================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC. 20549


                                   FORM 10-QSB

(Mark One)

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

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

                   For the Quarterly Period Ended May 31, 2005

                        Commission file number 000-28506

                                TRACKPOWER, INC.
        (Exact name of small business issuer as specified in its charter)

                               Wyoming 13-3411167
                 (State of Incorporation) (IRS. Employer ID No.)

                                 67 Wall Street
                         Suite 2211, New York, NY 10005
                    (Address of Principal Executive Offices)

                                 (212) 804-5704
                (Registrant's Telephone No. including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

            YES                                  NO X
               ---                                 ---

The number of shares outstanding of each of the Registrant's class of common
equity, as of May 31, 2005 are as follows:

          Class of Securities                    Shares Outstanding
          -------------------                    ------------------
    Common Stock, $.0001 par value                   340,732,951

Transitional Small Business Issuer Format.

            YES                                  NO X
               ---                                 ---

================================================================================

<PAGE>

                                TrackPower, Inc.



                                      INDEX


   PART I.    Financial Information

   Item 1.    Condensed Financial Statements (unaudited)
                   Condensed Balance Sheet................................  3
                   Condensed Statements of Operations.....................  4
                   Condensed Statements of Stockholders' Equity...........  5
                   Condensed Statements of Cash Flows.....................  6
                   Notes to Condensed Financial Statements................  7

   Item 2.    Management's Discussion and Analysis or Plan of Operation...  9

   Item 3.    Controls and Procedures..................................... 16

   PART II.   Other Information

   Item 2.    Unregistered Sales of Equity Securities..................... 17

   Item 5.   Other Information............................................ 17

   Item 6.    Exhibits ................................................... 18

   Signatures ............................................................ 20

   Exhibits

<PAGE>

                          PART I. Financial Information
                          -----------------------------

Item 1.  Condensed Financial Statements.
-------  -------------------------------

                                TrackPower, Inc.
                             Condensed Balance Sheet
                                   (UNAUDITED)
                                  May 31, 2005


ASSETS
Current Assets:
  Cash                                                             $     67,828
  Due from related parties                                              673,759
  Prepaid expenses                                                        2,519
-------------------------------------------------------------------------------
Total current assets                                                    744,106
-------------------------------------------------------------------------------

Office equipment                                                         17,087
  Less:  Accumulated depreciation                                       (12,578)
-------------------------------------------------------------------------------
     Net office equipment                                                 4,509

Investments                                                             101,525
Loans receivable                                                        714,876

-------------------------------------------------------------------------------
TOTAL ASSETS                                                       $  1,565,016
-------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Accounts payable                                                 $    247,910
  Due to related parties                                                377,741
  Accrued directors' fees                                                74,250
  Accrued professional fees                                              26,133
  Note payable                                                           21,000
-------------------------------------------------------------------------------
Total current liabilities                                               747,034
-------------------------------------------------------------------------------

Commitments and contingencies (see Summary of
Significant Accounting Policies)

Shareholders' equity:
  Convertible preferred stock, no par value,
  unlimited shares authorized, none issued                                 --
  Common stock, $.0001 par value; unlimited
  shares authorized, 340,732,951 shares, issued                          34,073
  and outstanding
  Additional paid in capital                                         25,520,799
  Common stock subscribed                                               575,200
  Accumulated deficit                                               (25,312,090)
-------------------------------------------------------------------------------
     Total shareholders' equity                                         817,982
-------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                         $  1,565,016
-------------------------------------------------------------------------------

                 See accompanying notes to financial statements.


                                       3

<PAGE>

                                TrackPower, Inc.
                       Condensed Statements of Operations
                                   (UNAUDITED)


                                                       Three Months Ended
                                                            May 31,
                                                    2005              2004

Operating expenses:
   Wages and consulting fees                   $      60,078      $      39,872
   Management fees, related party                     35,000             30,000
   Professional fees                                  23,814              9,000
   General and administrative                         31,570             25,364
-------------------------------------------------------------------------------
   Total operating expenses                          150,462            104,236

Loss from operations                                (150,462)          (104,236)

Other (income) expenses:
   Interest                                             --                8,100
   Depreciation and amortization                         265              1,723
-------------------------------------------------------------------------------
   Total other (income) expenses                         265              9,823
-------------------------------------------------------------------------------

Net income (loss)                              $    (150,727)     $    (114,059)
===============================================================================

Loss per share of common stock:
Weighted average number of common
shares outstanding                               275,129,618        224,098,369
Loss per share                                 $     (0.0005)     $     (0.0005)






                 See accompanying notes to financial statements.


                                       4

<PAGE>

<TABLE>
<CAPTION>

                                                        Trackpower, Inc.
                                         Condensed Statements of Stockholders' Equity
                                                          (UNAUDITED)


                                                Common Stock
                                           -------------------------
                                                                         Common     Additional                       Total
                                                                          Stock      Paid-in     Accumulated     Stockholders'
                                             Shares        Amount      Subscribed    Capital       Deficit        Deficiency
                                           -----------   -----------   ----------   ----------   -----------     -------------

<S>                                       <C>            <C>            <C>         <C>          <C>              <C>
Balance, February 29, 2004                 218,831,703   $  21,883       137,000    23,666,847   (24,681,880)      (856,150)

Common stock issued in connection with
private placements                           4,600,000         460       (46,000)       45,540          --             --

Common stock subscribed                           --          --          61,000          --            --           61,000

Common stock issued for settlement of
professional fees                            2,500,000         250      (100,000)       99,750          --             --

Common stock issued for investment           2,500,000         250                                    24,750         25,000

Loss for the three month period ended
 May 31, 2004                                       --          --            --            --      (114,059)      (114,059)

