years         Price
     --------------               -----------               -------------         -----
         $ 0.38                    13,074,109                   2.45              $0.38
    $ 0.50  -  $0.75                1,086,087                   2.10              $0.55
         $ 1.01                       300,000                   4.23              $1.01
                                  ------------
                                   14,460,196
                                  ============
</TABLE>

Warrants

During the three months ended August 31, 2003, the Company granted warrants to
consultants and investors. The Company charged to expense the fair value of the
instruments granted for services using the Black-Scholes option model.

On June 5, 2003, in connection with receiving proceeds of a loan, the Company
granted the lender warrants to purchase 75,000 shares of common stock at a price
of $0.79 per share that expire on June 5, 2004.

                                       9
<PAGE>


In connection with the sale of shares of Series B convertible preferred stock,
the Company granted the sales agent responsible for the private placement of
these shares warrants to purchase 65,700 shares of common stock at $2.00 per
share that expire on June 10, 2006.


In connection with the sale of shares of Series C convertible preferred stock,
the Company granted the sales agent responsible for the private placement of
these shares warrants to purchase 100,000 shares of common stock at $2.00 per
share that expire on July 25, 2006 and granted the investor warrants to purchase
500,000 shares of common stock at $1.00 per share that expire on July15, 2006.


A summary of the warrant activity for the three months ended August 31, 2003 is
as follows:

<TABLE>
<CAPTION>
<S>                                                                <C>               <C>              <C>

                                                                    Weighted                           Exercise
                                                                    Average                              Price
                                                                    Exercise          Number of           Per
                                                                     Price            Warrants          Warrant
                                                                   ----------     -------------     -------------

       Outstanding warrants at May 31, 2003............              $0.80            3,913,204      $0.75 -$1.51
           Granted.....................................              $1.20              740,700      $0.79 -$2.00
           Expired.....................................                  -                    -                 -
                                                                                   --------------
       Outstanding warrants at August 31, 2003.........              $0.87            4,653,904      $0.75 -$2.00
                                                                                   ==============
       Exercisable warrants at August 31, 2003.........              $0.87            4,653,904      $0.75 -$2.00
                                                                                   ==============


The following table summarizes information concerning warrants outstanding and
exercisable at August 31, 2003.

                                                                       Weighted               Weighted
                                                                       Average                Average
               Range of                                               Remaining              Exercise
            Exercise Price             Number of Warrants           Life in Years              Price
            --------------             ------------------           -------------              -----
            $ 0.75 - $0.90                 3,562,432                    1.10                   $0.75
            $ 1.00 - $1.25                   759,166                    2.35                   $1.05
            $ 1.50 - $2.00                   332,306                    1.63                   $1.75
                                         -----------
                                           4,653,904
                                         ===========
</TABLE>

NOTE 11 - SUBSEQUENT EVENTS

On September 18, 2003, the Company repaid the $125,000 outstanding balance of a
promissory note issued to an unaffiliated Company shareholder, and 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 will
be recognized as preferred dividends during the fiscal quarter ended November
30, 2003.

During the period from September 1, 2003 through the date of filing this Form
10-QSB, the Company sold an additional 27,800 shares of its Series B preferred
stock for $139,000. 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. In this case, since the beneficial conversion
feature is valued at more than the conversion price, the total value of the
shares or $139,000 will be recognized as preferred dividends during the quarter
ended November 30, 2003.

During the period from September 1, 2003 through the date of filing this Form
10-QSB, the Company sold 569,800 shares of its common stock for $368,422, net of
costs of $221,053 generating net proceeds of $147,369. These shares are
restricted securities as that term is defined in the Securities Act of 1933, as
amended.

                                       10

<PAGE>

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

This discussion should be read in conjunction with the unaudited Consolidated
Financial Statements and the Notes thereto contained elsewhere in this Quarterly
Report.

Critical Accounting Policies

The discussion and analysis of the Company's financial condition and results of
operations is based upon its 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 includes a summary of
the significant accounting policies and methods used in the preparation of its
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. The Company recognizes freight transportation revenue when
shipments reach their destinations and the receiver acknowledges the receipt of
goods by signing a bill of lading. Pursuant to the Financial Accounting
Standards Board's Emerging Issues Task Force, Abstracts Issue No. 99-19,
(reporting revenue gross as a principal versus net as an agent) freight
transportation revenue is recorded on a gross basis since the Company is the
primary obligor of the transaction, it assumes credit risk and it performs a
portion of the service ordered by its 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, is recognized on the percentage of completion
method.

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.

