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

                                  FORM 10-QSB

                                   (MARK ONE)

             [x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended December 31, 2003
                                  -------------

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                                  EXCHANGE ACT

                   For the transition period from ___ to ___

                      Commission file number: 333-5278-NY

                      POWERHOUSE TECHNOLOGIES GROUP, INC.
                      -----------------------------------
       (Exact name of small business issuer as specified in its charter)


                Delaware                               94-3334052
    -------------------------------                --------------------
    (State or other jurisdiction of                   (IRS Employer
     incorporation or organization)                Identification No.)

      2694 Bishop Drive, Suite 270
             San Ramon, CA                                94583
    -------------------------------                --------------------
         (Address of principal                         (Zip Code)
           executive offices)

       Issuer's telephone number:                    (925) 328-1075
                                                   --------------------

 Former name, former address and former
   fiscal year, if changed since last                      N/A
                 report                             -------------------


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


 As of March 15, 2004, there were 3,636,716 shares of the issuer's common stock,
                         $0.0001 par value, outstanding.


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


<PAGE>


                          PART I- FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                      POWERHOUSE TECHNOLOGIES GROUP, INC.
                         (A Development Stage Company)

                   Condensed Balance Sheet as of Dec 31, 2003

                                                                   Dec. 31, 2003
                                                                     (Unaudited)
                                     Assets
                                     ------

Current Assets
   Cash and cash equivalents                                        $    90.066
   Accounts Receivable                                                   19.283
   Inventory                                                             20.539
   Other Current assets                                                   9.550
                                                                    -----------
      Total current assets                                          $   139.438

Property and Equipment
      Total Property and equipment                                           --

Other Assets:
   License fee                                                          219.033
   Investment in equity investee                                        373.527
                                                                    -----------
      Total other assets                                                592.560

Total Assets                                                        $   731.998
                                                                    -----------

                 LIABIITIES AND STOCKHOLDERS' EQUITY (Deficit)
                 ---------------------------------------------

Current Liabilities:
   Accounts payable                                                 $   558.958
   Accrued liabilities                                                  654.427
   Deferred revenue                                                      50.390
   Note payable to equity investee                                        7.113
                                                                    -----------
      Total current liabilities                                       1.270.888

Long-Term Liabilities                                                   240.000
                                                                    -----------

Total Liabilities                                                     1.510.888
                                                                    -----------

   Commitments and contingencies

Stockholders' Equity (Deficit):
   Common stock, $.0001 par value; 20,000,000 shares authorized;            396
   3,596,716 shares issued and outstanding
   Additional Paid in Capital                                         6.090.611
   Deficit accumulated in development stage                          (6,869,897)
                                                                    -----------
      Total stockholders' equity (deficit)                             (778.890)
                                                                    -----------

Total Liabilities and Stockholders' Equity (Deficit)                $   731.998
                                                                    -----------

See accompanying notes to consolidated financial statements.


<PAGE>


POWERHOUSE TECHNOLOGIES GROUP, INC.
(A Development Stage Company)

CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                                                 For the period from
                                               For the three months ended          For the nine monghs ended        May 16, 2002
                                                       December 31,                        December 31,            (inception) to
                                                  2003              2002             2003               2002        Dec. 31, 2003
                                              (Unaudited)       (Unaudited)       (Unaudited)       (Unaudited)      (Unaudited)
<S>                                          <C>               <C>               <C>               <C>               <C>

Revenues                                     $    238,615      $          0      $    238,615      $          0      $    238,615
                                             ------------      ------------      ------------      ------------      ------------
   Total revenues                            $    238,615      $          0      $    238,615      $          0      $    238,615

Cost of Sales                                     166,380                 0           166,380                 0           166,380
                                             ------------      ------------      ------------      ------------      ------------
   Total cost of sales                            166,380                 0           166,380                 0           166,380

Gross Profit                                       72,235                 0            72,235                 0            72,235
                                             ------------      ------------      ------------      ------------      ------------

Operating Expenses:
   Research and development                             0            65,111           104,006            99,111           315,186
   Sales and marketing                            391,932            27,671         1,289,249            49,174         1,476,061
   General and administrative                     626,848           197,127         1,280,859           378,382         1,823,740
                                             ------------      ------------      ------------      ------------      ------------
      Total operating expenses                  1,018,780           289,909         2,674,114           526,667         3,614,987

