FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended                   September 30, 2000
                               ------------------------------------------------
                                                        OR

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

For the transition period from                 to
                              -----------------  ------------------------------

Commission file number                0-9624
                      ---------------------------------------------------------

                    International Thoroughbred Breeders, Inc.
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                 22-2332039
-------------------------------------------------------------------------------
(State or other jurisdiction of          (I.R.S. Employer Identification No.)
 incorporation or organization)

   P.O. Box 1232, Cherry Hill, New Jersey                      08034
-------------------------------------------------------------------------------
  (Address of principal executive offices)                   (Zip Code)

                                 (856) 488-3838
-------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the close of the latest practicable date.


           Class                            Outstanding at November 3, 2000
------------------------------           ------------------------------------
Common Stock, $ 2.00 par value                       8,980,254 Shares











<PAGE>



                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.

                                    FORM 10-Q

                                QUARTERLY REPORT
                  for the Three Months ended September 30, 2000
                                   (Unaudited)


                                TABLE OF CONTENTS

                                                                           PAGE
PART I. FINANCIAL INFORMATION

         Item 1. Financial Statements:

         Consolidated Balance Sheets
                  as of September 30, 2000 and June 30, 2000.................1-2

         Consolidated Statements of Operations
                  for the Three Months ended
                  September 30, 2000 and 1999..................................3

         Consolidated Statement of Stockholders' Equity
                  for the Three Months ended September 30, 2000................4

         Consolidated Statements of Cash Flows
                  for the Three Months ended
                  September 30, 2000 and 1999..................................5

         Notes to Consolidated Financial Statements.........................6-12

         Item 2. Management's Discussion and Analysis of
                    Financial Condition and Results of Operations..........13-17

PART II. OTHER INFORMATION

         Item 6. Exhibits and Reports on Form 8-K.............................18

SIGNATURES        ............................................................19




<PAGE>

                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                   AS OF SEPTEMBER 30, 2000 AND JUNE 30, 2000


                                     ASSETS

                                            September 30,
                                                2000        June 30,
                                             (UNAUDITED)      2000
                                             ----------    ----------
CURRENT ASSETS:
        Cash and Cash Equivalents         $     344,178 $     271,119
        Restricted Cash and Investments       1,671,173     1,656,743
        Accounts Receivable                           0       427,654
        Prepaid Expenses                        266,603       362,321
        Other Current Assets                    523,784       516,721
                                             ----------    ----------
             TOTAL CURRENT ASSETS             2,805,738     3,234,558
                                             ----------    ----------


NET ASSETS OF DISCONTINUED OPERATIONS
             - Long Term                     30,000,000    30,000,000
                                             ----------    ----------
PROPERTY HELD FOR SALE                                0             0
                                             ----------    ----------
LAND, BUILDINGS AND EQUIPMENT:
        Land and Buildings                      214,097       214,097
        Equipment and Artwork                 1,196,666     1,199,284
                                             ----------    ----------
                                              1,410,763     1,413,381
        LESS: Accumulated Depreciation
               and Amortization                 401,747       387,404
                                             ----------    ----------
             TOTAL LAND, BUILDINGS AND
                  EQUIPMENT, NET              1,009,016     1,025,977
                                             ----------    ----------


OTHER ASSETS:
        Notes Receivable                     23,000,000    23,000,000
        Deposits and Other Assets               906,204       906,204
                                             ----------    ----------
             TOTAL OTHER ASSETS              23,906,204    23,906,204
                                             ----------    ----------


TOTAL ASSETS                              $  57,720,958 $  58,166,739
                                             ==========    ==========







See Notes to Consolidated Financial Statements.

                                        1
<PAGE>

                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                   AS OF SEPTEMBER 30, 2000 AND JUNE 30, 2000


                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                      September 30,
                                                          2000        June 30,
                                                       (UNAUDITED)     2000
                                                     ----------      ----------
CURRENT LIABILITIES:
        Accounts Payable                           $     37,185    $     62,502
        Accrued Expenses                                895,571         858,510
        Current Maturities of Long-Term Debt         18,654,555      18,596,709
        Net Liabilities of Discontinued
             Operations - Current                     1,462,709       1,509,577
                                                     ----------      ----------
             TOTAL CURRENT LIABILITIES               21,050,020      21,027,298
                                                     ----------      ----------

DEFERRED INCOME                                       2,786,589       2,786,589
                                                     ----------      ----------
LONG-TERM DEBT, Net of Current Portion                  482,000         482,000
                                                     ----------      ----------

COMMITMENTS AND CONTINGENCIES                              --              --


STOCKHOLDERS' EQUITY:
        Series A Preferred Stock, $100.00
          Par Value,Authorized 500,000
          Shares, Issued and Outstanding,
          362,486 and 362,484 Shares,
          Respectively                               36,248,575      36,248,375
        Common Stock, $2.00 Par Value, Authorized
          25,000,000 Shares,Issued, 11,884,276 and
          11,884,270 Shares,and Outstanding,
          8,980,266 and 8,980,254 Shares,
          Respectively                               23,768,551      23,768,539
        Capital in Excess of Par                     26,144,328      26,144,540
        (Deficit) (subsequent to June 30, 1993,
           date of quasi-reorganization)            (45,473,648)    (45,003,895)
                                                     ----------      ----------
             TOTAL                                   40,687,806      41,157,559
        LESS:
           Treasury Stock, 2,904,016
            Shares, at Cost                          (7,260,040)     (7,260,040)
           Deferred Compensation, Net                   (25,417)        (26,667)
                                                     ----------      ----------
             TOTAL STOCKHOLDERS' EQUITY              33,402,349      33,870,852
                                                     ----------      ----------


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $ 57,720,958    $ 58,166,739
                                                     ==========      ==========











See Notes to Consolidated Financial Statements.

                                        2

<PAGE>

                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000



                                                Three Months Ended
                                                   September 30,
                                          --------------------------
                                               2000           1999
                                          -----------    -----------
REVENUE:
  Revenue                                 $    76,407    $    77,749
  Interest Income                              30,810         17,242
                                          -----------    -----------
          TOTAL REVENUES                      107,217         94,991
                                          -----------    -----------
EXPENSES:
  General & Administrative Expenses           571,992        482,205
  Interest and Financing Expenses               4,977      1,155,679
  El Rancho Property Carrying Costs                 0        376,649
                                          -----------    -----------
          TOTAL EXPENSES                      576,969      2,014,533
                                          -----------    -----------

NET (LOSS)                                $  (469,752)   $(1,919,542)
                                          ===========    ===========


NET BASIC AND DILUTED (LOSS)
  PER COMMON SHARE                        $     (0.05)   $     (0.21)
                                          ===========    ===========
WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING                       8,980,244      8,980,235
                                          ===========    ===========











See Notes to Consolidated Financial Statements.



