<PAGE>

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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                    FORM 10-Q

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 2004

[ ]   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: 2-98277C

                       SPORTS RESORTS INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

                  MICHIGAN                              38-3262264
        (State or other jurisdiction of              (I.R.S. employer
         incorporation or organization)             identification no.)

             951 AIKEN ROAD, OWOSSO, MICHIGAN            48867
         (Address of principal executive offices)     (Zip code)

                                 (989) 725-8354
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.01
                                    Par Value

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 an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                                 Yes [ ] No [X]

Number of shares of the registrant's Common Stock, $0.01 par value, outstanding
as of August 2, 2004: 48,399,771

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                                     PART I
                              FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The financial statements required under Item 1 of Part I are set forth in
Appendix A to this Report on Form 10-Q and are herein incorporated by reference.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

FORWARD-LOOKING STATEMENTS

Some of the statements in this report are forward-looking statements. These
forward-looking statements include statements relating to our performance. In
addition, we may make forward-looking statements in future filings with the
Securities and Exchange Commission and in written material, press releases and
oral statements issued by us or on our behalf. Forward-looking statements
include statements regarding the intent, belief or current expectations of us or
our officers, including statements preceded by, "should," "believe," "may,"
"will," "expect," "anticipate," "estimate," "continue," "predict," "propose," or
similar expressions.

It is important to note that our actual results could differ materially from
those anticipated in our forward-looking statements depending on various "risk
factors." Such risk factors include: concentration of stock ownership,
relationships with race sanctioning bodies, competition for leisure dollars,
reliance on key personnel, potential liabilities for personal injuries, need for
additional financing, limited trading market for our stock, dependence on the
North American new truck industry, variability of raw material and labor costs,
failure to manage mergers, acquisitions, dispositions and diversification into
other lines of business, the need to effectively manage a large sports and
entertainment development project and other factors discussed under the caption
"Risk Factors."

All forward-looking statements in this report are based on information available
to us on the date of this report. We do not undertake to update any
forward-looking statements that may be made by us or on our behalf in this
report or otherwise. In addition please note that the matters discussed under
the caption "Risk Factors" constitute cautionary statements identifying
important factors with respect to the forward-looking statements, including
certain risks and uncertainties, that could cause actual results to differ
materially from those in such forward-looking statements.

CRITICAL ACCOUNTING POLICIES

A summary of our critical accounting policies is incorporated by reference
beginning on page 10 of our 2003 Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March 25, 2004. There have been no
material changes in the accounting policies followed by us during fiscal 2004.

BACKGROUND

We are a Michigan corporation and a holding company with three active wholly
owned subsidiaries. We have no independent operations of our own, however, we
provide various administrative functions for our operating subsidiaries.

                                       2
<PAGE>

RUGGED LINER, INC. ("RL") manufactures and sells pickup truck bedliners and
tailgate covers through a distributor network. Truck bedliners are plastic
inserts that are placed in the rear beds of pickup trucks to protect the paint
and structural integrity of the bed. RL manufactures approximately 90 different
bedliners.

BRAINERD INTERNATIONAL RACEWAY & RESORT, INC. ("BIR") operates a motor sports
facility located approximately nine miles northwest of Brainerd, Minnesota.
Substantially all of BIR's revenues are obtained from motor sports racing events
at the racetrack. BIR schedules racing and other events held at the racetrack
during weekends in May through October of each year.

RACEWAY 66, INC. ("Raceway 66") is a combined convenience store and gas station
adjacent to our BIR facility.

DEVELOPMENT OF SPORTS AND ENTERTAINMENT COMPLEX. During 2001, we proposed the
development of a new sports and entertainment complex (the "Complex") to be
located on approximately 340 acres northeast of I-75 and Mount Morris Road in
Mount Morris Township, Genesse County, Michigan. This project is in the
development stage. We have received zoning and site plan approval for
development of the site by the Mount Morris Township Planning Board. The Complex
could eventually include a coliseum, domed stadium, hotel, theme restaurant, and
a combined gas station, convenience and souvenir store, along with 130 acres of
parking. To date, we have not been able to obtain the necessary funding for this
project and are currently evaluating our options. If we cannot obtain sufficient
capital to develop the Complex we will need to consider an alternative plan.

LIQUIDITY AND CAPITAL RESOURCES

Our consolidated current assets increased from $5,101,000 at December 31, 2003
to $11,253,000 at June 30, 2004. This increase is primarily related to the
reclassification from long term to current, the majority of the balance owed on
a related party note-receivable and increases in trade accounts receivable and
other current assets of $448,000 and $724,000, respectively. Our consolidated
current liabilities increased from $1,960,000 at December 31, 2003 to $3,194,000
at June 30, 2004. This increase primarily relates to increases in accounts
payable and accrued expenses of $517,000 and $711,000, respectively.

Cash increased by approximately $2,210,000 from $482,000 at December 31, 2003 to
$2,692,000 at June 30,2004 primarily due to the receipt of Federal income tax
refunds of $1,570,000. Additionally, the Company received proceeds of $414,000
upon the disposal of an unused warehouse building.

Accounts receivable - trade increased by approximately $448,000 from $821,000 as
of December 31, 2003 to $1,269,000 at June 30, 2004, due to increased seasonal
sales activity associated with the second quarter of the fiscal year, as
compared to the fourth quarter.