Non-Operating Expenses:
   Loss due to theft                                    0           563,225         1,839,411           920,759         3,192,759
   Equity in loss of investee                       2,398                 0            97,329                 0           126,473
   Interest - Net                                       0                 0             3,118                 0             7,113
                                             ------------      ------------      ------------      ------------      ------------
      Total non-operating expenses                  2,398           563,225         1,939,858           920,759         3,326,345

Loss Before Income taxes                     $    948,943      $    853,134      $  4,541,737      $  1,447,426      $  6,869,097

Provision for Income Taxes                              0                 0                 0                 0               800
                                             ------------      ------------      ------------      ------------      ------------

Net Loss                                     $    948,943      $    853,134      $  4,541,737      $  1,447,426      $  6,869,897
                                             ============      ============      ============      ============      ============


Basic and Diluted Loss per Share             $       0.27      $       0.67      $       1.48      $       1.15

Weighted Average shares Outstanding             3,548,716         1,268,222         3,059,242         1,257,556
</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>


POWERHOUSE TECHNOLOGIES GROUP, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                                          For the period from    For the period from
                                                                   For the nine               May 16, 2002           May 16, 2002
                                                                   months ended              (inception) to         (inception) to
                                                                   Dec. 31, 2003              Dec. 31, 2002          Dec. 31, 2003
                                                                    (Unaudited)                (Unaudited)            (Unaudited)
<S>                                                                 <C>                        <C>                    <C>
Cash Flows From Operating Activities:
   Net loss                                                       $  (4,541,737)             $  (1,447,426)         $  (6,869,897)

   Adjustments to Reconcile Net loss to Net Cash
   Used in Operating Activities:
      Common stock issued for services                                  779,000                        125                779,125
      Equity in loss of investee                                         97,329                          0                126,473
      Accrued interest on notes                                           3,118                          0                  3,118

   Changes in operating assets and liabilities:
      Accounts Receivable                                               (19,283)                         0                (19,283)
      Inventory                                                         (20,539)                         0                (20,539)
      Prepaids                                                           (7,500)                         0                 (7,500)
      Other deposits                                                     (2,050)                         0                 (2,050)
      License fee                                                      (219,033)                         0               (219,033)
      Accounts payable                                                  436,403                     38,730                558,956
      Accrued payroll                                                   309,003                    177,031                374,003
      Deferred revenue                                                   50,390                          0                 50,390
      Due to officer                                                    (93,667)                         0                      0
                                                                  -------------              -------------          -------------

   Net cash used in operating activities                             (3,228,566)                (1,231,540)            (5,246,237)
                                                                  -------------              -------------          -------------

Cash Flows from Investing Activities:
   Investment in equity investee                                              0                   (130,000)              (130,000)
                                                                  -------------              -------------          -------------

      Net cash used in investing activities                                   0                   (130,000)              (130,000)
                                                                  -------------              -------------          -------------

Cash Flows from Financing Activities:
   Finders' fee payable                                                 (50,000)                         0                      0
   Principal payment on note payable                                   (180,000)                         0               (266,005)
   Proceeds from Convertible Debentures                                 240,000                                           240,000
   Common stock subscriptions                                         3,308,632                  1,361,540              5,492,308
                                                                  -------------              -------------          -------------

   Net cash provided by financing activities                          3,318,632                  1,361,540              5,466,303
                                                                  -------------              -------------          -------------

Net Increase in cash and cash equivalents                                90,066                          0                 90,066

Cash and Cash Equivalents, beginning of period                                0                          0                      0
                                                                  -------------              -------------          -------------

Cash and Cash Equivalents, end of period                          $      90,066              $           0          $      90,066
                                                                  =============              =============          =============
</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>


      PowerHouse Technologies Group, Inc.
      (A Development Stage Company)

Notes To Financial Statements

For The Nine Months Ended December 31, 2003 (Unaudited) and December 31, 2002
(Unaudited), For The Period May 16, 2002 (inception) Through December 31, 2003
(Unaudited)