Description of Business

The Company, through its wholly-owned subsidiary Freight Rate, Inc., operates as
an Application Service Provider (ASP) offering a highly accessible,
user-friendly information and communication system for the truckload freight
industry. This system - named the P2S MobileMarket(TM) - includes an online site
that collects, consolidates, processes and presents real-time
transportation-related data that is valuable to logistics departments of
shippers and motor carriers. This information assists these shippers and
carriers to operate more efficiently by enabling them to 1) Identify and utilize
excess transportation capacity, 2) Execute freight transactions online and 3)
Track the movement of loads and/or transportation assets online. The Company's
website may be found at www.power2ship.com.

Change of Fiscal Year End

The Company filed a current report on Form 8-K changing its fiscal year end from
December 31 to May 31. This determination was made to conform the fiscal year
end of the Company to the fiscal year end of Freight Rate, Inc., the Company's
wholly owned subsidiary and sole accounting entity as of its merger with the
Company on March 11, 2003.

                                       11
<PAGE>

Results of Operations

Three Months Ended August 31, 2003 Compared to Three Months Ended August 31,
2002.

Revenue

Total revenue in the three months ended August 31, 2003 was $420,707 compared
with $0 during the same period of 2002. Revenue in the 2003 quarterly period
consisted of $105,000 from The Great Atlantic & Pacific Tea Company, Inc.
("A&P") for providing unlimited access to our ASP platform and enhanced data
security and $315,707 for providing freight transportation services utilizing
contract motor carriers. No revenue was generated in the same quarter in 2002
since the Company was a development stage company at that time.

Operating Expenses

Total operating expenses were $1,206,763 in the three months ended August 31,
2003, an increase of $982,850 from operating expenses of $223,913 incurred
during the same quarter in 2002. The increase in operating expenses during the
2003 quarterly period was attributed to increases in freight transportation
costs associated with the Company's revenue-generating operations and higher
selling, general and administrative expenses associated with additional
administrative and technical personnel required to implement the Company's
business plan during the period as compared with the same quarterly period in
2002 when it was a development stage company.

Freight transportation costs in the three months ended August 31, 2003 were
$253,491 versus $0 incurred during the same quarter in 2002. These costs
consisted primarily of payments to contract motor carriers to provide freight
transportation services. No cost of sales was incurred in the 2002 quarterly
period since the Company was a development stage company at that time.

Selling, general and administrative expenses were $953,272 in the three months
ended August 31, 2003, an increase of $729,359 or 326% from $223,913 during the
same quarter in 2002. The increase in selling, general and administrative
expenses consisted of the following:

-    Salaries, benefits and consulting fees increased by $441,445 or 428% to
     $544,615 in the three months ended August 31, 2003 from $103,170 during the
     same quarter in 2002. This increase primarily was due to the number of
     people working for the Company increasing to 29 at August 31, 2003 from 9
     at August 31, 2002. Also, the compensation level of many of these people,
     which was below industry average compensation in 2002 while the Company was
     a development stage company, was increased in 2003.

-    Common stock and options issued for services increased by $93,764 or 368%
     to $119,264 in the three months ended August 31, 2003 from $25,500 in the
     same quarter in 2002.

-    Other selling, general and administrative expenses increased by $194,150 or
     204% to $289,393 in the three months ended August 31, 2003 from $95,243 in
     the same quarter in 2002. This increase consisted of the following:

     -   Professional fees increased by $57,986 or 933% to $64,946 for the three
         months ended August 31, 2003 from $6,960 during the same quarter in
         2002. This increase is attributed to the higher legal, accounting and
         other professional fees related to litigation, public reporting
         requirements and other matters incurred in the ordinary course of
         business in the 2003 quarter compared with fewer such matters incurred
         during the same quarter in 2002 when the Company's subsidiary, Freight
         Rate, Inc., was a non-reporting company without any pending litigation.

     -   Web hosting expenses increased by $46,136 to $46,136 in the three
         months ended August 31, 2003 from $0 during the same quarter in 2002.
         These Web hosting expenses were incurred since the Company had
         customers accessing its Web site who require very high levels of
         security and reliability in the 2003 quarter. The Company was a
         development stage company with no customers during the same quarter of
         2002.

     -   Rent expense increased by $20,867 or 255% to $29,045 in the three
         months ended August 31, 2003 from $8,178 in the same quarter in 2002 as
         a result of the Company moving its corporate offices from approximately
         2,100 square feet in Cooper City, Florida to approximately 10,500
         square feet in Boca Raton, Florida in June 2003 to accommodate its
         recent and projected growth in personnel and operations.

