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               March 31, 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 May 5, 2000
------------------------------           --------------------------
Common Stock, $ 2.00 par value                8,980,252  Shares



<PAGE>





                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.

                                    FORM 10-Q

                                QUARTERLY REPORT
                    for the Nine Months ended March 31, 2000
                                   (Unaudited)

                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                     AS OF MARCH 31, 2000 AND JUNE 30, 1999

                                     ASSETS

                                            March 31,
                                               2000             June 30,
                                           (UNAUDITED)            1999
                                         -----------------  ------------------
CURRENT ASSETS:
     Cash and Cash Equivalents         $           94,018 $         1,358,200
     Reserve Escrow Deposits                            0             182,154
     Accounts Receivable                            2,235             234,774
     Prepaid Expenses                             130,781             349,182
     Other Current Assets                          39,003              53,771
     Net Assets of Discontinued
      Operations - Current                       (279,427)            494,699
                                         -----------------  ------------------
          TOTAL CURRENT ASSETS                    (13,390)          2,672,780
                                         -----------------  ------------------


NET ASSETS OF DISCONTINUED
 OPERATIONS - Long Term                        30,000,000          30,000,000
                                         -----------------  ------------------

PROPERTY HELD FOR SALE                         42,149,755          42,149,755
                                         -----------------  ------------------

LAND, BUILDINGS AND EQUIPMENT:
     Land and Buildings                           214,097             214,097
     Equipment                                    685,886             683,428
                                         -----------------  ------------------
                                                  899,983             897,525
     LESS: Accumulated Depreciation
           and Amortization                       373,060             329,667
                                         -----------------  ------------------

          TOTAL LAND, BUILDINGS AND
              EQUIPMENT, NET                      526,923             567,858
                                         -----------------  ------------------



OTHER ASSETS:
     Deposits and Other Assets                  1,003,172           1,198,172
                                         -----------------  ------------------
          TOTAL OTHER ASSETS                    1,003,172           1,198,172
                                         -----------------  ------------------


TOTAL ASSETS                           $       73,666,460 $        76,588,565
                                         =================  ==================


See Notes to Consolidated Financial Statements.

                                        1


<PAGE>



                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                     AS OF MARCH 31, 2000 AND JUNE 30, 1999

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                 March 31,
                                                    2000        June 30,
                                                (UNAUDITED)       1999
                                              ---------------------------
CURRENT LIABILITIES:
     Accounts Payable                       $      129,487  $     267,941
     Accrued Expenses                            1,586,480      1,176,796
     Current Maturities of
      Long-Term Debt                            36,713,200     34,297,145
     Deferred Income                               500,000              0
                                             -------------- --------------
       TOTAL CURRENT LIABILITIES                38,929,167     35,741,882
                                             -------------- --------------


COMMITMENTS AND CONTINGENCIES                       -              -


STOCKHOLDERS' EQUITY:
     Series A Preferred Stock,
     $100.00 Par Value,
       Authorized 500,000 Shares,
       Issued and Outstanding,
       362,482 and 362,482 Shares,
       Respectively                             36,248,375     36,248,175
     Common Stock, $2.00 Par Value,
     Authorized 25,000,000 Shares,
      Issued, 11,884,260 and
      11,884,249 Shares,
      and Outstanding, 8,980,244 and
      8,980,233 Shares, Respectively            23,768,527     23,768,497
     Capital in Excess of Par                   26,144,552     26,144,782
     (Deficit) (subsequent to
     June 30, 1993, date of
     quasi-reorganization)                     (44,136,204)   (38,023,064)
                                             -------------- --------------
          TOTAL                                 42,025,250     48,138,390
     LESS:
        Treasury Stock, 2,904,016
        Shares, at Cost                         (7,260,040)    (7,260,040)
        Deferred Compensation, Net                 (27,917)       (31,667)
                                             -------------- --------------
          TOTAL STOCKHOLDERS' EQUITY            34,737,293     40,846,683
                                             -------------- --------------


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $   73,666,460  $  76,588,565
                                             ============== ==============



See Notes to Consolidated Financial Statements.


                                        2

<PAGE>



                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                    FOR THE NINE MONTHS ENDED MARCH 31, 2000
                                   (UNAUDITED)
<TABLE>

                                               Preferred                Common
                                         ---------------------- --------------------------
                                         Number of                Number of
                                          Shares      Amount        Shares       Amount
                                         ---------------------- ------------- ------------
<CAPTION>
<S>                                       <C>     <C>             <C>        <C>
BALANCE - JUNE 30, 1999                   362,482 $ 36,248,175    11,884,249 $ 23,768,497

   Shares Issued for Fractional
    Exchanges With Respect to the
    One-for-twenty Reverse Stock Split
    effected on March 13, 1992                  2          200            15           30
   Amortization of Deferred
    Compensation Costs                     ---       ---          ---              ---
   Net (Loss) for the Nine Months
    Ended March 31, 2000                   ---       ---          ---              ---

                                         --------- ------------ ------------- ------------
BALANCE - MARCH 31, 2000                  362,484 $ 36,248,375    11,884,264 $ 23,768,527
                                         ========= ============ ============= ============
</TABLE>

<TABLE>


                                              Capital     Retained      Treasury    Deferred
                                             in Excess    Earnings        Stock,     Compen-
                                              of Par      (Deficit)      At Cost     sation      Total
                                           ------------  ------------  ----------- ---------  -----------
<CAPTION>
<S>                                      <C>           <C>           <C>          <C>        <C>
BALANCE - JUNE 30, 1999                  $  26,144,782 $ (38,023,064)$ (7,260,040)$ (31,667) $ 40,846,683

   Shares Issued for Fractional
    Exchanges With Respect to the
    One-for-twenty Reverse Stock Split
    effected on March 13, 1992                    (230)      ---          ---         ---          ---
   Amortization of Deferred
    Compensation Costs                         ---           ---          ---         3,750         3,750
   Net (Loss) for the Nine Months
    Ended March 31, 2000                       ---        (6,113,140)     ---         ---      (6,113,140)

                                          ------------- ------------- ------------ --------- -------------
BALANCE - MARCH 31, 2000                 $  26,144,552 $ (44,136,204)$ (7,260,040)$ (27,917) $ 34,737,293
                                          ============= ============= ============ ========= =============

</TABLE>


     See Notes to Consolidated Financial Statements.