Note receivable - related party is comprised of a note, which is secured by a
subordinated mortgage and personal guarantee from the majority shareholder. The
note requires monthly principal and interest payments through February 2005, at
which time the unpaid balance is due. The current portion of the note increased
by $4,351,000, from $161,000 at December 31, 2003 to $4,512,000 at June 30, 2004
primarily due to the reclassification of amounts from long-term. The note is
being paid in accordance with terms.

Federal income taxes receivable of $1,570,000 at December 31, 2003 relates to
net operating losses available for carryback. During 2003, we completed a cost
segregation study during which we reclassified certain assets originally
classified as real property into other more appropriate asset

                                       3
<PAGE>

categories, which allowed for shorter more accelerated methods of depreciation
as allowed by the Internal Revenue Service. As a result of the cost segregation
study, we were able to accelerate our deductions for depreciation and increase
the carryback of net operating losses during the completion of our 2002
consolidated Federal income tax return. During the second quarter of 2004 we
received a refund of $1,570,000 from the amendment of certain prior year
returns.

Inventory levels remained consistent and were $1,535,000 at December 31, 2003 as
compared to $1,525,000 at June 30, 2004.

Other assets-current increased $724,000 from $532,000 at December 31, 2003 to
$1,256,000 primarily due to prepaid sanction fees associated with events to be
held at BIR in the third quarter of 2004.

Net property, plant and equipment decreased by approximately $918,000 from
$11,673,000 at December 31, 2003 to $10,755,000 at June 30, 2004 due to fixed
asset additions of $178,000 offset by depreciation for the period of $866,000
and the disposal of an unused warehouse building with a carrying value of
$230,000. Tooling comprised the majority of additions during the period.

LIABILITIES AND EQUITY

Accounts payable increased by approximately $517,000 from $1,136,000 at December
31, 2003 to $1,653,000 at June 30, 2004 due to higher levels of activity
associated with the second quarter as compared to the fourth quarter of the
fiscal year.

Accrued expenses increased by $711,000 from $567,000 at December 31, 2003 to
$1,278,000 at June 30, 2004, primarily due to advanced ticket sales of $888,000
at BIR, offset by the payment of other accrued amounts.

During the first six months of 2002, we paid certain expenses on behalf of
affiliated entities controlled by Donald J. Williamson, our majority
shareholder. These expenses were predominately for the use of a common payroll
processing service as well as a pro rata share of general insurance coverage.
Additionally, we had advanced $1,036,000 on behalf of Mr. Williamson for
construction costs related to a convenience store and gas station built adjacent
to our BIR facility in Brainerd, Minnesota. Construction of the convenience
store was completed in the second quarter of 2002. Effective September 1, 2002,
Mr. Williamson transferred the facility to us, at which time the construction
advances were offset based on net book value which was determined using historic
cost data accumulated during the construction of the facility. Additionally, in
June of 2003, we received $711,000 from affiliated entities toward amounts
previously advanced. The total amount outstanding at June 30, 2004 and December
31, 2003 was $396,000, which is to be reimbursed to us by the affiliated
entities. In accordance with the Sarbanes-Oxley Act of 2002, we discontinued
making any additional advances to or on behalf of affiliated entities effective
June 30, 2002.

OUTSTANDING LOANS AND CONTRACTUAL COMMITMENTS

We entered into a term loan in August 1999 in the amount of $403,000. This loan
was secured by a permanent grandstand addition and required annual principal
payments of $100,675, plus 9% interest, through August 2003 at which time this
loan was paid in full. We have a term loan, which is secured by property that
requires quarterly interest payments at 2% above the prime rate, subject to a
minimum rate of 8% and a single principal payment of $50,000 in 2004.

In 1995, we leased $2,689,000 of equipment under a lease agreement that included
an option to purchase the equipment for $1.00 upon expiration of the lease term.
The payment amounts under the lease represented principal payments, with
interest at rates between 8.0% and 8.5%. In 1996, we

                                       4
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leased additional equipment in the amount of $3,744,000 structured in the same
manner. In May of 2003, these capital leases were paid in full.

In 2002 we entered into term loans in the amount of $595,237. These loans are
secured by transportation equipment and require monthly payments including
interest at rates approximating 8.0% through November 2007.

In February 2003, we entered into a note payable with a bank in the amount of
$500,000. This note was secured by a mortgage on BIR's facilities and required
monthly payments of interest at 7.5%. In October 2003, we extended this note
with monthly principal and interest payments at 2 -1/2% above prime through
October 2008.

We lease our Owosso, Michigan facility from an affiliated entity controlled by
Donald J. and Patsy L. Williamson, our majority shareholders. We are also
responsible for all taxes, insurance and maintenance expenses related to the
facility.

Summarized below are our obligations and commitments to make future payments
under debt obligations and lease agreements as of June 30, 2004:

<TABLE>
<CAPTION>
                     2005       2006       2007       2008       2009       2010
                   --------   --------   --------   --------   --------   --------
<S>                <C>        <C>        <C>        <C>        <C>        <C>
Debt obligations   $263,000   $228,000   $243,000   $173,000   $ 39,000   $     --
Lease agreements    610,000    610,000    607,000    605,000    602,000    250,000
                   --------   --------   --------   --------   --------   --------
     Total         $873,000   $838,000   $850,000   $778,000   $641,000   $250,000
                   ========   ========   ========   ========   ========   ========
</TABLE>

We believe that we will be able to satisfy our ongoing cash requirements for
operating activities in the next twelve months and thereafter with available
cash, cash flows from operations and the collection of advances and notes
receivable outstanding from our majority shareholder and related entities.
Borrowing arrangements or additional public capital will be necessary to fund
the proposed sports and entertainment complex, which we have been unable to
obtain to date.