                                        3

<PAGE>

                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999


<TABLE>

                                             Preferred                Common
                                       --------------------  -------------------------
                                       Number of             Number of
                                        Shares     Amount      Shares        Amount
                                       ------- ------------  ----------   ------------
<CAPTION>
<S>            <C> <C>                 <C>     <C>           <C>          <C>
BALANCE - JUNE 30, 2000                362,484 $ 36,248,375  11,884,270   $ 23,768,539

   Shares Issued for Fractional
    Exchanges With Respect to the
    One-for-twenty Reverse Stock
    Split effected on March 13, 1992         2        200             6             12
   Amortization of Deferred
    Compensation Costs                      --         --          --             --
   Net (Loss) for the Three Months
    Ended September 30, 2000                --         --          --             --
                                       ------- ------------  ----------   ------------
BALANCE - SEPTEMBER 30, 2000           362,486 $ 36,248,575  11,884,276   $ 23,768,551
                                       ======= ============  ==========   ============
</TABLE>
<TABLE>

                                         Capital                         Treasury      Deferred
                                        in Excess                          Stock,       Compen-
                                          of Par        (Deficit)         At Cost       sation         Total
                                      ------------    ------------    ------------    ---------    ------------
<CAPTION>
<S>            <C> <C>                <C>             <C>             <C>             <C>          <C>
BALANCE - JUNE 30, 2000               $ 26,144,540    $(45,003,895)   $ (7,260,040)   $ (26,667)   $ 33,870,852

   Shares Issued for Fractional
    Exchanges With Respect to the
    One-for-twenty Reverse Stock
    Split effected on March 13, 1992          (212)           --              --           --              --
   Amortization of Deferred
    Compensation Costs                        --              --              --          1,250           1,250
   Net (Loss) for the Three Months
    Ended September 30, 2000                  --          (469,752)           --           --          (469,752)
                                      ------------    ------------    ------------    ---------    ------------
BALANCE - SEPTEMBER 30, 2000          $ 26,144,328    $(45,473,648)   $ (7,260,040)   $ (25,417)   $ 33,402,349
                                      ============    ============    ============    =========    ============
</TABLE>

See Notes to Consolidated Financial Statements.

                                        4

<PAGE>

                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999


<TABLE>

                                                                        Three Months Ended
                                                                           September 30,
                                                                           -------------
                                                                         2000          1999
                                                                         ----          ----
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                 <C>            <C>
        (LOSS) BEFORE DISCONTINUED OPERATIONS                       $  (469,752)   $(1,919,542)
                                                                    -----------    -----------
        Adjustments to reconcile (loss)  to net cash (used in)
          operating activities:
                Depreciation and Amortization                            15,594         15,904
                Changes in Operating Assets and Liabilities -
                   (Increase) in Restricted Cash & Investments          (14,430)             0
                   Decrease in Accounts Receivable                      427,654        187,889
                   (Increase) Decrease in Other Assets                   (7,063)           598
                   Decrease in Prepaid Expenses                          95,719        104,761
                   Increase in Accounts Payable and Accrued Expenses     11,742        879,587
                                                                    -----------    -----------
        CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES BEFORE
           DISCONTINUED OPERATIONS                                       59,464       (730,803)

        CASH PROVIDED BY (USED IN) DISCONTINUED OPERATING ACTIVITIES     11,676        (25,935)
                                                                    -----------    -----------
        NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES              71,140       (756,738)
                                                                    -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital Expenditures                                                      0         (1,210)
                                                                    -----------    -----------
        CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
          BEFORE DISCONTINUED INVESTING ACTIVITIES                            0         (1,210)
        CASH (USED IN) DISCONTINUED INVESTING ACTIVITIES                      0       (130,000)
                                                                    -----------    -----------
        NET CASH (USED IN) INVESTING ACTIVITIES                               0       (131,210)
                                                                    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from Loan                                                  150,000              0
    Escrow Deposits Utilized                                                  0         94,747
    Deposit to Escrow Funds                                                   0       (320,000)
    (Increase) in Balances Due to/From Discontinued Subsidiaries       (136,405)       (28,051)
    Principal Payments on Short Term Notes                                    0        (80,997)
                                                                    -----------    -----------
        CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
          BEFORE DISCONTINUED FINANCING ACTIVITIES                       13,595       (334,301)
        CASH PROVIDED BY DISCONTINUED FINANCING ACTIVITIES                5,475        286,652
                                                                    -----------    -----------
        NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES              19,070        (47,649)
                                                                    -----------    -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                     90,210       (935,597)
          LESS CASH AND CASH EQUIVALENTS AT END OF THE PERIOD
            FROM DISCONTINUED OPERATIONS                                (17,151)      (130,716)
        CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD
          BEFORE DISCONTINUED OPERATIONS                                271,119      1,358,200
                                                                    -----------    -----------
        CASH AND CASH EQUIVALENTS AT END OF THE PERIOD              $   344,178    $   291,887
                                                                    ===========    ===========

        Supplemental Disclosures of Cash Flow Information:
                Cash paid during the period for:
                Interest                                            $         0    $         0
                Income Taxes                                        $         0    $         0
</TABLE>


See Notes to Consolidated Financial Statements.


                                        5

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

(1)  BASIS OF PRESENTATION

     The  accompanying  consolidated  financial  statements  have been  prepared
assuming   International    Thoroughbred   Breeders,   Inc.   and   subsidiaries
(collectively,  the "Company")  will continue as a going concern.  The remaining
debt to the Company's  primary lender was due June 30, 1999. On May 7, 1999, the
Company  notified  their primary  lender,  Credit  Suisse First Boston  Mortgage
Capital LLC ("Credit Suisse"), of its intent to extend the loan maturity date to
June 30, 2000. On January 21, 2000 after  obtaining  the written  consent of the
holders of a majority of the outstanding shares of stock of the Company entitled
to vote thereon, the Company entered into a restructuring  agreement with Credit
Suisse. Prior to this agreement, the Company had been in a maturity default with
Credit  Suisse  for its  loan  due on June 1,  1999  (the  "CSFB  Loan")  in the
principal  amount of  $30,500,000  plus unpaid  interest since June 1, 1999. The
restructuring  agreement  returned  the  loan to a good  standing  position  and
extended the maturity date of the CSFB Loan to June 30, 2000.  The maturity date
was further extended to November 30, 2000 as a result of the pending sale of the
Garden State Park property.

     On January 25, 2000,  the Company  entered into  agreements  with unrelated
third parties for the sale of the Garden State Park and El Rancho properties. On
May 22,  2000 the  Company  closed  on the sale of the El  Rancho  property  and
reduced the debt to Credit Suisse to $14,668,022.  Unless the scheduled  closing
of the Garden State Park property prior to December 1, 2000 is consummated,  the
Company  will be in  default  with  respect  to the  Credit  Suisse  loan due on
November 30, 2000.  The Company  does not have any  committed  source of working
capital and there are no  assurances  that the Company  would be  successful  in
obtaining  working  capital from other sources.  There can be no assurances that
the sale of the Garden State Park property will be  consummated or to the timing
thereof.

