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


                                   FORM 10-QSB


          (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                 For the quarterly period ended: March 31, 2003

          ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                        For the transition period from to

                        Commission File Number: 000-30771


                           INTERACTIVE MOTORSPORTS AND
                               ENTERTAINMENT CORP.
                   f.k.a. Pacific International Holding, Inc.
               (Exact name of registrant as specified in charter)


                                     Indiana
         (State or other jurisdiction of incorporation or organization)

                                   87-0678630
                           (I.R.S. Employer I.D. No.)

               5624 West 73rd Street, Indianapolis, Indiana 46278
                    (Address of principal executive offices)

                                 (317) 295-3500
              (Registrant's telephone number, including area code)


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

Issuer's Revenues for its most recent fiscal year: $9,636,278.

As of December 31, 2002, the aggregate  market value of the voting stock held by
non-affiliates of the Issuer,  43,204,733  shares,  was $12,097,325.  The market
value of Common Stock of the Issuer,  par value $0.0001 per share,  was computed
by  reference to the average of the closing bid and asked prices of one share on
such date which was $0.28.

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the last practicable date. Class outstanding as of April 30,
2003: Common Stock, par value $0.0001, 61,360,000 shares issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None
<PAGE>

                    INDEX TO QUARTERLY REPORT ON FORM 10-QSB



                                                                           Page
Section                                                                   Number

BASIS OF PRESENTATION.......................................... ..............4

                                     PART I

Item 1.  Condensed  Financial   Statements  and  Notes  to  Condensed
           Financial Statements
         Condensed Consolidated Balance Sheets at March 31, 2003 and December
           31, 2002...........................................................5
         Condensed Consolidated Statements of Operations for the Three Months
           Ended March 31, 2003 and 2002......................................6
         Condensed Consolidated Statements of Changes in Shareholders' Equity
           for the Three Months Ended March 31, 2003 and 2002.................7
         Condensed Consolidated Statements of Cash Flows for the Three
           Months Ended March 31, 2003 and 2002...............................8
         Notes to Condensed Consolidated Financial Statements.................9
Item 2.  Management's Discussion and Analysis of Financial Condition and
           Results of Operations..............................................10
Item 3.  Qualitative and Quantitative Disclosures of Market Risk..............14
Item 4.  Internal Controls and Procedures.....................................14


                                     PART II

Item 1.    Legal Proceedings..................................................15
Item 2     Changes in Securities. ............................................15
Item 3     Defaults Upon Senior Securities....................................15
Item 4.    Submission of Matters to a Vote of Security Holders................15
Item 5.    Other Information..................................................15
Item 6.    Exhibits and Reports on Form 8-K...................................15


SIGNATURES....................................................................16

CERTIFICATIONS................................................................17

EXHIBITS......................................................................19

<PAGE>


                       NOTE ON FORWARD-LOOKING INFORMATION

This Form  10-QSB and other  statements  issued or made from time to time by the
Company  or  its  representatives  contain  statements,   which  may  constitute
"forward-looking  statements"  within the meaning of the  Securities Act of 1933
and the  Securities  Exchange Act of 1934, as amended by the Private  Securities
Litigation  Reform Act of 1995,  15  U.S.C.A  Sections  77z-2 and  78u-5.  Those
statements  include  statements   regarding  the  intent,   belief,  or  current
expectations  of the Company and members of its  management  team as well as the
assumptions on which such statements are based. All statements,  trend analyses,
and other  information  contained  in this  report  relative  to markets for the
Company's  products  and/or  trends in the  Company's  operations  or  financial
results,  as well as other  statements which include words such as "anticipate,"
"could,"  "feel(s),"   "believes,"   "plan,"  "estimate,"   "expect,"  "should,"
"intend,"  "will," and other  similar  expressions,  constitute  forward-looking
statements and are subject to known and unknown risks,  uncertainties  and other
factors  that may cause actual  results to be  materially  different  from those
contemplated by the  forward-looking  statements.  Such factors  include,  among
other things:  (i) general  economic  conditions  that may impact the disposable
income and spending  habits of consumers;  (ii) the  availability of alternative
entertainment  for  consumers;  (iii)  the  ability  of the  company  to  obtain
additional  capital and/or debt  financing;  (iv) the receipt of a going concern
opinion from the Company's  independent  public  accountants  for the year ended
December  31,  2002;  and (v) the  ability of the  company to control  costs and
execute its business plan.

The  reader  is  cautioned  that any  such  forward-looking  statements  are not
guarantees of future performance and involve risks and  uncertainties,  and that
actual  results  may  differ   materially   from  those   contemplated  by  such
forward-looking statements. Important factors currently known to management that
could cause actual results to differ  materially  from those in  forward-looking
statements are set forth herein.  The Company undertakes no obligation to update
or  revise  forward-looking  statements  to  reflect  changed  assumptions,  the
occurrence of unanticipated  events or changes to future operating  results over
time.
<PAGE>

                              BASIS OF PRESENTATION

Effective  August  2,  2002,  Pacific  International   Holding,   Inc.,  a  Utah
corporation  ("PIH"),  which was originally organized in 1986, changed its state
of  domicile  and name by  merging  with and into  Interactive  Motorsports  and
Entertainment   Corp.  (the  surviving  entity),  an  Indiana  corporation  (the
"Company"), pursuant to an Agreement and Plan of Reorganization.  Per the merger
agreement,  each share of PIH common stock outstanding  immediately prior to the
effective  date of the merger was cancelled  and  converted  into four shares of
Interactive  Motorsports and Entertainment  Corp. common stock.  Although it had
been in a variety of  businesses  for over 15 years,  at the time of the merger,
PIH had limited operations.