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
                                 Six Months Ending   Three Months Ending
                                      June 30              June 30
                                 -----------------   -------------------
                                  2004       2003     2004         2003
                                 ------     ------   ------       ------
<S>                              <C>        <C>      <C>          <C>
Sales                             100%       100%     100%          100%
Cost of Sales                      84         82       85            83
Selling, General and
   Administrative Expenses         22         22       20            21
Land Development Costs              2          2        1             1
Net Gain on Disposal of Assets      2          1        3             1
Loss from Operations                6          5        2             3
Other Income                        2          2        1             1
Net Loss                            4          3        1             2
</TABLE>

                                       5
<PAGE>

Our revenues were $5,720,000 in the three months ended June 30, 2004 compared to
$5,772,000 in the same period of 2003. Revenues attributable to RL were
$4,898,000 and $5,030,000 for the quarters ended June 30, 2004 and 2003,
respectively. The 3% decrease in RL's sales is attributable to a slight
softening in customer demand. BIR's revenues were $822,000 and $742,000 for the
quarters ended June 30, 2004 and 2003, respectively. The increase in BIR's
revenue from 2003 to 2004 is primarily due to higher prices charged on fuel
sales at our Raceway 66 convenience store operation because of higher fuel
costs.

Revenues were $10,442,000 and $10,211,000 for the six month periods ending June
30, 2004 and 2003, respectively. Revenues for RL were $9,512,000 and $9,326,000
for the six month periods ending June 30, 2004 and 2003, respectively. The
slight increase in RL's revenues overall from 2003 to 2004 is primarily due to a
reduction in sales incentives offered to new customers. BIR's revenues were
$930,000 and $885,000 for the same periods for the same reason as described
above.

Cost of sales were $4,838,000 and $4,784,000 for the quarters ended June 30,
2004 and 2003 respectively or 85% and 83% of revenue. Cost of sales attributable
to RL were $3,670,000 and $3,773,000 for the quarters ended June 30, 2004 and
2003 respectively or 75% of revenue for both periods. RL's cost of sales
remained consistent primarily due to consistent prices in plastic resin, the
material used to manufacture bedliners. Gross profit for RL was 25% of sales for
the second quarters of 2004 and 2003. Cost of sales attributable to BIR were
$1,168,000 and $1,011,000 for the quarters ended June 30, 2004 and 2003,
respectively. The increase in BIR's cost of sales from 2003 to 2004 is primarily
due to higher costs for fuel sold at our Raceway 66 convenience store operation.

Cost of sales for the six month periods ended June 30, 2004 and 2003 were
$8,775,000 and $8,384,000, respectively for the same reasons as described above.
Cost of sales attributable to RL were $7,162,000 and $6,978,000 for the six
month periods ended June 30, 2004 and 2003, respectively or 75% of revenues for
both periods. Cost of sales attributable to BIR for the six month periods ended
June 30, 2004 and 2003 were $1,613,000 and $1,406,000, respectively.

Selling, general and administrative expenses remained consistent and were
$1,135,000 and $1,184,000 for the quarters ended June 30, 2004 and 2003,
respectively, or 20% and 21% respectively, as a percentage of revenues. Selling,
general and administrative expenses attributed to RL were $865,000 and $927,000
for the quarters ended June 30, 2004 and 2003, respectively. Selling, general
and administrative expenses for BIR were $270,000 and $257,000 for the three
month periods ended June 30, 2004 and 2003 respectively.

Selling, general and administrative expenses were $2,297,000 and $2,197,000 for
the six month periods ended June 30, 2004 and 2003, respectively or 22% of
revenues for both periods. Selling, general and administrative expenses
attributed to RL were $1,851,000 and $1,739,000 for the six month periods ended
June 30, 2004 and 2003, respectively. Selling, general and administrative
expenses for BIR were $446,000 and $458,000 for the six month periods ended June
30, 2004 and 2003, respectively.

Land development costs were $57,000 and $65,000 for the quarters ended June 30,
2004 and 2003, respectively and $170,000 and $200,000 for the six month periods
ended June 30, 2004 and 2003, respectively. Land development costs are comprised
principally of professional fees and non-refundable deposits to extend various
agreements to purchase land in Mount Morris Township, Michigan in connection
with our proposed sports and entertainment complex. The extended agreements are
for periods of four to six months. Since financing for development of the
project was not in place at June 30, 2004 these amounts have been expensed.

                                       6
<PAGE>

Net gain on disposal of assets was $185,000 for the quarter ended June 30, 2004
and is related to the sale of an unused warehouse facility. We recorded a net
gain of $70,000 in the same period of 2003, principally related to the sale of
unused land at our BIR facility.

Net gain on disposal of assets was $198,000 and $98,000 for the six month
periods ended June 30, 2004 and 2003, respectively, principally for the same
reasons described above.

Interest expense in the second quarter of 2004 decreased by $11,000 from the
second quarter of 2003 due to the reduction of outstanding debt. Interest
expense in the six month period ending June 30, 2004 decreased by $21,000 from
the same period in 2003 for the same reason.

Interest income was $94,000 and $97,000 for the quarters ended June 30, 2004 and
2003, respectively, and $188,000 and $195,000 for the six month periods ended
June 30, 2004 and 2003, respectively.