                                                                3

<PAGE>



                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
           FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2000 AND 1999
                                   (UNAUDITED)
<TABLE>

                                                      Three Months Ended          Nine Months Ended
                                                          March 31,                   March 31,
                                                 ------------------------------------------------------
                                                       2000          1999         2000         1999
                                                 -------------  ------------  -----------  ------------
<CAPTION>
REVENUE:
<S>                                            <C>             <C>           <C>          <C>
     Rental Income                             $        76,199 $      58,936 $    230,154 $      58,936
     Interest Income                                     5,263        85,306       34,749       298,387
                                                 --------------  ------------  ----------- -------------
                       TOTAL REVENUES                   81,462       144,242      264,903       357,323
                                                 --------------  ------------  ----------- -------------

EXPENSES:
     General & Administrative Expenses                 807,295       895,880    2,132,032     3,631,202
     Interest and Financing Expenses                 1,139,091     3,270,181    3,285,517     6,794,154
     Amortization of Financing Costs                         0     1,044,839            0     2,574,441
     El Rancho Property Carrying Costs                 307,291       303,029      960,494       922,562
                                                 --------------  ------------  ----------- -------------
                       TOTAL EXPENSES                2,253,676     5,513,929    6,378,043    13,922,359
                                                 --------------  ------------  ----------- -------------

(LOSS) FROM CONTINUING OPERATIONS
                                                 --------------  ------------  ----------- -------------
   BEFORE DISCONTINUED OPERATIONS                   (2,172,215)   (5,369,687)  (6,113,140)  (13,565,036)
                                                 --------------  ------------  ----------- -------------

INCOME FROM DISCONTINUED OPERATIONS:
     Net Gain on Sale of Net Assets of
      Discontinued Operations                               0     3,621,507            0     3,621,507
       (less applicable state income taxes
         of $1,335,500)
     Income from operations of discontinued
      racetrack operations (less applicable
      state income taxes of $22,500 and
      $150,000 for the respective three
      and nine months ended March 31, 1998)                  0       247,640            0     4,504,184
                                                 --------------  ------------  ----------- -------------
     INCOME FROM DISCONTINUED OPERATIONS                     0     3,869,147            0     8,125,691
                                                 --------------  ------------  ----------- -------------

                                                 --------------  ------------  ----------- -------------
NET (LOSS)                                     $    (2,172,215)$  (1,500,540)$ (6,113,140)$  (5,439,345)
                                                 ==============  ============  =========== =============


BASIC PER SHARE DATA:

(LOSS) BEFORE DISCONTINUED OPERATIONS          $         (0.24)$       (0.59)$      (0.68)$       (1.08)

NET GAIN ON SALE OF NET ASSETS
   OF DISCONTINUED OPERATIONS                             0.00          0.40         0.00          0.29
INCOME FROM DISCONTINUED OPERATIONS                       0.00          0.03         0.00          0.36

                                                 --------------  ------------  ----------- -------------
NET (LOSS)                                     $         (0.24)$       (0.16)$      (0.68)$       (0.43)
                                                 ==============  ============  =========== =============

WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING                                8,980,245     8,980,226    8,980,240    12,409,426
                                                 ==============  ============  =========== =============
</TABLE>

See Notes to Consolidated Financial Statements.

                                                                4

<PAGE>



                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999
                                   (UNAUDITED)
<TABLE>

                                                                    Nine Months Ended
                                                                         March 31,
                                                             --------------------------------
                                                                   2000           1999
                                                              -------------   -------------
<CAPTION>
<S>                                                          <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     (LOSS) FROM CONTINUING OPERATIONS                       $  (6,113,140)  $ (13,565,036)
                                                              -------------    ------------
     Adjustments to reconcile (loss) to net cash
     (used in) operating activities:
        Depreciation and Amortization                               47,143       2,613,859
        Loss on Disposal of Fixed Assets                                          146,238
        Changes in Operating Assets and Liabilities -
           Decrease in Accounts Receivable                         232,541          36,838
           (Increase)Decrease in Other Assets                       14,768         179,900
           Decrease in Prepaid Expenses                            218,401         200,486
           Increase (Decrease) in Accounts Payable
            and Accrued Expenses                                   271,230        (914,871)
                                                              -------------    ------------
     CASH (USED IN) CONTINUING OPERATING ACTIVITIES             (5,329,057)    (11,302,586)

     CASH PROVIDED BY DISCONTINUED OPERATING ACTIVITIES            104,129      10,755,328
                                                              -------------    ------------
     NET CASH (USED IN) OPERATING ACTIVITIES                    (5,224,928)       (547,258)
                                                              -------------    ------------


CASH FLOWS FROM INVESTING ACTIVITIES:
    Non-refundable Deposit on El Rancho                            500,000               0
    Proceeds from Sale of Freehold                                       0      17,900,000
    Proceeds from Sale of Land at Garden State Park                      0       2,000,000
    Purchase of 2,904,016 Shares of Treasury Stock                       0      (6,850,000)
    Capital Expenditures                                            (2,458)        (69,044)
                                                              -------------   ------------
     CASH PROVIDED BY (USED IN) CONTINUING
      INVESTING ACTIVITIES                                         497,542      12,980,956
     CASH (USED IN) DISCONTINUED
      INVESTING ACTIVITIES                                        (130,000)        (85,068)
                                                              -------------   ------------
     NET CASH PROVIDED BY (USED IN)
      INVESTING ACTIVITIES                                         367,542      12,895,888
                                                              -------------   ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Escrow Deposits Utilized                                       502,159       9,311,725
    Deposit to Escrow Funds                                       (320,000)              0
    Decrease in Balances Due From
     Discontinued Subsidiaries                                   2,611,679     (14,460,563)
    Principal Payments on Short Term Notes                         773,496      (2,708,426)
                                                              -------------    ------------
     CASH PROVIDED BY CONTINUING FINANCING ACTIVITIES            3,567,334      (7,857,264)
     CASH (USED IN) DISCONTINUED FINANCING ACTIVITIES             (678,312)     (4,644,520)
                                                              -------------    ------------
     NET CASH PROVIDED BY FINANCING ACTIVITIES                   2,889,022     (12,501,784)
                                                              -------------    ------------

NET (DECREASE) IN CASH AND CASH EQUIVALENTS                     (1,968,364)       (153,154)
     LESS CASH AND CASH EQUIVALENTS AT END OF PERIOD
      FROM DISCONTINUED OPERATIONS                                 704,184       2,099,952
     CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
      FROM CONTINUING OPERATIONS                                 1,358,200         213,795
                                                              -------------    -----------

     CASH AND CASH EQUIVALENTS AT END OF PERIOD              $      94,018   $   2,160,593
                                                              =============    ===========

     Supplemental Disclosures of Cash Flow Information:
                       Cash paid during the period for:
                       Interest                              $           0   $   4,636,979
                       Income Taxes                          $      61,415   $   1,500,000
</TABLE>

     Supplemental Schedule of Non-Cash Investing and Financing Activities:
     During the nine  months  ended  March 31,  1999,  the  Company  recorded an
          unrealized loss of $12,078 on trading securities.
     During the nine months ended March 31, 1999, the Company issued warrants to
          purchase  497,153 shares of Common Stock at a fair value of $1,242,883
          in connection with financing agreements.
     During the nine months ended March 31, 1999, the Company canceled 2,093,868
          shares of Common Stock in connection with the Delaware Settlement.
     During the nine months  ended March 31,  1999,  the  purchase of  2,904,016
          shares of Common Stock was financed, in part, through a long term note
          in the amount of $3,558,032.
     During the nine months ended March 31, 1999,  $22,000,000  of the Company's
          short term debt was assumed by the the purchaser in in connection with
          the sale of certain assets at Freehold Raceway and Garden State Park.


