As filed with the Securities and Exchange Commission on January 16, 2006

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

                       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 November 30, 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 |X|                                  NO |_|

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |_|  No |X|

The number of shares outstanding of each of the Registrant's class of common
equity, as of January 6, 2006 are as follows:

       Class of Securities                                 Shares Outstanding
       -------------------                                 ------------------
   Common Stock, $.0001 par value                             461,452,951

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


<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' Deficiency............   5
                Condensed Statements of Cash Flows..........................   8
                Notes to Condensed Financial Statements.....................   9

Item 2.  Management's Discussion and Analysis or Plan of Operation..........  13

Item 3.  Controls and Procedures............................................  22

PART II. Other Information

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds........  23

Item 6.  Exhibits...........................................................  24

Signatures..................................................................  25


<PAGE>

                                     PART I.

Financial Information

Item 1. Condensed Financial Statements.

                                TrackPower, Inc.
                             Condensed Balance Sheet
                                   (UNAUDITED)
                                November 30, 2005

ASSETS
Current Assets:
     Prepaid expenses                                              $        839
                                                                   ------------
Total current assets                                                        839
                                                                   ------------

Office equipment                                                         17,087
     Less:Accumulated depreciation                                      (13,108)
                                                                   ------------
        Net office equipment                                              3,979

Investments (Note 3)                                                  5,132,764
                                                                   ------------
TOTAL ASSETS                                                       $  5,137,582
                                                                   ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
     Bank overdraft                                                $     20,751
     Accounts payable                                                   314,705
     Due to related parties                                             205,971
     Accrued Directors' Fees                                             71,750
     Accrued professional fees                                           64,134
     Preferred dividends payable                                         30,904
     Notes payable (Note 4)                                             870,341
                                                                   ------------
        Total current liabilities                                     1,578,556
                                                                   ------------
Commitments and contingencies (see Summary of
 Significant Accounting Policies)

Shareholders' equity:
     Series A 8% convertible preferred stock,
      $3,000 initial value, no par value,
      unlimited shares authorized, 1,000 issued (Note 5)              3,000,000
     Common stock, $.0001 par value; unlimited
      shares authorized, 426,952,951 shares, issued
      and outstanding                                                    42,695
     Common stock subscribed                                            150,000
     Additional paid in capital                                      26,414,377
     Accumulated deficit                                            (26,048,046)
                                                                   ------------
        Total shareholders' equity                                    3,559,026
                                                                   ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                         $  5,137,582
                                                                   ============

                 See accompanying notes to financial statements.

                                       3
<PAGE>

                                TrackPower, Inc.
                       Condensed Statements of Operations
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                              Three Months Ended               Nine Months Ended
                                                                November 30,                     November 30,
                                                           2005             2004             2005            2004
                                                       -------------    -------------    -------------    -------------
<S>                                                    <C>              <C>              <C>              <C>
Revenues:                                              $          --    $          --    $          --    $          --

Operating expenses:
      Wages and consulting fees                              342,685            8,301          503,307           78,571
      Management fees - related parties                       45,000           30,000          125,000           90,000
      Professional fees                                       54,425           10,675          141,886           69,133
      General and administrative                              31,701           14,268          118,275           69,378
                                                       =============    =============    =============    =============
      Total operating expenses                               473,811           63,244          888,468          307,082

Loss from operations                                        (473,811)         (63,244)        (888,468)        (307,082)

Other (income) expenses:
      Gain on disposal of investments                        (33,484)              --          (33,484)              --
      Interest                                                    --            5,368               --           21,564
      Depreciation and amortization                              265            1,723              795            5,169
                                                       -------------    -------------    -------------    -------------
      Total other (income) expenses                          (33,219)           7,091          (32,689)          26,733

                                                       -------------    -------------    -------------    -------------
Net (loss)                                                  (440,592)         (70,335)        (855,779)        (333,815)
                                                       -------------    -------------    -------------    -------------
      Preferred dividends (Note 5)                           (30,904)              --          (30,904)              --
                                                       -------------    -------------    -------------    -------------
Net (loss) applicable to common shareholders                (471,496)         (70,335)        (886,683)        (333,815)
                                                       =============    =============    =============    =============

Earnings (loss) per share of common stock:
Weighted average number of common shares outstanding     421,036,284      239,906,703      365,932,948      230,281,703
Basic earnings (loss) per share                        $      (0.001)   $      (0.000)   $      (0.002)   $      (0.001)
</TABLE>


                 See accompanying notes to financial statements.

                                       4
<PAGE>

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


<TABLE>
<CAPTION>
                                                   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)
                                            -----------   -----------   -----------    -----------   -----------    -------------

Common stock subscribed                              --            --        67,700             --            --           67,700

Common stock issued in private
 placements                                   6,500,000           650       (65,000)        64,350            --               --

Loss for three month period ended
 August 31, 2004                                     --            --            --             --      (149,421)        (149,421)

                                            -----------   -----------   -----------    -----------   -----------    -------------
Balance, August 31, 2004                    234,931,703   $    23,493        54,700     23,901,237   (24,945,360)        (965,930)
                                            -----------   -----------   -----------    -----------   -----------    -------------

Common stock subscribed                              --            --        38,500             --            --           38,500

Common stock issuable in
 debenture conversion                                --            --       552,900             --            --          552,900

Common stock issued in private
 placements                                   6,770,000           677       (67,700)        67,023            --               --

Loss for three month period ended
 November 30, 2004                                   --            --            --             --       (70,335)         (70,335)

                                            -----------   -----------   -----------    -----------   -----------    -------------
Balance, November 30, 2004                  241,701,703   $    24,170       578,400     23,968,260   (25,015,695)        (444,865)
                                            -----------   -----------   -----------    -----------   -----------    -------------
</TABLE>

                                       5
<PAGE>

<TABLE>
<CAPTION>


                                               Common Stock               Preferred Stock
                                         -------------------------   ------------------------
                                           Shares        Amount         Shares       Amount
                                         -----------   -----------   -----------   -----------
<S>                                      <C>           <C>           <C>           <C>
Balance, February 28, 2005               257,992,951   $    25,799            --   $        --

Common stock issued in connection
 with private placements                  81,740,000         8,174            --            --

Common stock issued for consulting
 services provided                         1,000,000           100            --            --