     The Company has sustained  losses of  approximately  $33 million during the
last  three  fiscal  years and a loss of  $469,752  for the three  months  ended
September 30, 2000,  all of which raise  substantial  doubt about its ability to
continue as a going concern.  The Company believes its projected cash flows from
its current  operations will be sufficient until November 30, 2000 and there can
be no assurances beyond that date.

     The Company currently  estimates that  approximately  $150,000 per month is
needed to cover  operating  expenses  of  International  Thoroughbred  Breeders.
Should the closing of the Garden state Park property be delayed beyond  November
30,  2000,  the  Company  will  need to seek  additional  short  term  loans  or
additional advances from the buyer to fund its operations

     The  Company's  Board  is  continuing  to  consider  all of  the  Company's
strategic  options  to  maximize  stockholder  value  and  alternatives  for the
Company's future.

     The financial  statements do not include any adjustments  that might result
from the outcome of these uncertainties.

(2)  CLASSIFICATIONS

     Certain  prior years'  amounts have been  reclassified  to conform with the
current years' presentation.










                                        6

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

(3)  DISCONTINUED OPERATIONS

     On January 28, 1999,  the Company  completed  the sale of the real property
and certain related assets at Freehold  Raceway and a ten-acre parcel of land at
the Garden State Park  facility,  and the lease of the real property and certain
related assets of Garden State Park for a seven-year period.

The net assets of the operations to be disposed of included in the  accompanying
consolidated balance sheets as of September 30, 2000 consist of the following:

Classified As:

Current Assets                                          $    545,929

Current Liabilities                                      (1,070,221)
                                                         -----------
Deferred Income                                            (938,417)

   Net Liabilities of Discontinued Operations - Current  (1,462,709)

Property Assets of Garden State Park                      30,000,000
                                                         -----------
   Net Assets of Discontinued Operations                $ 28,537,291
                                                         ===========

     On January 25, 2000, the Company entered into an Agreement of sale pursuant
to which it has agreed to sell the real  property  known as Garden State Park to
Turnberry/Cherry Hill LLC. Under the Agreement of Sale, as amended, the purchase
price for the Garden State Park real property is $30 million, plus assumption of
certain  monetary  obligations  of the Company with respect to the property sold
which aggregate approximately $500,000 (the "Assumed Liability"). The buyer also
agreed to pay up to $200,000 per month of the Company's  out-of-pocket  carrying
costs of the Garden State Park property after April 15, 2000 (including interest
on the Company's  Mortgage debt). At closing,  $20 million of the purchase price
will be payable in cash (of which the Company has already  received  deposits of
$1,000,000),  and the buyer will deliver its promissory  note in the face amount
of  $10  million  (the  "Note").  Under  the  Note,  once  the  buyer  has  made
distributions  to its equity  investors  equal to the  amount of their  invested
capital  contributions plus an agreed upon return thereon,  the next $10 million
of the buyer's  distributable  cash would be paid under the Note to the Company,
and the  Company  thereafter  would  receive  payments  under the Note  equal to
one-third of the distributable cash of the buyer, including (without limitation)
distributable cash generated by development, sale or leasing of the Garden State
Park property. The agreed upon rate of return to be paid to buyer's owner on its
invested  capital  contributions,  before  payments under the Note will be made,
will be 15% per year,  except  that the rate of return on  capital  invested  by
buyer's owner to cover certain costs,  in excess of $1,000,000,  which buyer may
incur in respect  of the  Assumed  Liability,  environmental  investigation  and
remediation,   and  various  other  specified  items  (including  the  September
extension fee of $146,680 paid to the Company's primary lender, CSFB), may be as
high as 33 1/3% per annum.  Closing is  scheduled  to occur prior to December 1,
2000.  The parties  continue  to  negotiate  certain  issues and there can be no
assurance that the transaction will be consummated.













                                        7

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

(4)  NOTES AND MORTGAGES PAYABLE

         Notes and Mortgages Payable are summarized below:

                                                         September 30, 2000
                                                     ---------------------------
                              Interest % Per Annum      Current           Long-
                                                                          Term
                              ---------------------  --------------     --------
International Thoroughbred
Breeders Inc.:

Credit Suisse First Boston (A)  LIBOR Rate plus 7%  $  14,668,022    $       -0-
                              (9/30/00 rate 13.62%)

REB Bankruptcy Trustee (B)      Prime Rate              3,652,226            -0-
                              (9/30/00 rate 9.50%)
Robert E. Brennan Jr. (C)                                     -0-        482,000

Other                           Various                   334,307            -0-

Garden State Park:
Service America Corporation (D) 6%                        320,000            -0-

Other (E)                       Various                   137,982            -0-
                                                     ------------     ----------
    Totals                                          $  19,112,537    $       -0-
Less Amounts Reclassified to:
  Net Liabilities of Discontinued
    Operations - Current                                 (457,982)           -0-
                                                     ------------     ----------
    Totals                                          $  18,654,555    $   482,000
                                                     ============     ==========
The effective  LIBOR Rate and the Prime Rate at September 30, 2000 was 6.62% and
9.5%, respectively.

     (A) On May 23, 1997, the Company entered into a two-year $55 million credit
facility with Credit Suisse First Boston Mortgage Capital LLC, ("Credit Suisse")
secured by a pledge of certain of the personal and real  property of the Company
and its  subsidiaries  (the "Credit Suisse Credit  Facility").  Proceeds of this
facility were used to repay in full the Company's  $30 million  existing  credit
facility and to provide funds for working  capital and other  general  corporate
purposes,  including,  but not limited  to,  preliminary  development  of the El
Rancho  Property.  Of the remaining  facility  borrowings,  approximately  $16.8
million  was  placed in escrow  accounts,  financing  and  closing  fees of $4.3
million  were  incurred by the Company and $3.9  million was used by the Company
for  general  corporate  purposes  and  repayment  of  certain  other  financial
obligations. Interest under the Credit Suisse Credit Facility is payable monthly
in arrears at 7% over the London interbank offered rate ("LIBOR").

     On January 21, 2000,  after obtaining the written consent of the holders of
a majority of the  outstanding  shares of stock of the Company  entitled to vote
thereon,  the Company entered into a restructuring  agreement (the  "Restructure
Agreement") with Credit Suisse. Prior to this agreement, the Company had been in
a  maturity  default  with  Credit  Suisse for its loan due on June 1, 1999 (the
"CSFB Loan") in the principal  amount of $30,500,000  plus unpaid interest since
June 1, 1999. On November 17, 1999,  the Company and Credit Suisse signed a term
sheet outlining the terms and conditions of the Restructure  Agreement.  At that
time,  accrued  interest in the amount of $1,762,891  was added to the principal
balance of the note.