See Notes to Consolidated Financial Statements.



                                        5

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                               NOTES TO FINANCIAL
                                   (Unaudited)

(1)      BASIS OF PRESENTATION

     On January 28, 1999, the Company completed the sale of Freehold Raceway and
a ten-acre  parcel at the Garden State Park facility and the lease of the Garden
State Park  facilities.  Prior to June 30, 1998, the Company  determined to sell
its  racetracks  and,  accordingly,  the  operating  results  of  the  racetrack
subsidiaries  have been segregated and reported as  discontinued  operations for
each of the periods presented.

     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 1, 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 1, 2000.  On January 21,  2000 after  obtaining  the  written  consent 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 restructure
agreement  returns the loan to a good standing position and extends the maturity
date of the CSFB Loan to June 30, 2000.

     On January 25, 2000,  the Company  entered into  agreements  with unrelated
third  parties  for  the  sale  of the  Garden  State  Park  and  the El  Rancho
properties.  Unless the scheduled  closing of the El Rancho  property on June 1,
2000,  is  consummated  and the  closing of the Garden  State Park  property  is
consummated,  the Company will be in default  with respect to the Credit  Suisse
loan due on June 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
either  sale of the El  Rancho  or the  Garden  State  Park  properties  will be
consummated or to the timing thereof.

     The Company has sustained  losses of  approximately  $7.9 million and $18.3
million  during  fiscals  1999  and  1998,   respectively  and  a  net  loss  of
approximately  $6.1  million for the nine  months  ended  March 31,  2000..  The
Company  believes its projected cash flows from its current  operations  will be
sufficient until June 30, 2000. There can be no assurances beyond that date.

     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.

(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.



                                        6

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                               NOTES TO FINANCIAL
                                   (Unaudited)

The net assets of the operations to be disposed of included in the  accompanying
consolidated balance sheets as of March 31, 2000 consist of the following:

                                                   March 31, 2000
                                                 -------------------
Classified As:
Current Assets                                 $           1,197,873
Current Liabilities                                        1,477,300
                                                 -------------------
         Net Assets of Discontinued
          Operations - Current                              (279,427)

Long-Term Property Assets of Garden State Park            30,000,000
                                                 -------------------
Net Assets of Discontinued Operations          $          29,720,573
                                                 ===================

(4)      PROPERTY HELD FOR SALE

     On January 28,  1999,  the Company  consummated  the  settlement  under the
Stipulation and Agreement of Compromise,  Settlement and Release entered into on
July 2, 1998 to resolve the  stockholder  derivative  litigation in the Delaware
Court  of  Chancery  (the  "Delaware  Settlement").  As  part  of  the  Delaware
Stipulation,  the Company has provided  for the  possible  sale of the El Rancho
Property pursuant to the terms enumerated by the Delaware Settlement.

     On March 1,  2000,  International  Thoroughbred  Breeders,  Inc.  signed an
agreement  for the  sale of the El  Rancho  property  in Las  Vegas,  Nevada  to
Turnberry/Las  Vegas  Boulevard,  LLC on  basically  the same  terms  previously
reported in the Company's Form 8-k dated January 21,2000.  The purchase price is
$45,000,000.  The  purchase  price will be paid by: (i) a $100,000  deposit into
escrow at the  signing  of the  Purchase  and Sale  Agreement;  (ii) a  $400,000
additional  deposit into escrow due on March 15, 2000,  and (iii) the balance of
the purchase price due at the closing, payable in cash.

     The closing,  originally  scheduled  to occur by March 31,  2000,  had been
extended  to April 30, 2000 after the buyer:  (i) agreed to pay the  approximate
$100,000  carrying costs of the El Rancho  property for the month of April 2000;
(ii) agreed to pay the  interest  due to Credit  Suisse  First  Boston  Mortgage
Capital,  LLC on a principal amount of $20,000,000 at 12% for the month of April
2000;  and (iii)  released  $1,600,000,  which  included the above  $100,000 and
$400,000 deposits, as a non-refundable  deposit to the Company. The closing date
was further  extended to June 1, 2000 provided the buyer:  (i) agreed to pay the
approximate  $100,000  carrying costs of the El Rancho property for the month of
May 2000;  (ii) pays the  interest due to Credit  Suisse  First Boston  Mortgage
Capital,  LLC on a principal  amount of  $19,000,000 at 12% for the month of May
2000;  (iii) pays an additional  deposit of $900,000 to the Company by April 30,
2000, of which  $400,000 has been  received;  and (iv)  demonstrates  it has the
financial ability to close.

     The Company has  separately  agreed to  purchase a  promissory  note 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,  depending  upon  certain
circumstances.

     The note  would  accrue  interest  at a 22% per annum  rate,  which 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 at any time after

                                        7

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                               NOTES TO FINANCIAL
                                   (Unaudited)

     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 on the day
before the 30th anniversary of its issuance.

     The sale of the El Rancho property to Turnberry/Las  Vegas Boulevard LLC or
to any other buyer cannot be assured at this time.

(5)      RESERVE ESCROW DEPOSITS

     In connection with the  restructuring  agreement on January 21, 2000 Credit
Suisse  released  to the  Company  the  $167,476  balance in the escrow  deposit
accounts which were used by the Company for working capital purposes.

(6)      NOTES AND MORTGAGES PAYABLE

     Notes and Mortgages Payable are summarized below:

                                                             March 31, 2000
                                                        -----------------------
                                 Interest % Per Annum      Current    Long-Term
                                ---------------------   ------------ -----------
International Thoroughbred
Breeders Inc.:
Credit Suisse First Boston (A)      LIBOR Rate plus 7%  $  33,022,749   $ -0-
                                (3/31/00  rate 13.133)
REB Bankruptcy Trustee (B)                  Prime Rate      3,652,226
                                     (3/31/00 rate 9%)
Other                                          Various         38,225     -0-

Garden State Park:
Service America Corporation (C)                     6%        320,800     -0-
Other (D)                                      Various        325,382     -0-
                                                          -----------    ----
    Totals                                              $  37,359,382     -0-
Less Amounts Reclassified to:
  Net Assets of Discontinued
    Operations - Current                                      646,182     -0-
                                                          -----------    ----
    Totals                                              $  36,713,200   $ -0-
                                                          ===========    ====

The effective LIBOR Rate and the Prime Rate at March 31, 2000 was 6.133% and 9%,
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").  The Credit
Suisse Credit Facility is

                                        8

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                               NOTES TO FINANCIAL
                                   (Unaudited)

evidenced by a convertible promissory note (the "Credit Suisse Note").