Common stock subscribed                           --            --            --            --
                                         -----------   -----------   -----------   -----------
Loss for the three month period ended
 May 31, 2005                                     --            --            --            --
                                         -----------   -----------   -----------   -----------
Balance, May 31, 2005                    340,732,951   $    34,073            --   $        --
                                         -----------   -----------   -----------   -----------
Common stock issued in connection with
 private placements                       76,720,000         7,672            --            --

Common stock subscribed                           --            --            --            --

Loss for the three month period ended
 August 31, 2005                                  --            --            --            --
                                         -----------   -----------   -----------   -----------
Balance, August 31, 2005                 417,452,951   $    41,745            --   $        --
                                         -----------   -----------   -----------   -----------
Common stock issued in connection with
 private placements                        7,500,000           750            --            --

Common stock subscribed                           --            --            --            --

Common stock issued for consulting
 services provided                         2,000,000           200            --            --

Preferred stock issued for assets                 --            --         1,000     3,000,000

Loss for the three month period ended
 November 30, 2005                                --            --            --            --
                                         -----------   -----------   -----------   -----------
Balance, November 30, 2005               426,952,951   $    42,695         1,000   $ 3,000,000
                                         -----------   -----------   -----------   -----------
</TABLE>

<TABLE>
<CAPTION>
                                                                                           Total
                                           Common        Additional                    Stockholders'
                                           Stock          Paid-in      Accumulated      (Deficiency)
                                         Subscribed       Capital        Deficit          /Equity
                                         -----------    -----------   -------------    -------------
<S>                                           <C>        <C>          <C>              <C>
Balance, February 28, 2005                    37,200     24,684,873     (25,161,363)        (413,491)

Common stock issued in connection
 with private placements                          --        809,226              --          817,400

Common stock issued for consulting
 services provided                           (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                        575,200     25,520,799     (25,312,090)         817,982

                                         -----------    -----------   -------------    -------------
Common stock issued in connection with
 private placements                         (767,200)       759,528              --               --

Common stock subscribed                      382,000             --              --          382,000

Loss for the three month period ended
 August 31, 2005                                  --             --        (264,460)        (264,460)
                                         -----------    -----------   -------------    -------------
Balance, August 31, 2005                     190,000     26,280,327     (25,576,550)         935,522
                                         -----------    -----------   -------------    -------------
Common stock issued in connection with
 private placements                          (75,000)        74,250              --               --

Common stock subscribed                       35,000             --              --           35,000

Common stock issued for consulting
 services provided                                --         59,800              --           60,000

Preferred stock issued for assets                                --              --        3,000,000

Loss for the three month period ended
 November 30, 2005                                --             --        (471,496)        (471,496)

                                         -----------    -----------   -------------    -------------
Balance, November 30, 2005                   150,000     26,414,377     (26,048,046)       3,559,026
                                         -----------    -----------   -------------    -------------
</TABLE>


                                       6
<PAGE>


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


                                                         Nine Months Ended
                                                           November 30,
                                                       2005            2004
                                                    -----------    -----------
Net cash from operations
      Net income (loss)                             $  (886,683)   $  (333,815)
      Adjustments to reconcile net loss
      to net cash used in operating activities:
      Depreciation and amortization                         795          5,169
      Gain on disposal of  investments                  (33,484)            --
      Common stock issued for consulting services        86,800             --
      Common stock issuable for consulting
      services provided                                 134,687             --
  Changes in:
      Prepaid expenses                                     (839)            --
      Preferred dividends payable                        30,904             --
      Accounts payable and accrued expenses             110,809        145,399
                                                    -----------    -----------
Net cash used in operating activities                  (557,011)      (183,247)
                                                    -----------    -----------
Cash flows from investing activities:
    Acquisition of investments                          (41,525)            --
    Proceeds from disposal of investments                56,595             --
    Increase in due to related parties                  (40,459)            --
    Capital contributions to investments              1,205,009)            --
                                                    -----------    -----------
Net cash used in investing activities                (1,230,398)            --
                                                    -----------    -----------

Cash flows from financing activities:
    Proceeds from issuance of common stock            1,772,400        167,200
    Increase in bank overdraft                           15,009             --
                                                    -----------    -----------
Net cash provided by financing activities             1,787,409        167,200
                                                    -----------    -----------
Increase (decrease) in cash                                  --        (16,047)
                                                    -----------    -----------
Cash, beginning of period                                    --         18,047
                                                    -----------    -----------
Cash, end of period                                 $        --    $     2,000
                                                    -----------    -----------
Noncash activities:

During the nine month period ended November 30, 2005 the Company:

1.    Issued 1,000,000 shares of its common stock, valued at $26,800 for
      investor relations consulting services provided.

2.    Issued 2,000,000 shares of its common stock, valued at $60,000 for Tioga
      Downs strategic consulting services provided.

During the nine month period ended November 30, 2004:

1.    The Company issued 2,500,000 shares of its common stock to acquire a
      $25,000 face value convertible debenture of Diversified Racing Investments
      Inc. (Diversified Racing) which collectively with other convertible
      debenture having a total face value of $75,000 were converted into
      1,020,000 common shares of Diversified Racing.

2.    The Company issued 2,500,000 shares of its common stock to settle legal
      fees totaling $100,000.

3.    Subordinated convertible debentures having a face value of $396,000 (plus
      accrued and unpaid interest of $156,900) matured on October 31, 2004 and
      automatically convert into 1,105,800 common shares and 1,105,800 warrants
      exercisable over the next 3 years at $0.75 per share. At November 30, 2004
      the shares and warrants had not yet been issued and therefore $552,900 is
      recorded as common stock subscribed.


                 See accompanying notes to financial statements.

                                       7
<PAGE>

                                TrackPower, Inc.

                     Notes to Condensed Financial Statements
                                November 30, 2005

Note 1 Basis of Presentation and Nature of Operations

      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 and nine months
ended November 30, 2005 are not necessarily indicative of the results that may
be expected for the fiscal year ending February 28, 2006. It is suggested that
these condensed consolidated financial statements be read in conjunction with
Company's Annual Report on Form 10-KSB for the fiscal year ended February 28,
2005.

      Note 2 Summary of Significant Accounting Policies

      Going Concern

      The accompanying financial statements have been prepared assuming the
Company will continue on as 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.