Forward-Looking Statements
This Quarterly Report on Form 10-QSB contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995 or
under rules and regulations adopted by the Securities and Exchange Commission.
These forward-looking statements are based on the Company's current expectations
or beliefs, including, but not limited to, statements concerning our operations,
economic performance, financial condition, growth and acquisition strategies,
investments and operational plans. For this purpose, any statements contained
herein that are not statements of historical fact may be deemed to be
forward-looking statements Without limiting the generality of the foregoing,
words such as "believe," "anticipate," "expect," "intend," "plan," "will,"
"believe," "intend," "could," "might" or "continue" or the negative or other
variations thereof and other similar expressions identify forward-looking
statements. In addition, any statements that refer to expectations, projections
or other characterizations of future events or circumstances are forward-looking
statements. These forward-looking statements by their nature involve substantial
risks and uncertainties, including general economic and market conditions, the
potential loss or termination of existing clients and contracts and the ability
of the Company to successfully identify and thereafter consummate one or more
acquisitions, certain of which are beyond our control, and actual results may
differ materially.?

You are cautioned not to place undue reliance on these forward-looking
statements, which relate only to events as of the date on which the statements
are made. We undertake no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date hereof.
You should refer to and carefully review the information in future documents we
file with the Securities and Exchange Commission.


1. Basis of Presentation
------------------------
The accompanying unaudited condensed financial statements include all
adjustments which management believes are necessary for a fair presentation of
the Company's financial position at December 31, 2003 and results of operations
for the periods presented. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted.

Results of operations for the periods presented are not necessarily indicative
of the results to be expected for the full year. The accompanying condensed
financial statements should be read in conjunction with our audited financial
statements and footnotes as of and for the year ended March 31, 2003 contained
in our Form 8-K/A filed on January 28, 2004.

2. Summary of Significant Accounting Policies
---------------------------------------------
Critical Accounting Policies
The Company makes estimates and assumptions in the preparation of its
consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America. Actual results could differ
significantly from those estimates under different assumptions and conditions.
The Company does not consider any of its accounting policies to be critical. Our
significant accounting policies are described in Note 1 to the audited
consolidated financial statements included in our audited financial statements
for the year ended March 31, 2003. The accounting policies used in preparing our
interim condensed consolidated financial statements are the same as those
described in our audited financial statements.

Revenue Recognition Policy
The Company recognizes revenue from distributors when the product has been sold
to third party customers. Revenue from sales through the Company's website is
recognized after the 30 day return period has lapsed.

New Accounting Pronouncements
On May 31, 2003, the FASB issued Statement No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity ("SFAS
150"). SFAS 150 establishes standards for how an issuer classifies and measures
in its statement of financial position certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument within its scope as a liability (or an asset in
some circumstances) because that financial instrument embodies an obligation of
the issuer. SFAS 150 is effective at the beginning of the first interim period
beginning after June 15, 2003. The Company does not have any financial
instruments that fall under the guidance of SFAS 150 and, therefore, the
adoption did not have any effect on its financial position or results of
operations.


3.  Stock Transactions
---------------------
On May 15, 2003, the Company formed a wholly-owned subsidiary, Forward
Solutions, Inc. Forward Solutions, Inc. entered into an employment agreement
with its President and Chief Operating Officer for a perpetual period terminable
upon 30 days notice by either party. The agreement calls


<PAGE>

for a base salary at the rate of $175,000 per annum and is subject to review no
less than annually. The contract calls for an annual target bonus of 25% of the
then current base salary, pursuant to a bonus plan adopted by the Board of
Directors. The employee was also granted 100,000 shares of common stock of
PowerHouse Technologies Group, Inc. Compensation expense of $500,000 was
recorded in the quarter ended June 30, 2003 related to these shares.

Effective May 19, 2003, the Company completed a combination with Agate
Technologies, Inc. The effective date of the plan was to be November 15, 2002,
with Powerhouse Studios, Inc. becoming a wholly-owned subsidiary of the Agate
Technologies, Inc. on closing. Because of delays in obtaining certain
assignments and property rights, the closing was delayed to January 6, 2003.
Then, due to a delay in the process of confirming the marketability of certain
intellectual property rights and the products embodying those rights, the
closing was further delayed to April 2, 2003. As of May 19, 2003, the
transaction was deemed effective and the Company conducted a 1-for-122 reverse
split of the Agate Technologies, Inc. common stock. Additionally, the Company
amended its Articles of Incorporation changing its name to "Powerhouse
Technologies Group, Inc." The combination was accounted for as a reverse
acquisition. As a result, no goodwill was recorded.