                                           -----------   ---------     ---------    ----------   -----------     ----------
Balance, May 31, 2004                      228,431,703   $  22,843        52,000    23,836,887   (24,795,939)      (884,209)
                                           -----------   ---------     ---------    ----------   -----------     ----------

<CAPTION>

                                                Common Stock
                                           -------------------------
                                                                         Common     Additional                       Total
                                                                          Stock      Paid-in     Accumulated     Stockholders'
                                             Shares        Amount      Subscribed    Capital       Deficit    (Deficiency)/Equity
                                           -----------   -----------   ----------   ----------   -----------  -------------------

<S>                                       <C>            <C>            <C>         <C>          <C>              <C>
Balance, February 28, 2005                 257,992,951   $  25,799        37,200    24,684,873   (25,161,363)      (413,491)

Common stock issued in connection with
private placements                          81,740,000       8,174          --         809,226          --          817,400

Common stock issued for consulting
services provided                            1,000,000         100       (26,800)       26,700          --             --

Common stock subscribed                           --          --         564,800          --            --          564,800

Loss for the three month period ended
 May 31, 2005                                     --          --            --            --        (150,727)      (150,727)

                                           -----------   ---------     ---------    ----------   -----------     ----------
Balance, May 31, 2005                      340,732,951   $  34,073       575,200    25,520,799   (25,312,090)       817,982
                                           -----------   ---------     ---------    ----------   -----------     ----------
</TABLE>


                 See accompanying notes to financial statements.


                                       5
<PAGE>

                                TrackPower, Inc.
                       Condensed Statements of Cash Flows
                                   (UNAUDITED)


                                                        Three Months Ended
                                                              May 31,

                                                         2005           2004
  ------------------------------------------------------------------------------
Net cash from operations
   Net (loss)                                        $  (150,727)   $  (114,059)
   Adjustments to reconcile net (loss)
    to net cash used in operating activities:
   Depreciation and amortization                             265          1,723
   Changes in:
      Prepaid expenses                                    (2,519)          --
      Accounts payable and accrued expenses                8,513         71,293
--------------------------------------------------------------------------------
Net cash used in operating activities                   (144,468)       (41,043)
--------------------------------------------------------------------------------

Cash flows from investing activities:
          Acquisition of investment                      (41,525)          --
          Increase in due from/to related parties       (407,761)          --
          Loan receivable                               (714,876)          --
--------------------------------------------------------------------------------
Net cash used in investing activities                 (1,164,162)          --
--------------------------------------------------------------------------------

Cash flows from financing activities:
          Decrease in bank indebtedness                   (5,742)          --
          Proceeds on issuance of common stock           817,400           --
          Proceeds from common stock subscribed          564,800         61,000
--------------------------------------------------------------------------------
Net cash provided by financing activities              1,376,458         61,000
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Increase in cash                                          67,828         19,957
--------------------------------------------------------------------------------
Cash, beginning of period                                   --           18,047
--------------------------------------------------------------------------------
Cash, end of period                                  $    67,828    $    38,004
--------------------------------------------------------------------------------

Noncash activities:

During the three month period ended May 31, 2005, the Company issued 1,000,000
shares of its common stock, valued at $26,800 for investor relations consulting
services provided.

During the three month period ended May 31, 2004, the Company issued 2,500,000
shares of its common stock to acquired a $25,000 face value convertible
debenture of Diversified Racing Investments Inc.


                 See accompanying notes to financial statements.


                                       6

<PAGE>

                                TrackPower, Inc.

                     Notes to Condensed Financial Statements
                                  May 31, 2005

Summary of Significant Accounting Policies
------------------------------------------

      Nature of Business
      ------------------

      TrackPower's present business strategy and direction is primarily to
acquire interests in horseracing tracks and also to evaluate other horseracing
industry opportunities.

      Basis of Presentation
      ---------------------

      The accompanying unaudited financial statements of TrackPower, Inc. have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and item
310 (b) of Regulation S-B. Accordingly they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months ended
May 31, 2005 are not necessarily indicative of the results that may be expected
for the fiscal year ending February 28, 2006. For further information, refer to
the financial statements and footnotes thereto included in the Company's annual
report on Form 10-KSB for the fiscal year ended February 28, 2005.

      Going Concern
      -------------

      The accompanying financial statements have been prepared assuming the
Company will continue on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The Company has suffered recurring losses from operations during
its operating history. The ability of the Company to continue as a going concern
is dependent upon obtaining future financing and profitable operations.
Management is in the process of evaluating future business opportunities, which
would generate revenue to sustain the operations of the Company. The financial
statements do not include any adjustments relating to the recoverability and
classification of recorded assets and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.

      Use of Estimates
      ----------------

      The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Significant estimates include the recoverability of assets and
the fair value of common stock and other equity securities issued. Actual
results could differ from those estimates.

      Due to/from Related Parties
      ---------------------------

      Periodically, the Company advances funds and pays expenses on behalf of
related parties


                                       7
<PAGE>

and funds are advanced and expenses are paid by related parties on behalf of the
Company. These transactions result in non-interest bearing payables or
receivables to/from related parties. These balances primarily represent the
effect of timing differences between when the amount was paid by the Company (or
related party) and when the amount was recovered from the related party (or
transferred by the Company). Related parties of the Company include entities
under common management.

      At May 31, 2005, amounts due from related parties totaled to $673,759 and
amounts due to related parties totaled $377,741. As of July 15, 2005 the amounts
due from related parties had been reduced by $230,749. The Company anticipates
full recovery and/or settlement of all related party balances by the end of the
second quarter.