                                        8

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

     The Restructure Agreement returned the loan to a good standing position and
extended  the maturity  date of the CSFB Loan to June 30,  2000.  As part of the
Restructure  Agreement,  the Company  agreed that as of January  21,  2000,  the
restructured  principal  balance  due on the CSFB  Loan was  $33,103,189,  which
consisted  of: (i) the  principal  amount of  $30,500,000  remaining on the CSFB
Loan;  (ii)  accrued  interest  advanced  by Credit  Suisse from June 1, 1999 to
January 21, 2000 in the amount of $2,523,189;  and (iii) an advance of a portion
of Credit  Suisse's  legal fees  incurred  in  connection  with the  Restructure
Agreement  in the amount of  $80,000.  Credit  Suisse  agreed,  pursuant  to the
Restructure  Agreement,  to advance the  monthly  interest  payments  due by the
Company under the CSFB Loan until April 15, 2000.  Such interest  amounts shall,
to the extent not paid when due by the Company,  become part of the  outstanding
principal balance of the CSFB Loan on the date such interest becomes due.

     On  January  28,  1999,  a  portion  of the  proceeds  from  the  Greenwood
Transaction  and  $2,500,000  held in escrow  was used to reduce  the  principal
balance on the Credit  Suisse Note to $30.5  million and to pay a 2%  prepayment
fee of $500,000,  recorded as financing  expenses,  to Credit Suisse. On May 22,
2000, the proceeds from the sale of the El Rancho property were principally used
by  the  Company  to  reduce  the  outstanding  balance  on  the  CSFB  Loan  to
$14,668,022. The Company has entered into an Agreement of sale pursuant to which
it has  agreed  to  sell  the  real  property  known  as  Garden  State  Park to
Turnberry/Cherry  Hill LLC.  CSFB has agreed to extend the maturity  date of the
Company's  mortgage  indebtedness  to November  30, 2000 in order to permit this
sale to the buyer, subject to payment of interest monthly in advance and payment
of monthly  extension  fees for  September,  October and November,  2000, in the
amount of $146,680 per month. The buyer has been paying the interest accruing to
CSFB since April 15, 2000 and has paid the  extension  fee for  September in the
amount of $146,680.  Extension  fees paid by the buyer for October and November,
2000 will be credited towards the purchase price at closing.  If the transaction
fails to close by November 30,  2000,  CSFB may declare a default and proceed to
sell the Garden State Park property.

     The Credit Suisse Credit Facility is evidenced by a convertible  promissory
note (the "Credit  Suisse Note")  pursuant to which $10 million of the aggregate
principal  amount of the CSFB Note can be  converted  in certain  circumstances,
including on the maturity date of the CSFB Note, upon the prepayment of at least
$10  million  in an  aggregate  principal  amount  of  the  CSFB  Note  or  upon
acceleration  of the CSFB Note, at the option of Credit  Suisse,  into shares of
the Company's  Common Stock at a conversion price of $8.75 per share (subject to
adjustment in certain events).  In addition,  Credit Suisse was granted warrants
to purchase  1,044,000  shares  (valued at  $1,269,579)  at an exercise price of
$4.375 per share  (subject to  adjustment  in certain  events).  The warrants to
purchase  546,847  shares  are  immediately  exercisable,  have  been  valued at
approximately  $1.6 million and have been recorded as original  issue  discount.
The warrants to purchase  497,153  shares became  exercisable  January 28, 1999,
following  the  consummation  of the Delaware  Settlement  and were  recorded as
financing  expenses  in the amount of  $1,242,883  during  the third  quarter of
Fiscal 1999.

     Credit Suisse also received  232,652  shares of the Company's  Common Stock
upon the prior  conversion  of a $10.5  million  promissory  note  issued by the
Company  to LVEN in  consideration  for Credit  Suisse's  consent  and  advisory
services in connection  with this  transaction.  The Company has granted  Credit
Suisse certain  registration rights with respect to the above described warrants
and shares.

     The Credit Suisse Credit  Facility also provides for both  affirmative  and
negative covenants, including financial covenants such as tangible net worth, as
defined in the Credit Suisse Credit Facility.

     (B) On January 28, 1999, the Company  executed a note (the "Trustee  Note")
in the principal  amount of $3,558,032 to the Chapter 11 Bankruptcy  Trustee for
the estate of Robert E. Brennan (the  "Trustee") in order to purchase  2,904,016
shares of the Company's  Common Stock from NPD, a company owned by the Company's
former Chief Executive Officer. The Trustee received:  (a) a pay down on the NPD
Note from the original  principal  balance of  $5,808,032 to  $3,558,032;  (b) a
promissory  note from ITB in the  amount of  $3,558,032  (the  "ITB  Note"),  on
substantially  the same terms as the NPD Note,  except that the ITB Note becomes
due and payable on the earlier to occur of (i)  January  15,  2001,  or (ii) the
closing

                                        9

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

of either the sale of the  Company's  non-operating  El Rancho  hotel and casino
property in Las Vegas, Nevada (the "El Rancho Property"),  or the sale of Garden
State Park (the "Garden  State  Property");  (c) a security  interest in the NPD
Shares;  (d) the payment of the costs and  expenses  incurred by the  Bankruptcy
Trustee in connection with the Delaware  Settlement and the Trustee  Settlement;
(e)  subordinate  interests in both the El Rancho  Property and the Garden State
Property; and (f) an escrow of the July 15, 1999 interest payment due on the ITB
Note.  Proceeds from the sale of the El Rancho  property were used to reduce the
CSFB debt due to this note being subordinate to the CSFB debt. (See below)

     In connection with the January 21, 2000  Restructure  Agreement with Credit
Suisse, the Trustee entered into an agreement with the Company wherein:  (i) the
amounts due under the Trustee Note are due at the earlier of (a) June 1, 2000 or
(b) the date on which the latter of the Garden State Park or El Rancho  property
is sold, provided that the sale of the latter will satisfy the remaining balance
on the CSFB Loan and the Trustee  Note;  (ii) all interest due under the Trustee
Note will be accrued and deferred until the maturity date of the Note; and (iii)
the Company  shall  reimburse  the Trustee for legal and  accounting  fees up to
$20,000,  which  amount  will  be  advanced  by the  Trustee  and  added  to the
outstanding  principal balance of the Trustee Note.  Pursuant to the Restructure
Agreement,  the Trustee Note is subordinate to the CSFB Loan,  thereby principal
and interest payments on the Trustee Note will be made only if and when the CSFB
Loan is paid in full.

     (C) On February  24, 2000,  the Company  sold several  pieces of artwork to
Robert E. Brennan Jr., son of the Company's  former Chairman and Chief Executive
Officer.  The $218,000  sales price of the artwork was in excess of the original
cost of  $186,600.  The  Company  recorded a $31,400  gain on the sale in Fiscal
2000. In addition,  the Company purchased two large bronze sculptures located on
the Garden State Park property that were  previously on loan to the Company from
Mr. Brennan Jr. The purchase price of the sculptures was $700,000. In connection
with the  transaction,  the Company signed a $482,000  promissory  note with Mr.
Brennan Jr. which  represented  the purchase  price of the  sculptures  less the
sales  price of the artwork  sold to Mr.  Brennan Jr. The note is due on January
31, 2002  without  interest if the  principal  is paid on or before  January 31,
2002. Any amounts not paid prior to January 31, 2002 will accrue  interest at 8%
On July 27, 2000 the  Company  received a notice from the Chapter 11 Trustee for
the bankruptcy estate of Robert E. Brennan asserting certain ownership rights in
a number of items on loan to the Company,  including  the  sculptures  mentioned
above.