In December 2003, the Company issued 60,000 shares of its common stock to
officers, directors and employees for services and compensation. Compensation
expense of $279,000 was recorded in the quarter ended December 31, 2003 related
to these shares.

During the nine months ended December 31, 2003, the Company issued 1,258,192
shares of its common stock in a private placement for net proceeds of
$5,282,309.


4. Lease Agreement
------------------
In April 2003 the Company entered into a 20 month sub-lease agreement with a
third party for 2,186 square feet of office space located in San Ramon,
California. The agreement commenced May 1, 2003 and requires monthly sub-lease
payments of $3,607 through December 31, 2004. The payment includes the use of
existing furniture and equipment located on the premises. The agreement also
provided a right of first refusal on an additional 1,519 square feet that was
optioned to the Company on August 15, 2003. The Company agreed to lease the
additional space for an additional monthly payment of $2,506. The termination of
this portion of the lease is also December 31, 2004.

Future minimum facilities sublease rental expense as of December 31, 2003, is as
follows:

                  -----------------------------------------------
                  2004                             $    57,219
                  -----------------------------------------------
                  2005                                  55,017
                                                   -----------
                  -----------------------------------------------

                  -----------------------------------------------
                  Total                            $   112,236
                                                   ===========
                  -----------------------------------------------

5.  Secured Convertible Notes
---------------------------------
In October 2003, the Company offered up to $10,000,000 principal amount of its
10% secured convertible notes, bearing interest at the rate of 10% per annum
with a maturity of 10 years. The notes are collateralized by all of the
Company's intellectual property and tangible assets of the Company, current and
future. The notes are convertible at any time, at the holder's option, at an
initial conversion price of $4.00 per share. As of December 31, 2003, the
Company had issued $240,000 principal amount of the secured convertible notes,
and issued an additional $204,000 principal amount of the secured convertible
notes on various dates between January 1, 2004, and March 15, 2004.


6.  Commitments and Contingencies
---------------------------------
Licensing Agreement - On May 28, 2003, the Company entered into a Business
Alliance and Software Licensing Agreement (the "Licensing Agreement") with First
Person Software, Inc. The agreement grants the Company an exclusive license for
the distribution of the PocketLogin software developed by First Person Software,
Inc. This exclusive license is valid for 6 months beginning 30 days after the
acceptance of the software by the Company. The agreement also calls for the good
faith negotiation of future licenses for the referenced product, and for the
development of future products. The Company is also obligated to pay First
Person Software, Inc. a royalty equal to 10% of gross revenue for each product
sold that consists of a hardware and software system, and in any event no less
than $5.00 per unit sold. The Company is also obligated to pay 50% of gross
revenue for software-only sales. In anticipation of unit sales, the Company
agreed to royalty prepayments of $243,000 from May 15, 2003 through October 15,
2003. As of December 31, 2003, $100,000 of the prepayment was due, and $23,967
was earned through product sales.

As part of the Licensing Agreement, the Company agreed to spend $4,500,000 on
marketing the Company's products that include the PocketLogin software. The
Company has not yet complied with this provision in the Licensing Agreement.
Based on the success of the Company's marketing efforts to date and its
favorable business relationship with First Person Software, Inc., the Company
believes that First Person Software, Inc. has no intention of calling a breach
of the Licensing Agreement.

Consulting Agreement - On July 15, 2003, PowerHouse Technologies Group, Inc.
entered into a consulting agreement with its acting Chief Operating Officer and
International President for a period of 3 years, subject to certain cancellation
provisions including a mutual 90 day notice period. The agreement calls for
annual payments of $200,000 paid semi-monthly, and provides for the
reimbursement of approved expenses including living expenses while in the United
States. The agreement restricts the consultant from engaging in other business
activities while under contract with PowerHouse Technologies Group, Inc., and
provides for other restrictions to protect the intellectual and business
property of the Company.