Subsequent to the merger and effective as of the same date, the Company acquired
pursuant to a Plan and  Agreement of Exchange all of the issued and  outstanding
shares of common stock and  preferred  stock of Perfect  Line,  Inc., an Indiana
corporation  ("Perfect Line"), from the Perfect Line shareholders in exchange on
a "share-for-share" basis for shares of the Company's common stock and preferred
stock. As a result of the share exchange,  the Perfect Line shareholders held as
of August 2, 2002 Company shares representing  approximately  eighty-two percent
(82%) of the Company's  capital stock.  Also effective as of August 2, 2002, the
members of the Board of  Directors  of Perfect  Line were elected to replace the
members of the  Company's  Board of  Directors  and the  executive  officers  of
Perfect Line became the executive officers of the Company.

As Perfect Line had revenues,  operations,  and business activity, for financial
reporting purposes,  Perfect Line is considered the acquirer,  and therefore the
predecessor,  and the Company is  considered  the  acquiree for  accounting  and
reporting  purposes.  Due to the fact  that the  merger  is being  treated  as a
reverse  acquisition,  the  equity of the  Company  has been  recapitalized  for
financial  reporting  purposes.  The operations of Interactive  Motorsports  and
Entertainment  Corp.  have been  included in  consolidation  from August 2, 2002
until March 31, 2003.

All  information  in this  Form  10-QSB is  presented  from the  perspective  of
Interactive  Motorsports and Entertainment Corp. and its subsidiary Perfect Line
and not from the perspective of PIH.



                                     PART I

Item 1. Condensed Financial Statements

         INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP. AND SUBSIDIARY
            f.k.a. Pacific International Holding, Inc. and Subsidiary

                      CONDENSED CONSOLIDATED BALANCE SHEETS
             As of March 31, 2003 (Unaudited) and December 31, 2002
<TABLE>


                                                                                    March 31,          December 31,
                                                                                       2003                2002
     ASSETS
<S>                                                                                     <C>                <C>
     Cash and cash equivalents                                                          $519,519           $582,905
     Trade accounts receivable                                                            49,552             86,734
     Merchandise inventory                                                               157,570            161,459
     Prepaid insurance and other expenses                                                 27,817             29,706
              Total current assets                                                       754,458            860,804

     Property and equipment, net of accumulated depreciation                           1,079,195          1,061,464

     Deposits                                                                            101,574            101,574
     Other intangible assets, net of accumulated amortization                             12,667             13,667
              Total other assets                                                         114,241            115,241

     Total assets                                                                     $1,947,894         $2,037,509

     LIABILITIES AND SHAREHOLDERS' EQUITY
     Liabilities:
          Accounts payable                                                              $394,847           $349,210
          Accrued payroll and payroll taxes                                              224,188            162,894
          Sales tax payable                                                               59,352             65,423
          Gift certificates and customer deposits, net                                   125,541            141,617
          Accrued expenses                                                               388,280            524,197
          Accrued property taxes                                                          46,134             43,192
          Accrued interest                                                                 4,932                  -

          Notes payable - current                                                        553,137                  -
     Total liabilities                                                                 1,796,411          1,286,533

     Shareholders' equity:
          Common stock;  $0.0001 par value,  200,000,000  shares  authorized,
         61,330,000 shares issued and outstanding                                          6,133              6,130
          Convertible  preferred stock,  $0.0001 par value,  5,000,000 shares
         authorized, 4,745,456 shares issued and outstanding                                 475                475
          Additional paid-in capital                                                   3,810,385          3,653,445
          Retained deficit                                                           (3,665,510)        (2,909,074)
     Total shareholders' equity                                                          151,483            750,976

     Total liabilities and shareholders' equity                                       $1,947,894         $2,037,509
</TABLE>

               The accompanying notes are an integral part of the
                  condensed consolidated financial statements.
<PAGE>

         INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP. AND SUBSIDIARY
            f.k.a. Pacific International Holding, Inc. and Subsidiary

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
   For the three months ended March 31, 2003 (Unaudited) and 2002 (Unaudited)
<TABLE>

                                                                                           2003            2002

<S>                                                                                      <C>              <C>
Net sales                                                                                $2,120,314       $2,508,872

Total operating expenses                                                                  2,859,318        2,504,375

Operating income (loss)                                                                    (739,004)           4,497


Interest expense                                                                             17,432           24,793

Loss before income tax                                                                     (756,436)        (20,296)


Provision for income tax                                                                          -               -

Net loss                                                                                  $(756,436)       $(20,296)

Net loss per Common Share:
         Basic                                                                               $(0.01)
         Diluted                                                                             $(0.01)
Weighted average shares outstanding:
         Basic                                                                           61,313,000
         Diluted                                                                         61,313,000
</TABLE>

               The accompanying notes are an integral part of the
                  condensed consolidated financial statements.
<PAGE>

         INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP. AND SUBSIDIARY
            f.k.a. Pacific International Holding, Inc. and Subsidiary

      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
         For the three months ended March 31, 2003 and 2002 (Unaudited)


<TABLE>


                                                               Member's      Member's         Total
                                                               Units and     Retained        Member's
                                                               Dollars       Deficit         Deficit


<S>                                                          <C>           <C>             <C>
Balance at December 31, 2001                                   $650,000      $(719,854)      $ (69,854)

Net loss                                                              -        (20,296)        (20,296)


Conversion of member loans to equity                            400,000               -        400,000

Balance at March 31, 2002                                    $1,050,000      $(740,150)       $309,850