                                       8
<PAGE>

      Due to/from Related Parties

      Periodically, the Company advances funds and pays expenses on behalf of
related parties 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 November 30, 2005, amounts due to related parties totaled to $205,971.
The Company anticipates full recovery and/or settlement of all related party
balances by the end of the fiscal year.

      Investments

      Investments are recorded as held to maturity investments and are recorded
at amortized cost. Any unrealized losses which are considered "other than
temporary" are classified as realized losses through 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. Diluted loss per share
is not presented as the effects of convertible preferred stock and warrants are
anti-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 was improperly entered and is
seeking to have the judgment set aside and tried on its own merits. 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. 123R, SHARE BASED PAYMENT.

FASB issued SFAS No. 123R which revises SFAS No. 123 and is effective for small
business issuers as of the beginning of the first interim or annual reporting
period after December 15, 2005. SFAS No. 123R requires public entities to
measure the cost of employment services received in exchange for an award of
equity instruments on the grant-date fair value of the award. The cost will be
recognized over the period during which an employee is required to provide
service in exchange for the award--the requisite service period (usually the
vesting period). No compensation cost is recognized for equity instruments for
which employees do not render the requisite service. Employee share purchase
plans will not result in recognition of compensation cost if certain conditions
are met; those conditions are much the same as the related conditions in
Statement 123. The Company does not anticipate that the adoption of SFAS 123R
will have a material impact on its consolidated balance sheets and statements of
operations, shareholders' equity and cash flows.


                                       9
<PAGE>

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.

Note 3 Investments

      Academy Capital Corp.

      As of November 30, 2005, the Company holds 1,730,000 common shares of
Academy Capital Corp. a TSX Venture Exchange public entity that acquired all the
issued and outstanding common shares of Baymount Corporation. The Company also
holds the following warrants of Academy Capital: (i) 200,000 warrants that have
vested and are exercisable at a price of CAD$0.20 per common share until May 11,
2006; (ii) 400,000 warrants that are exercisable at a price of CAD$0.30 per
common share and vest on the date that Wheat City Horse Park receives regulatory
approval for a horseracing license in the Province of Manitoba; and (iii)
400,000 warrants that 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 November 30, 2005, the Company sold
510,000 common shares of Academy Capital for net proceeds of $56,595 and
recorded a realized gain on disposal of $33,484.

      The fair value of the investment, based on the closing share price of
Academy Capital Corp. on December 29, 2005 of $0.10 (CAD$0.115), exceeds the
carrying value and therefore management believes the investment value is
conservatively presented at $78,414.

      American Racing and Entertainment, LLC.

      On November 8, 2005, the Company entered into agreements with Southern
Tier Acquisition II, LLC and Nevada Gold NY, Inc. pursuant to which the Company
exchanged its 50% membership interest in Tioga Downs Racetrack, LLC ("TDRLLC")
for a 25% membership interest in American Racing and Entertainment, LLC
("American Racing"). The Company issued $3,000,000 Series A 8% Convertible
Cumulative Preferred Stock to acquire the assets of Tioga Downs Racetrack from
Asolare II LLC. Subsequent to the acquisition of the assets, the Company and
Southern Tier Acquisitions, LLC formed TDRLLC to develop the property. Since the
formation of TDRLLC, the Company has made capital contributions to TDRLLC
totaling $2,054,350 ($849,341 of which was made by Southern Tier Acquisitions,
LLC on behalf of Trackpower). As of November 30, 2005, the carrying value of
this investment was $5,054,350.


                                       10
<PAGE>

      The Academy Capital Corp. and American Racing and Entertainment LLC
investments 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.

Note 4 Notes Payable

      On November 15, 2005, the Company executed a non-interest bearing
promissory note to Southern Tier Acquisitions LLC under which it is obligated to
repay $849,341 on or before December 31, 2005. The Note is secured by a Pledge
Agreement pursuant to which the Company pledged its membership interest in
American Racing as security. On November 14, 2005, the Company and Southern Tier
entered into a Capital Contribution Agreement pursuant to which both parties
acknowledged that Southern Tier had made capital contributions to Tioga Downs
Racetrack LLC in excess of Trackpower in the amount of $849,341. On January 3,
2006, Southern Tier and Trackpower agreed to extend the repayment date of the
Note to January 15, 2006, all other terms and conditions remained the same.

      Also included in notes payable is a 10% promissory note due to SIG
Communications Partnership in the amount of $21,000.

Note 5 Preferred Stock

      On October 14, 2005, TrackPower entered into an Asset Purchase Agreement
whereby the Company purchased substantially all of the assets of Tioga Downs
Racetrack for the purchase price $3 million paid through the issuance of the
Company's Series A Cumulative Preferred Stock.

      Pursuant to the Agreement, the material terms of the Preferred Stock are
as follows:

      Designation:                     Series A 8% Convertible
                                       Cumulative Preferred Stock
      Amount:                          $3 million,
      Number of Shares:                1,000
      Initial Value:                   $3,000/share
      Term:                            5 years
      Dividends:                       8% of Initial Value payable
                                       semi-annually in cash, cumulative
      Redemption:                      Redeemable at anytime for Initial Value,
                                       plus accrued and unpaid dividends.
      Voting Rights:                   None
      Seniority:                       Senior to all previously issued and
                                       future securities
      Liquidation Preference:          Upon occurrence of a liquidation,
                                       dissolution, or winding up of the
                                       Company, whether voluntary or
                                       involuntary, 125% of Initial Value.
      Conversion:                      $.03  conversion  rate,  (i.e. 1 share
                                       of Preferred Stock with an Initial Value
                                       of $3,000 will convert into 100,000
                                       shares of the Company's Common Stock).
      Anti-Dilution Protection or
      Price Protection:                None