RISK FACTORS

GENERAL

OWNERSHIP OF OUR COMMON STOCK IS CONCENTRATED IN ONE SHAREHOLDER, WHO IS ABLE TO
EXERCISE CONTROL AND MAKE DECISIONS THAT MAY NOT BE IN THE BEST INTEREST OF ALL
OF OUR SHAREHOLDERS

Donald J. Williamson, our majority shareholder and his wife, Patsy Williamson,
own approximately 96% of our issued and outstanding shares of common stock.
Accordingly, Donald and Patsy Williamson are able to control the election of
directors and all other matters which are subject to a vote of shareholders.
This concentration of ownership may have the effect of delaying or preventing a
change of control of Sports Resorts International, Inc. even if this change of
control would benefit all shareholders.

OUR FUTURE SUCCESS WILL BE DEPENDENT ON THE SKILL OF OUR KEY PERSONNEL

Our success depends upon the availability and performance of our officers and
senior management and other key personnel. We rely heavily upon the expertise of
a relatively small core of executives. We do not have employment agreements with
any of our key personnel. The loss of the services of one or more of our key
executives could have a material adverse effect on our operations.

OUR COMMON STOCK HAS A LIMITED TRADING MARKET, WHICH MAY MAKE IT DIFFICULT TO
SELL OR OBTAIN AN ADEQUATE PRICE FOR YOUR SHARES

There is a limited public market for our common stock and there is no assurance
that an active trading market will develop or be sustained. Because of this lack
of liquidity, our stock price may be highly volatile.

FLUCTUATIONS IN INTEREST RATES COULD INCREASE OUR BORROWING COSTS AND ADVERSELY
AFFECT OUR FINANCIAL RESULTS

In the event we borrow money in the future, we may be exposed to changes in
interest rates. Our credit facilities are usually based on the prime rate of
interest and may not necessarily be the lowest rate of interest. If the interest
rates charged by our lenders increase, there could be an adverse effect on our
financial results.

                                       7
<PAGE>

TRUCK ACCESSORIES SEGMENT

OUR PROFITABILITY IS DEPENDENT ON CONTROL OF OUR COSTS, IN THE EVENT WE ARE
UNABLE TO CONTROL OUR COSTS, OUR FINANCIAL RESULTS COULD BE ADVERSELY AFFECTED

In order to manufacture our truck accessories we require plastic resin as a raw
material. The cost of plastic resin is directly dependent upon fluctuations in
natural gas feedstock prices. We do not have any long-term supply contracts and
do not use any hedging techniques to manage the costs of plastic resin. In the
event raw material prices increase, we may be unable to pass the increased costs
on to our customers which could adversely affect our results of operations. In
addition, we attempt to control our labor costs. In the event that the cost of
labor increases and we are unable to pass such increased labor costs to our
customers, our results of operations could be adversely affected.

OUR TRUCK ACCESSORIES BUSINESS FACES STRONG COMPETITION WHICH COULD AFFECT OUR
SALES AND PROFIT MARGINS

We compete for sales of bedliners and other truck accessories against a number
of companies. Many of these companies are larger, have greater market
recognition and substantially greater financial, technical, marketing,
distribution and other resources than we have. Additionally, new and alternative
product offerings are increasingly available. While product quality is an
important factor, price and features are also very important to our customers.
We attempt to manufacture high quality full-featured products, which are cost
competitive. We have faced and will continue to face additional competition from
new entrants and alternative products into our markets. We cannot be certain
that we will be able to compete successfully with existing or new competitors or
products.

THE EFFECTS OF INFLATION COULD ADVERSELY AFFECT OUR FINANCIAL RESULTS IF OUR
COSTS INCREASE FASTER THAN WE CAN PASS THEM ON TO OUR CUSTOMERS

The relatively moderate rate of inflation experienced during the last decade has
not had a significant impact on our results of operations. However, there can be
no assurance that a moderate rate of inflation will continue. In the event the
rate of inflation increases more dramatically in the future, our costs may
increase faster than we can pass them on to our customers which would have an
adverse effect on our financial results.

OUR TRUCK ACCESSORY BUSINESS IS TIED TO THE NORTH AMERICAN VEHICLE INDUSTRY,
WHICH IS HIGHLY CYCLICAL AND DEPENDENT ON CONSUMER SPENDING AND GENERAL ECONOMIC
CONDITIONS IN NORTH AMERICA

Sales of our truck accessories including bedliners is tied to the North American
vehicle industry. The truck industry is highly cyclical and dependent on
consumer spending and general economic conditions in North America. We primarily
sell our truck accessories in the United States and as result we are solely
dependent on the health and vitality of the U. S. economy for our success. There
can be no assurance that production of pickup trucks will not decline in the
future or that we will be able to fully utilize our manufacturing capacity.
Economic factors adversely affecting truck sales and production and consumer
spending could adversely impact our sales and operating results.

                                       8
<PAGE>

SPORTS AND ENTERTAINMENT SEGMENT

WE NEED TO MAINTAIN AND ENHANCE OUR WORKING RELATIONSHIP WITH THE NHRA

In order to be successful, our raceway operation needs to maintain a good
relationship with the primary sanctioning body of our racing events, The
National Hot Rod Association ("NHRA"). While we believe that we have a good
relationship with the NHRA, and the current term of our sanctioning agreement
has been extended to December 31, 2005, it is likely that the loss of the
national race with the NHRA would adversely affect the results of our
operations.