<PAGE>


Services Agreements

In April 2003, the Company entered into an agreement for financial public
relations services. This agreement calls for monthly cash payments of $7,500,
plus reimbursement of out-of-pocket expenses as approved by the Company. The
agreement also provided for stock options equal to $150,000 (but not less than
60,000 shares) based on the post-reverse price as of April 15, 2003. Since the
combination agreement did not occur at that time, the Company and the vendor
intend to mutually agree on a number of shares and option price agreeable to
both parties.

In August 2003, Forward Solutions, Inc. entered into an agreement appointing an
exclusive manufacturer's representative for the sale of its products in a
certain territory. The 12 month agreement called for an initial payment of
$10,000, followed by 4 monthly payments of $25,000. Beginning in January 2004,
the Company was obligated to make 7 additional payments of $15,000, and 7
monthly payments of $10,000 as a draw against product sales. Commissions of 5%
of gross revenues were to be applied (non-cumulative) to the $10,000 draw, and
would be obligated to pay amounts earned over $10,000. In February 2004 both
parties issued notices of termination for cause, ending the agreement as of
March 1, 2004. As of March 15, 2004 there was an outstanding balance of $75,000
under the agreement.

Litigation
On September 15, 2003, PowerHouse Technologies Group, Inc. filed a complaint in
the Superior Court of the State of California in and for the County of Los
Angeles, South West District against Joseph Ford Proctor, Chief Executive
Officer of MayFair Capital Group Limited, and others (collectively, the "Proctor
Group") (case no: YC 047491) (the "Civil Action"), seeking, among other items:
(1) the recovery of significant funds that the Company believes were diverted
from it by the Proctor Group during and after the period Mr. Proctor headed a
capital-raising effort for the Company; (2) the cancellation of approximately 7
million shares of Company Common Stock (post-split) claimed by the Proctor Group
which would represent a majority of the total shares of Company Common Stock
currently outstanding (the "Proctor Group Shares"); and (3) the issuance of a
temporary restraining order preventing the Proctor Group from, among other
items, transferring, selling, or exercising voting rights in respect of the
Proctor Group Shares. Subsequent to a court hearing regarding the Civil Action
on November 5, 2003, the Superior Court, without prejudice, declined to continue
a temporary restraining order that the Superior Court had granted to the Company
on September 15. On February 20, 2004, the court set a tentative date for the
trial for November 10, 2004.

The Company and its Board of Directors believe, based upon a review of all
relevant information available to the Company and after consulting with the
Company's counsel, that the Proctor Group Shares were illegally and invalidly
issued and therefore, the Board of Directors of the Company has determined that
the Proctor Group Shares are, and are deemed to be, not validly issued and
outstanding and that the holders of those shares shall not be entitled to
exercise any of the voting and other rights and privileges of stockholders of
the Company in respect of such shares. The Board of Directors of the Company,
acting upon advice of counsel, has taken actions it believes to be necessary and
appropriate to implement the foregoing determinations, including advising the
Company's transfer agent with respect thereto.

On December 1, 2003, PowerHouse Technologies Group, Inc. and Forward Solutions,
Inc. were served a complaint filed in the Superior Court of the State of
California and for the County of Los Angeles, Central District by Draft, Inc., a
Delaware corporation (case no. BC306660), alleging breach of contract and
related claims pursuant to an alleged contract to develop and implement a direct
marketing program for the Company. The suit claims damages of approximately
$445,000 plus an alleged bonus based on product sales. The Company believes the
complaint is without merit and intends to defend it vigorously and believes that
the loss, if any, resulting from the suit will not have material impact on the
company's financial position, results of operations, or cash flows in future
years.

The Company is not aware of any additional litigation as of March 26, 2004.


7. Subsequent Events
--------------------
Common Stock Issuances - In March 2004, the Company issued 40,000 shares of its
common stock to a vendor in satisfaction of $120,000 consideration for services
previously rendered.

Series A Convertible Preferred Stock offering, and Bridge Financing - On March
2, 2004, the Company signed a Term Sheet for the sale of up to $12 million of
Series A Convertible Preferred Stock (the "contemplated Series A Preferred Stock
offering"). The terms of the offering have not yet been finalized. In
conjunction with this sale the Company signed a Security Agreement and Secured
Convertible Promissory Note (herein after "Bridge Financing") to secure
immediate funding of up to $1,250,000. The note pays interest at the rate of 10%
per annum beginning 90 days from the date of the note and is secured by all
assets of the Company. The note is due March 2, 2005, unless repaid as part of
the contemplated Series A Preferred Stock offering. As of March 15, 2004 the
Company had received $250,000 under the Bridge Financing.