      Loan Receivable
      ---------------

      The Company has provided a loan to Tioga Downs Racetrack LLC, an entity in
which the Company is an equal member with Southern Tier Acquisitions LLC
("Southern Tier"). In September 2004 the Company entered into an Operating
Agreement with the other member of Tioga Downs Racetrack LLC pursuant to which
both parties agreed to fund the development of the Tioga Downs property. In the
fourth quarter of fiscal 2005 the Company agreed with Southern Tier that all New
York state horseracing track ownership opportunities would be jointly pursued
with Southern Tier. As of May 31, 2005, the Company has advanced $114,876 to
Tioga Downs Racetrack LLC for the development of Tioga Downs and $600,000 in
debtor in possession loans to Mid-State Raceway Inc. which is a bankrupt entity
that owns Vernon Downs racetrack. See "Recent Developments - Vernon Downs."
below.

      The portion of the loan made to Tioga Downs Racetrack LLC for purposes of
the development of the Tioga Downs property does not possess specific repayment
terms. However, the portion of the loan made for purposes of the Vernon Downs
debtor in possession loan has a stated interest rate of 9%, contains provisions
for a 3% service fee (whereby a contribution of $100,000 results in indebtedness
of $103,000) and is due and payable upon confirmation of a plan of
reorganization. Confirmation of the plan of reorganization is subject to the an
affirmative vote by all interested parties and although the Company is hopeful
that matters will be resolved in September 2005 the debtor in possession portion
of the loan receivable has been reflected on the Company's balance sheet as a
non-current asset.

      Investments
      -----------

      During fiscal 2004, the Company purchased a $25,000 convertible note of
Baymount Corporation (formerly known as Diversified Racing Investments Inc.)(a
private related party by virtue of a common director) for cash and exchanged a
racehorse valued in the Company's financial statements at $10,000 for another
convertible note of Baymount having a face value of $25,000. The second
convertible note was valued at the exchange value of $10,000 due to the non-cash
nature of the exchange and because Baymount is a related party. The Convertible
notes; 1) bear interest at 10%, 2) are secured by all the operating assets of
Diversified Racing, 3) automatically convert into common shares of Baymount upon
the listing of the shares on a public stock exchange, 4) upon conversion the
total series (CAD$1,000,000) shall convert into common shares that constitute
50% of the outstanding common shares as constituted at closing of this series of
the note offering, 5) Baymount may repay the principal and interest, without
penalty, at any time after the first anniversary of issuance, and 6) have a term
of two years.

      The Company acquired a third $25,000 convertible note by issuing 2,500,000
shares of the Company's common stock. The Company valued the third convertible
note at $25,000 based on the value of the common stock issued. The Company
ascribed the value of $25,000 to the common stock, due to private placements
completed for cash at this level at the same time.

      During the three month period ended August

                                       8
<PAGE>

 31, 2004 the Company converted
the notes into 1,020,000 shares of Baymount common stock and at the time
continued to value the investments at $60,000. The Board of Directors of
Baymount is planning to take the company public shortly on the TSX Venture
Exchange.

      During the three month period ended May 31, 2005, the Company acquired
100,000 additional common shares of Baymount in a private transaction for a cash
payment of $41,525 (CAD$50,000). As of May 31, 2005, the Company holds 1,120,000
Baymount common shares, representing an ownership position of approximately 3%.
Management of Trackpower believes that the public company value of the
investment will likely exceed the carrying value and therefore believes the
investment value is conservatively presented at $101,525.

      These shares are considered "held to maturity" investments and are
recorded at amortized cost. Any unrealized losses that are perceived to be an
other than temporary impairment will be recorded as realized losses through the
Company's statement of operations.

      Loss per Share
      --------------

      Loss per common share is based on the weighted average number of shares
outstanding during each period presented. Warrants to purchase stock are
included as common stock equivalents only when dilutive.

      Contingencies
      -------------

      The Company has been informed of a judgment by a former consultant of the
Company involving a dispute over a consulting agreement. The judgment totals
$261,625 and involves services provided prior to fiscal 2004. The Company has
sought legal advice and believes the judgment is without merit. Management
believes the loss or settlement, if any, will not have a material affect on the
Company's financial position or results of operations. Any cost of settlement or
loss will be recognized in the period it occurs.

      Recent Accounting Pronouncements
      --------------------------------

      FASB STATEMENT NO. 154, ACCOUNTING CHANGES AND ERROR CORRECTIONS In May
2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections"("SFAS 154"). SFAS 154 replaces APB No. 20, "Accounting Changes" and
SFAS No. 3, "Reporting Accounting Changes in Interim Financial Statements" and
establishes retrospective application as the required method for reporting a
change in accounting principle. SFAS 154 provides guidance for determining
whether retrospective application of a change in accounting principle is
impracticable and for reporting a change when retrospective application is
impracticable. The reporting of a correction of an error by restating previously
issued financial statements is also addressed. SFAS 154 is effective for
accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005. The Company does not anticipate that the adoption of
SFAS 154 will have a material impact on its consolidated balance sheets and
statements of operations, shareholders' equity and cash flows.

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

      Forward Looking Statements
      --------------------------

      Certain matters discussed in this Quarterly Report may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and as such may involve risks and uncertainties.
These forward-looking statements relate to, among other things, expectations of
the business environment in which the Company operates, projections of future
performance, projections of regulatory approvals, projected transactions
perceived opportunities in the market and statements regarding the Company's
goals. The Company's actual results, performance, or achievements expressed or
implied in such forward-looking statements may differ. We are under no duty to
update, and do not undertake to update, any of the forward-looking statements
contained in this quarterly report to conform them to actual results or to
changes in our expectations.

Without limiting the foregoing, there can be no assurance that the necessary
licenses to permit harness racing and VLT gaming at Tioga Downs will be obtained
or if obtained will be on satisfactory terms. There

                                       9
<PAGE>

also can be no assurance that the Plan to buy the Vernon Downs property outlined
below will be approved on terms favorable to the Company, if at all. In
addition, there is a risk that our interests in TDRLLC and the Baymount
Corporation will not be as valuable as anticipated if these entities are unable
to develop profitable operations and projects.