                                       11
<PAGE>


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

      Forward Looking Statements

Certain information included in this Form 10-QSB and other materials filed or to
be filed by us with the Securities and Exchange Commission (as well as
information included in oral or written statements made by us or on our behalf),
may contain forward-looking statements about our current and expected
performance trends, growth plans, business goals and other matters. These
statements may be contained in our filings with the Securities and Exchange
Commission, in our press releases, in other written communications, and in oral
statements made by or with the approval of one of our authorized officers.
Information set forth in this discussion and analysis contains various
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Private
Securities Litigation Reform Act of 1995 (the "Act") provides certain "safe
harbor" provisions for forward-looking statements. The reader is cautioned that
such forward-looking statements are based on information available at the time
and/or management's good faith belief with respect to future events, and are
subject to risks and uncertainties that could cause actual performance or
results to differ materially from those expressed in the statements.
Forward-looking statements speak only as of the date the statement was made. We
assume no obligation to update forward-looking information to reflect actual
results, changes in assumptions or changes in other factors affecting
forward-looking information. Forward-looking statements are typically identified
by the use of terms such as "anticipate," "believe," "could," "estimate,"
"expect," "intend," "may," "might," "plan," "predict," "project," "should,"
"will," and similar words, although some forward-looking statements are
expressed differently. Although we believe that the expectations reflected in
such forward-looking statements are reasonable, we can give no assurance that
such expectations will prove to be correct. Important factors that could cause
actual results to differ materially from our expectations include: the effect of
global economic conditions; the effect (including possible increases in the cost
of doing business) resulting from future war and terrorist activities or
political uncertainties; the economic environment; changes in New York law that
impact revenues of American Racing and Entertainment, LLC racing and gaming
operations in New York; any business disruption associated with Tioga Downs
facility renovations; our accountability for environmental contamination; the
loss of key personnel and the volatility of our stock price.

Specifically, 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 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
American Racing and Entertainment, LLC and the Academy Capital Corp. will not be
as valuable as anticipated if these entities are unable to develop profitable
operations and projects.


                                       12
<PAGE>

      Recent Developments

      American Racing and Entertainment, LLC

      On November 8, 2005, the Company entered into a series of agreements with
Nevada Gold & Casinos, Inc. ("Nevada Gold"), Nevada Gold NY, Inc. ("Nevada Gold
NY"), an affiliate of Nevada Gold, Southern Tier Acquisitions, LLC ("Southern
Tier") and Southern Tier Acquisition II LLC, a New York limited liability
company ("Southern Tier II"), an affiliate of Southern Tier, pursuant to which
American Racing and Entertainment, LLC ("American Racing"), a New York limited
liability company, was formed for the purpose of developing two horseracing
facilities known as Tioga Downs and Vernon Downs into racing and gaming complex,
including video lottery terminals ("VLT").

      On November 8, 2005, Nevada Gold NY, Southern Tier II and Company,
hereinafter referred to collectively as the "Members") entered into an Operating
Agreement effective August 24, 2005 under which the Members became 50%, 25% and
25% members of American Racing, respectively. Pursuant to the terms of the
Operating Agreement the Board of Directors would operate the business and the
initial members of the Board of Directors were H. Thomas Winn and Jon Arnesen
(on behalf of Nevada Gold NY), Edward M. Tracy (on behalf of TrackPower) and
Jeffery Gural (on behalf of Southern Tier II). The Members also acknowledged
that they would participate in arranging senior note financing of $70 million
for the purpose of developing the two properties and it was further acknowledged
that Nevada Gold NY would provide an approximately $5 million guarantee to the
senior lender if required, and if collateral is required by the senior lender
with respect to such guarantee, then Nevada Gold NY agrees to provide cash or a
letter of credit to the senior lender to the extent required to collateralize
such guarantee. The Members further acknowledged that in the event American
Racing was unsuccessful in acquiring the Vernon Downs facility, American Racing
would still pursue the development of Tioga Downs, but the initial debtor in
possession financing ("DIP Financing") of $1,414,000 contributed by Southern
Tier and TrackPower would be returned to these parties, subject to certain
limitations, that the senior debt financing would be reduced to approximately
$25 million and the guarantee on the senior debt provided by Nevada Gold NY, if
required, would be reduced to approximately $2.5 million. Pursuant to the
Operating Agreement the Members agreed to distribute 100% of excess cash flow as
follows: first to TrackPower and Southern Tier II up to $2.5 million each, and
thereafter to each Member in proportion to their respective percentages. Excess
cash flow is defined as earnings before interest, taxes, depreciation and
amortization less management fees, capital expenditures, tax distributions to
Members, scheduled principal payment on debt of the Company and Reserves,
defined as working capital set aside to pay taxes, insurance, debt service,
repairs, capital replacements, capital improvements, contingent liabilities or
other costs and expenses incident to the ownership or operation of the Company's
properties.

      In addition, on November 8, 2005, Nevada Gold, Southern Tier and the
Company entered into a Contribution Agreement pursuant to which Southern Tier
and Company each contributed their 50% membership interest in Tioga Downs
Racetrack, LLC ("TDR") and Vernon Downs Acquisition, LLC ("VDA") to American
Racing.


                                       13
<PAGE>

      On November 15, 2005, the Company executed a non-interest bearing $849,341
promissory note (the "Note") to Southern Tier. TrackPower is obligated to repay
the Note on or before December 31, 2005. Due date for such note was extended on
January 3, 2006 to January 15, 2006 by way of letter agreement between the
Company and Southern Tier. The Note is secured by a Pledge Agreement pursuant to
which the Company pledged its membership interest in American Racing as security
on the Note to Southern Tier. On November 14, 2005, the Company and Southern
Tier entered into a Capital Contribution Agreement pursuant to which both
parties acknowledged that Southern Tier had made capital contributions to TDR in
the amount of $4,337,147.76 and the Company had made capital contributions of
$2,638,466.85, totaling capital contributions of $6,975,614.61. The parties also
acknowledged that TrackPower and Southern Tier II, LLC ("Southern Tier II"),
pursuant to the American Racing Operating Agreement, each would received a 25%
membership interest in American Racing and both TrackPower and Southern Tier II
would receive credit for capital contributions in the amount of $3,487,807.30.
As the Company had only made contributions of $2,638,466.85, but received credit
for $3,487,807.30, TrackPower agreed to issue the Note to Southern Tier,
representing the difference in these two amounts.