                                       12
<PAGE>

     -   Travel and reimbursed expenses increased by $35,686 or 268% to $48,992
         in the three months ended August 31, 2003 from $13,306 in the same
         quarter in 2002 as a result of additional travel to customers, vendors
         and potential funding sources and for expenses associated with employee
         relocations.

     -   Convention and trade show expenses increased by $20,323 to $20,323 in
         the three months ended August 31, 2003 from $0 in the same quarter of
         2002 as the company began participating in conventions and trade shows
         to introduce its products and services to its target markets during
         2003. It did not participate in any trade shows in 2002 since it was a
         development stage company at that time.

     -   Other general and administrative expenses increased by $13,153 or 20%
         in the three months ended August 31, 2003 to $79,951 from $66,798 in
         the same quarter in 2002, primarily as a result of the normal operating
         costs associated with the greater number of employees and consultants
         working with the Company.

Other Expenses

Other expenses increased by $66,316 or 197% to $100,017 in the three months
ended August 31, 2003 from $33,701 in the same quarter of 2002. This increase
was primarily due to an increase of $66,861 in interest expense to $100,678 in
the 2003 quarterly period from $33,826 in the same period of 2002.

Liquidity and Capital Resources

The Company has experienced losses and negative cash flows from operations since
its inception. As of August 31, 2003, the Company had an accumulated deficit of
$9,255,237, stockholders' equity of $22,977 and cash and cash equivalents of
$341,577. In addition, the Company had a working capital surplus of $183,256, an
increase of $625,726 from a working capital deficit of $442,470 as of August 31,
2002. This increase in working capital primarily is attributed to increases in
cash and cash equivalents by $243,204 and accounts receivable by $371,498.

During the quarter ended August 31, 2003, the Company generated cash of
$323,177. The Company offset $621,116 of cash used in operating activities and
$14,707 of cash used to purchase fixed assets with proceeds from the sale of
shares of Series B preferred stock totaling approximately $959,000. Since August
31, 2003, the Company has raised approximately $286,000 through the sale of its
equity securities.

Management estimates that its cash on hand at August 31, 2003 and projected cash
flow from  operations  would be  sufficient to fund its current  operations  for
approximately the next four months. For the remainder of fiscal 2004, management
anticipates that the Company requires approximately $600,000 to $900,000 million
to execute its business plan. The Company's future capital  requirements  depend
primarily on the rate at which it decreases its use of cash to fund  operations.
The Company's  cash used for  operations  will be affected by numerous known and
unknown risks and  uncertainties  including,  but not limited to, its 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  required as it grows. As long as its cash flow from operations is
insufficient  to  completely  fund  operations,  it will  continue to expend its
previously  raised capital and, should those funds become  depleted,  it will be
required to fund operations  through  subsequent  equity or debt financings.  It
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 some dilution for existing  shareholders and any
additional debt instruments issued may contain  restrictions  covenants that may
have an adverse affect on its operations.

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.

                                       13
<PAGE>


(b) Changes in internal controls

Subsequent to August 31, 2003 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.

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

During the three months ended August 31, 2003, the Company sold 137,800 shares
of its Series B convertible preferred stock for $689,000. 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
transaction was effected under Rule 506 of Regulation D of the Securities Act of
1933.

During July, 2003, the Company sold 10,000 shares of its Series C convertible
preferred stock for $300,000 less commissions of $30,000. The shares are
convertible into the Company's common stock at $0.30 per share, are entitled to
receive annual dividends of 10% and have preferred registration rights. This
transaction was effected under Rule 506 of Regulation D of the Securities Act of
1933.

During the three months ended August 31, 2003, the Company granted 420,000
shares of common stock to lenders, employees and consultants and recorded the
shares at their fair market value of $285,500.

During the three months ended August 31, 2003, the Company sold 66,500 shares of
common stock to non-United States residents for $48,480 less offering costs and
discounts of $29,088. The net proceeds of $19,392 were accounted for as
subscriptions receivable since payment for the shares was not received by the
Company until September 5, 2003. This transaction was exempt from registration
under Regulation S of the Securities Act of 1933.

The proceeds from these sales were used to fund the Company's operating loss
incurred during the period.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS 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 Principal Executive Officer Pursuant to 18 U.S.C.
         Section 1350.

(b) Reports on Form 8-K:  None

                                       14
<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:  October 15, 2003                             POWER2SHIP, INC.

                                                     /s/ Richard Hersh
                                                    Chief Executive Officer


                                       15

<PAGE>