            Recent Developments
            -------------------

      Any previous disclosure in press releases or Company filings with the SEC
that may conflict in any way with the facts outlined in this or other sections
of this 10-QSB should be disregarded.

      Tioga Downs
      -----------

      Trackpower is a member of Tioga Downs Racetrack LLC, a New York limited
liability company ("TDRLLC"). Southern Tier Acquisitions, LLC ("Southern Tier"),
a limited liability company owned by Jeffrey Gural, is also a member. Each of
Trackpower and Southern Tier own 50% of TDRLLC. Mr. Gural currently serves as
sole manager of TDRLLC, as the appointee of Southern Tier. TDRLLC was organized
to begin to development of Tioga Downs racetrack. TrackPower and Southern Tier
have agreed that each will contribute $1,500,000 to Tioga Downs. Southern Tier
has contributed $1,500,000 cash and TrackPower's contribution was the transfer
of the Tioga Downs property.

      While TDRLLC currently holds title to the Tioga Downs property, this
ownership remains subject to approval by TrackPower's stockholders of ongoing
negotiations by the Company with the seller, Asolare II, LLC, a limited
liability company controlled by certain principals of TrackPower, including John
Simmonds and Kenneth Adelberg.

      There remain several state and local regulatory permits, licenses and
agreements that must be obtained or consummated in order for the Tioga Downs
property to open for harness racing and gaming. The principals of the owners of
Tioga Downs, Jeffery Gural and John Simmonds, have each held New York State
harness racing licenses for over 15 years. In addition, Edward Tracy, the CEO of
the Company, has been licensed for gaming activities in seven jurisdictions
(including New Jersey) over the last 20 years. There can be no assurance,
however, that the necessary licenses to permit harness racing and VLT gaming at
Tioga Downs will be obtained or if obtained will be on satisfactory terms. In
addition, there is a risk that our interest in TDRLLC and the property it owns
will not be as valuable as anticipated if it is unable to develop profitable
operations and projects.

      Vernon Downs
      ------------

      Each of TrackPower and Southern Tier own 50% of, and are each committed to
funding 50% of, Vernon Downs Acquisition, LLC, a New York limited liability
company ("Vernon Downs, LLC"), an entity that has filed a Chapter 11
Reorganization Plan to seek to acquire out of bankruptcy a property located on
600 acres in Vernon N.Y., which includes a harness racing racetrack, which began
operating in 1953, a 175-room hotel, numerous restaurants and built out space
for a 1,000-machine VLT casino, known as Vernon Downs. The Plan provides that
Vernon Downs, LLC will become the sole shareholder of Vernon Downs, subject to
the right by prior shareholders of the Mid-State Raceway, Inc., the debtor
entity, to purchase ten percent of the aggregate membership interests in Vernon
Downs, LLC. The members of Vernon Downs, LLC have already provided $1.2 million
of debtor in possession funding to Vernon Downs, LLC. Confirmation of the Plan
is currently expected during the third quarter of 2005. There can be no
assurance, however, that the Plan will be approved on terms favorable to the
Company, if at all.


                                       10
<PAGE>

      The Vernon Downs and Tioga Downs properties are approximately 140 miles
apart and serve different markets. Nevertheless, these tracks are close enough
to offer the opportunity to share resources of management, horses and horsemen,
resulting in significant savings for all parties. Trackpower anticipates that
the tracks will develop complimentary schedules which will allow the horsemen a
greater number of racing days without traveling to other parts of the country.

      Baymount Corporation
      --------------------

      Baymount Corporation (formerly known as Diversified Racing Investments
Inc.) is an entity co-founded by Mr. John Simmonds, Mr. Simmonds' son Graham
Simmonds and others, in which Mr. John Simmonds has a minority interest. The
Company acquired from Baymount Corporation $75,000 of Baymount Corporation
convertible debentures in exchange for; 1) $25,000 cash, 2) 2,500,000 shares of
the Company's common stock and 3) a racehorse valued at $10,000. In June 2004,
the debentures were converted into 1,020,000 common shares of Baymount,
representing approximately a 3% ownership position.

      The Company also entered into a joint venture with Baymount Corporation to
develop a horse racetrack in Brandon Manitoba Canada known as the Wheat City
Horse Park (Wheat City). Under the joint venture Trackpower obtained a 42.5%
interest in the project. On May 11, 2005, Baymount Corporation, acquired the
Corporation's 42.5% interest in the Wheat City joint venture from Trackpower in
exchange for Baymount issued warrants to purchase 500,000 shares of Baymount
common stock. Of these warrants, (i) 100,000 have vested and are exercisable at
a price of CAD$0.40 per common share until May 11, 2006; (ii) 200,000 are
exercisable at a price of CAD$0.60 per common share and vest on the date that
Wheat City receives regulatory approval for a horseracing license in the
Province of Manitoba; and (iii) 200,000 are exercisable at a price of $0.80 per
common share and vest on the date that Wheat City receives from its auditors an
audited consolidated financial statement evidencing that Wheat City's cash flow
for the previous financial year was positive.

      During the three month period ended May 31, 2005, the Company acquired
100,000 additional common shares of Baymount in a private transaction for a cash
payment of $41,525 (CAD$50,000). As of May 31, 2005, the Company holds 1,120,000
Baymount common shares, representing an ownership position of approximately 3%,
valued at $101,525. Note that there is a risk that our interest in the Baymount
Corporation will not be as valuable as anticipated if it is unable to develop
profitable operations and projects.