</TABLE>


<TABLE>

                         Common Stock        Preferred Stock   Additional                        Total
                                                                 Paid-In     Retained        Shareholders'
                                                                 Capital      Deficit           Equity
                       Shares     Dollars  Shares     Dollars



Balance at
<S>                 <C>          <C>     <C>            <C>   <C>          <C>               <C>
December 31, 2002    61,300,000   $6,130  4,745,456      $475  $3,653,445   $(2,909,074)      $750,976

Net loss                      -        -          -         -           -      (756,436)      (756,436)

Issuance of
common stock for
consulting
services                 30,000        3          -         -      10,077              -        10,080


Issuance of
secured notes
with warrants                 -        -          -         -     146,863              -       146,863


Balance at March
31, 2003             61,330,000   $6,133  4,745,456      $475  $3,810,385   $(3,665,510)      $151,483

</TABLE>

               The accompanying notes are an integral part of the
                  condensed consolidated financial statements.
<PAGE>

         INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP. AND SUBSIDIARY
            f.k.a. Pacific International Holding, Inc. and Subsidiary

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
   For the three months ended March 31, 2003 (Unaudited) and 2002 (Unaudited)

<TABLE>

                                                                                          2003              2002

  Cash flows from operating activities
<S>                                                                                      <C>                <C>
       Net loss                                                                          $ (756,436)        $(20,296)
      Adjustments to reconcile net loss to net cash provided by (used
       in) operations:
        Depreciation, amortization, and other                                                92,476           84,500
        Common stock issued for consulting services                                          10,080                -
        Provision for inventory obsolescence                                                 10,000                -
      Net changes in operating assets and liabilities:
       Trade accounts receivable                                                             37,182          (52,262)
       Merchandise inventory                                                                 (6,111)         (28,726)
       Prepaid expenses and other current assets                                              1,889          (13,016)
       Accounts payable                                                                      45,637          (20,956)
       Accrued payroll and payroll taxes                                                     61,294           68,351
       Sales tax payable                                                                     (6,071)         (38,916)
       Gift certificates and customer deposits                                              (16,076)         (29,691)
       Accrued expenses                                                                    (135,917)        (201,596)
       Accrued property taxes                                                                 2,942           22,500
       Accrued interest                                                                       4,932           18,000
       Other assets and liabilities                                                               -           49,711
               Net cash used in operations                                                 (654,179)        (162,397)

  Cash flows from investing activities:
        Decrease in deposits                                                                      -           33,867
        Purchase of property and equipment                                                 (109,207)         (72,379)
               Net cash used in investing activities                                       (109,207)         (38,512)

  Cash flow from financing activities:
        Proceeds from issuance of secured notes with warrants                               700,000                -
        Net borrowings on bank loan                                                               -          102,229
               Net cash provided by financing activities:                                   700,000          102,229

  Decrease in cash and cash equivalents                                                     (63,386)         (98,680)
  Cash and cash equivalents, beginning of period                                            582,905          778,629
  Cash and cash equivalents, end of period                                                 $519,519         $679,949


  Supplemental disclosure of non-cash transactions:

  Conversion of member loans to equity                                                        $   -         $400,000
</TABLE>


               The accompanying notes are an integral part of the
                  condensed consolidated financial statements.


<PAGE>

         INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP. AND SUBSIDIARY
            f.k.a. Pacific International Holding, Inc. and Subsidiary

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a.   UNAUDITED  INTERIM  FINANCIAL   INFORMATION:   The  accompanying  unaudited
     condensed  consolidated  balance  sheets  of  Interactive  Motorsports  and
     Entertainment  Corp.  (the  "Company")  at March 31, 2003 and  December 31,
     2002,  and  the  unaudited   consolidated   statements  of  operations  and
     statements  of cash flows for the three  months  ended  March 31,  2003 and
     2002, have been prepared by the Company's management and do not include all
     the  information  and notes to the  financial  statements  necessary  for a
     complete presentation of the financial position, results of operations, and
     cash flows in conformity with generally accepted accounting principles.  In
     the  opinion  of  management,   all   adjustments   necessary  for  a  fair
     presentation of the results of operations and financial  position have been
     included  and  all  such  adjustments  are of a  normal  recurring  nature.
     Although  management  believes  the  disclosures  are  adequate to make the
     information  presented  not  misleading,  it is  suggested  that that these
     condensed consolidated financial statements be read in conjunction with the
     audited  financial  statements  and  the  notes  thereto  included  in  the
     Company's  latest  annual  financial  statements  included in the Company's
     annual  report on Form  10-KSB.  The  results of  operations  for the three
     months ended March 31, 2003 are not  necessarily  indicative of the results
     that may be  expected  for the full year  ending  December  31, 2003 or any
     future period.

b.   USE OF ESTIMATES:  The  preparation  of financial  statements in conformity
     with  accounting  principles  generally  accepted  in the United  States of
     America  requires  management to make estimates and assumptions that affect
     the  reported  amounts  of assets and  liabilities  and the  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. Actual results could differ from those estimates.

NOTE 2 - DEBT AND CREDIT ARRANGEMENTS

During the first quarter 2003,  the Company was  successful in obtaining  bridge
financing  totaling   $700,000.   On  March  7,  2003,  Perfect  Line,  Inc.,  a
wholly-owned subsidiary of the Company, issued Secured Bridge Notes and warrants
due  December  31, 2003 (the "Bridge  Notes") in the  aggregate  total amount of
$700,000 to one institutional investor and three related-party investors.