     (D) In  connection  with the January 28,  1999 lease  transactions  for the
Garden State Park facility,  the Company purchased the undepreciated  balance of
equipment  located  at  Garden  State  Park  and a  liquor  license  owned by an
unaffiliated third party, Service America Corporation, for $500,000 ($100,000 of
which will be paid by the lessee when title is  transferred  to Pennwood,  which
event has not  occurred as of September  30,  2000)  financed by a five (5) year
promissory  note at a 6% interest  rate.  The Company  paid  $100,000 on June 1,
1999, a principal  and  interest  payment of $99,200 on December 28, 1999 and is
scheduled to make  principal  payments of $80,000 plus interest on December 28th
for the next three years.

     (E) In  connection  with the January 28,  1999 lease  transactions  for the
Garden State Park  facility,  a note  associated  with certain  equipment at the
Garden  State  Park  facility  will be paid by  Greenwood  as part of the  lease
agreement.

(5)  COMMITMENTS AND CONTINGENCIES

     A state has  asserted a tax claim for the period  June 30, 1988 to June 30,
1991 (during which the Company maintained an accounting office in the state) for
a Foreign Corporate  Franchise Tax in the approximate  amount of $400,000 (which
amount was accrued in Fiscal 1998), not taking into  consideration  any interest
or penalties that may be assessed.  At this time, the Company cannot predict the
final  amount  which  may be due.  It is  likely  that  litigation  will have to
commence in the courts to pursue a  compromise  of the amount due. It is unknown
at this time  whether the Company will be  successful  in abating all or part of
the tax due.


                                       10

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

     Commencing in the third quarter of Fiscal 1999,  the Company and certain of
its officers and directors and former officers and directors  received subpoenas
from the  Securities  and Exchange  Commission  (the "SEC")  relating to certain
transactions  and  reports.  The  Company  has fully  cooperated  with the SEC's
investigation.

     The  Company  is  responsible  for  remediation  costs  associated  with an
environmental  site on the Freehold  Raceway  property.  The Company has accrued
what it believes to be the total cost of remediation. At June 30, 1999 and 1998,
the Company had accrued  $300,000 and $100,000,  respectively,  for  remediation
costs.

     In connection  with the  environmental  evaluation on the Garden State Park
property by the  prospective  buyer,  the Company has been made aware of certain
environmental  issues that may have to be addressed  with respect to the sale of
the property.  At this time, the Company cannot make a  determination  as to any
costs that would be  necessary  to correct  the  situation  or the extent of any
violations.  In addition,  the State of New Jersey has fined the Company $75,000
for alleged violations with respect to required  environmental reports not being
filed with the state following the property's lease to Pennwood.  The Company is
negotiating  with Pennwood to recover the cost in  accordance  with the terms of
the lease.

     In connection with the January 28, 1999 lease  transactions  for the Garden
State Park  facility,  a note  associated  with certain  equipment at the Garden
State Park  facility is being paid by Greenwood as part of the lease  agreement.
In the event that the Company or Pennwood  terminates its lease  agreement prior
to July 2001 when the note is fully paid,  the Company will be  responsible  for
the monthly note payments of approximately  $17,000. The Company may be required
to reimburse approximately $240,000 to Pennwood for all the payments made on the
note from the  inception  of the lease should the Company sell the property to a
third  party.  The Company is currently  negotiating  with  Turnberry  for these
reimbursement costs to be included as a cost of purchasing the property.

     In connection with the January 28, 1999 lease  transactions  for the Garden
State  Park  facility,  the  Company  purchased  a  liquor  license  owned by an
unaffiliated third party, Service America Corporation, for $500,000 ($100,000 of
which will be paid by the lessee when title is  transferred  to Pennwood,  which
event has not  occurred as of September  30,  2000)  financed by a five (5) year
promissory  note at a 6% interest  rate.  The Company  paid  $100,000 on June 1,
1999,  $99,200 on December 28, 1999 and is scheduled to make principal  payments
of $80,000 plus interest on December 28th for the next three years. In the event
Pennwood is awarded a license to own and operate an off-track  betting  facility
prior to January 28,  2002,  the Company  will be required to release the liquor
license to  Pennwood  in  consideration  of the  $100,000  payment to be made by
Pennwood for the transfer of the title to the liquor license.

     The Chapter 11 Bankruptcy  Trustee (the "Trustee") for the estate of Robert
E.  Brennan  has  asserted   certain   claims   challenging   the  ownership  of
approximately 2,300,000 shares of the Company's Common Stock (the "Shares") held
by certain  individuals.  In order to preserve the Company's net operating  loss
carryforwards from being lost due to the shares being  transferred,  the Company
and the Trustee have entered into an agreement whereby the Trustee has agreed to
accept a letter of credit for $1,150,000,  which will be secured by an amount of
$1,150,000  held in escrow,  that will be used to purchase  his  interest in the
Shares in the event that he is awarded a  judgement  granting  him an  ownership
interest in the Shares.

     The Company's  debt with CSFB is due on November 30, 2000.  Unless the sale
of the Garden State Park property is consummated prior to that date, the Company
will be in default in connection with the CSFB loan agreement. Additionally, the
cash proceeds from the sale must be in an amount  sufficient to satisfy the loan
due on the trustee note together with accrued interest.  The total amount due on
November 30, 2000 to satisfy the CSFB loan  together  with accrued  interest and
fees and the trustee  note  together  with  accrued  interest  is  approximately
$18,600,000.  The proceeds  from the sale of the Garden State Park  property are
expected to be sufficient to meet this obligation.



                                       11

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

LEGAL PROCEEDINGS

     The  Company is a defendant  in a wrongful  death  action  arising out of a
motor  vehicle/pedestrian  accident  at  Freehold  Raceway.  The  case is in the
initial stages of discovery. The Company believes that it has adequate insurance
coverage for the claim,  however,  because of the uncertainties,  the Company is
unable to determine at this time the potential liability,  if any. Any claim for
punitive damages would not be covered by insurance.

     The Company is a defendant  in various  other  lawsuits  incidental  to the
ordinary course of business.  It is not possible to determine with any precision
the probable  outcome or the amount of liability,  if any, under these lawsuits;
however, in the opinion of the Company and its counsel, the disposition of these
lawsuits  will not have  material  adverse  effect  on the  Company's  financial
position, results of operations, or cash flows.