     On January 21, 2000 after  obtaining  the written  consent 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 term 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.

     The Restructure  Agreement returns the loan to a good standing position and
extends  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 has agreed,  pursuant to the
Restructure  Agreement,  to advance the  monthly  interest  payments  due by the
Company  under the CSFB Loan  until the  maturity  date of June 30,  2000.  Such
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.  Commencing  April 16, 2000 and until 30 days following the closing
of the  sale of the El  Rancho  property,  interest  accruing  shall  be paid by
Turnberry/Las Vegas Boulevard LLC ("Turnberry"),  the purchaser of the El Rancho
property.

     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. The Company's non- compliance with
certain non-financial  covenants at December 31, 1998 were waived on January 28,
1999 in connection with the Delaware Settlement.

     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.

     (B) On January 28, 1999 in  connection  with the Delaware  Settlement,  the
Company ("ITB")  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.  Pursuant to the Trustee  Settlement  associated with the
Delaware Settlement,  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 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. On July 15, 1999, the escrow  interest  payment in the amount of $195,000,
together with interest earned from January 28, 1999 to that date, was applied to
the principal  balance of the note reducing the principal balance on the note to
$3,361,940.

     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

                                        9

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                               NOTES TO FINANCIAL
                                   (Unaudited)

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.

     (C) 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 May  17,  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.

     (D) 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.

(7)      INCOME TAX EXPENSE

     The  Company's  income tax  expense  for the three and nine  month  periods
ending  March 31,  1998  relates to New  Jersey  income  taxes for its  Freehold
Raceway operations.

(8)      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 is accrued,  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.

     During 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.

     Effective December 3, 1999, the Board of Directors accepted the resignation
of Christopher C. Castens,  the Company's Secretary and General Counsel.  During
the  second  quarter of Fiscal  2000,  the  Company  paid  $79,846 in  severance
payments in association with his employment contract.

     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 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. In
the event that the Company or Greenwood  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.


                                       10

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                               NOTES TO FINANCIAL
                                   (Unaudited)

     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,  for 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 June 30, 2000.  Unless the sale of
the El Rancho  property and 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 sales must be in an amount
sufficient  to satisfy the loan due on the trustee  note  together  with accrued
interest.  The  total  amount  due on June 30,  2000 to  satisfy  the CSFB  loan
together  with  accrued  interest and fees and the trustee  note  together  with
accrued interest is approximately $39,500,000. The proceeds from the sale of the
El Rancho and Garden State Park properties are expected to be sufficient to meet
this obligation.

LEGAL PROCEEDINGS

Harris v. DeSantis, et al.

     The first New Jersey  Action,  filed on February 24, 1998 in the New Jersey
District Court, captioned Myron Harris,  derivatively on behalf of International
Thoroughbred  Breeders,  Inc. v. Nunzio P. DeSantis,  Anthony Coelho, Kenneth W.
Scholl,  Michael  Abraham,  Joseph  Zappala,  Frank A. Leo,  Robert J.  Quigley,
Charles  R.  Dees,  Jr.  and  Francis W.  Murray  ("Harris-Federal"),  C.A.  No.
98-CV-517(JBS),  is a derivative  suit brought by a stockholder  of the Company.
The factual allegations and claims asserted in the Harris- Federal complaint are
virtually  identical to the claims asserted in the Quigley  complaint and in the
Counterclaim asserted by the Company in the Quigley action.

     On May 4,  1998,  all  defendants  filed a motion  to  dismiss  or,  in the
alternative,  a motion to stay the Harris-Federal  action, pending resolution of
the Quigley action.  The New Jersey District Court has not ruled on that motion.
On May 4, 1998, the plaintiff filed an amended complaint to, among other things,
add another stockholder as an additional plaintiff.

     As described  more fully below,  pursuant to the New Jersey  Memorandum and
the  satisfaction of certain  conditions set forth therein,  the  Harris-Federal
action is to be fully and finally dismissed with prejudice,  and the parties are
to provide mutual releases of all claims related to the action.  See "New Jersey
Settlement."

Harris v. DeSantis, et al.

     The first New Jersey  Action,  filed on February 24, 1998 in the New Jersey
District Court, captioned Myron Harris,  derivatively on behalf of International
Thoroughbred  Breeders,  Inc. v. Nunzio P. DeSantis,  Anthony Coelho, Kenneth W.
Scholl,  Michael  Abraham,  Joseph  Zappala,  Frank A. Leo,  Robert J.  Quigley,
Charles  R.  Dees,  Jr.  and  Francis W.  Murray  ("Harris-Federal"),  C.A.  No.
98-CV-517(JBS),  is a derivative  suit brought by a stockholder  of the Company.
The Harris-Federal complaint alleges that various individual defendants acted in
contravention  of ITB's  by-laws and their  fiduciary  duties by (i) causing the
Company to undertake  various  actions,  including the issuance of a significant
amount of the Company's common stock, in violation of the Supermajority  By-law;
(ii) usurping certain corporate  opportunities  allegedly  belonging to ITB; and
(iii) causing the Company to fail to file current, audited financial statements.

     On May 4,  1998,  all  defendants  filed a motion  to  dismiss  or stay the
Harris-Federal action, pending resolution of the Quigley action. On May 4, 1998,
the plaintiff filed an amended  complaint to, among other things,  add Howard J.
Kaufman, a stockholder of the Company, as an additional plaintiff.


                                       11

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                               NOTES TO FINANCIAL
                                   (Unaudited)

     As described  more fully below,  pursuant to the New Jersey  Memorandum and
the  satisfaction of certain  conditions set forth therein,  the  Harris-Federal
action is to be fully and finally dismissed with prejudice,  and the parties are
to provide mutual releases of all claims related to the action.  See "New Jersey
Settlement."

Harris v. DeSantis, et al.

     A second  New  Jersey  Action,  filed on July  15,  1998 in the New  Jersey
Superior Court, captioned Myron Harris and Howard Kaufman v. Nunzio P. DeSantis,
Anthony Coelho,  Kenneth W. Scholl,  Michael Abraham,  Joseph Zappala,  Frank A.
Leo,  Robert  J.  Quigley  and  Charles  R.  Dees,  Jr.   ("Harris-State"   and,
collectively  with  the  Harris-Federal   action,  the  "New  Jersey  Actions"),
Cam-L-5534-98,  is a purported  class action suit brought by the same plaintiffs
as the  Harris-Federal  action.  The  complaint  alleges  that the  Harris-State
defendants  breached their  fiduciary  duties to the Company's  stockholders  by
failing to file timely  audited  financial  statements for the fiscal year ended
June  30,  1997,  resulting  in the  indefinite  suspension  of  trading  of the
Company's stock on AMEX.