      Appointment of Edward M. Tracy as CEO
      -------------------------------------

      On May 11, 2005, the Company appointed Mr. Edward M. Tracy as its
president and CEO. Edward Tracy is the CEO of the Tracy Group, a Casino
Management and Development Company. The Tracy Group focuses on workout
strategies, development of management and marketing strategies, and ground-up
development for a variety of clients. The Tracy Group is currently engaged in
several workout projects in New York as well as ground-up development in
Pennsylvania.

      Prior to forming the Tracy Group, Mr. Tracy has had over twenty years of
hands on management and development experience in the gaming and hospitality
industry. His extensive experience includes serving as Chairman and CEO of
Capital Gaming, a multi-jurisdictional manager of Native American and Riverboat
Casinos. Mr. Tracy also served as CEO of the Trump

                                       11
<PAGE>

Organization, which include all casino, hotel and entertainment entities. During
his tenure at the Trump Organization, Mr. Tracy was responsible for managing
over 13,500 employees, 3,000 luxury rooms and 240,000 square feet of casino
space, which produced annual revenues in excess of $1 billion. Mr. Tracy will be
responsible for developing the Company into a profitable gaming enterprise.
Concurrent with this announcement, Mr. John G. Simmonds resigned as CEO. Mr.
Simmonds will continue as chairman of the Board and will provide strategic
planning advice as the Company develops.

Results of Operations
---------------------

      For the three month period ended May 31, 2005

      Operating expenses totaled $150,462 during the three-month period ended
May 31, 2005 approximately $46,000 higher than during the three month period
ended May 31, 2004.

      Wages and consulting fees were $60,078 during the three month period ended
May 31, 2005 compared to $39,872 during the comparative period in the prior
year. The wages and consulting fees during the three month period ended May 31,
2005 represented $50,900 of employment costs of Mr. Ed Tracy (newly appointed
CEO effective May 1, 2005), $4,071 in accounting staff employment costs and
marketing consulting services of $5,107. Wages and consulting costs during the
three month period ended May 31, 2004 consisted of payroll costs of accounting
staff totaling $6,963 and various consulting fees totaling $32,909. The Company
also paid $30,000 in management fees to a related party for executive management
services of the Company's officers.

      Management fees paid to a related party were $35,000 in the current
quarter and $30,000 in the prior quarter. Up to and including April 30, 2005 the
Company has been paying for executive management services of $10,000 per month.
Effective May 1, 2005 the Company agreed to an increase of $5,000 per month (to
$15,000) for the additional part time services of a CFO.

      General and administrative expenses were $31,570 during the three month
period ended May 31, 2005 compared to $25,364 during the three month period
ended May 31, 2004.

      Within general and administrative costs; 1) travel, meals and
entertainment totaled $9,569 during the three months ended May 31, 2005 compared
to $9,404 during the three month period ended May 31, 2004, 2) auto lease,
repair and gasoline expenses were $5,715 during the quarter ended May 31, 2005
up from $4,398 during the three month period ended May 31, 2004, 3) directors
fees were static at $3,750 in both quarters, 4) rent and insurance expenses were
$3,695 in the current quarter and $2,815 in the prior year, 5) corporate fees
were $3,800 during the three month period ended May 31, 2005 compared to $1,805
in the comparative period in the prior year, 6) foreign exchange losses were
$4,026 during the three month period ended May 31, 2005 compared to a gain of
$175 during the quarter ended May 31, 2004, and 7) other miscellaneous costs
totaled $1,015 during the current quarter.

      Professional fees were $23,814 during the current quarter up significantly
from $9,000 during the comparative period in the prior year. Accounting fees
were $9,000 during each of the

                                       12
<PAGE>

three month periods ending May 31, 2005 and 2004. Legal fees were $14,814 during
the quarter ended May 31, 2005 and zero during the comparative period in the
prior. The increase is a result of legal fees associated with the Tioga Downs
investment and higher legal fees associated with general corporate matters of a
public company.

      The loss from operations has been increased, primarily due to the Company
engaging Mr. Tracy as CEO effective May 1, 2005.

      Amortization decreased from $1,723 during the three month period ended May
31, 2004 to $265 during the current quarter. The reduction is the result of the
disposal of certain capital assets during fiscal 2005.

      Interest expense was reduced from $8,100 during the three month period
ended May 31, 2004 to zero during the current quarter. Interest expense has been
eliminated due to the conversion of all remaining debentures during fiscal 2005.

      The Company recorded a net loss of $114,059 during the three month period
ended May 31, 2004 (less than $0.01 per share) compared to a net loss of
$150,727 (also less than $0.01 per share) during the comparative period in the
current year. The increase is primarily the result of new executive level
management hired effective May 1, 2005.

Critical Accounting Policies and Estimates

      The discussion and analysis of results of operations and financial
condition are based upon the financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America (GAAP). The preparation of these financial statements requires
management to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. Management evaluates the estimates on an on-going basis,
including those related to bad debts, investments, customer accounts, intangible
assets, income taxes, and contingencies and litigation. Management bases its
estimates on historical experience and on various other assumptions that they
believe to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions. Note 2 of the "Notes
to Financial Statements" of the Company's Annual Audited Financial Statements
includes a summary of the significant accounting policies and methods used in
the preparation of the financial statements. The following is a brief
description of the more significant accounting policies and methods the Company
uses.

Fair Value of Financial Instruments:

      Cash, accounts payable, accrued expenses, note payable and loans
receivable are carried in the financial statements at amounts which approximate
fair value.

Investments:

      The Company's investments consist of common stock of a related private
company. The common shares of the private company are considered as "held to
maturity" investments and are

                                       13
<PAGE>

recorded at amortized cost. Any unrealized losses which are considered "other
than temporary" are classified as realized losses through operations.