(6)  FAIR VALUE OF FINANCIAL INSTRUMENTS

     As of June 30, 2000, in assessing the fair value of financial  instruments,
the Company has used a variety of methods and  assumptions,  which were based on
estimates of market conditions and loan risks existing at that time. For certain
instruments,  including  cash  and  cash  equivalents,   investments,  non-trade
accounts  receivable and loans,  and short-term  debt, it was estimated that the
carrying amount  approximated  fair value for the majority of these  instruments
because of their  short-term  maturity.  The carrying  amounts of long term debt
approximate fair value since the Company's  interest rates  approximate  current
interest rates.

(7)  STOCK OPTIONS AND WARRANTS

     (A)  EMPLOYEE AND NON-EMPLOYEE OPTIONS

     At September 30, 2000,  total employee  options  outstanding were 1,055,000
and total non-employee options outstanding were 300,000.

     (B) WARRANTS

     At September 30, 2000,  total  warrants  outstanding  were  2,604,000.  All
warrants are exercisable at September 30, 2000.

(8)  RELATED PARTY TRANSACTIONS

     On September  18, 2000,  the Company  borrowed  $150,000 from the Company's
acting Chief  Executive  Officer,  Mr. Francis  Murray,  in order to finance its
current  operations  until November 30, 2000.  The Company  expects to repay the
note with a portion of the Garden State Park sale proceeds.

     For  additional   information  regarding  related  party  transactions  see
Footnote 15 in the consolidated  financial  statements included in the Company's
Form 10-K for the fiscal year ended June 30, 2000.











                                       12

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                  MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS
                 AND RESULTS OF OPERATIONS FOR THE THREE MONTHS
                            ENDED SEPTEMBER 30, 2000

ITEM 2 -  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITIONS  AND
RESULTS OF OPERATIONS

Liquidity and Capital Resources

     The Company's  working capital,  as of September 30, 2000, was a deficit of
($18,244,282)  which  represents  a decrease  in the  deficit  of  approximately
$16,534,668   from  the   September   30,  1999  working   capital   deficit  of
($34,778,950).  The  decrease in the deficit  was  primarily  caused by: (i) the
funds received from the sale of the El Rancho  property that were; (a) in excess
of the carrying value of the property;  (b) were used to retire $17.9 million of
the debt to the Company's  primary  lender,  Credit Suisse First Boston Mortgage
Capital  LLC,  ("Credit  Suisse");  and (c) were used to purchase a  $23,000,000
promissory  note from the  buyer;  ii) a  $1,985,456  decrease  in net assets of
Discontinued  Racetrack Operations primarily the result of: (a) cash used by the
Company  to fund  corporate  activities;  and  (b)  non-refundable  deposits  of
$1,000,000 on the sale of the Garden State Park property  classified as deferred
income at September 30, 2000.

     The net loss for the three months ended  September 30, 2000 was ($469,752).
Cash flows provided by operating  activities  amounted to approximately  $71,140
during the three months ended September 30, 2000.

     Cash provided by financing  activities  was $19,070 during the three months
ended  September 30, 2000,  consisting  principally  of a $150,000 loan from the
Company's  acting Chief Executive  Officer  partially offset by cash used by the
Company in the form of advances to the subsidiaries. (See Notes 4 and 8)

     On May 23, 1997, the Company obtained a credit facility from Credit Suisse.
This  two-year  $55 million  facility  was secured by a pledge of certain of the
personal and real property of the Company and its  subsidiaries.  Interest under
the Credit Suisse Credit  Facility is payable  monthly in arrears at 7% over the
LIBOR  rate.  On January  28,  1999,  the credit  facility  was reduced to $30.5
million in connection  with the sale of certain  assets of Freehold  Raceway and
the sale of a ten-acre  parcel of land at the Garden  State  Park  facility.  On
January  21,  2000 after  obtaining  the  written  consent  of the  holders of a
majority  of the  outstanding  shares of stock of the  Company  entitled to vote
thereon,  the Company entered into a restructuring  agreement (the  "Restructure
Agreement") with Credit Suisse. Prior to this agreement, the Company had been in
a  maturity  default  with  Credit  Suisse for its loan due on June 1, 1999 (the
"CSFB Loan") in the principal  amount of $30,500,000  plus unpaid interest since
June 1, 1999.  The  Restructure  Agreement  returned the loan to a good standing
position and extended  the maturity  date of the CSFB Loan to June 30, 2000.  As
part of the  Restructure  Agreement,  the Company  agreed that as of January 21,
2000, the restructured  principal  balance due on the CSFB Loan was $33,103,189,
which  consisted of: (i) the principal  amount of  $30,500,000  remaining on the
CSFB Loan; (ii) accrued interest  advanced by Credit Suisse from June 1, 1999 to
January 21, 2000 in the amount of $2,523,189;  and (iii) an advance of a portion
of Credit  Suisse's  legal fees  incurred  in  connection  with the  Restructure
Agreement  in the amount of  $80,000.  Credit  Suisse  agreed,  pursuant  to the
Restructure  Agreement,  to advance the  monthly  interest  payments  due by the
Company under the CSFB Loan until April 15, 2000.  Such interest  amounts shall,
to the extent not paid when due by the Company,  become part of the  outstanding
principal balance of the CSFB Loan on the date such interest becomes due. On May
22, 2000, the proceeds from the sale of the El Rancho property were  principally
used by the  Company  to  reduce  the  outstanding  balance  on the CSFB Loan to
$14,668,022. The Company has entered into an Agreement of sale pursuant to which
it has  agreed  to  sell  the  real  property  known  as  Garden  State  Park to
Turnberry/Cherry  Hill LLC.  CSFB has agreed to extend the maturity  date of the
Company's  mortgage  indebtedness  to November  30, 2000 in order to permit this
sale to the buyer, subject to payment of interest monthly in advance and payment
of monthly  extension  fees for  September,  October and November,  2000, in the
amount of $146,680 per month. The buyer has been paying the interest accruing to
CSFB since April 15, 2000 and has paid the  extension  fee for  September in the
amount of $146,680.  Extension  fees paid by the buyer for October and November,
2000 will be credited towards the purchase price at closing.  If the transaction
fails to close by November 30, 2000,

                                       13

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                  MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS
                 AND RESULTS OF OPERATIONS FOR THE THREE MONTHS
                            ENDED SEPTEMBER 30, 2000

CSFB may declare a default and proceed to sell the Garden  State Park  property.
At September 30, 2000,  the interest  rate on the Credit Suisse Credit  Facility
was 13.62%.(See Notes 4 and 6)

     In connection  with the  Restructure  Agreement,  the Chapter 11 Bankruptcy
Trustee (the "Trustee") for the estate of Robert E. Brennan, to whom the Company
and its subsidiaries  Garden State Race Track, Inc. and Orion Casino Corporation
are indebted to in the remaining principal amount of $3,363,032, as evidenced by
a note dated  January 28, 1999 (the "Trustee  Note"),  entered into an agreement
with the Company wherein:  (i) the amounts due under the Trustee Note are due at
the  earlier  of (a) June 1,  2000 or (b) the date on which  the  latter  of the
Garden State Park or El Rancho  property is sold,  provided that the sale of the
latter will satisfy the remaining balance on the CSFB Loan and the Trustee Note;
(ii) all interest due under the Trustee Note will be accrued and deferred  until
the maturity date of the Note; and (iii) the Company shall reimburse the Trustee
for legal and  accounting  fees up to $20,000,  which amount will be advanced by
the Trustee and added to the outstanding  principal balance of the Trustee Note.
Pursuant to the  Restructure  Agreement,  the Trustee Note is subordinate to the
CSFB Loan,  thereby  principal and interest payments on the Trustee Note will be
made only if and when the CSFB Loan is paid in full.