Under  the  terms  of the  Bridge  Notes,  Ropart  Asset  Management  Fund,  LLC
("Ropart"),  Tampa Bay  Financial,  Inc.  (related-party),  William R. Donaldson
(related-party)  and Erik R.  Risman  (related-party),  are due to  receive  the
principal  sums of  $500,000,  $100,000,  $50,000 and $50,000,  respectively  on
December  31,  2003.  Interest  will  be paid on the  unpaid  principal  balance
existing prior to maturity at an annual rate of twelve  percent (12%).  Interest
on the unpaid  principal under the Bridge Notes is due and payable in arrears on
the first day of each month, commencing April 1, 2003.

Ropart and Mr. Risman also received warrants entitling them to purchase from the
Company, at an exercise price of $0.17 per share,  2,941,176 and 294,118 shares,
respectively,  of the Company at any time before the earlier of June 30, 2004 or
six  months  following  payment  of the  Bridge  Note in  full.  Management  has
determined  the value of the  Ropart  and  Risman  warrants  to total  $146,863.
Accordingly,  the balance in notes payable on the accompanying condensed balance
sheet at March 31, 2003 is $553,137.

NOTE 3 - LICENSING AND CONSULTING AGREEMENTS

The Company has a licensing  agreement with the National  Association  for Stock
Car Auto Racing, Inc. ("NASCAR") for location-based entertainment,  which allows
the  Company  to use the  NASCAR  name  and  logo.  The  Company's  confidential
licensing  agreement with NASCAR  requires  annual royalty  payments in 2002 and
quarterly  royalty  payments in 2003 and 2004 based on  simulator,  merchandise,
food, beverage,  sponsor,  and remote site revenues at varying percentages.  The
licensing agreement is subject to renewal on December 31, 2004.

The  Company  also has  licensing  agreements  with  several  NASCAR race teams,
drivers, and racetracks that expire on various dates
through 2005.
<PAGE>


NOTE 4 - MANAGEMENT'S PLANS

For the year ended  December 31, 2002,  the first full year of operations  since
the Company's acquisition of the racing centers, the Company's 12 racing centers
generated revenue of approximately $9.6 million. Operating without the necessary
capital to properly market and merchandise these stores,  sales performance fell
short of expectation,  resulting in a net loss of approximately $2.2 million for
the year ended December 31, 2002.  Losses have continued in the first quarter of
2003  with a net  operating  loss of  $756,436  on sales of  approximately  $2.1
million. With proper funding, the Company plans to increase the revenue from the
existing centers by increasing the average  transaction value, the percentage of
sales generated from group events, and improving the retention level of existing
customers  by  enhancing  the  gaming   experience.   The  Company   anticipates
accomplishing  this through  marketing  initiatives  and systems and  technology
improvements.

As previously  reported,  the equity financing of $2,610,050  received in August
2002 has been depleted.  The Company  received net proceeds of $687,500 from the
issuance of $700,000 of Secured  Bridge  Notes and  warrants in March 2003 which
has also been  depleted as of May 15, 2003.  The Company  believes the projected
level  of cash  receipts  from  simulator  and  merchandise  sales  will  not be
sufficient to fund the daily operations of the business through 2003. Management
is seeking additional  sources of short-term funds to continue  operations until
additional long-term equity and/or debt financing can be established.

Since  inception,  the Company's  short-term  and long-term  plans have included
raising a level of  investment  adequate to  accomplish  the  objectives  of the
business.  The  required  level  of  financing  has not yet been  achieved.  The
Company's ability to raise the necessary  financing will depend on many factors,
including the economic and market conditions prevailing at the time financing is
sought.  Management  believes  that the  investment  climate  since the  Company
commenced  operations  has generally  been  unfavorable,  particularly  to newer
enterprises,  which has hindered the Company in obtaining its  financing  goals.
Nonetheless, management believes it can achieve the required level of financing;
however,  there can be no assurance that additional  financing will be available
or, if available, that it will be on terms acceptable to the Company.

Currently,  the Company is exploring  collateralized debt financing with several
sources and is in various  stages of  discussion  with each.  Additionally,  the
Company has entered  into an  agreement  with a New York based firm to assist in
raising equity  financing for up to $7.5 million.  It was through this firm that
the Company  successfully secured its recent "bridge" financing discussed above.
While the Company  believes  that at least one of these  financing  efforts will
occur, there are no assurances.

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

The following  discussion and analysis  provides  information that we believe is
relevant to an  assessment  and  understanding  of the  consolidated  results of
operations and financial  condition of the Company.  The terms "Company",  "we",
"our" or "us" are used in this  discussion to refer to  Interactive  Motorsports
and  Entertainment  Corp. along with Interactive  Motorsports and  Entertainment
Corp.'s wholly owned  subsidiary,  Perfect Line, Inc., on a consolidated  basis,
except  where the  context  clearly  indicates  otherwise.  The  discussion  and
information  that follows concerns the Registrant as it exists today, as of this
filing,  including the  predecessor of the Company's  operations,  Perfect Line,
LLC. This  discussion  and analysis does not relate to the operations of Pacific
International  Holding,  Inc. which had limited  operations  prior to the merger
with the Company on August 2, 2002.

Interactive  Motorsports and Entertainment  Corp. ("IMTS" or the "Company"),  an
Indiana  corporation,  through its wholly owned subsidiary,  Perfect Line, Inc.,
owns and operates NASCAR Silicon Motor Speedway  ("NSMS")  racing  centers,  the
largest chain of NASCAR branded  entertainment and retail stores. NSMS customers
experience  driving in a NASCAR race car that  simulates the motion,  sights and
sounds  of an  actual  NASCAR  event.  Located  in high  profile,  high  traffic
locations,  IMTS's 12 racing  centers  include up to 14 racecar  simulators  per
location and offer the best selling NASCAR driver  merchandise  available to the
market.