Loan Receivable:

      The Company has provided a loan to Tioga Downs Racetrack LLC for (a) the
development of the Tioga Downs property and (b) debtor in possession financing
of Vernon Downs which is in bankruptcy proceedings As of May 31, 2005, the
Company has advanced $714,876 to Tioga Downs Racetrack LLC.

      Financial Condition
      -------------------

      During the three month period ended May 31, 2005, total assets increased
from $64,774 to $1,565,016. The increase is primarily the result of a loan made
to Tioga Downs Racetrack LLC of $714,876, an increase in amounts due from
related parties of $673,759, an increase in cash to $67,828 (from a bank
indebtedness balance of $5,742) and an increase in investments of $41,525.

      The Company has provided a loan of $714,876 to Tioga Downs Racetrack LLC,
an entity in which the Company is an equal member, to fund the development of
the Tioga Downs property and also to partially fund a debtor in possession loan
to Vernon Downs racetrack. The Company and Southern Tier Acquisitions LLC have
agreed to share equally in the costs of pursuing any horseracing track
opportunities in New York State.

      The Company occasionally pays the costs of related parties and also
occasionally has certain of its costs paid by related parties. These payments by
related parties and the Company itself result in intercompany amounts either due
to or due from the related party. As of May 31, 2005, the net amount due from
related parties was $296,018. As of July 15, 2005 such balance had been reduced
by $230,749 and management expects full recovery of the amount by the end of the
second quarter.

      The Company's cash balance during the three month period ended May 31,
2004 increased from a negative $5,742 to $67,828. The funding of the loans to
related parties arose from the issuance of common stock.

      The Company's carrying value of office equipment was reduced from $4,774
to $4,509 during the quarter due to normal depreciation of $265.

      During the quarter ended May 31, 2005, the Company increased its
investment in Baymount Corporation from $60,000 to $101,525. The Company
acquired an additional 100,000 common shares of Baymount for a cash payment of
$41,525. The Company now holds 1,120,000 common shares of Baymount which
represents an approximately 3% ownership position. Baymount Corporation has
agreed to take the company public by agreeing to merge it into a Canadian TSX
Venture exchange public company. The necessary documentation has been filed with
the regulatory agencies and Baymount is ready to close the transaction. The
Company expects the Baymount investment to have a significantly higher market
value than the $101,525 carrying value when the shares begin to trade publicly.

      Current liabilities of the Company increased from $478,265 at February 28,
2005 to $747,034 as at May 31, 2005. The increase is primarily the result of an
increase of approximately

                                       14
<PAGE>

$266,000 in due to related party amounts, a collective reduction in accrued
directors' and professional fees of approximately $38,000 offset by an increase
in trade accounts payable of approximately $47,000.

      The shareholders' equity increased from a deficiency of $413,491 as at
February 28, 2005 to shareholders' equity of $817,982 at May 31, 2005. Common
stock and additional paid in capital increased by $844,200 during the quarter.
Common stock subscribed (defined as cash received on equity private placements
for which common stock certificates have not been issued) increased from $37,200
to $575,200. During the quarter ended May 31, 2005 the Company received
$1,382,200 in common stock private placement subscriptions. The subscription
consists of one common share of the Company's common stock at $0.01 per share
plus one half-warrant to acquire another common share at $0.04 at anytime over
the next three years. (Two half-warrants may be exercised at $0.04 to acquire
one common share.) As of May 31, 2005 81,740,000 common shares and warrants to
acquire 40,870,000 common shares were issued. In addition the Company is
obligated to issue another 57,520,000 common shares and warrants to purchase an
additional 28,240,000 common shares under amounts subscribed for as of May 31,
2005. The Company also issued 1,000,000 shares for investor relations consulting
services provided valued at $26,800, which had previously been recorded within
common stock subscribed. The Company's accumulated deficit increased from
$25,161,363 at the beginning of the period to $25,312,090 at the end of the
quarter, as a result of the Company's net loss of $150,727 during the period.

      Liquidity and Capital Resources
      -------------------------------

      During the three month period ended May 31, 2005 cash used in operating
activities totaled $144,468, primarily as a result of the net loss of $150,727
for the period reduced by non cash adjustments and changes in various working
capital items.

      Cash provided by financing activities totaled $1,376,458 and primarily
represented additional private placements of common stock.

      Cash used in investing activities totaled $1,164,162 and represented; 1) a
loan provided to Tioga Downs Racetrack LLC of $714,876, 2) $407,761 transferred
or loaned to related parties and 3) a further investment in Baymount Corporation
of $41,525.

      The revenues of the Company are non-existent and therefore are not a
source for financing operating results. Thus far the Company has been successful
in continuing to raise sufficient funds to operate the business and provide
development funds for Tioga Downs and to provide debtor in possession loans to
Vernon Downs, through equity private placements. However, there can be no
assurance that the Company will able to continue this practice, nor can it
ensure existing shareholders that they will not incur significant dilution while
the Company pursues its business opportunities.

      Management is hopeful that the development of the Tioga Park property will
substantially decrease the operating losses and provide the ability to improve
the Company's liquidity.

      The Company does not have any material sources of liquidity or off balance
sheet arrangements or transactions with unconsolidated subsidiaries.

      The Company will require additional capital over the next year in order to
satisfy existing

                                       15
<PAGE>

liabilities and to provide funding to achieve its current business plan. Failure
to obtain such capital could adversely impact the Company's operations and
prospects.

      The accompanying financial statements have been prepared assuming the
Company will continue on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The Company has suffered recurring losses from operations during
its operating history. The ability of the Company to continue as a going concern
is dependent upon obtaining future financing and profitable operations.
Management is in the process of evaluating future business opportunities, which
would generate revenue to sustain the operations of the Company. The financial
statements do not include any adjustments relating to the recoverability and
classification of recorded assets and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.