OUR RACEWAY OPERATIONS FACE COMPETITION FOR TICKET SALES AND MARKETING AND
ADVERTISING DOLLARS

We compete for marketing, advertising and ticket sales with other sports and
with other entertainment and recreational activities. In the event fan interest
in racing declines, it is likely that our results of operations would be
adversely affected. We compete with well-established raceway operations some of
which have greater market recognition and substantially greater financial,
technical, marketing, distribution and other resources than we have. Our ability
to compete successfully depends on a number of factors, which are primarily
outside our control including our ability to develop and maintain effective
marketing programs, the number and location of our competitors and general
market and economic conditions.

WE MAY INCUR LIABILITY FOR PERSONAL INJURIES

Racing events can be dangerous to participants and to spectators. We maintain
insurance policies that provide coverage within limits that in our judgement are
sufficient to protect us from material financial loss due to liability for
personal injuries sustained by or death of, spectators in the ordinary course of
our business. Our insurance may not be adequate or available at all times and in
all circumstances. In the event damages for injuries sustained by our spectators
exceed our liability coverage or our insurance company denies coverage, our
financial condition, results of operations and cash flows could be adversely
affected to the extent claims and associated expenses exceed our insurance
recoveries.

WE WILL NEED ADDITIONAL FINANCING WHICH MAY OR MAY NOT BE AVAILABLE OR WHICH MAY
DILUTE THE OWNERSHIP INTEREST OF CURRENT SHAREHOLDERS

We have previously announced plans to develop a large sports and entertainment
complex in Mount Morris Township, Michigan. To date, we have been unable to
obtain the necessary funding for this project and are currently evaluating our
options. If we cannot obtain sufficient capital to develop the complex we will
need to consider an alternative plan.

OUR RACEWAY OPERATIONS ARE SEASONAL AND THEREFORE ADVERSE WEATHER CAN AFFECT OUR
RESULTS OF OPERATIONS

Our raceway operations primarily operate on the weekends from May through
October. In the event that adverse weather conditions curtail attendance at any
of our races, it could have a material adverse affect on our results of
operations.

                                       9
<PAGE>

OUR FAILURE TO PROPERLY MANAGE MERGERS, ACQUISITIONS, DISPOSITIONS AND
DIVERSIFICATION INTO OTHER LINES OF BUSINESS COULD ADVERSELY AFFECT OUR BUSINESS

Recently, we announced that we have decided to expand the sports and
entertainment aspects of our business. In the future we may expand or contract
our operations through mergers, acquisitions, dispositions and diversification.
These activities expose us to a number of special risks, including diversion of
management's attention, failure to retain key personnel or customers of an
acquired business, difficulties transitioning operations to accommodate new
businesses or activities and limited experience in managing a large sports and
entertainment enterprise. There can be no assurance that we will be able to
effectively manage these special risks.

NEW ACCOUNTING STANDARDS

In January 2003, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities."
FIN 46 provides guidance on how to identify a variable interest entity ("VIE")
and determine when the assets, liabilities, noncontrolling interests, and
results of operations of a VIE are to be included in an entity's Consolidated
Financial Statements. A VIE exists when either the total equity investment at
risk is not sufficient to permit the entity to finance its activities by itself,
or the equity investors lack one of three characteristics associated with owning
a controlling financial interest. Those characteristics include the direct or
indirect ability to make decisions about an entity's activities through voting
rights or similar rights, the obligation to absorb the expected losses of an
entity if they occur, and the right to receive the expected residual returns of
the entity if they occur.

In December 2003, the FASB reissued Fin 46 ("FIN 46 (R)") with certain
modifications and clarifications. Application of this guidance was effective for
interests in certain VIE's commonly referred to as special-purpose entities
("SPEs") as of December 31, 2003. Application for all other types of entities is
required for periods ending after March 15, 2004, unless previously applied. The
provisions of FIN 46 (R) have not had an impact on our financial position or
results of operations.

SEGMENT REPORTING

For a discussion of our business segments, see Note 12 to the condensed
financial statements included in Appendix A.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

See the discussion under "Market Risk Disclosure" in Item 2 above.

ITEM 4. CONTROLS AND PROCEDURES

Disclosures Controls and Procedures

The Company maintains controls and procedures designed to ensure that it is able
to collect the information that is required to be disclosed in the reports it
files with the SEC, and to process, summarize and disclose this information
within the time period specified in the rules of the SEC. The Company's Chief
Executive and Chief Financial Officers are responsible for establishing,
maintaining and enhancing these procedures. They are also responsible, as
required by the rules established by the SEC, for the evaluation of the
effectiveness of these procedures.

                                       10
<PAGE>

Based on their evaluation of the Company's disclosure controls and procedures
which took place as of the end of the period covered by this report, the Chief
Executive Officer and the Chief Financial Officer believe that these procedures
are effective to ensure that the Company is able to collect, process and
disclose the information it is required to disclose in the reports it files with
the SEC within the required time period.

Internal Controls

The Company maintains a system of internal controls designed to provide
reasonable assurance that transactions are executed in accordance with
management's general or specific authorization; transactions are recorded as
necessary to (1) permit preparation of financial statements in conformity with
generally accepted accounting principles, and (2) maintain accountability for
assets. Access to assets is permitted only in accordance with management's
general or specific authorization.