      Asolare II LLC Asset Purchase Agreement and Issuance of Preferred Stock

      The Company intended to acquire 100% of the Tioga Downs assets (the
"Purchased Assets") from Asolare II, LLC in exchange for consideration of $3
million of TrackPower Series A Cumulative Preferred Stock. In September 2004,
Southern Tier and TrackPower became equal members of Tioga Downs Racetrack, LLC.
However, in contemplation of the sale by Asolare and the purchase by TrackPower
of the Purchased Assets, Asolare and TrackPower directed the Bankruptcy Court to
transfer the Purchased Assets directly to Tioga Downs Racetrack, LLC upon
confirmation of the Chapter 11 Plan of Reorganization. On June 21, 2004, the
United States Bankruptcy Court for the Northern District of New York transferred
the deed for the Tioga Downs property directly to Tioga Downs Racetrack, LLC
rather than Asolare II, LLC ("Asolare"). TrackPower technically did not make a
contribution to Tioga Downs Racetrack, LLC., since the contemplated transaction
regarding the Purchased Assets between Asolare and TrackPower had not yet been
consummated. Subsequent to September 2004, beginning in March 2005, the Company
made a series of cash contributions to Tioga Downs Racetrack, LLC which it
initially recorded as loans receivable. These advances should have been recorded
as member contributions to Tioga Downs Racetrack, LLC. On October 14, 2005, the
Company and Asolare II, LLC entered into an Asset Purchase Agreement whereby
Asolare sold the Purchased Assets to TrackPower in exchange for $3 million of
TrackPower Series A Cumulative Preferred Stock. See Note 5 for the specific
terms of the Preferred Stock.

      Two members of the Board of Directors, Messrs. Simmonds and Adelberg, are
members of Asolare, and therefore pursuant to the Wyoming Business Corporation
Act, could not vote as a member of the Company's Board of Directors when the
Board considered the purchase of Tioga Downs by the Company. The two remaining
disinterested directors, Messrs. Tracy and Ahearn, engaged Growthink Securities
Inc. to provide the Board of Directors a fairness opinion, prior to the Board's
consideration of this purchase of Tioga Downs, that the consideration paid by
the Company to Asolare was fair from a financial point of view. After due
consideration, on October 14, 2005, the two disinterested members of the Board
of Directors voted to authorize the management of the Company to consummate the
proposed purchase of Tioga Downs from Asolare.

      Under the Wyoming Business Corporation Act, the Board of Directors is not
required to seek shareholder approval of the Tioga Downs purchase. Previously,
the Company announced that it intended to seek approval from its shareholders at
the next Annual Meeting of Shareholders that was anticipated to be held in late
2005. However, due to the urgent need for the Company to consummate the
anticipated transaction with Nevada Gold & Casinos Inc., (previously reported in
the Company's Current Report on Form 8-K dated August 24, 2005 and September 9,
2005), the Board of Directors decided to dispense with the approval by
shareholders of the Tioga Downs purchase.


                                       14
<PAGE>

      Tioga Downs was previously contributed to Tioga Downs Racetrack, LLC an
entity in which the Company is a 50% member. The other 50% member is Southern
Tier Acquisitions, LLC an entity solely owned by Jeffery Gural. The Company and
Mr. Gural have announced their intention to contribute their interests in Tioga
Downs to a new entity called American Racing and Entertainment, LLC in which
Nevada Gold & Casinos, Inc., Mr. Gural and the Company would hold a 50%, 25% and
25% membership interest in, respectively. The Company's ability to participate
in these transactions was contingent upon the quick approval of the Agreement
and the purchase of Tioga Downs by the Company.

      Plan of Operations

      The Company and Southern Tier Acquisitions, LLC plans to contribute their
investment in Tioga Downs Racetrack, LLC to the new venture with Nevada Gold &
Casinos, Inc. Under the terms of the proposed agreement the Company and Southern
Tier are obligated to advance further amounts to the venture in the event that
the new venture successfully acquires the Vernon Downs property from bankruptcy.
In addition, the Company will need additional cash to continue to pay its
operating expenses until the distribution from the new venture exceed the day to
day operating costs. The Company also plans to seek other racing and gaming
opportunities in the United States.

      The Company plans to raise additional funds, in the next twelve months,
through the issuance of its common stock or through a combination of equity and
debt security instruments. It is anticipated that the debt security instruments
will have conversion features that would cause further dilution to existing
shareholders.

      Results of Operations

      For the three month period ended November 30, 2005

      Revenues for the three month period ended November 30, 2005 and 2004 were
zero. Pursuant to the agreement struck with Nevada Gold and Casinos, Inc.
distributions in form of dividends or revenue from American Racing and
Entertainment, LLC are not expected until operations begin at Tioga Downs and if
or when American Racing and Entertainment, LLC is successful in acquiring Vernon
Downs.

      Operating expenses totaled $473,811 during the three-month period ended
November 30, 2005 approximately $411,000 higher than during the three month
period ended November 30, 2004. The increase is the result of additional
employment costs and related expenses of the Company's new CEO, incremental
legal costs associated with the Nevada Gold joint venture and higher consulting
fees incurred to advance the joint venture business affairs of the Company..



                                       15
<PAGE>

      Wages and consulting fees were $342,685 during the three month period
ended November 30, 2005 compared to $8,301 during the comparative period in the
prior year. Wages and consulting fees during the three month period ended
November 30, 2005 represented $229,412 paid for consulting costs of the
Company's CEO (of which $134,687 was the accrued fair value of 6,700,824 shares
of the Company's common stock issuable pursuant to Mr. Tracy's employment letter
agreement), various miscellaneous consulting costs associated with the American
Racing and Entertainment and Tioga Downs Racetrack ventures totaling $80,000,
wage costs of a part time accountant totaling $5,849, marketing consulting costs
of $16,724 and corporate secretarial consulting services of $10,700. The
Company's CEO is paid $50,000 per month of which $20,000 is recovered from Tioga
Downs Racetrack, LLC. With the closing of the American Racing and Entertainment,
LLC transaction the Company will be responsible for 100% of the CEO consulting
costs. Wages and consulting costs during the three month period ended November
30, 2004 consisted of the costs of a part time accountant.

      The Company paid $45,000 in management fees to a related party for
executive management services during the three month period ended November 30,
2005. During the three month period ended November 30, 2004 the Company paid
$30,000 for such services.