For the year ended  December 31, 2002,  the first full year of operations  since
the  Company's  acquisitions  of the racing  centers,  the  Company's  12 racing
centers generated revenue of approximately  $9.6 million.  Operating without the
necessary  capital  to  properly  market and  merchandise  these  stores,  sales
performance fell short of expectation,  resulting in a net loss of approximately
$2.2 million for the year ended December 31, 2002.  Losses have continued in the
first  quarter  of 2003  with a net  operating  loss of  $756,436  on  sales  of
approximately $2.1 million.  With proper funding,  the Company plans to increase
the revenue  from the existing  centers by  increasing  the average  transaction
dollars,  the percentage of sales generated from group events, and improving the
retention level of existing  customers by enhancing the gaming  experience.  The
Company will do this through  marketing  initiatives  and systems and technology
improvements.
<PAGE>

IMTS's 12 company owned racing centers are located in high traffic, high profile
locations.
<TABLE>

<S>     <C>                       <C>                        <C>             <C>
             Location                      Market              Sq. Ft.          Simulators
1)       Mall of America            Minneapolis, MN           5,899             12 racecars
2)       Concord Mills              Charlotte, NC             7,875             14 racecars
3)       Mall of Georgia            Atlanta, GA               5,895             12 racecars
4)       Katy Mills                 Houston, TX               6,048             12 racecars
5)       RiverTown Crossing         Grand Rapids, MI          6,101             10 racecars
6)       Crossgates Mall            Albany, NY                4,167              8 racecars
7)       Riverchase Galleria        Birmingham, AL            6,188             10 racecars
8)       Universal CityWalk         Los Angeles, CA           5,067             12 racecars
9)       Opry Mills                 Nashville, TN             5,992             12 racecars
10)      Woodfield                  Chicago, IL               6,044             12 racecars
11)      Palisades Center           Nyack, NY                 5,700             12 racecars
12)      Arbor Place                Douglasville, GA          5,055             10 racecars
</TABLE>

History

Perfect Line,  LLC, the  predecessor  of the Company's  wholly owned  subsidiary
Perfect Line, Inc.  ("Perfect  Line"),  was formed in 2001 as a Delaware limited
liability company and merged with and into Perfect Line, Inc. on August 1, 2002.
Perfect  Line  is in  the  business  of  owning  and  operating  simulated  race
facilities and selling racing related merchandise.

NSMS  racing   centers   were   originally   owned  and   developed  by  Silicon
Entertainment,  Inc.  ("SEI").  SEI opened its first site in August  1997 at the
Mall of  America  in  Bloomington,  Minnesota,  the  largest  mall in the United
States.  SEI raised large sums of initial  capital,  of which,  according to SEI
internal  documents,  approximately  $6.5  million  was  utilized  to create its
proprietary  software  technology and  approximately $25 million was utilized to
produce  approximately 170 simulators and complete the build-out of 15 stores in
high traffic malls.  SEI was unable to secure  additional long term financing to
support its capital  expansion,  and was liquidated through Chapter 7 bankruptcy
in April 2001.  Perfect Line's assets were primarily  acquired from creditors of
SEI. As a result of SEI's  bankruptcy,  Perfect  Line was able to  purchase  the
assets of SEI at a price substantially below SEI's cost.

Perfect  Line  re-opened  12 of the racing  centers,  which  utilize  136 of the
simulators,  between July 2001 and August 2002.  The Company has  warehoused  32
simulators  for future  deployment  and 2  simulators  are used for research and
development  purposes  at  the  Company's  technology  center  in  Santa  Clara,
California.  The proprietary technology includes two U.S. Patents, which combine
to create  what  management  believes to be one of the  world's  most  realistic
simulation of the sights, sounds and motions experienced by driving in an actual
NASCAR race. The proprietary motion-based platform that the racecar simulator is
mounted on is among the other assets that were  acquired and licensed as part of
the transaction.

In August 2002,  Perfect Line became a wholly owned subsidiary of IMTS,  through
an  exchange  of shares  that  resulted  in  Perfect  Line  shareholders  owning
approximately 82% of IMTS equity.  Simultaneous  with this event,  approximately
$2.6 million in private  equity  financing  was made  available to Perfect Line.
Approximately one-half of the funding was used to retire the Company's bank note
and the balance was used for working capital.

The Company's Current Operations, Recent Developments and Plan for the Future

The  Company's  primary  focus  is to own  and  operate  the  largest  chain  of
officially-licensed,   NASCAR-branded  entertainment  and  retail  merchandising
stores in the world. The Company  believes that with the correct  combination of
marketing, location, and product upgrades, it can build a national following and
a profitable enterprise.

NASCAR racing is currently the #1 spectator sport in America. The Company has an
exclusive license agreement with NASCAR for location-based entertainment,  which
includes  the right to use the NASCAR  name within the  Silicon  Motor  Speedway
logo, on racing center signage,  within collateral sales materials,  on the NSMS
web site, and within the NSMS racing  simulator  software.  The Company has also
secured licenses with many popular racetracks in the United States, and the cars
driven by many of the race fans' favorite Winston Cup teams and drivers, ranging
from  established  stars such as Dale  Earnhardt,  Jr., Tony  Stewart,  and Dale
Jarrett,  to rising  stars like Matt  Kenseth  and Kurt Busch.  These  licensing
agreements and the use of NASCAR related  identities and marks provide immediate
name recognition, credibility, and authenticity to NSMS.