      Item 3. Controls and Procedures.
      --------------------------------

      The Company maintains a system of disclosure controls and procedures that
is designed to provide reasonable assurance that information, which is required
to be disclosed, is accumulated and communicated to management in a timely
manner. The CEO and CFO have reviewed this system of disclosure controls and
procedures as of the end of the period covered by this form 10-QSB, and believe
that the system is operating in an effective way to ensure appropriate and
timely disclosure.

      There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.



                                       16
<PAGE>

                           PART II. Other Information
                           --------------------------

Item 2.  Unregistered Sales of Equity Securities.
-------  ----------------------------------------

      The Company received $1,382,200 during various dates throughout the
current quarter for private placement subscriptions from accredited investors
totaling 138,220,000 common shares (of which 81,740,000 common share
certificates were issued during the quarter) and warrants to acquire an
additional 69,110,000 common shares at $0.04 per share over the next three
years. 40,870,000 such warrants were issued in the current quarter. The
purchased shares were not registered at the time of their issuance in reliance
on exemptions under Section 4(2) of the Securities Act of 1933, as amended, or
Regulation D promulgated thereunder.

Item 5.  Other Information.
-------  ------------------

      See Item 2 above.




                                       17

<PAGE>

Item 6.  Exhibits
-------  --------

Exhibit                 Document
-------                 --------

2.01       Articles of Merger as filed with the New York Department of State on
           February 11, 1994 (incorporated by reference to Exhibit 2.1 to report
           on Form 8-K dated February 14, 1994).

2.02       Articles of Merger as filed with the Wyoming Secretary of State on
           February 14, 1994 (incorporated by reference to Exhibit 2.2 to report
           on Form 8-K dated February 14, 1994).

2.03       Agreement and Plan of Merger dated July 1, 1993 between the Company
           and Mont Rouge Resources, Inc. (incorporated as Exhibit A to Exhibit
           2.2 above).

3.01       Articles of Incorporation of Mont Rouge Resources, Inc. as filed with
           the New York Department of State on March 19, 1987. (incorporated by
           reference to Exhibit 3.1 to registration statement on Form S-1, File
           No. 33-6343).

3.02       Articles of Amendment of American Digital Communications, Inc. as
           filed with the Wyoming Secretary of State on September 7, 1999
           (incorporated by reference to Exhibit 3.2 to report on Form 424B3
           dated July 6, 2000).

3.03       Articles of Incorporation of the Company, as filed with the Wyoming
           Secretary of State on June 30, 1993 (incorporated by reference to
           Exhibit 3.1 to report on Form 8-K dated July 14, 1993).

3.04       Bylaws of the Company (incorporated by reference to Exhibit 3.2 to
           report on Form 8-K dated July 14, 1993).

4.01       Specimen Stock Certificate of the Company (incorporated by reference
           to Exhibit 4.1 to report on Form 8-K dated July 14, 1993).

4.02       Form of Warrant issued by Registrant to various investors, dated as
           of April 17, 1998 (incorporated by reference to Exhibit 4.1 to report
           on Form 8-K, dated May 7, 1998).

4.03       Form of October, 1999 Debenture issued by Registrant to various
           investors. (incorporated by reference to Exhibit 4.03 to report on
           Form 10KSB, dated May 30, 2000)

10.01      1993 Incentive Stock Option Plan of the Company dated July 15, 1993
           (incorporated by reference to Exhibit 10.1 to report on Form 8-K
           dated July 14, 1993).

10.02      1993 Non-Statutory Stock Option Plan of the Company dated July 15,
           1993 (incorporated by reference to Exhibit 10.2 to report in Form 8-K
           dated July 14, 1993).

10.03      1993 Employee Stock Compensation Plan of the Company dated July 15,
           1993 (incorporated by reference to Exhibit 10.3 to report on Form 8-K
           dated July 14, 1993).

10.04      1993 Employee Stock Compensation Plan of the Company dated November
           5, 1993 ( incorporated by reference to Exhibit 10.4 to report on Form
           8-K dated February 14, 1994).

10.05      Asset purchase agreement dated November 8, 1996 for the sale of
           certain licensing rights, distribution rights, and right to acquire
           up to $1,000,000 in certain inventory by and between Simmonds Capital
           Limited, SCL Distributors (Western) Ltd., Midland International
           Corporation, and American Digital Communications, Inc. (incorporated
           by reference to Exhibit 10.41).

10.06      Agreement, dated January 15, 1998, between Simmonds Capital Limited
           and the Registrant (incorporated by reference to Exhibits 2 through
           2.6 of the Registrant's Form 8-K, dated May 7, 1998).

10.07      Amended and Restated Global Secured Demand Promissory Note, dated
           July 28, 1998, in the principal amount of $850,000, issued by the
           Registrant in favor of Pellinore, for itself and as agent for certain
           investors (incorporated by reference to Exhibit 10.1 of the
           Registrant's Form 8-K dated September 10, 1998).

10.08      Amended and Restated Pledge Agreement, dated July 28, 1998, between
           the Registrant and Pellinore, for itself and as agent for certain
           investors (incorporated by reference to Exhibit 10.2 of the
           Registrant's Form 8-K dated September 10, 1998).


                                       18
<PAGE>

Exhibit                 Document
-------                 --------

10.09      Placement Agent Agreement, dated July 28, 1998 between the Registrant
           and Pellinore, for itself and as agent for certain investors
           (incorporated by reference to Exhibit 1 of the Registrant's Form 8-K
           dated September 10, 1998).