     Prior to filing  pleadings in response to the Harris-State  complaint,  ITB
and the  defendants  in the New Jersey  Actions  entered  into a  memorandum  of
understanding  dated August 18, 1998 (the "New Jersey  Memorandum")  pursuant to
which upon satisfaction of multiple conditions  (including the parties' approval
of definitive settlement  documents,  notice of the settlement to ITB's past and
current stockholders,  and the approval of the New Jersey Superior Court and the
New Jersey District  Court),  the New Jersey Actions are to be fully and finally
dismissed  with  prejudice,  and ITB and all defendants are to receive a release
from all holders of ITB common and preferred  stock of any claims arising out of
the facts and transactions set forth in the complaints in the New Jersey Actions
(the "Proposed New Jersey Settlement").  The New Jersey Memorandum provides that
the Proposed New Jersey  Settlement  would be submitted  for approval to the New
Jersey  Superior  Court,  that a fee petition  would be submitted by plaintiffs'
attorneys  in the New Jersey  Actions for  approval  by the New Jersey  District
Court, and that the Harris-Federal action would be dismissed on the grounds that
the plaintiffs' claims are barred and released as a result of the settlement and
dismissal of the Quigley  Action by the Delaware Court of Chancery on October 6,
1998.

New Jersey Settlement

     The New Jersey  Actions are  currently at a standstill  as the parties have
entered  into the New  Jersey  Memorandum.  Subject to the  approval  of the New
Jersey  District  Court,  the Company will pay, on behalf and for the benefit of
the  individual  defendants  in the New Jersey  Actions,  the  aggregate  sum of
$175,000 for  plaintiffs'  counsel fees and expenses in the New Jersey  Actions.
Any incentive  award to plaintiffs  Harris and Kaufman would be paid out of this
$175,000  sum.  Pursuant to the Proposed New Jersey  Settlement,  following  the
implementation of the Delaware Settlement,  the Board will restructure its Audit
Committee of the Company so as to facilitate the  procurement  and timely filing
of audited  financial  statements  in the  future.  Further,  the ITB Board will
establish a Relisting  Committee  for the  purpose of  attempting  to secure the
relisting of the Company's common stock on a public market.


     Pursuant to the Proposed New Jersey  Settlement,  the plaintiffs agreed not
to file  objections  to the Delaware  Settlement.  In addition,  pursuant to the
Proposed New Jersey Settlement, upon consummation of the Delaware Settlement the
plaintiffs  will move for a dismissal,  with  prejudice,  of the  Harris-Federal
action,  and will  provide  releases to the  defendants  and the Company and all
others acting on the Company's behalf for any claims that were asserted or could
have been asserted in the Harris-Federal action. For settlement purposes only, a
class will be certified for Harris-State action consisting of all holders of the
Company's stock between October 13, 1997 (the date AMEX suspended trading of the
Company's  stock)  and the date  the  final  order is  entered  to  dismiss  the
Harris-State action.

     On June 17,  1999,  the New Jersey  Superior  Court acted  unilaterally  to
dismiss the  complaint in the  Harris-State  action  filed under  docket  number
Cam-L-5534-98. On July 30, 1999, the plaintiffs in the

                                       12

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                               NOTES TO FINANCIAL
                                   (Unaudited)

Harris-State  action filed in the New Jersey Superior Court a second  complaint,
identical to the original  action and naming as  defendants  the same parties as
the  original  complaint  in  the  Harris-State   action,  under  docket  number
Cam-L-5620-99 (the "Second Harris-State Complaint"). Subsequent to the filing of
the  Second  Harris-State  Complaint,  the  terms  of the  Proposed  New  Jersey
Settlement  were amended to expressly  include the claims asserted by plaintiffs
in the Second Harris-State  Complaint.  Beginning in October 1999, plaintiffs in
the  Harris-State  Action  began  serving  process  of the  Second  Harris-State
Complaint on certain of the defendants.

     The  parties  in the New Jersey  Actions  have  resolved  nearly all issues
necessary to execute the definitive  settlement  stipulation required to solicit
the requisite  approval of the Proposed New Jersey  Settlement by the New Jersey
Superior  Court and the requisite  approval by the New Jersey  District Court of
the fee petition by plaintiffs' attorneys. Because of ITB's distressed financial
condition, the Company cannot agree to pay any amount approved by the New Jersey
District Court pursuant to the  contemplated  fee petition  unless and until the
carrier of the Company's  directors and officers liability insurance policy (the
"D&O   Carrier")   agrees  to  cover  entirely  the  fee  award  and  settlement
implementation  costs.  The Company is continuing to negotiate  such issues with
the D&O Carrier.

     On December 3, 1999, plaintiffs in the Harris-Federal action filed with the
New Jersey  District  Court a motion for an order  enforcing  the  Proposed  New
Jersey Settlement. On December 3, 1999, the New Jersey District Court entered an
order dismissing the  Harris-Federal  action without costs and without prejudice
to the plaintiffs' right to reopen the action within 60 days if the Proposed New
Jersey  Settlement is not  consummated.  In light of the entry of this order, on
December 7, 1999, the New Jersey  District Court  dismissed as moot  plaintiffs'
motion for an order enforcing the Proposed New Jersey Settlement.  On January 6,
2000,  plaintiffs  in the  Harris-Federal  action moved to vacate the New Jersey
District  Court's  dismissal  order and to pursue the original motion to enforce
the Proposed New Jersey Settlement.

     In January 2000, the plaintiffs in the  Harris-State  action filed Requests
to Enter  Default  against  those  defendants  who had not answered or otherwise
responded to the Second  Harris-State  Complaint.  Counsel for the defendants in
the Harris-State  action are currently  engaged in negotiations with counsel for
the plaintiffs in an effort to reach an agreement that  plaintiffs  will take no
further action in prosecution of the  Harris-State  action while the parties are
finalizing the Proposed New Jersey Settlement.

     ITB is hopeful that the Company and the D&O Carrier will reach an agreement
in the near  future to allow the  parties to the New  Jersey  Actions to proceed
with the Proposed  New Jersey  Settlement.  There is no assurance  that any such
agreement  will be reached or that the  Proposed New Jersey  Settlement  will be
approved by the New Jersey Superior Court and the contemplated fee petition will
be approved by the New Jersey  District Court. No prediction can be made at this
time as to the outcome of the New Jersey Actions.