The  Company  has  integrated  these  license   agreements  with   sophisticated
proprietary  racing  simulator  technology  to create a chain of  NASCAR-themed,
family-oriented,  racing  entertainment  and  retail  merchandise  centers.  The
Company's  facilities are in some of America's premier shopping malls, giving us
access to over 178 million annual site visits from potential customers.
<PAGE>

Simulator  races take place on famous  NASCAR  Winston  Cup  racetracks  such as
Daytona International Speedway,  Indianapolis Motor Speedway, Lowe's (Charlotte)
Motor  Speedway,  Atlanta Motor Speedway,  Bristol Motor Speedway,  and Richmond
International Raceway.

NSMS Racing  Centers are operated as combined  racing  entertainment  and retail
merchandise  stores. In addition to providing  customers with the opportunity to
drive Winston Cup racecars,  NSMS Racing Centers also feature a large  selection
of officially-licensed  NASCAR merchandise.  Research indicates that NASCAR fans
buy more merchandise than fans from almost any other sport and they are also the
most brand-loyal.  These characteristics  helped boost worldwide  NASCAR-branded
retail sales from approximately $82 million in 1990 to $1.5 billion in 2002. The
Company's  NSMS racing  centers are the largest  chain of  officially  licensed,
NASCAR-branded  interactive  entertainment  stores in the  world,  and offer its
customers the most popular NASCAR merchandise  available.  With these factors in
place,  the  Company  believes  it is  well-positioned  to  capitalize  on  this
billion-dollar market.

Tony Stewart, 2002 NASCAR Winston Cup Champion, was recently named spokesman and
technical  advisor for NASCAR  Silicon  Motor  Speedway.  He will be featured in
promotions,   advertising  and   point-of-sale   material  and  will  also  make
appearances at NSMS racing center locations throughout the country.

The Company has entered into an agreement,  through its wholly owned subsidiary,
Perfect Line,  Inc.,  with Burroughs and Chapin  Company of Myrtle Beach,  South
Carolina  for  the  installation  of 10  proprietary  simulators  at the  NASCAR
SpeedPark Smoky Mountains and the Myrtle Beach Pavilion  Amusement  Park's Ocean
Front Arcade.  Together,  both companies are studying  further  opportunities to
install these unique NASCAR simulators in other Burroughs and Chapin properties.

The Company has made technological improvements to the simulation,  resulting in
an enhanced racing experience. In addition, two popular racetracks,  Bristol and
Indianapolis,  were  introduced to the  simulation  experience  late in 2002 and
early in 2003. Other software  improvements were implemented,  including on-line
programs  such  as  MySpeedway.  MySpeedway  is  a  feature  on  IMTS's  website
(www.smsonline.com)  that allows  customers to find their recent lap times,  and
analyze their results to improve their  performance by comparing  their times to
those of other racers throughout the country.

Technological  improvements  are  currently  under  development.  These  include
upgrading and enhancing the game graphics,  upgrading the  underlying  operating
system in order to accommodate  future  developments,  and  significant  revenue
enhancing game features that target the Company's core customers.

The Company is pursuing  additional  revenue  sharing  agreements  such as those
entered into with  Burroughs  and Chapin as described  above and plans to expand
this  activity,  based on its future  financing.  Revenue share  locations  will
provide  IMTS the  opportunity  to install  simulators  in  existing  or planned
entertainment  venues  and share  proportionately  in the sales  generated  with
owner-operators. The Company will provide the simulators at cost (expected to be
financed  through  a  third  party  leasing  firm)  and  the  host  organization
(owner-operator) will provide the space, required site build-out, and day-to-day
operations  staffing.  The Company's first installation opened in mid-April 2003
in Sevierville, Tennessee.

The Company plans,  based on future  financing,  to establish a division to sell
its motion-based  simulators to the commercial  entertainment/amusement  market.
Exploiting this opportunity may create another attractive revenue stream for the
Company.

Within its existing  racing  centers,  the Company  plans to improve each racing
center's  profitability  includes  increasing the average price per transaction,
increasing  the amount of traffic in the stores,  increasing the amount of group
sales, and improving the retention level of existing  customers by enhancing the
gaming  experience.  Through this strategy IMTS believes it will be less reliant
on the acquisition of new customers.

Overview of Financial Position and Results of Operations

The Company has not generated a profit nor has it generated sufficient cash flow
since inception to fund operations.  Since inception on May 31, 2001 and through
March  31,  2003,  the  Company  has  accumulated   aggregate   losses  totaling
$(3,665,510).
<PAGE>

The Company has funded its retained  losses  through the initial  investment  of
$650,000  in May  2001,  $400,000  of  capital  contributed  in  February  2002,
approximately  $2.6  million  received in August 2002 from the sale of Preferred
Stock,  and the $700,000  received in March 2003 from the sale of Secured Bridge
Notes. The Company is in the process of soliciting additional debt and/or equity
financing to fund current operating  deficits and the Company's growth plan. See
further discussion under "Liquidity and Capital Resources" below.

During the three months ended March 31, 2003,  the Company had total revenues of
$2,120,314 compared to $2,508,872 for the three months ended March 31, 2002. The
decrease in revenue of 15.5% is principally  attributed to  deterioration in the
economy and the related impact on discretionary  consumer  spending.  During the
first  quarter of 2003,  the  Company has  experienced  a decline in the average
sales  per week per  store on a  comparable  basis  from  $17,862  for the first
quarter  of 2002 to an  average of  $14,501  for the first  quarter  of 2003,  a
decrease of 18.8%.