10.10      Letter Memorandum with Mr. Tracy dated May 11, 2005, effective May 1,
           2005, regarding Mr. Tracy's employment (incorporated by reference to
           Exhibit 10.10of the Registrant's Form 10KSB/A dated June 30, 2005)

31.1       Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
           2002.*

31.2       Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
           2002.*

32.1       Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002. *

32.2       Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002. *

99.1       Audit Committee Charter adopted May 27, 2005 (incorporated by
           reference to Exhibit 10.10 of the Registrant's Form 10KSB/A dated
           June 30, 2005)


(*)   Filed with this Report.


   (Remainder of page left intentionally blank)



                                       19

<PAGE>

                                   SIGNATURES

In accordance with the registration requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereto duly authorized.



DATE:  JULY 15, 2005               BY:   /s/ Edward Tracy
                                         ---------------------------------
                                         Edward M. Tracy
                                         President / CEO / Director
                                         (principal executive officer)


                                   BY:   /s/ Gary N. Hokkanen
                                         ---------------------------------
                                         Gary N. Hokkanen
                                         CFO
                                         (principal financial officer)




                                       20

<PAGE>

                                  Exhibit Index
                                  -------------


Exhibit                         Document
-------                         --------

2.01       Articles of Merger as filed with the New York Department of State on
           February 11, 1994 (incorporated by reference to Exhibit 2.1 to report
           on Form 8-K dated February 14, 1994).

2.02       Articles of Merger as filed with the Wyoming Secretary of State on
           February 14, 1994 (incorporated by reference to Exhibit 2.2 to report
           on Form 8-K dated February 14, 1994).

2.03       Agreement and Plan of Merger dated July 1, 1993 between the Company
           and Mont Rouge Resources, Inc. (incorporated as Exhibit A to Exhibit
           2.2 above).

3.01       Articles of Incorporation of Mont Rouge Resources, Inc. as filed with
           the New York Department of State on March 19, 1987. (incorporated by
           reference to Exhibit 3.1 to registration statement on Form S-1, File
           No. 33-6343).

3.02       Articles of Amendment of American Digital Communications, Inc. as
           filed with the Wyoming Secretary of State on September 7, 1999
           (incorporated by reference to Exhibit 3.2 to report on Form 424B3
           dated July 6, 2000).

3.03       Articles of Incorporation of the Company, as filed with the Wyoming
           Secretary of State on June 30, 1993 (incorporated by reference to
           Exhibit 3.1 to report on Form 8-K dated July 14, 1993).

3.04       Bylaws of the Company (incorporated by reference to Exhibit 3.2 to
           report on Form 8-K dated July 14, 1993).

4.01       Specimen Stock Certificate of the Company (incorporated by reference
           to Exhibit 4.1 to report on Form 8-K dated July 14, 1993).

4.02       Form of Warrant issued by Registrant to various investors, dated as
           of April 17, 1998 (incorporated by reference to Exhibit 4.1 to report
           on Form 8-K, dated May 7, 1998).

4.03       Form of October, 1999 Debenture issued by Registrant to various
           investors. (incorporated by reference to Exhibit 4.03 to report on
           Form 10KSB, dated May 30, 2000)

10.01      1993 Incentive Stock Option Plan of the Company dated July 15, 1993
           (incorporated by reference to Exhibit 10.1 to report on Form 8-K
           dated July 14, 1993).

10.02      1993 Non-Statutory Stock Option Plan of the Company dated July 15,
           1993 (incorporated by reference to Exhibit 10.2 to report in Form 8-K
           dated July 14, 1993).

10.03      1993 Employee Stock Compensation Plan of the Company dated July 15,
           1993 (incorporated by reference to Exhibit 10.3 to report on Form 8-K
           dated July 14, 1993).

10.04      1993 Employee Stock Compensation Plan of the Company dated November
           5, 1993 ( incorporated by reference to Exhibit 10.4 to report on Form
           8-K dated February 14, 1994).

10.05      Asset purchase agreement dated November 8, 1996 for the sale of
           certain licensing rights, distribution rights, and right to acquire
           up to $1,000,000 in certain inventory by and between Simmonds Capital
           Limited, SCL Distributors (Western) Ltd., Midland International
           Corporation, and American Digital Communications, Inc. (incorporated
           by reference to Exhibit 10.41).

10.06      Agreement, dated January 15, 1998, between Simmonds Capital Limited
           and the Registrant (incorporated by reference to Exhibits 2 through
           2.6 of the Registrant's Form 8-K, dated May 7, 1998).

10.07      Amended and Restated Global Secured Demand Promissory Note, dated
           July 28, 1998, in the principal amount of $850,000, issued by the
           Registrant in favor of Pellinore, for itself and as agent for certain
           investors (incorporated by reference to Exhibit 10.1 of the
           Registrant's Form 8-K dated September 10, 1998).

10.08      Amended and Restated Pledge Agreement, dated July 28, 1998, between
           the Registrant and Pellinore, for itself and as agent for certain
           investors (incorporated by reference to Exhibit 10.2 of the
           Registrant's Form 8-K dated September 10, 1998).

                                       22

<PAGE>

Exhibit                         Document
-------                         --------

10.09      Placement Agent Agreement, dated July 28, 1998 between the Registrant
           and Pellinore, for itself and as agent for certain investors
           (incorporated by reference to Exhibit 1 of the Registrant's Form 8-K
           dated September 10, 1998).

10.10      Letter Memorandum with Mr. Tracy dated May 11, 2005, effective May 1,
           2005, regarding Mr. Tracy's employment (incorporated by reference to
           Exhibit 10.10of the Registrant's Form 10KSB/A dated June 30, 2005)

31.1       Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
           2002.*

31.2       Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
           2002.*

32.1       Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002. *

32.2       Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002. *

99.1       Audit Committee Charter adopted May 27, 2005 (incorporated by
           reference to Exhibit 10.10 of the Registrant's Form 10KSB/A dated
           June 30, 2005)


(*)   Filed with this Report.


   (Remainder of page left intentionally blank)


                                       21