Other Litigation

     The Company is a defendant in two  wrongful  death  actions  arising out of
motor  vehicle/pedestrian  accidents at Freehold  Raceway.  The cases are in the
initial  stages of  discovery.  The Company  believes  that it may have adequate
insurance coverage for the claims,  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,

                                       13

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                               NOTES TO FINANCIAL
                                   (Unaudited)

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.

     For additional  information  regarding legal  proceedings see Footnote13 in
the consolidated  financial  statements  included in the Company's Form 10-K for
the fiscal year ended June 30, 1999.

(9)      DEFERRED FINANCING COSTS

     Deferred financing costs at March 31, 1999 include those amounts associated
with its May 23, 1997 financing  agreement  with Credit  Suisse.  These costs of
$6,238,731  were being  expensed  over the  original  two year life of the loan.
Amortization  expense  for the three and nine  months  ended March 31, 1999 were
$1,044,839 and $2,574,441, respectively.

(10)     STOCK OPTIONS AND WARRANTS

         (A)      EMPLOYEE AND  NON-EMPLOYEE OPTIONS

     At March 31, 2000,  total employee  options  outstanding were 1,055,000 and
total non-employee options outstanding were 300,000.

         (B)      WARRANTS

     At March 31, 2000, total warrants  outstanding were 2,604,000 and have been
accounted for as financing  costs and costs  associated  with the acquisition of
the El Rancho property. The fair value of the warrants issued in connection with
the  acquisition of the El Rancho  property had been  capitalized and were to be
amortized  when the  facility  became  operational;  however,  the  Company  has
determined to dispose of the El Rancho Property.

(11)     RELATED PARTY TRANSACTIONS

     Kenneth  Scholl,  a director of the Company  until July 23, 1998,  provides
consulting services to LVEN and certain of its subsidiaries through the Stanford
Company  of which he is the  president.  Until  December  31,  1997,  LVEN  paid
Stanford  Company  $10,000  per month for  consulting  services,  including  Mr.
Scholl's  services  as  project  manager  for the El Rancho  Property.  LVEN was
reimbursed  by the Company  for the  payments  to  Stanford  Company.  Effective
January 1, 1998,  the  Company  began  paying Mr.  Scholl  $10,000 per month for
ongoing  consulting  services  as project  manager  for the El Rancho  Property.
During the nine  months  ended March 31,  2000 and 1999,  the  Company  paid Mr.
Scholl $90,000 for these  services.  Additionally,  Mr. Scholl was paid director
fees of $10,000 in Fiscal 1998. Mr. Scholl was elected president and director of
Casino-Co  in March 1996,  he  resigned as a board  member on March 14, 1997 and
resigned as  president  on May 19,  1997.  Mr.  Scholl also held the position of
Secretary and resigned the position on March 1, 1998.

     For  additional   information  regarding  related  party  transactions  see
Footnote18 in the consolidated  financial  statements  included in the Company's
Form 10-K for the fiscal year ended June 30, 1999.

(12)     STOCK TRADING INFORMATION

     Effective  August 7, 1998,  the  Company's  Common Stock and its  Preferred
Stock were delisted from trading on the American Stock Exchange ("AMEX") for the
failure to comply with certain listing criteria.

                                       14

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                               NOTES TO FINANCIAL
                                   (Unaudited)

Neither the Common Stock nor the  Preferred  Stock has been traded on AMEX since
October  13,  1997 when it was  suspended  because the Company had not filed its
Annual  Report on Form 10-K for fiscal 1997 within the  Securities  and Exchange
Commission's  prescribed  time period.  The stock is listed for quotation on the
NQB Pink Sheets.



                                       15

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

            MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
                OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
                                 MARCH 31, 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 March 31,  2000,  was a deficit of
($38,942,557)  which  represents  an increase  in the  deficit of  approximately
$11,526,754  from the March 31, 1999 working capital  deficit of  ($27,416,103).
The increase in the deficit was  primarily  caused by: (i) a decrease in cash of
$2,066,576  and a decrease  in  Reserve  Escrow  Deposits  of  $1,149,456  which
together were used primarily to fund the Company's  corporate  operating  costs;
(ii) a $854,152  decrease  in net assets of  Discontinued  Racetrack  Operations
primarily the result of cash used by the Company to fund  corporate  activities:
(iii) the  increase  in the  Credit  Suisse  debt  associated  with the  accrued
interest in the amount of $1,762,891 being added to the principal balance of the
note on November  17, 1999 and an  additional  $840,298 in accrued  interest and
fees  being  added on January  28,  2000;  (iv) the  increase  of  approximately
$1,000,000 in accounts  payable and accrued expenses  primarily  associated with
the Company delaying  payments due until the scheduled sale of the El Rancho and
Garden State Park properties;  and (v) a  non-refundable  deposit of $500,000 on
the sale of the El Rancho  property  classified as deferred  income at March 31,
2000.

     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. Proceeds of this
facility were used to repay in full the Company's  $30 million  existing  credit
facility and were used to provide  funds for working  capital and other  general
corporate purposes,  including,  but not limited to, preliminary  development of
the El Rancho  property.  Interest  under the Credit Suisse  Credit  Facility is
payable monthly in arrears at 7% over the LIBOR rate. Of the remaining  facility
borrowings,  approximately  $16.8  million  was  placed  in  escrow  accounts  (
including  $10 million in an interest  reserve  account).  Financing and closing
fees of $4.3  million  were paid and $3.9  million  was used by the  Company for
general corporate  purposes and repayment of certain financial  obligations.  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 land at the Garden State Park  facility.  At June 30, 1999,  the interest
rate on the Credit Suisse Credit Facility was 12.24%.  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  returns the loan to a good standing position and extends 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 30, 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 has agreed,  pursuant to the Restructure  Agreement,  to
advance the monthly  interest  payments  due by the Company  under the CSFB Loan
until the maturity date of June 30, 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.
Commencing April 16, 2000 and until 30 days following the closing of the sale of
the El Rancho property,  interest accruing shall be paid by Turnberry/Las  Vegas
Boulevard LLC ("Turnberry"), the purchaser of the El Rancho property. (See Notes
6-A and 13-A)

                                       16

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

            MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
                OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
                                 MARCH 31, 2000

     The Credit Suisse Credit Facility is evidenced by a convertible  promissory
note (the "CSFB 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).

     The net loss for the nine months  ended  March 31,  2000 was  ($6,113,140).
Cash flows used in operating activities amounted to $5,224,928.

     Cash provided by investing  activities was $367,542  during the nine months
ended March 31, 2000, primarily the result of the non-refundable  deposit toward
the sale of the El Rancho property and cash used by discontinued operations.

     Cash provided by financing activities was $2,889,022 during the nine months
ended March 31, 2000,  consisting  principally  of decreases in amounts due from
Discontinued Operations.

     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.