Review of Consolidated Financial Position

Cash and Cash Equivalents: The Company had $519,519 in cash and cash equivalents
as of March 31, 2003  compared with $582,905 at December 31, 2002, a decrease of
$63,386.  This  decrease  in cash  was  caused  principally  by the net  loss of
$756,436 for the quarter  offset by the receipt of $687,500 in net proceeds from
the sale of the Secured  Bridge Notes in March 2003.  See further  discussion of
the cash position of the Company in "Liquidity and Capital Resources" below.

Trade Accounts  Receivable:  These are primarily credit card receivables and the
lower  balance of $49,522 at March 31, 2003 versus  $86,734 at December 31, 2002
is due to the lower  volume of  business  transacted  in March  2003  versus the
holiday shopping season in December 2002 when sales are at their seasonal peak.

Merchandise  Inventory:  At March 31, 2003,  merchandise  inventory decreased by
$3,889 from  December 31, 2002 levels due  primarily to the  establishment  of a
$10,000 reserve for obsolete inventory in the first quarter of 2003.

Notes Payable:  The Company  issued  secured bridge notes and warrants  totaling
$700,000  in  March  2003  as  further  discussed  in  Note 2 to  the  Condensed
Consolidated  Financial  Statements.  A portion of the total amount  received of
$146,863 was attributed to warrants and the remainder of $553,137 was attributed
to the bridge  notes.  The notes bear  interest at a rate of 12% per annum.  All
amounts due under the notes are due and payable December 31, 2003.

Other  Liabilities:  Accounts payable,  accrued payroll and payroll taxes, sales
taxes payable,  unearned revenue,  and other accrued expenses fluctuate with the
volume of  business,  timing of  payments,  and the day of the week on which the
period ends.

Review of Consolidated Results of Operations

Sales for the three  months  ended March 31, 2003 were  $388,558  lower than the
comparable  period in 2002 due  primarily to continued  softening of the economy
and the  associated  impact on consumer  spending.  During the first  quarter of
2003,  the Company has  experienced  a decline in the average sales per week per
store on a  comparable  basis from  $17,862 for the first  quarter of 2002 to an
average  of  $14,501  for the  first  quarter  of 2003,  a  decrease  of  18.8%.
Management believes this decrease is primarily attributable to a lack of funding
and to the  difficult  consumer  and  retail  environment  in 2003 and  consumer
concern over the war in Iraq.

Operating  expenses for the three months ended March 31, 2003 were approximately
135% of net sales and approximately  100% for the comparable period in 2002. The
primary  reasons for the increase in 2003 are the large  decrease in sales which
results in a higher  percentage,  as most costs are fixed,  and an  increase  in
corporate overhead expenses which were established  following the funding of the
business in August 2002.

Liquidity and Capital Resources

The primary source of funds available to the Company are receipts from customers
for simulator and merchandise  sales,  proceeds from equity offerings  including
the $2,610,050  received in August 2002,  proceeds from debt offerings including
the $700,000 in Secured  Bridge Notes and warrants  issued in March 2003,  loans
from shareholders, and possible future financings.

As of the filing of this Form  10-QSB,  the net  proceeds of  $687,500  from the
Secured  Bridge  Notes and  warrants  financing  received in March 2003 has been
depleted and the Company  believes the  projected  level of cash  receipts  from
simulator  and  merchandise  sales  will not be  sufficient  to fund  the  daily
operations  of the  business  through  2003.  A  difficult  consumer  and retail
environment  and  consumer  concern  over the war in Iraq have  created  further
declines in sales volume in April and May 2003. Management is seeking additional
sources of short-term funds to continue  operations  until additional  long-term
equity and/or debt financing can be established.
<PAGE>

Currently,  the Company is exploring  collateralized debt financing with several
sources and is in various  stages of  discussion  with each.  Additionally,  the
Company has entered  into an  agreement  with a New York based firm to assist in
raising equity  financing for up to $7.5 million.  It was through this firm that
the Company  successfully secured its recent "bridge" financing discussed above.
While the Company  believes  that at least one of these  financing  efforts will
occur, there are no assurances.

Since  inception,  the Company's  short-term  and long-term  plans have included
raising a level of  investment  adequate to  accomplish  the  objectives  of the
business.  The required  level of financing  has not yet been  achieved.  Absent
additional funding, the Company believes it may not have sufficient resources to
satisfy cash  requirements for the next twelve months.  The Company's ability to
raise the  necessary  financing  will  depend  on many  factors,  including  the
economic  and market  conditions  prevailing  at the time  financing  is sought.
Management  believes that the  investment  climate  since the Company  commenced
operations has generally been  unfavorable,  particularly to newer  enterprises,
which has hindered the Company in obtaining  its financing  goals.  Nonetheless,
management  believes it can achieve the required  level of  financing;  however,
there can be no assurance  that  additional  financing  will be available or, if
available, that it will be on terms acceptable to the Company.

During the quarter ended March 31, 2003, the operating activities of the Company
used  net  cash of  $654,179  compared  to net  cash  used of  $162,397  for the
comparable  period  in  2002.  The  majority  of the  increase  in cash  used in
operations  was  due to an  increase  in net  operating  loss  before  taxes  of
approximately $736,140.

During the three months ended March 31, 2003,  the Company used  $109,207 of net
cash in investing activities compared with $38,512 of net cash used in investing
activities  during the  comparable  period in 2002.  In 2003,  the net cash used
relates primarily to the capitalization of internally developed software for the
new  Indianapolis  Motor  Speedway  racetrack  and  other  enhancements  to  the
Company's proprietary racing simulation software.