      Professional fees were $54,425 during the current quarter substantially
higher than $10,675 during the comparative period in the prior year. Accounting
fees were $9,000 during both the three month period ended November 30, 2005 and
the quarter ended November 30, 2004. Legal fees were $45,425 during the quarter
ended November 30, 2005 and $1,675 in the comparative period a year ago. The
increase in legal fees is a result of legal advice sought on structuring the
Nevada Gold transaction, additional public company filings associated with the
transaction and the legal costs associated with a judgment arising from a former
consultant of the Company.

      General and administrative expenses were $31,701 during the three month
period ended November 30, 2005 compared to $14,268 during the three month period
ended November 30, 2004.

      Within general and administrative costs; 1) travel, meals and
entertainment totaled $8,379 during the three month period ended November 30,
2005 and were $2,830 in the comparative quarter in the prior year, 2) auto
lease, repair and gasoline expenses were $6,156 during the three month period
ended November 30, 2005 up from $4,415 in the comparative period in the prior
year, 3) corporate fees and directors fees totaled $5,574 during the three month
period ended November 30, 2005 and $6,242 during the comparative period in the
prior year, 4) rent and insurance expenses were $5,279 in the current quarter
and $3,821 in the prior year, 6) telephone and cellular costs were $3,420 in the
current quarter and zero in the prior year, and 7) other miscellaneous costs
totaled $2,893 during the current quarter compared to net credits (arising
primarily from the reversal of certain costs originally charged to the Company
and subsequently charged to investees) of $3,040 during the three month period
ended November 30, 2004.

      Other income totaled $33,219 during the three month period ended November
30, 2005 compared to other expense of $7,091 during the comparative period a
year ago.

      Interest expense on the Company's senior subordinated convertible
debentures totaled $5,368 during the three month period November 30, 2004.
Interest expense has been reduced to zero due to the conversion of the remaining
debentures during the third and fourth quarters of fiscal year ended February
28, 2005.

      Depreciation and amortization expense was $265 during the current quarter
and $1,723 during the quarter ended November 30, 2004, reflecting the
disposition of certain assets in the last quarter of fiscal 2005.


                                       16
<PAGE>

      During the three month period ended November 30, 2005, the Company
disposed of 510,000 common shares of Academy Capital Corp. for net proceeds of
$56,595 and recorded a gain of $33,484.

      The Company also accrued $30,904 on the Series A 8% Convertible Cumulative
Preferred Stock issued during the current quarter.

      The Company recorded a loss of $471,496 during the three month period
ended November 30, 2005 (less than $0.01 per share) compared to a net loss of
$70,335 (less than $0.01 per share) during the comparative period in the prior
year. The Company expects the losses to continue for the foreseeable future
until distributions commence from American Racing and Entertainment, LLC.

      For the nine month period ended November 30, 2005

      Revenues for the nine month period ended November 30, 2005 and 2004 were
zero. Pursuant to the agreement struck with Nevada Gold and Casinos, Inc.
distributions in form of dividends or revenue from American Racing and
Entertainment, LLC are not expected until operations begin at Tioga Downs and if
or when American Racing and Entertainment, LLC is successful in acquiring Vernon
Downs.

      Operating expenses totaled $888,468 during the nine-month period ended
November 30, 2005 approximately $581,000 higher than during the nine month
period ended November 30, 2004. The increase is the result of additional
employment costs and related expenses of the Company's new CEO, incremental
legal costs associated with the Nevada Gold joint venture and higher consulting
fees incurred to advance the joint venture business affairs of the Company..

      Wages and consulting fees were $503,307 during the three month period
ended November 30, 2005 compared to $78,571 during the comparative period in the
prior year. Wages and consulting fees during the nine month period ended
November 30, 2005 represented $361,353 paid for consulting costs of the
Company's CEO(of which $134,687 was the accrued fair value of 6,700,824 shares
of the Company's common stock issuable pursuant to Mr. Tracy's employment letter
agreement), various miscellaneous consulting costs associated with the American
Racing and Entertainment and Tioga Downs Racetrack ventures totaling $80,000,
wage costs of a part time accountant totaling $13,827, marketing consulting
costs of $37,427 and corporate secretarial consulting services of $10,700. The
Company's CEO is paid $50,000 per month of which $20,000 is recovered from Tioga
Downs Racetrack, LLC. With the closing of the American Racing and Entertainment,
LLC transaction the Company will be responsible for 100% of the CEO consulting
costs. Wages and consulting costs during the nine month period ended November
30, 2004 consisted of executive payroll costs and a part time accounting staff
member totaling $22,163 and consulting fees associated with the Tioga Park
initiative totaling $56,408.

      The Company paid $125,000 in management fees to a related party for
executive management services during the nine month period ended November 30,
2005. During the nine month period ended November 30, 2004 the Company paid
$90,000 for such services.

      Professional fees were $141,886 during the nine month period ended
November 30, 2005 substantially higher than $69,133 during the comparative
period in the prior year. Accounting fees were $27,000 during both the nine
month period ended November 30, 2005 and November 30, 2004. Legal fees were
$114,886 during the nine month period ended November 30, 2005 and $42,133 in the
comparative period a year ago. The increase in legal fees is a result of legal
advice sought on structuring the Nevada Gold transaction, additional public
company filings associated with the transaction and the legal costs associated
with a judgment arising from a former consultant of the Company.


                                       17
<PAGE>

      General and administrative expenses were $118,275 during the nine month
period ended November 30, 2005 compared to $69,378 during the nine month period
ended November 30, 2004.

      Within general and administrative costs; 1) travel, meals and
entertainment totaled $37,643 during the nine month period ended November 30,
2005 and were $20,900 in the comparative period in the prior year, 2) corporate
fees and directors fees totaled $23,031 during the nine month period ended
November 30, 2005 and $19,535 during the comparative period in the prior year,
3) auto lease, repair and gasoline expenses were $20,352 during the nine month
period ended November 30, 2005 up from $13,447 in the comparative period in the
prior year, 4) rent and insurance expenses were $11,669 in the current period
and $9,781 in the prior year, 5) foreign exchange losses totaled $7,444 during
the nine month period ended November 30, 2005 and $2,453 during the nine month
period ended November 30, 2004, 6) advertising costs were $7,350 in the current
period compared to zero a year ago, 7) telephone and cellular costs were $6,090
in the current period and $1,248 in the prior year, and 8) other miscellaneous
costs totaled $4,696 during the current period compared to $2,014 during the
nine month period ended November 30, 2004.

