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 September 30, 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 report                  N/A
                                            -------------------------------

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 5, 2004, there were 3,596,716 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 Sept. 30, 2003

                                                                  Sept. 30, 2003
                                                                    (Unaudited)

                                     ASSETS
                                     ------

Current Assets
  Cash and cash equivalents                                         $   269,282
  Inventory                                                             105,480
  Other current assets                                                    2,050
                                                                    -----------
      Total current assets                                          $   376,812

Property and Equipment                                                       --
                                                                    -----------
      Total property and equipment                                           --

Other Assets:
  License fee                                                           203,000
  Investment in equity investee                                         375,925
                                                                    -----------
      Total other assets                                                578,925

Total Assets                                                        $   955,737
                                                                    -----------

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------

Current Liabilities:
  Accounts payable                                                  $   385,102
  Accrued liabilities                                                   586,999
  Customer deposits                                                      85,470
  Note payable to equity investee                                         7,113
                                                                    -----------
      Total current liabilities                                       1,064,684

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

Total Liabilities                                                     1,064,684
                                                                    -----------

  Commitments and contingencies

Stockholders' Equity (Deficit):
      Common stock, $.0001 par value; 20,000,000 shares authorized;
      3,536,716 shares issued and outstanding                               390
      Additional Paid in Capital                                      5,811,617
  Deficit accumulated in development stage                           (5,920,954)
                                                                    -----------
      Total stockholders' equity (deficit)                             (108,947)
                                                                    -----------
Total Liabilities and Stockholders' Equity (Deficit)                $   955,737
                                                                    -----------


See accompanying notes to consolidated financial statements.

                                       2
<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 six months ended      May 16, 2002
                                               September 30,                   September 30,          (inception) to
                                            2003            2002            2003            2002      Sept. 30, 2003
                                        (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)
                                        -----------     -----------     -----------     -----------     -----------
<S>                                     <C>             <C>             <C>             <C>             <C>
Revenues                                $        --     $        --     $        --     $        --     $        --
      Total revenues                             --              --               0              --               0

Cost of Sales                                    --              --               0              --               0
                                        -----------     -----------     -----------     -----------     -----------
      Total cost of sales                        --              --               0              --               0

Gross Profit                                     --              --               0              --               0
                                        -----------     -----------     -----------     -----------     -----------

Operating Expenses:
  Research and development                   30,130          22,000         104,006          34,000         315,186
  Sales and marketing                       330,952          19,186         897,317          21,503       1,084,129
  General and administrative                414,114         110,432         654,011         181,255       1,196,892
                                        -----------     -----------     -----------     -----------     -----------
      Total operating expenses              775,196         151,618       1,655,334         236,758       2,596,207

Non-Operating Expenses:
  Loss due to theft                         162,841         167,612       1,839,411         357,534       3,192,759
  Equity in loss of investee                 49,810               0          94,931               0         124,075
  Interest - Net                                898               0           3,118               0           7,113
                                        -----------     -----------     -----------     -----------     -----------
      Total non-operating expenses          213,549         167,612       1,937,460         357,534       3,323,947

Loss Before Income taxes                    988,745         319,230       3,592,794         594,292       5,920,154

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

Net Loss                                $   988,745     $   319,230     $ 3,592,794     $   594,292     $ 5,920,954
                                        ===========     ===========     ===========     ===========     ===========

Basic and Diluted Loss per Share        $      0.29     $      0.26     $      1.68     $      0.48

Weighted Average Shares Outstanding       3,430,966       1,250,000       2,143,302       1,250,000
</TABLE>


See accompanying notes to consolidated financial statements.

                                       3
<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 six        May 16, 2002       May 16, 2002
                                                      months ended      (inception) to     (inception) to
                                                     Sept. 30, 2003     Sept. 30, 2002     Sept. 30, 2003
                                                       (Unaudited)        (Unaudited)        (Unaudited)
                                                       -----------        -----------        -----------
<S>                                                    <C>                <C>                <C>
Cash Flows From Operating Activities:
  Net loss                                             $(3,592,794)       $  (594,292)       $(5,920,954)

Adjustments to Reconcile Net loss to Net Cash
  Used in Operating Activities:
    Common stock issued for services                       500,000                125            500,125
    Equity in loss of investee                              94,931                  0            124,075
    Accrued interest on notes                                3,118                  0              3,118

    Changes in operating assets and liabilities:
      Inventory                                           (105,480)                             (105,480)
      Other deposits                                        (2,050)                 0             (2,050)
      License fee                                         (203,000)                 0           (203,000)
      Accounts payable                                     262,549             30,390            385,102
      Accrued payroll                                      241,573            139,652            306,573
      Customer deposit                                      85,470                  0             85,470
      Due to officer                                       (93,667)                 0                  0
                                                       -----------        -----------        -----------

Net cash used in operating activities                   (2,809,350)          (424,125)        (4,827,021)
                                                       -----------        -----------        -----------