Since the date of the most recent evaluation of the Company's internal controls
by the Chief Executive and Chief Financial Officers, there have been no
significant changes in such controls or in other factors that could have
significantly affected those controls, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                       11
<PAGE>

                                     PART II
                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None

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

None

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

(a) Exhibits

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

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

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

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

(b) Reports on Form 8-K

      We filed the following reports on Form 8-K during the period covered by
this report:

      Form 8-K
      Filing Date    Description
      -----------    -----------
      May 5, 2004    Press release dated May 3, 2004 announcing that the
                     Company met with officials from the State of Michigan's
                     Office of Racing Commissioner.

      May 10, 2004   Press release dated May 7, 2004 announcing the appointment
                     of Salvatore P. Semola to the Board of Directors.

      May 17, 2004   Press release dated May 14, 2004 announcing the Company's
                     results for the quarter ending March 31, 2004.

                                       12
<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.

                                       SPORTS RESORTS INTERNATIONAL, INC.

Dated: August 12, 2004                 By: /s/ Gregory T. Strzynski
                                          --------------------------------------
                                           Gregory T. Strzynski
                                           Chief Financial Officer
                                           (Duly Authorized Officer and
                                           Principal Accounting and
                                           Financial Officer of the Registrant)

                                       13
<PAGE>

                                   APPENDIX A

                                      A-1
<PAGE>

                       SPORTS RESORTS INTERNATIONAL, INC.
                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                      June 30     December 31,
                                                       2004           2003
                                                    (unaudited)    (audited)
                                                    -----------   ------------
<S>                                                 <C>           <C>
ASSETS

CURRENT ASSETS:
  Cash                                              $ 2,691,757   $    482,128
  Accounts receivable:
    Trade (net of allowance for doubtful accounts
    and cash discounts of $235,000
    at June 30, 2004 and $181,000
    at December 31, 2003)                             1,268,860        820,873
  Note receivable - related party (Note 2)            4,511,523        160,538
  Federal income taxes receivable (Note 9)                   --      1,570,234
  Inventories (Note 3)                                1,524,694      1,534,779
  Other (Note 4)                                      1,255,748        532,033
                                                    -----------   ------------
          Total current assets                       11,252,582      5,100,585

PROPERTY, PLANT, AND EQUIPMENT - Net                 10,755,181     11,673,250
  (Notes 5 and 7)
OTHER ASSETS:
  Note receivable - related party (Note 2)                   --      4,429,654
  Other (Note 6)                                      1,287,800      1,294,119
                                                    -----------   ------------
          Total other assets                          1,287,800      5,723,773
                                                    -----------   ------------
TOTAL ASSETS                                        $23,295,563   $ 22,497,608
                                                    ===========   ============
</TABLE>

                                      A-2
<PAGE>

                       SPORTS RESORTS INTERNATIONAL, INC.
                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                         June 30       December 31,
                                                          2004            2003
                                                       (unaudited)      (audited)
                                                       ------------    ------------
<S>                                                    <C>             <C>
LIABILITIES & SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Current portion of long-term debt (Note 7)           $    263,431    $    256,578
  Accounts payable                                        1,652,514       1,135,813
  Accrued expenses (Note 8)                               1,278,147         567,482
                                                       ------------    ------------
          Total current liabilities                       3,194,092       1,959,873

LONG-TERM DEBT (Note 7)                                     682,723         791,194

SHAREHOLDERS' EQUITY
  Common stock: 70,000,000 shares authorized
      at $0.01 par value, 48,399,771 and
      48,362,953 shares issued and outstanding at
      June 30, 2004 and December 31, 2003,
      respectively                                          483,997         483,629
  Additional paid-in-capital                              5,775,068       5,656,605
  Net advances to related parties (Note 2)                 (396,292)       (396,292)
  Retained earnings                                      13,555,975      14,002,599
                                                       ------------    ------------
             Total shareholders' equity                  19,418,748      19,746,541
                                                       ------------    ------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY               $ 23,295,563    $ 22,497,608
                                                       ============    ============
</TABLE>

                                      A-3
<PAGE>

                       SPORTS RESORTS INTERNATIONAL, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                       Six Months Ending              Three Months Ending
                                           June 30                         June 30
                                 ----------------------------    ----------------------------
                                     2004            2003            2004            2003
                                 ------------    ------------    ------------    ------------
<S>                              <C>             <C>             <C>             <C>
SALES                            $ 10,441,815    $ 10,211,021    $  5,719,714    $  5,771,851

COST OF SALES                       8,775,315       8,384,181       4,838,395       4,783,947
                                 ------------    ------------    ------------    ------------
GROSS PROFIT                        1,666,500       1,826,840         881,319         987,904

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES           2,296,509       2,196,804       1,135,360       1,183,742

LAND DEVELOPMENT
   COSTS (Note 5)                     169,773         199,592          57,204          65,322

NET GAIN ON DISPOSAL
  OF ASSETS (Note 5)                  198,333          97,981         184,763          69,972
                                 ------------    ------------    ------------    ------------
LOSS FROM OPERATIONS                 (601,449)       (471,575)       (126,482)       (191,188)

OTHER INCOME (EXPENSE):
  Interest expense                    (32,512)        (53,053)        (16,292)        (27,176)
  Interest income                     188,020         194,663          94,155          96,915
  Other                                  (683)          3,090            (197)          2,431
                                 ------------    ------------    ------------    ------------
    Other income, net                 154,825         144,700          77,666          72,170
                                 ------------    ------------    ------------    ------------
LOSS BEFORE INCOME TAX BENEFIT
  (EXPENSE)                          (446,624)       (326,875)        (48,816)       (119,018)