      Other income totaled $32,689 during the nine month period ended November
30, 2005 compared to other expense of $26,733 during the comparative period a
year ago.

      Interest expense on the Company's senior subordinated convertible
debentures totaled $21,564 during the nine month period November 30, 2004.
Interest expense has been reduced to zero due to the conversion of the remaining
debentures during the third and fourth quarters of fiscal year ended February
28, 2005.

      Depreciation and amortization expense was $795 during the current period
and $5,169 during the nine month ended November 30, 2004, reflecting the
disposition of certain assets in the last quarter of fiscal 2005.

      During the nine month period ended November 30, 2005, the Company disposed
of 510,000 common shares of Academy Capital Corp. for net proceeds of $56,595
and recorded a gain of $33,484.

      The Company also accrued $30,904 on the Series A 8% Convertible Cumulative
Preferred Stock issued during the nine month period ended November 30, 2005.

      The Company recorded a loss of $886,683 during the nine month period ended
November 30, 2005 (less than $0.01 per share) compared to a net loss of $333,815
(less than $0.01 per share) during the comparative period in the prior year. The
Company expects the losses to continue for the foreseeable future until
distributions commence from American Racing and Entertainment, LLC.


                                       18
<PAGE>

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 and notes payable are carried in
the financial statements at amounts which approximate fair value.

Investments:

      The Company's investments consist of "held to maturity investments" and
are recorded at amortized cost. Any unrealized losses which are considered
"other than temporary" are classified as realized losses through operations.

      Financial Condition

      Since the end of the previous fiscal year, total assets have increased
substantially to $5,137,582. The increase is the result of the Company's
acquisition of Tioga Downs racetrack, subsequent divestiture to Tioga Downs
Racetrack, LLC for a 50% interest in Tioga Downs Racetrack LLC and the exchange
of the Company's investment in Tioga Downs Racetrack, LLC for a 25% investment
in American Racing and Entertainment, LLC.

      Since last fiscal year end, the Company's carrying value of office
equipment has been reduced from $4,744 to $3,979 due to normal depreciation of
$795.

      The carrying value of the Company's investment in American Racing and
Entertainment, LLC is $5,054,350. The Company also holds 1,730,000 common shares
of Academy Capital Corp. a TSX Venture Exchange listed entity which acquired the
Company's investment in the private entity Baymount Corporation. The $78,414
carrying value of this investment is less than the current market value of
approximately $173,000 based on a recent close of $0.10 (CAD$0.115) on December
29, 2005. The Company currently regards these investments as a held to maturity
investment carried at cost.

      Current liabilities of the Company have increased since last fiscal year
end to $1,578,556 as at November 30, 2005. The increase is primarily the result
of the issuance of an $849,341 short term promissory note issued to Southern
Tier Acquisitions, LLC as a result of amounts advanced by Southern Tier
Acquisitions, LLC to Tioga Downs Racetrack, LLC prior to closing of the American
Racing and Entertainment LLC transaction on the Company's behalf.


                                       19
<PAGE>

      Shareholders' equity has increased since last fiscal year end to
$3,559,026 at November 30, 2005. Since February 28, 2005, the Company has issued
$3,000,000 Series A 8% Convertible Cumulative Preferred Stock (1,000 shares
having an initial value of $3,000 each) to acquire certain assets. Common stock
and additional paid in capital increased by $1,746,400 since last year end.
Common stock subscribed (defined as cash received on equity private placements
for which common stock certificates have not been issued) has increased by
$112,800 since February 28, 2005. Since last fiscal year end the Company has
issued 165,960,000 common shares plus warrants to purchase an additional
82,980,000 common shares at $0.04 per share over the next three years. In
addition the Company issued 3,000,000 common shares for consulting services
provided valued at $86,800 since year end. The subscription approved by the
Board of Directors 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.) In addition the Company is obligated to
issue another 15,000,000 common shares and warrants to purchase an additional
7,500,000 common shares under amounts subscribed for as of November 30, 2005.
Since last fiscal year end, the Company's accumulated deficit increased by
$886,683 as a result of the Company's net loss.

      Liquidity and Capital Resources


      During the nine month period ended November 30, 2005 cash used in
operating activities totaled $557,011, primarily attributable to the net loss of
$886,683 reduced by non cash adjustments and changes in various working capital
items.

      Cash provided by financing activities totaled $1,787,409 and represented
$1,772,400 of additional private placements of common stock and an increase in
bank overdraft of $15,070.

      Cash used in investing activities totaled $1,230,398 and represented; 1)
capital contributions to Tioga Downs Racetrack, LLC prior to closing of the
American Racing and Entertainment LLC transaction of $1,205,009, 2) $40,459
decrease in amounts due to related parties, 3) a further investment in Baymount
Corporation of $41,525 and 4) net proceeds of $56,595 received on the disposal
of investments.

      Revenues of the Company are non-existent and are not a source for
financing operating losses. 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. The Company will not have
sufficient funds to meet its working capital needs for the next twelve months,
meet its obligations under the Southern Tier note or make additional capital
contributions to American Racing and Entertainment, LLC, unless it continues to
raise capital from external sources and there can be no assurance that the
Company will be successful in this endeavor and may have a material adverse
impact upon the Company.

      The Company does not have any material sources of liquidity or off balance
sheet arrangements or transactions with unconsolidated subsidiaries, other than
additional member contributions to American Racing and Entertainment, LLC.

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


                                       20
<PAGE>

      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.

Off-Balance Sheet Arrangements

      The Company does not have any material off-balance sheet arrangements that
have or are reasonably likely to have a current or future effect on its
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources, except that under certain
circumstances it may be required to fund additional member contributions to
American Racing and Entertainment, LLC.

      Item 3. Controls and Procedures.

Evaluation of disclosure controls and procedures.

Management of the Company has evaluated, with the participation of the Chief
Executive Officer and Chief Financial Officer of the Company, the effectiveness
of the Company's disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) as of the end of the fiscal quarter covered by this
Quarterly Report on Form 10-QSB. Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer of the Company have concluded that the
Company's disclosure controls and procedures as of the end of the fiscal quarter
covered by this Quarterly Report on Form 10-QSB are effective to provide
reasonable assurance that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the Securities and Exchange Commission and that the
information required to be disclosed in the reports is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure.