Employment Agreement - On March 15, 2004, the Company entered into an employment
agreement with its Senior Vice President for Product Development for a perpetual
period terminable upon 30 days notice by either party. The agreement calls for a
base salary at the rate of $180,000 per annum and is subject to review no less
than annually. The contract calls for an annual target bonus of 25% of the then
current base salary, pursuant to a bonus plan adopted by the Board of Directors.
The employee was also promised 100,000 options of common stock pursuant to a
Stock Option Plan to be formalized by the Company's Board of Directors.


<PAGE>


ITEM  2. PLAN OF OPERATION.

Development of the Company

Company Background
We were founded in May 2002 as PowerHouse Studios, Inc. Our business is
currently to acquire, develop and market computing software and infrastructure
technologies designed to improve the way mobile information is securely stored,
carried and accessed. In May 2003 we combined with Agate Technologies, Inc. and
changed the name of the surviving company to PowerHouse Technologies Group, Inc.

In a similar fashion to the way a mobile phone has changed the way we
communicate, PowerHouse has launched a product designed to change the way you
work with, and away from, your PC. The Company has developed the Migo, a
portable personal server computing system that couples the popularity of USB
flash storage devices with the Company's advanced synchronization,
personalization and data management software called PocketLogin. The Migo, a
device that fits on a key chain, is designed to improve the mobile computing
experience by allowing computer users to easily transport and access their
personalized desktop environment (complete with files, Microsoft(R) Outlook(R)
e-mail, Internet Explorer favorites, wallpaper, presentations, photos, and MP3
audio files) on other computers.

The Migo was launched through channel and VAR distributors in November 2003, and
first sales have occurred. The Migo featuring PocketLogin software currently
supports the Microsoft Windows PC's and Outlook email programs. The Company is
developing new products and upgrades to operate on Linux and Mac platforms as
wells as other email clients (e.g., AOL, MSN, Lotus Notes).

The Company is also developing a range of Migo devices that will include larger
capacity USB Flash Storage, high capacity Mini Disks, Mobile Cell phones, PDAs
and other mobile data communication platforms that may potentially be used in
the healthcare, banking and financial services and education industries.


Patents, Proprietary Technology and Other Intellectual Property

Because its proprietary technology and information is important to the Company,
it relies on a combination of trade secret, copyright, trademark, and patent
laws, together with confidentiality procedures and nondisclosure agreements, to
establish and protect the proprietary rights and technology used in its
products. The Company also relies on unpatented proprietary know-how in
developing its products, and employs various methods, including confidentiality
agreements with employees, consultants and others, to protect its trade secrets
and know-how.

Irrespective of the foregoing, the Company cannot be sure that these methods of
protecting its proprietary technology, information and know-how will afford
complete protection. Patents may not be enforceable or provide the Company with
meaningful protection from competitors. If a competitor were to infringe the
Company's patents, the costs of enforcing its patent rights might be substantial
or even prohibitive. Likewise, the Company cannot be sure that others will not
independently develop its trade secrets and know-how or obtain access to them.

The Company expects that software product developers will increasingly be
subject to infringement claims as the number of products and competitors in the
Company's industry segment grows and the functionality of products in different
industry segments overlaps. Any such claims, with or without merit, could be
time-consuming, result in costly litigation, cause product shipment delays or
require the Company to enter into royalty or licensing agreements. Such royalty
or licensing agreements, if required, may not be available on terms acceptable
to the Company or at all, which could have a material adverse effect upon the
Company's business, operation results and financial condition.

Principal Suppliers
Our current product is sole-sourced from one manufacturer. Any termination or
significant disruption in this relationship or any material adverse change to
the financial condition of the manufacturer could prevent us from filling
customer orders in a timely manner and would have a material adverse effect on
our financial position and results of operation. Although we believe that our
relationship with this manufacturer is good, there can be no assurance that this
relationship will continue or that this manufacturer will continue to be in a
position to manufacture products for the Company in a timely and cost efficient
manner. Although we are attempting to reduce the adverse impact that problems
with this supplier could cause by developing relationships with other suppliers,
there is no assurance that we would be able to replace the supplier should a
disruption in the relationship occur.