     The proceeds of the  Greenwood  Transaction  were  principally  used by the
Company to pay off the first lien on the assets of Freehold Raceway,  reduce the
outstanding  balance on the  Company's  loan from  Credit  Suisse  First  Boston
Mortgage  Capital LLC ("Credit  Suisse") to $30.5 million and to consummate  the
Delaware  Settlement.  In addition,  Credit  Suisse also released to the Company
approximately  $4.475  million from its escrow  reserves of which $1.475 million
was used for working capital purposes and $3 million was used to reduce debt and
pay fees.

     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.

                                       17

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

            MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
                OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
                                 MARCH 31, 2000

     The Trustee 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,  for his interest in the Shares in the event that he
is awarded a judgement granting him an ownership interest in the Shares.

     Pursuant  to the  Restructure  Agreement,  Garden  State Race  Track,  Inc.
transferred  title to the Garden State Race Track to GSRT,  LLC , a wholly owned
subsidiary of the Company  ("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  be
entered into on or prior to January 25, 2000 (the "GSRT Option").

     On January 25,  2000,  the Company and Garden State Race Track,  Inc.,  the
owner of Garden State Park, entered into an agreement for the sale of all of the
Garden  State Park  property,  excluding  a ten-acre  parcel of land  previously
committed to GS Park Racing,  L.P., to Turnberry/Cherry  Hill, LLC. The terms of
the sale meet all the  conditions  required by Credit  Suisse to be a valid GSRT
Option, according to a letter received from Credit Suisse.

     On January 25,  2000,  the Company  entered  into an agreement of sale with
Turnberry/Cherry  Hill LLC,  for the sale of the Garden  State Park real estate.
While the  Company  received  from escrow a $500,000  deposit  made by the buyer
under the terms of the sale,  possible  changes to the  agreement  are currently
being  negotiated  by the  parties.  Upon  execution  of a  modification  of the
definitive  agreement  the Company  expects to  announce  the final terms of the
transaction.

     The sale of the Garden State Race Track property to Turnberry/Cherry  Hill,
LLC or any other buyer  cannot be assured at this time and if for any reason the
potential  buyer of the property is not able to close this  transaction  by June
30,  2000,  the property  may be marketed  and  possibly  sold by the  Company's
lender, Credit Suisse First Boston Mortgage, LLC.

     The Restructure  Agreement  further  provides that (i) if the proceeds from
the  sale  of the  Garden  State  Park  property  are  insufficient  to pay  the
outstanding  amounts due to Credit Suisse under the CSFB Loan, or (ii) after the
sale or joint venture of the Garden State property, the total amount outstanding
under the CSFB Loan is equal to or greater than $5,000,000 and the Company shall
not have received a binding  commitment  for a loan or purchase of the El Rancho
Property, then, Orion Casino Corporation must convey the El Rancho property to a
new Delaware limited  liability  company ("New LLC") having  substantially  same
ownership structure and limited liability company agreement as GSRT. Once the El
Rancho property is conveyed to New LLC in accordance with and upon the happening
of the circumstances and conditions provided in the Restructure Agreement, Orion
Casino Corporation,  as the sole member of New LLC, will have the right to cause
New LLC to sell or refinance the El Rancho  property so long as the  outstanding
obligations due under the CSFB Loan are paid in full by such sale or refinancing
and such sale or refinancing closes on or before June 30, 2000.

     On March 1,  2000,  International  Thoroughbred  Breeders,  Inc.  signed an
agreement for the sale of the

                                       18

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

            MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
                OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
                                 MARCH 31, 2000

El Rancho property in Las Vegas, Nevada to Turnberry/Las Vegas Boulevard, LLC on
basically the same terms  previously  reported in the  Company's  Form 8-k dated
January 21,2000.  The purchase price is $45,000,000.  The purchase price will be
paid by: (i) a $100,000  deposit  into escrow at the signing of the Purchase and
Sale Agreement;  (ii) a $400,000 additional deposit into escrow due on March 15,
2000, and (iii) the balance of the purchase price due at the closing, payable in
cash.

     The closing,  originally  scheduled  to occur by March 31,  2000,  had been
extended  to April 30, 2000 after the buyer:  (i) agreed to pay the  approximate
$100,000  carrying costs of the El Rancho  property for the month of April 2000;
(ii) agreed to pay the  interest  due to Credit  Suisse  First  Boston  Mortgage
Capital,  LLC on a principal amount of $20,000,000 at 12% for the month of April
2000;  and (iii)  released  $1,600,000,  which  included the above  $100,000 and
$400,000 deposits, as a non-refundable  deposit to the Company. The closing date
was further  extended to June 1, 2000 provided the buyer:  (i) agreed to pay the
approximate  $100,000  carrying costs of the El Rancho property for the month of
May 2000;  (ii) pays the  interest due to Credit  Suisse  First Boston  Mortgage
Capital,  LLC on a principal  amount of  $19,000,000 at 12% for the month of May
2000;  (iii) pays an additional  deposit of $900,000 to the Company by April 30,
2000,  of which  400,000 has been  received;  and (iv)  demonstrates  it has the
financial ability to close.

     The Company has  separately  agreed to  purchase a  promissory  note 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,  depending  upon  certain
circumstances.

     The note  would  accrue  interest  at a 22% per annum  rate,  which 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 at any time after 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 on the day before the
30th anniversary of its issuance. (See Note 4)

     The sale of the El Rancho property to Turnberry/Las  Vegas Boulevard LLC or
to any other buyer cannot be assured at this time.

     The Company  currently  estimates  that the escrow funds made  available on
January  21,  2000  associated  with the Credit  Suisse  Restructure  Agreement,
together with the $500,000 deposit made available March 2, 2000 and the deposits
of  $2,000,000  received from the  extensions of the El Rancho  closing and cash
generated from the Company's  operations  prior to the sale of the  discontinued
operations,  will be sufficient to finance its current  operations  and expected
expenditures  and carrying costs of the El Rancho  Property until June 30, 2000.
The Company currently estimates that approximately  $200,000 per month is needed
to cover operating expenses of International  Thoroughbred Breeders and $100,000
per month is needed to cover the carrying costs of the El Rancho Property.

     The  Company's  debt with CSFB is due on June 30, 2000.  Unless the sale of
the El Rancho  property and 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 sales must be in an amount
sufficient  to satisfy the loan due on the trustee  note  together  with accrued
interest. The total amount due on June 30, 2000

                                       19

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

            MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
                OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
                                 MARCH 31, 2000

to satisfy the CSFB loan together with accrued interest and fees and the trustee
note together with accrued interest is approximately  $39,500,000.  The proceeds
from the sale of the El Rancho and Garden State Park  properties are expected to
be sufficient to meet this obligation.