INCOME TAX BENEFIT (EXPENSE)
   (Note 9)                                --              --              --              --
                                 ------------    ------------    ------------    ------------
NET LOSS                         $   (446,624)   $   (326,875)   $    (48,816)   $   (119,018)
                                 ============    ============    ============    ============
</TABLE>

                                                                       Continued

                                      A-4
<PAGE>

                       SPORTS RESORTS INTERNATIONAL, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                       Six Months Ending              Three Months Ending
                                           June 30                         June 30
                                 ----------------------------    ----------------------------
                                     2004            2003            2004            2003
                                 ------------    ------------    ------------    ------------
<S>                              <C>             <C>             <C>             <C>
BASIC AND DILUTED
 LOSS PER SHARE
 (Note 10)

 Net Loss                        $      (0.01)   $      (0.01)   $      (0.00)   $      (0.00)
                                 ============    ============    ============    ============
WEIGHTED AVERAGE COMMON
 SHARES
 Basic                             48,378,741      48,362,953      48,388,746      48,362,953
 Effect of dilutive securities:
  Common share equivalents,
   common shares issuable upon
   exercise of outstanding
   stock options                           --              --              --              --
                                 ------------    ------------    ------------    ------------
 Diluted                           48,378,741      48,362,953      48,388,746      48,362,953
                                 ============    ============    ============    ============
</TABLE>

                                                                       Concluded

                                      A-5
<PAGE>

                       SPORTS RESORTS INTERNATIONAL, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            Six Months Ending
                                                                                 June 30
                                                                        --------------------------
                                                                           2004           2003
                                                                        -----------    -----------
<S>                                                                     <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                            $  (446,624)   $  (326,875)
    Adjustments to reconcile net loss to net cash
         provided by operating activities:
         Depreciation and amortization                                      866,119      1,064,243
         Gain on disposal of property and equipment                        (198,333)       (97,981)
         Changes in assets and liabilities that provided (used) cash:
           Accounts receivable                                             (447,987)      (289,392)
           Income taxes receivable                                        1,570,234             --
           Inventories                                                       10,085        252,911
           Other                                                           (717,396)      (859,641)
           Accounts payable                                                 516,701       (134,730)
           Accrued expenses                                                 710,665        715,673
                                                                        -----------    -----------
Net cash provided by operating activities                                 1,863,464        324,208
                                                                        -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures                                                   (178,274)      (612,837)
    Proceeds from disposal of property and equipment                        428,557        113,591
    Payments received on notes receivable-related party                      78,669        116,137
                                                                        -----------    -----------
Net cash provided by (used in) investing activities                         328,952       (383,109)
                                                                        -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from borrowings                                                     --        535,621
    Principal payments on long-term debt                                   (101,618)       (52,923)
    Principal payments on obligations under capital leases                       --       (407,326)
    Proceeds from exercise of stock options                                 118,831        711,038
                                                                        -----------    -----------
Net cash provided by financing activities                                    17,213        786,410
                                                                        -----------    -----------
INCREASE IN CASH                                                          2,209,629        727,509

CASH, BEGINNING OF PERIOD                                                   482,128        692,138
                                                                        -----------    -----------
CASH, END OF PERIOD                                                     $ 2,691,757    $ 1,419,647
                                                                        ===========    ===========
</TABLE>

                                                                       Continued

                                      A-6
<PAGE>

                       SPORTS RESORTS INTERNATIONAL, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            Six Months Ending
                                                                                 June 30
                                                                        --------------------------
                                                                           2004           2003
                                                                        -----------    -----------
<S>                                                                     <C>            <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:
   Cash paid during the period for interest                             $    37,069    $    47,031
                                                                        ===========    ===========
   Cash paid during the period for taxes                                $        --    $        --
                                                                        ===========    ===========
</TABLE>

                                                                       Concluded

                                      A-7
<PAGE>

                       SPORTS RESORTS INTERNATIONAL, INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Note 1   BASIS OF PRESENTATION

         The Company is a Michigan corporation and a holding company with three
         active wholly owned subsidiaries, Rugged Liner, Inc. ("RL") (formerly
         The Colonel's Truck Accessories, Inc.), Brainerd International Raceway
         & Resort, Inc., ("BIR") (formerly the Colonel's Brainerd International
         Raceway, Inc.) and Raceway 66, Inc. ("Raceway 66"). The Colonel's, Inc.
         ("The Colonel's") is an inactive subsidiary, having sold all of its
         assets except for certain land in December 1998. The Company's
         subsidiaries operate in two segments, truck accessories and sports and
         entertainment.

         These financial statements should be read in conjunction with the
         audited financial statements and notes to consolidated financial
         statements included in the Company's 2003 Annual Report on Form 10-K,
         filed with the Securities and Exchange Commission on March 25, 2004. A
         summary of critical accounting policies is presented beginning on page
         10 of the Company's most recent Form 10-K. There have been no material
         changes in the accounting policies followed by the Company during
         fiscal year 2004.

         The financial information included herein is unaudited; however such
         information reflects all adjustments (consisting solely of normal
         recurring adjustments) that are, in the opinion of management,
         necessary for a fair presentation of the results of operations,
         financial position and cash flows for the periods presented.

         Interim results of operations are not necessarily indicative of the
         results expected for the full year.

         Reclassifications - Certain amounts from prior periods have been
         reclassified to conform to the current presentation.