Changes in internal controls.

Management of the Company has also evaluated, with the participation of the
Chief Executive Officer and Chief Financial Officer of the Company, any change
in the Company's internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal
quarter covered by this Quarterly Report on Form 10-QSB. There was no change in
the Company's internal control over financial reporting identified in that
evaluation that occurred during the fiscal quarter covered by this Quarterly
Report on Form 10-QSB that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.


                                       21
<PAGE>

                           PART II. Other Information

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

      Between September 30, 2005 and November 15, 2005, the Company issued to
several investors 7,500,000 common shares and warrants with a term of three
years for 3,750,000 common shares at $.04 per share. Total proceeds from this
offering was $75,000. All of the proceeds were received in the prior quarter,
however share certificates and warrant agreements were not issued until the
current quarter.

      In addition, on September 27, 2005 and September 28, 2005 the Company
received gross proceeds of $35,000, from several private investors, for which
share certificates and warrant agreement were not issued during the current
quarter. Therefore the Company is obligated to issue 3,500,000 common shares and
warrants with a term of three years for 1,750,000 common shares at $.04 per
share these subscription agreements.

      The issuance of the foregoing securities by the Company was a private
placement made in reliance on Section 4(2) of the Securities Act of 1933, as
amended.

      The primary use of proceeds was to fund the working capital needs of the
Company.

      On October 14, 2005, the Company entered into an Asset Purchase Agreement
(the "Agreement") with Asolare II, LLC, a New York Limited Liability Company,
("Asolare") whereby the Company purchased substantially all of the assets of
Tioga Downs Racetrack ("Tioga Downs") located in the Town of Nichols, County of
Tioga, New York for the purchase price of $3 million paid through the issuance
of the Company's Series A Cumulative Preferred Stock (the "Preferred Stock").
Pending filing of the Articles of Amendment with the Secretary of State of
Wyoming, the Preferred Stock has not yet been issued.


Item 6. Exhibits

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

10.1     Asset Purchase Agreement between the Registrant and Asolare II, LLC
         dated October 14, 2005, filed as Exhibit 10.1 on Form 8-K dated October
         12, 2005 and incorporated by reference herein.

10.2     Operating Agreement of American Racing and Entertainment, LLC between
         the Registrant, Southern Tier Acquisition II, LLC and Nevada Gold NY,
         Inc. dated November 8, 2005,` filed as Exhibit 10.1 on Form 8-K dated
         November 8, 2005 and incorporated by reference herein.

10.3     Contribution Agreement between the Registrant, Southern Tier
         Acquisition, LLC, American Racing and Entertainment, LLC and Nevada
         Gold and Casinos, Inc. dated November 8, 2005, filed as Exhibit 10.2 on
         Form 8-K dated November 8, 2005 and incorporated by reference herein.

                                       22
<PAGE>



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

10.4     Promissory Note issued by Registrant to Southern Tier Acquisitions, LLC
         dated November 15, 2005, filed as Exhibit 10.3 on Form 8-K dated
         November 8, 2005 and incorporated by reference herein.

10.5     Pledge and Security Agreement between the Registrant and Southern Tier
         Acquisitions, LLC dated November 15, 2005, filed as Exhibit 10.4 on
         Form 8-K dated November 8, 2005 and incorporated by reference herein.

10.6     Capital Contribution Agreement between the Registrant and Southern Tier
         Acquisitions, LLC dated November 14, 2005, filed as Exhibit 10.5 on
         Form 8-K dated November 8, 2005 and incorporated by reference herein.

31.1     Certification of Principal Executive Officer Pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002

31.2     Certification of Principal Financial Officer Pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002

32.1     Certification of Principal Executive Officer Pursuant to Section 906 of
         the Sarbanes-Oxley Act of 2002

32.2     Certification of Principal Financial Officer Pursuant to Section 906 of
         the Sarbanes-Oxley Act of 2002


                                       23
<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.



Dated:  January 16, 2006                  By: /s/ Edward M. Tracy
                                              ---------------------------
                                              Name:  Edward M. Tracy
                                              Title: President and Chief
                                                     Executive Officer


Dated:  January 16, 2006                  By: /s/ Gary N. Hokkanen
                                              ----------------------------
                                              Name:  Gary N. Hokkanen
                                              Title: Chief Financial Officer


                                       24
<PAGE>

                                Index of Exhibits

Exhibit                Document

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

10.1     Asset Purchase Agreement between the Registrant and Asolare II, LLC
         dated October 14, 2005, filed as Exhibit 10.1 on Form 8-K dated October
         12, 2005 and incorporated by reference herein.

10.2     Operating Agreement of American Racing and Entertainment, LLC between
         the Registrant, Southern Tier Acquisition II, LLC and Nevada Gold NY,
         Inc. dated November 8, 2005,` filed as Exhibit 10.1 on Form 8-K dated
         November 8, 2005 and incorporated by reference herein.

10.3     Contribution Agreement between the Registrant, Southern Tier
         Acquisition, LLC, American Racing and Entertainment, LLC and Nevada
         Gold and Casinos, Inc. dated November 8, 2005, filed as Exhibit 10.2 on
         Form 8-K dated November 8, 2005 and incorporated by reference herein.

10.4     Promissory Note issued by Registrant to Southern Tier Acquisitions, LLC
         dated November 15, 2005, filed as Exhibit 10.3 on Form 8-K dated
         November 8, 2005 and incorporated by reference herein.

10.5     Pledge and Security Agreement between the Registrant and Southern Tier
         Acquisitions, LLC dated November 15, 2005, filed as Exhibit 10.4 on
         Form 8-K dated November 8, 2005 and incorporated by reference herein.

10.6     Capital Contribution Agreement between the Registrant and Southern Tier
         Acquisitions, LLC dated November 14, 2005, filed as Exhibit 10.5 on
         Form 8-K dated November 8, 2005 and incorporated by reference herein.

31.1     Certification of Principal Executive Officer Pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002

31.2     Certification of Principal Financial Officer Pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002

32.1     Certification of Principal Executive Officer Pursuant to Section 906 of
         the Sarbanes-Oxley Act of 2002

32.2     Certification of Principal Financial Officer Pursuant to Section 906 of
         the Sarbanes-Oxley Act of 2002

                                       25