Substantial Doubt About Our Viability as a Going Concern.

Our financial statements have been prepared in accordance with generally
accepted accounting principles applicable to a going concern that contemplates
the realization of assets and the satisfaction of liabilities and commitments in
the normal course of business. We have limited revenues as of December 31, 2003
and minimal assets and we have incurred losses since our inception. To date we
have relied solely on loans from shareholders and officers and the sale of our
equity securities to fund our operations. Our auditor has therefore recognized
that there is substantial doubt about our ability to continue as a going
concern.

Employees
We currently have 6 full-time employees. In addition to our full-time employees,
we have consultants who currently provide administrative and management services
similar to those that would be provided by full and part-time employees. We have
also entered into consulting agreements to obtain counsel and services relating
to marketing, media relations and business development.

Financial Results, Liquidity and Management's Plan (Unaudited)

Three months ended December 31, 2003 and 2002


<PAGE>


We had our first revenues of $238,615 for the three months ended December 31,
2003, and no revenues for the corresponding period ended December 31, 2002. We
completed our contract for the sale of a private-labeled version of our product,
which resulted in revenue of $115,220. We also recognized $78,555 of revenue
through distributor channels. The balance of our revenue came from online sales.
Our costs related to product sales were $166,380.

Our spending for the three months ended December 31, 2003 increased dramatically
from the same period in 2002 due to several factors. Our initial product was
introduced to the market, therefore our spending for marketing and
product-branding related expenses were $391,932 for the three months ended
December 31, 2003, up from $27,671 in the corresponding period in 2002. We
continued our relationships with certain professional services firms to assist
our development of strategies and related materials to successfully market and
sell our products. Also, our general and administrative expenses increased to
$626,848 from $197,127 due to expenses for staffing, and costs associated with
the litigation against the Proctor Group.


Nine months ended December 31, 2003 and 2002

We had revenues of $238,615 for the three months ended December 31, 2003, and no
revenues for the corresponding period ended December 31, 2002. We completed our
contract for the sale of a private-labeled version of our product, which
resulted in revenue of $115,220. We also recognized $78,555 of revenue through
distributor channels. The balance of our revenue came from online sales. Our
costs related to product sales were $166,380.

Our spending for the nine months ended December 31, 2003 increased from the same
period in 2002 as we continued to ramp operations of the company in anticipation
of normal operations. Our sales and marketing expenses were $1,289,249 due
mainly to costs associated with the hiring of a President and COO of Forward
Solutions, Inc., the hiring of additional employees for Forward, development of
a public relations strategy and initial spending on product branding expenses.
General and administrative expenses were comprised of employment related
expenses, office operations and expenses related to the Proctor litigation.

The loss due to theft was substantial, $1,839,411 for the nine months ending
December 31, 2003; the total as of this date is $3,192,759. No additional losses
are anticipated due to activities associated with the Proctor group.


Liquidity and Capital Resources

At December 31, 2003, we had working capital of ($1,153,262) as compared to
working capital of ($2,698,891) at March 31, 2003. We believe we will be able to
obtain sufficient cash resources and working capital to meet our present cash
requirements through debt and/or equity-based fund raising (see Subsequent
Events). During the nine months ended December 31, 2003, net cash used in
operations of $3,228,566 consisted principally of a net loss of $4,541,737 and
was offset by stock-based compensation of $779,000. We have been successful
borrowing approximately $444,000 under a convertible note offering subsequent to
December 31, 2003, and $250,000 under a Bridge Loan. See Subsequent Events for
additional discussion of our fund-raising efforts.


ITEM 3.  CONTROLS AND PROCEDURES
An evaluation was performed by the Company's management with the participation
of the Company's principal executive officer and financial officer of the
effectiveness of the Company's disclosure controls and procedures (as such term
is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the
end of the period covered by this report. During the period covered by this
report, our Company was unable to comply with its Exchange Act reporting
requirements because the Company had not obtained required records and materials
in the possession of certain formerly affiliated persons of the Company. The
evaluation revealed that, as a result of those circumstances, the design and
operation of the Company's disclosure controls and procedures were not effective
as of the end of the period covered by this report. As of the date this report
is filed, the Company has committed significant funds for legal and accounting
work and the preparation of financial statements and audits, which has enabled
our Company's principal executive officer and financial officer to begin the
process of maintaining our Company as current pursuant to its Exchange Act
reporting obligations and provide our Company with effective disclosure controls
and procedures.