     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 June 30, 2000 and has sustained a loss of approximately $6.1 million for the
nine months  ended March 31,  2000,  which  raises  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 March 31, 2000 and 1999

     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,  accordingly,  the  operating  results of the  racetrack
subsidiaries  have been segregated and reported as  discontinued  operations for
each of the periods presented.

     Revenue  from  continuing  operations  for the three months ended March 31,
2000  decreased  $62,781  primarily  as a result of a decrease  interest  income
partially  offset by a one month  increase  in rental  income  generated  by the
Garden State Park lease in Fiscal 2000 as compared to Fiscal 1999. Expenses from
continuing  operations for the three month periods  decreased  $3,260,253 or 59%
for the quarter of Fiscal 2000 as compared to the same  quarter in Fiscal  1999.
This decrease in expenses was primarily the result of a decrease in: (i) general
and  administrative  expenses of $88,585 or 10% from  $895,880 in Fiscal 1999 to
$807,295 in Fiscal 2000;  (ii) a decrease in interest and  financing  expense of
$2,131,090  primarily as a result  reduced debt and a finance cost of $1,242,883
associated with the Delaware Settlement in the third quarter of fiscal 1999; and
(iii) the costs associated with the debt no longer being amortized.

     The  decrease  in  general  and  administrative  expenses  of  $88,585  was
principally   attributable   to:  (i)  a  decrease  in  officer  and   corporate
administrative  salaries and benefits of approximately  $263,172 associated with
the  termination  of  certain  agreements  upon  consummation  of  the  Delaware
Settlement;   (ii)  a  decrease  in   consulting   fees  and  director  fees  of
approximately $30,000 associated with the termination of certain agreements upon
consummation  of the  Delaware  Settlement;  (iii) a decrease  of  approximately
$30,000 in travel expenses and the  administrative  costs of operating an office
in New Mexico;  partially  offset by (iv)  corporate  expenses of  approximately
$175,000  associated with discontinuing the racetrack  subsidiaries;  and (v) an
increase in legal fees of approximately $45,000 during the quarter in connection
with various corporate activies.

     During the third  quarter of Fiscal 2000,  the Company  incurred a net loss
from  continuing  operations  of  ($2,172,216)  as  compared  to a net loss from
continuing operations of ($5,369,687) for the comparable quarter in Fiscal 1999.
Income from discontinued racetrack operations was $247,640 for the third quarter
of Fiscal  1999.  Also  during the third  quarter of Fiscal  1999,  the  Company
recognized a net gain of  $3,621,507,  following the write down to fair value of
the remaining  assets of Garden State Park, on the sale of Freehold  Raceway and
the sale of a ten-acre parcel at the Garden State Park facility. The increase in
net loss of $671,676

                                       20

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

            MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
                OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
                                 MARCH 31, 2000

for the three month period was the result of those differences described above.

Results of Operations for the Nine Months Ended March 31, 2000 and 1999

     As a result of the sale and lease of racetrack  assets described above, the
operating  results of the racetrack  subsidiaries for the six month periods have
been segregated and reported as discontinued  operations for each of the periods
presented.

     Revenue from continuing operations for the nine months ended March 31, 2000
decreased  $92,420  from  $357,323  in Fiscal  1999 to  $264,903  in Fiscal 2000
primarily as a result of decreased  interest income  partially  offset by rental
income  generated  by the Garden  State Park  lease.  Expenses  from  continuing
operations  decreased  $7,544,316  or 54%,  from  $13,922,359  in Fiscal 1999 to
$6,378,043  in Fiscal 2000.  This  decrease in expenses was primarily the result
of: (i) a decrease in general and  administrative  expenses of $1,499,170 or 41%
from  $3,631,202 in Fiscal 1999 to $2,132,032 in Fiscal 2000; (ii) a decrease in
interest and financing expense of $3,508,637  primarily as a result reduced debt
and a finance cost of $$1,242,883 associated with the Delaware Settlement in the
third quarter of fiscal 1999;  and (iii) the costs  associated  with the debt no
longer being amortized.

     The  decrease of  $1,499,170  in general and  administrative  expenses  was
principally  attributable to: (i) a decrease of approximately  $441,000 in legal
expenses  associated with the various  director and stockholder  lawsuits in the
prior fiscal year partially offset by an increase in legal fees of approximately
$136,000  during  the second  and third  quarters  in  connection  with  various
corporate  activies ; (ii) a decrease  in officer and  corporate  administrative
salaries and benefits of approximately  $573,000  primarily  associated with the
termination of certain agreements upon consummation of the Delaware  Settlement;
(iii) a decrease in consulting and director fees of $222,000 associated with the
termination of certain agreements upon consummation of the Delaware  Settlement;
(iv)  a  decrease  of   approximately   $150,000  in  travel  expenses  and  the
administrative  costs of  operating  an office in New Mexico;  (v) a decrease in
professional  fees of $141,320  associated  with the change of  accountants  for
Fiscal 1999 and 2000;  (vi) a costs of $60,000 in penalties  assessed by the New
Jersey Racing Commission  associated with the Casino-Co Stock issuance in Fiscal
1999; and (vii) a decrease in political contributions of $50,000 associated with
New Jersey legislation affecting racetrack operations.

     During the nine months  ended March 31,  2000,  the Company  incurred a net
loss from  continuing  operations of ($6,113,140) as compared to a net loss from
continuing operations of ($13,565,036) for the comparable period in Fiscal 1999.
Income from discontinued racetrack operations was $4,504,184 for the nine months
ended March 31, 1999.  Also during the third quarter of Fiscal 1999, the Company
recognized a net gain of  $3,621,507,  following the write down to fair value of
the remaining  assets of Garden State Park, on the sale of Freehold  Raceway and
the sale of a ten-acre parcel at the Garden State Park facility. The increase in
net  loss of  $673,795  for the  nine  month  period  was the  result  of  those
differences described above.

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

                                       21

<PAGE>


                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

            MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
                OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
                                 MARCH 31, 2000

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.




                                       22

<PAGE>



                    INTERNATIONAL THOROUGHBRED BREEDERS, INC.
                                AND SUBSIDIARIES

                                     PART II

                                OTHER INFORMATION


Item 6.   Exhibits and Reports on Form 8-K

     During the quarter ended March 31, 1999, the registrant filed the following
Current Reports on Form 8-K:



        Date                                    Subject Matter
--------------------        ---------------------------------------------------


  January 28, 1999                   Sale and lease of racetrack assets




                                       23

<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.





May 18, 2000                     /s/Robert J. Quigley
                                    Robert J. Quigley, President, and
                                    Chairman of the Board




May 18, 2000                     /s/William H. Warner
                                    William H. Warner
                                    Treasurer
                                    (Principal Financial
                                     and Accounting Officer)


                                       24

<PAGE>