     Pursuant  to the  Restructure  Agreement,  Garden  State Race  Track,  Inc.
transferred  title to the  Garden  State  Race Track to GSRT,  LLC  ("GSRT"),  a
Delaware limited liability company in which Garden State Race Track, Inc. is the
sole member,  the result of which effects no change in real ownership.  Pursuant
to the limited  liability  company  agreement of GSRT entered into in connection
with the Restructure Agreement,  Garden State Race Track, Inc. may cause GSRT to
enter into an  arm's-length  sale or joint venture of the Garden State  Property
under  certain  enumerated  circumstances  and  conditions,  including  that the
purchase price for such sale or joint venture be at least equal to fifty-percent
of the combined  outstanding  principal balance of the CSFB Loan and the Trustee
Note, which amount must be paid to Credit Suisse, and the contract for such sale
or joint  venture  must have been  entered  into on or prior to January 25, 2000
(the "GSRT Option").

     On January 25, 2000, the Company entered into an Agreement of Sale pursuant
to which it has agreed to sell the real  property  known as Garden State Park to
Turnberry/Cherry Hill LLC. The terms of the sale met all the conditions required
by Credit Suisse to be a valid GSRT Option,  according to a letter received from
Credit Suisse.  Under the Agreement of Sale, as amended,  the purchase price for
the Garden State Park real property is $30 million,  plus  assumption of certain
monetary  obligations  of the Company with  respect to the  property  sold which
aggregate  approximately  $500,000  (the  "Assumed  Liability").  The buyer also
agreed to pay up to $200,000 per month of the Company's  out-of-pocket  carrying
costs of the Garden State Park property after April 15, 2000 (including interest
on the Company's  mortgage debt). At closing,  $20 million of the purchase price
will be payable in cash (of which the Company has already  received  deposits of
$1,000,000),  and the buyer will deliver its promissory  note in the face amount
of  $10  million  (the  "Note").  Under  the  Note,  once  the  buyer  has  made
distributions  to its equity  investors  equal to the  amount of their  invested
capital  contributions plus an agreed upon return thereon,  the next $10 million
of the buyer's  distributable  cash would be paid under the Note to the Company,
and the  Company  thereafter  would  receive  payments  under the Note  equal to
one-third of the distributable cash of the buyer, including (without limitation)
distributable cash generated by development, sale or leasing of the Garden State
Park property. The agreed upon rate of return to be paid to buyer's owner on its
invested  capital  contributions,  before  payments under the Note will be made,
will be 15% per year,  except  that the rate of return on  capital  invested  by
buyer's owner to cover certain costs,  in excess of $1,000,000,  which buyer may
incur in respect  of the  Assumed  Liability,  environmental  investigation  and
remediation,   and  various  other  specified  items  (including  the  September
extension fee of $146,680 paid to the Company's primary lender, CSFB), may be as
high as 33 1/3% per annum.  Closing is  scheduled  to occur prior to December 1,
2000.  The parties  continue  to  negotiate  certain  issues and there can be no
assurance that the transaction will be consummated.

     On February 24, 2000,  the Company sold several pieces of artwork to Robert
E.  Brennan  Jr.,  son of the  Company's  former  Chairman  and Chief  Executive
Officer.  The $218,000  sales price of the artwork was in excess of the original
cost of $186,600. The Company recorded a $31,400 gain on the sale in Fiscal

                                       14

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                  MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS
                 AND RESULTS OF OPERATIONS FOR THE THREE MONTHS
                            ENDED SEPTEMBER 30, 2000

2000. In addition,  the Company purchased two large bronze sculptures located on
the Garden State Park property that were  previously on loan to the Company from
Mr. Brennan Jr. The purchase price of the sculptures was $700,000. In connection
with the  transaction,  the Company signed a $482,000  promissory  note with Mr.
Brennan Jr. which  represented  the purchase  price of the  sculptures  less the
sales  price of the artwork  sold to Mr.  Brennan Jr. The note is due on January
31, 2002  without  interest if the  principal  is paid on or before  January 31,
2002. Any amounts not paid prior to January 31, 2002 will accrue interest at 8%.
On July 27, 2000 the  Company  received a notice from the Chapter 11 Trustee for
the bankruptcy estate of Robert E. Brennan asserting certain ownership rights in
a number of items on loan to the Company,  including  the  sculptures  mentioned
above.

     On May 22, 2000, the Company,  through its wholly-owned  subsidiary,  Orion
Casino  Corporation,  closed on the sale (the "El  Rancho  Transaction")  of the
non-operating  former El Rancho Hotel and Casino (the "El Rancho  Property")  in
Las Vegas,  Nevada, to Turnberry/Las  Vegas Boulevard,  LLC  ("Turnberry").  The
purchase  price was $45  million  and was paid by: (i)  previous  cash  deposits
totaling $2,000,000;  and (ii) the balance of the purchase price paid in cash at
the closing.  The proceeds of the El Rancho Transaction were principally used by
the Company to reduce the outstanding  balance on the Company's loan from Credit
Suisse First Boston Mortgage Capital LLC ("Credit  Suisse") to $14.7 million and
to  purchase  a  promissory  note,   secured  by  the  rights  to  100%  of  the
distributable  cash of the  buyer in the event of  default,  of the buyer in the
amount of $23,000,000  which will be convertible at the Company's  option into a
33 1/3% equity  interest in the buyer.  The interest  rate will be adjusted from
time to time since the interest  actually  payable will be dependent  upon,  and
payable solely out of, the buyer's net cash flow available for  distribution  to
its equity  owners  ("Distributable  Cash").  After the equity  investors in the
buyer have received  total  distributions  equal to their capital  contributions
plus an agreed upon return on their  invested  capital,  the next $23 million of
Distributable  Cash will be paid to the  Company.  The Company  will  thereafter
receive payments under the note equal to 33 1/3% of all Distributable Cash until
the  maturity  date,  which  occurs  on the 30th  anniversary  of the  Company's
purchase  of the note.  The Company may  convert  the  promissory  note,  at its
option,  into a 33 1/3% equity  interest in the buyer  during a six month period
beginning  at the 15th  anniversary  of the  issuance  of the note.  If not then
converted,  the note will convert into a 33 1/3% equity interest in the buyer at
the 30th anniversary of its issuance.  The Company has elected to defer the gain
on the sale  until such time that  collectability,  under the  $23,000,000  note
purchased from Turnberry after the closing, can be determined.