An evaluation was also made by the Company's management, with the participation
of the Company's principal executive officer and financial officer, to determine
whether any changes occurred during the quarter covered by this quarterly report
that have materially affected, or are reasonably likely to materially affect,
the Company's internal controls over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) as of the end
of the period covered by this report. During the period covered by this report,
our Company was unable to comply with its Exchange Act reporting requirements
because the Company had not obtained required records and materials in the
possession of certain formerly affiliated persons of the Company. The evaluation
revealed that, as a result of those circumstances, the design and operation of
the Company's internal control over financial reporting was not effective as of
the end of the period covered by this report. As of the date this report is
filed, the Company has committed significant funds for legal and accounting work
and the preparation of financial statements and audits and the development of
revised procedures related to the Company's internal controls over financial
reporting.


<PAGE>


                           PART II - OTHER INFORMATION


ITEM  1.    LEGAL PROCEEDINGS.

See Note 5 to the financial statements.


ITEM  2.    CHANGES IN SECURITIES.

See Note 3 to the financial statements.


ITEM  3.     DEFAULTS UPON SENIOR SECURITIES.

None.



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

Not applicable.



ITEM  5.     OTHER  INFORMATION.

None.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

        (a)   Exhibit 31.1. Certification of Chief Executive Officer pursuant to
              Section 302 of the Sarbanes-Oxley Act of 2002.

              Exhibit 31.2. Certification of Chief Financial Officer pursuant to
              Section 302 of the Sarbanes-Oxley Act of 2002.

              Exhibit 32.1. Certification of Chief Executive Officer pursuant to
              Section 906 of the Sarbanes-Oxley Act of 2002.

              Exhibit 32.2. Certification of Chief Financial Officer pursuant to
              Section 906 of the Sarbanes-Oxley Act of 2002.

        (b)   The following report on Form 8-K was filed during the quarter
              ended December 31, 2003:

              On November 7, 2003, PowerHouse Technologies Group, Inc. (the
              "Company") filed an 8-K/A related to the rescission of shares
              reportedly owned by the Proctor Group.

              On November 14, 2003, PowerHouse Technologies Group, Inc. (the
              "Company") filed an NT 10-Q related to the September 30, 2003
              quarterly statement filing.

              On November 21, 2003, PowerHouse Technologies Group, Inc. (the
              "Company") filed an 8-K/A noticing the change of Accounting firm.

              On December 10, 2003, PowerHouse Technologies Group, Inc. (the
              "Company") filed an 8-K/A related to the change of Accounting firm
              and included a confirming letter from their prior Accounting firm.


<PAGE>



                                   SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                              POWERHOUSE TECHNOLOGIES GROUP, INC.



Date: March 26, 2004          By: /s/ Jay Elliot
                              --------------------------------------------------
                              Jay Elliot
                              Chairman of the Board and Chief Executive Officer
                              (Principal Executive Officer)



Date: March 26, 2004          By: /s/ Gregory A. Duffell
                              --------------------------------------------------
                              Gregory A. Duffell
                              Secretary, Treasurer
                              (Principal Financial and Accounting Officer)


<PAGE>


Exhibit Index:

-------------------------------------------------------------------------------

Exhibit    Description Number
-------------------------------------------------------------------------------

31.1       Certification of Chief Executive Officer pursuant to Section 302
           of the Sarbanes-Oxley Act of 2002.
-------------------------------------------------------------------------------

31.2       Certification of Chief Financial Officer pursuant to Section 302
           of the Sarbanes-Oxley Act of 2002.
-------------------------------------------------------------------------------

32.1       Certification of Chief Executive Officer pursuant to Section 906
           of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350.
-------------------------------------------------------------------------------

32.2       Certification of Chief Financial Officer pursuant to Section 906
           of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350.
-------------------------------------------------------------------------------


<PAGE>



                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

POWERHOUSE TECHNOLOGIES GROUP, INC.

     By:    /s/  Jay Elliot
            --------------------
            President and Chief Executive Officer

     Date:  March 26, 2004