The  Company  intends  to use the debt and equity  markets  to raise  sufficient
capital to fund its operating  deficits  while it refines its business model and
technology  and then market the new offering to  customers.  All of the $700,000
cash provided through  financing  activities during the three months ended March
31, 2003  represents  the receipt of proceeds  from the  issuance of the Secured
Bridge Notes and warrants in March 2003.

As of March  31,  2003,  the  Company  had cash  and cash  equivalents  totaling
$519,519  compared to $582,905 at December  31,  2002.  Current  assets  totaled
$754,458 at March 31, 2003  compared to $860,804 on December 31,  2002.  Current
liabilities  totaled  $1,796,411 on March 31, 2003  compared with  $1,286,533 on
December 31,  2002.  As such,  these  amounts  represent an overall  decrease in
working capital of $616,224 from December 31, 2002.

ITEM 3. Qualitative and Quantitative Disclosures of Market Risk

The fair value of the assets and liabilities  comprising the Company's condensed
consolidated  balance  sheet are not subject to an  inordinate  amount of market
risk.  The term  market  risk refers to the risk of loss  arising  from  adverse
changes in  interest  rates and other  relevant  market  rates and  prices.  The
Company's  primary  assets are the racing  simulators and the software that runs
them. As such, the Company does not believe it has any  significant  exposure to
market risk, as defined.

ITEM 4. Controls and Procedures

The Principal  Executive  Officer  ("PEO") and the Principal  Financial  Officer
("PFO") of the  Company  have  evaluated  the  effectiveness  of its  disclosure
controls and  procedures  (as defined in Rule 13a-14 of the Exchange Act) within
90 days prior to the filing of this report.  Based on that  evaluation,  the PEO
and PFO have concluded that the Company's disclosure controls and procedures are
adequate and effective.  There have been no significant changes in the Company's
internal  controls,  or in factors  that  could  significantly  affect  internal
controls, subsequent to the most recent evaluation of such controls.




                                     PART II

Item 1.  Legal Proceedings

From  time to time,  the  Company  may be party to  various  legal  actions  and
complaints arising in the ordinary course of business.  As of March 31, 2003 and
as of the filing of this Annual Report on Form 10-KSB,  the Company is not aware
of any material legal actions directed against the Company.

Item 2.  Changes in Securities

In February  2003,  30,000  shares of common  stock were issued under a Form S-8
filed on February 13, 2003 for consulting services.

Item 3.  Defaults Upon Senior Securities

None, not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders

None, not applicable.

Item 5.  Other Information

None, not applicable.

Item 6.   Exhibits and Reports on Form 8-K

A.       Exhibits.

         99.1     Certification of William R. Donaldson pursuant to 18 U.S.C.
                  Section 1350.
         99.2     Certification of Mark A. Paul pursuant to 18 U.S.C.
                  Section 1350.

B.       Reports on Form 8-K.

         None, not applicable.

<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                               INTERACTIVE MOTORSPORTS AND ENTERTAINMENT CORP.

Date: May 20, 2003             By:       /s/ William R. Donaldson
                               -----------------------------------------------
                               William R. Donaldson
                               Chairman of the Board and Chief Executive Officer


Pursuant to the requirements of the Securities Exchange of 1934, this report has
been signed below by the following  persons on behalf of the  Registrant  and in
the capacities and on the dates indicated.


Date: May 20, 2003             By:       /s/ William R. Donaldson
                               -----------------------------------------------
                               William R. Donaldson
                               Chairman of the Board and Chief Executive Officer
                               (Principal Executive Officer)

Date: May 20, 2003             By:      /s/ Mark A. Paul
                               -----------------------------------------------
                               Mark A. Paul
                               Vice President, Chief Financial Officer and
                               Treasurer (Principal Financial Officer)


<PAGE>


CERTIFICATION OF WILLIAM R. DONALDSON

I, William R. Donaldson, certify that:

I have reviewed this quarterly report on Form 10-QSB of Interactive  Motorsports
and Entertainment Corp.;

1.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;
2.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;
3.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
     a.   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;
     b.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and
     c.   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;
4.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent  function):
     a.   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and
     b.   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and
5.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: May 20, 2003            By:       /s/ William R. Donaldson
                              -----------------------------------------------
                              William R. Donaldson
                              Chairman and Chief Executive Officer


A signed  original of this written  statement has been  provided to  Interactive
Motorsports  and  Entertainment  Corp.  and  will  be  retained  by  Interactive
Motorsports and Entertainment Corp. and furnished to the Securities and Exchange
Commission or its staff upon request.
<PAGE>

CERTIFICATION OF MARK A. PAUL

I, Mark A. Paul, certify that:

I have reviewed this quarterly report on Form 10-QSB of Interactive  Motorsports
and Entertainment Corp.;

1.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;
2.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;
3.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
     a.   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;
     b.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and
     c.   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;
4.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):
     a.   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and
     b.   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and
5.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: May 20, 2003        By:       /s/ Mark A. Paul
                          -----------------------------------------------
                          Mark A. Paul
                          Vice President, Chief Financial Officer and Treasurer


A signed  original of this written  statement has been  provided to  Interactive
Motorsports  and  Entertainment  Corp.  and  will  be  retained  by  Interactive
Motorsports and Entertainment Corp. and furnished to the Securities and Exchange
Commission or its staff upon request.



<PAGE>



                                  EXHIBIT INDEX

Exhibits:

99.1    Certification of William R. Donaldson pursuant to 18 U.S.C. Section 1350
99.2    Certification of Mark A. Paul pursuant to 18 U.S.C. Section 1350