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

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

Cash Flows from Financing Activities:
  Finders' fee payable                                     (50,000)                 0                  0
  Principal payment on note payable                       (180,000)                 0           (266,005)
  Advances on common stock subscriptions                 3,308,632            424,125          5,492,308
                                                       -----------        -----------        -----------

      Net cash provided by financing activities          3,078,632            424,125          5,226,303
                                                       -----------        -----------        -----------

Net Increase in cash and cash equivalents                  269,282                  0            269,282

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

Cash and Cash Equivalents, end of period               $   269,282        $         0        $   269,282
                                                       ===========        ===========        ===========
</TABLE>

                                       4
<PAGE>

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

Notes To Financial Statements

For The Six Months Ended September 30, 2003 (Unaudited) and September 30, 2002
(Unaudited), For The Period May 16, 2002 (inception) Through September 30, 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 September 30, 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.

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 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.

During the six months ended September 30, 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.  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 September 30, 2003, $203,000 of the prepayment was due.

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 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.

Services Agreements

In April 2003 the Company entered into an agreement for financial public
relations services. This agreements 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 an amount 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 5, 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 5, 2004.


6. Subsequent Events
--------------------

Common Stock Issuances - In December 2003, the Company issued 60,000 shares of
its common stock to officers, directors and employees for services and
compensation.

Secured Convertible Notes - In October 2003, the Company offered up to
$10,000,000 in its 10% secured convertible notes, bearing interest 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 and at an
initial conversion price of $4.00 per share. As of March 5, 2004, the Company
has issued approximately $444,000 of the secured convertible notes.

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 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 equal to 10% per annum beginning 90 days from the date of the note and
is collateralized by all assets of the Company. The note is due March 2, 2005,
unless repaid as part of the Series A Preferred Stock offering. As of March 5,
2004 the Company had received $50,000 as part of the Bridge Financing.
<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 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 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 no revenues as of September 30, 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 5 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. Copies of consulting
agreements and employment agreements have been filed as exhibits to this filing.

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

Three months ended September 30, 2003 and 2002

We had no revenues for the three months ended September 30, 2003 or for the
corresponding period ended September 30, 2002. We did enter a contract for the
sale of a private-labeled version of our product, and received a deposit of
$85,470 for this order. The first portion of this order is for 2,000 units to be
delivered during our fiscal third quarter.

Our spending for the three months ended September 30, 2003 increased
dramatically from the same period in 2002 due to several factors. Our initial
product was nearly ready for market introduction, therefore our spending for
marketing and product-branding related expenses were $330,952 for the three
months ended September 30, 2003, up from $19,186 in the corresponding period in
2002. We retained certain professional services firms to assist our development
of strategies and related materials to successfully market and sell our
products. We also hired additional staff to support the growth. Also, our
General & Administrative expenses increased to $414,114 from $110,432 due to
expenses for staffing, and costs associated with the ligitation against the
Proctor Group.

The Loss due to theft was reduced to $167,841 for the three months ending
September 30, 2003, due to management's identification of the situation and
decisive actions to stop the losses and initiate litigation. See Proctor Group
(see Commitments and Contingencies, Litigation). This brings the total loss as
of September 30, 2003 to $3,192,759.


Six months ended September 30, 2003 and 2002

We had no revenues for the six months ended September 30, 2003 or for the
corresponding period ended September 30, 2002. We did enter a contract for the
sale of a private-labeled version of our product, and received a deposit of
$85,470 for this order. The first portion of this order is for 2,000 units to be
delivered during our fiscal third quarter.

Our spending for the six months ended September 30, 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 $897,317 due mainly
to costs associated with the hiring of a President and COO of Forward Solutions,
Inc., the hiring of additional employees for Forward, and initial spending on
product branding expenses. General and administrative costs were comprised of
employment related expenses, and expenses related to the Proctor litigation.

The Loss due to theft was substantial, $1,839,411 for the six months ending
September 30, 2003; the total as of this date is $3,192,759. No additional
losses are anticipated to the Proctor group.


Liquidity and Capital Resources

At September 30, 2003, we had working capital of ($667,872) 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 six months ended September 30, 2003, net cash used in
operations of $2,809,350 consisted principally of a net loss of $3,592,754 and
was offset by stock-based compensation of $500,000. We have been successful
borrowing approximately $444,000 under a convertible note offering subsequent to
September 30, 2003. 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 reports on Form 8-K were filed during the quarter
            ended September 30, 2003:

            On July 14, 2003, PowerHouse Technologies Group, Inc. (the
            "Company") filed a Form 8-K/A related to the combination with Agate
            Technologies, Inc. and PowerHouse Studios, Inc..

            On September 19, 2003, PowerHouse Technologies Group, Inc. (the
            "Company") filed a Form 8-K which included as an exhibit a copy of a
            press release dated September 19, 2003, announcing recent
            developments affecting the Company.
<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 12, 2004      By: /s/ Jay Elliot
                              -------------------------------------------------
                              Jay Elliot
                              Chairman of the Board and Chief Executive Officer
                              (Principal Executive Officer)



Date: March 12, 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.