     On January 28, 1999,  the Company  completed the sale of Freehold  Raceway,
the sale of a ten-acre  parcel at Garden  State Park and the lease of the Garden
State Park facilities to subsidiaries  of Greenwood  Racing,  Inc.("Greenwood"),
which  owns  Philadelphia  Park  racetrack,  the Turf  Clubs and  Phonebet  (the
"Greenwood  Transaction").  The  purchase  price was $46  million ($1 million of
which  will be  held in  escrow  to  cover  certain  indemnification  and  other
obligations  of the  Company),  with an  additional  $10  million in  contingent
promissory  notes (the  "Contingent  Notes") which become  effective upon, among
other  things,  the New  Jersey  Legislature's  approval  of  off-track  betting
facilities or telephone account  pari-mutuel  wagering on horse racing.  Further
adjustments  could be made to increase the purchase price if certain  additional
regulatory  gaming  changes are  approved by the New Jersey  Legislature  in the
future.  The  Greenwood  Transaction  was  subsequently  amended to include Penn
National Gaming,  Inc.("Penn  National"),  which owns Penn National Race Course,
Pocono Downs  Racetrack,  Charles Town Races and at least ten off-track  betting
parlors  in  Pennsylvania  as a 50% joint  venture  between  Greenwood  and Penn
National ( "Pennwood").  Greenwood and Pennwood have  guaranteed the performance
by the purchaser of all obligations under the Contingent Notes.

     On September  18, 2000,  the Company  borrowed  $150,000 from the Company's
acting Chief  Executive  Officer,  Mr. Francis  Murray,  in order to finance its
current  operations  until November 30, 2000.  The Company  expects to repay the
note with a portion of the Garden State Park sale proceeds.

     The Company  currently  estimates that the proceeds from the sale of the El
Rancho  property,  the $500,000  deposit made available March 2, 2000 toward the
sale of the Garden State Park  property  and a short term loan of $150,000  made
available on September 18, 2000 will be sufficient to finance its current

                                       15

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                  MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS
                 AND RESULTS OF OPERATIONS FOR THE THREE MONTHS
                            ENDED SEPTEMBER 30, 2000

operations through November 30, 2000.

     The Company's  debt with CSFB is due on November 30, 2000.  Unless the sale
of the Garden  State Park  property  is  consummated  prior to that date or CSFB
further  extends  the due date of the Note,  the  Company  will be in default in
connection  with the CSFB loan agreement.  Additionally,  the cash proceeds from
the sale must be in an amount  sufficient to satisfy the loan due on the trustee
note together with accrued  interest.  The total amount due on November 30, 2000
to satisfy the CSFB loan together with accrued interest and fees and the trustee
note together with accrued interest is approximately  $18,600,000.  The proceeds
from the sale of the Garden State Park property are expected to be sufficient to
meet this obligation.

     The Company currently  estimates that  approximately  $150,000 per month is
needed to cover  operating  expenses  of  International  Thoroughbred  Breeders.
Should the closing of the Garden State Park property be delayed beyond  November
30,  2000,  the  Company  will  need to seek  additional  short  term  loans  or
additional advances from the buyer to fund its operations.

     The  Company's  Board  is  continuing  to  consider  all of  the  Company's
strategic  options  to  maximize  stockholder  value  and  alternatives  for the
Company's future.

     The accompanying  financial statements have been prepared assuming that the
Company  will  continue as a going  concern.  As  discussed in Footnote 1 to the
consolidated  financial statements,  the Company's debt with its major lender is
due November 30, 2000 and the Company has sustained losses of approximately  $33
million during the last three fiscal years, all of which raise substantial doubt
about its ability to continue as a going concern.  Management's  plans in regard
to these matters are also described in Footnote 1 to the consolidated  financial
statements. The consolidated financial statements do not include any adjustments
that might result from the outcome of these uncertainties.

Results of Operations for the Three Months Ended September 30, 2000 and 1999

     Revenue for the three months ended  September  30, 2000  increased  $12,226
from $94,991 in Fiscal 2000 to $107,217 in Fiscal 2001  primarily as a result of
increased interest income. Expenses decreased $1,437,564 or 71%, from $2,014,533
in the three month period in Fiscal 2000 to $576,969 in the comparable period in
Fiscal  2001.  This  decrease  in  expenses  was  primarily  the result of: (i)a
decrease in interest expense of $1,150,702  primarily as a result of interest on
the Company's mortgage debt being paid by the purchaser of the Garden State Park
property;  (ii) the elimination of carrying costs on the El Rancho property as a
result of is sale in Fiscal  2000;  partially  offset  by (iii) an  increase  in
general and administrative expenses of $89,787 from $482,205 in during the three
month period in Fiscal 2000 to $571,992 in for the  comparable  period in Fiscal
2001.

     The  increase  in  general  and  administrative  expenses  of  $89,787  was
principally  attributable to: (i) an increase of approximately $160,000 in costs
associated  with the final phases of a stockholder  lawsuit in the first quarter
of Fiscal  2001;  (ii) a decrease in  salaries  and  benefits  of  approximately
$43,000  associated  with  a  reduced  number  of  corporate  employees  in  the
comparable  three  month  periods;  and (iii) a decrease in  accounting  fees of
$26,000 in the three month comparable period in Fiscal 2001.

     For the first quarter of Fiscal 2001,  the Company's loss was ($469,752) as
compared  to  a  loss  for  the  comparable  period  in  prior  fiscal  year  of
($1,919,542),  a decrease in the loss of  $1,449,790 or 76%. The decrease in net
loss was the result of those differences described above.







                                       16

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                  MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS
                 AND RESULTS OF OPERATIONS FOR THE THREE MONTHS
                            ENDED SEPTEMBER 30, 2000

Inflation

     To  date,  inflation  has  not  had a  material  effect  on  the  Company's
operations.


Impact of Year 2000 on the Company's Systems

     The year 2000 issue was the result of computer programs being written using
two  digits  rather  than four to define  the  applicable  year,  which may have
resulted in systems  failures and  disruptions to operations at January 1, 2000.
Management  determined where  appropriate  action was necessary and at a cost of
approximately  $5,000 brought the Company's  accounting and operational  systems
into year 2000 compliance. The Company has not experienced any problems with its
vendors associated with a Year 2000 issue.




                                       17

<PAGE>



                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES


                                     Part II

                                OTHER INFORMATION


Item 6.

     The  Company  did not file any  reports  on Form  8-K with  respect  to the
quarter ended September 30, 2000.












                                       18

<PAGE>




                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                                   SIGNATURES


     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.



                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.




November 8, 2000                            /s/Francis W. Murray
                                            ------------------------------
                                               Francis W. Murray, President, and
                                               Chairman of the Board




November 8, 2000                            /s/William H. Warner
                                            ------------------------------
                                               William H. Warner
                                               Secretary/Treasurer
                                               (Principal Financial and
                                                Accounting Officer)



































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