         NEW ACCOUNTING PRONOUNCEMENTS

         In January 2003, the Financial Accounting Standards Board ("FASB")
         issued FASB Interpretation No. 46 ("FIN 46"), "Consolidation of
         Variable Interest Entities." FIN 46 provides guidance on how to
         identify a variable interest entity ("VIE") and determine when the
         assets, liabilities, noncontrolling interests, and results of
         operations of a VIE are to be included in an entity's Consolidated
         Financial Statements. A VIE exists when either the total equity
         investment at risk is not sufficient to permit the entity to finance
         its activities by itself, or the equity investors lack one of three
         characteristics associated with owning a controlling financial
         interest. Those characteristics include the direct or indirect ability
         to make decisions about an entity's activities through voting rights or
         similar rights, the obligation to absorb the expected losses of an
         entity if they occur, and the right to receive the expected residual
         returns of the entity if they occur.

         In December 2003, the FASB reissued Fin 46 ("FIN46 (R)") with certain
         modifications and clarifications. Application of this guidance was
         effective for interests in certain VIE's commonly referred to as
         special-purpose entities ("SPEs") as of December 31, 2003. Application
         for all other types of entities is required for periods ending after
         March 15, 2004,

                                      A-8
<PAGE>

         unless previously applied. The provisions of FIN 46 (R) have not had an
         impact on the Company's financial position or results of operations.

Note 2   RELATED PARTY TRANSACTIONS

         Note Receivable

         During the first quarter of 1999, a note receivable from South Saginaw
         LLC, a company owned by Donald J. Williamson, the Company's majority
         shareholder, of $5,200,000 was established. The note requires monthly
         payments of $43,496, including interest at 8.0%, through February 2005,
         at which time the unpaid balance is due. The note is being paid in
         accordance with terms and is secured by a subordinated mortgage and
         personal guarantee.

         Net Advances to Related Parties

         From 1999 through the first six months of 2002, the Company paid
         certain expenses on behalf of affiliated entities controlled by Donald
         J. Williamson. These expenses were predominately for the use of a
         common payroll processing service as well as a pro rata share of
         general insurance coverage. Additionally, the Company had advanced
         $1,036,000 on behalf of Mr. Williamson for construction costs related
         to a convenience store and gas station being built adjacent to BIR's
         facility in Brainerd, Minnesota. Construction of the convenience store
         was completed in the second quarter of 2002. Effective September 1,
         2002, Mr. Williamson transferred the facility to the Company, at which
         time the advances were offset based on net book value which was
         determined using historic cost data accumulated during the construction
         of the facility. Additionally, in June of 2003, the Company received
         $711,000 from affiliated entities toward amounts previously advanced.
         The total amount outstanding at June 30, 2004 and December 31, 2003 was
         $396,000, which is to be reimbursed to the Company by the affiliated
         entities. These advances to related parties are recorded as a reduction
         to shareholders' equity. In accordance with the Sarbanes-Oxley Act of
         2002, the Company discontinued making any additional advances to or on
         behalf of affiliated entities effective June 30, 2002.

Note 3   INVENTORIES

         Inventories are summarized as follows:

<TABLE>
<CAPTION>
                      June 30,   December 31,
                       2004          2003
                    (unaudited)    (audited)
                    -----------  ------------
<S>                 <C>          <C>
Finished products   $   973,260  $  1,030,140
Raw materials           480,312       451,280
Other                    71,122        53,359
                    -----------  ------------
Total               $ 1,524,694  $  1,534,779
                    ===========  ============
</TABLE>

                                      A-9
<PAGE>

Note 4   OTHER ASSETS, CURRENT

         Other assets, current is summarized as follows:

<TABLE>
<CAPTION>
                          June 30,   December 31,
                           2004          2003
                        (unaudited)    (audited)
                        -----------  ------------
<S>                     <C>          <C>
Prepaid sanction fees   $   900,213  $    250,000
Other                       355,535       282,033
                        -----------  ------------
Total                   $ 1,255,748  $    532,033
                        ===========  ============
</TABLE>

Note 5   PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment is summarized by major classification as
         follows:

<TABLE>
<CAPTION>
                                         June 30,      December 31,
                                           2004            2003
                                        (unaudited)      (audited)
                                       ------------    ------------
<S>                                    <C>             <C>
Land and improvements                  $  3,757,629    $  3,760,857
Track                                     1,560,300       1,560,300
Buildings                                 2,928,442       3,278,442
Condominium units                           466,000         466,000
Leasehold improvements                      319,899         319,899
Bleachers & fencing                       1,656,266       1,656,266
Equipment                                 7,468,566       7,451,805
Transportation equipment                  2,028,204       2,078,672
Furniture & fixtures                        697,947         695,372
Tooling                                   4,144,736       3,985,798
                                       ------------    ------------
       Total                             25,027,989      25,253,411
       Less accumulated depreciation    (14,272,808)    (13,580,161)
                                       ------------    ------------
Net property, plant and equipment      $ 10,755,181    $ 11,673,250
                                       ============    ============
</TABLE>

         The Company sold an unused warehouse building with a carrying value of
         approximately $230,000 and recognized a gain of $184,000 in the second
         quarter of 2004.

         During the first six months of 2004 and 2003, the Company made
         non-refundable deposits and extended various agreements to purchase
         land in Mount Morris Township, Michigan in connection with a proposed
         plan to develop a sports and entertainment complex. The extended
         agreements are for additional periods of four to six months. Since
         financing for development of the project was not in place at June 30,
         2004, these deposits have been expensed and included in land
         development costs.

         Subsequent to June 30, 2004 the Company purchased approximately 38
         acres of land in Mount Morris Township which had been under agreement
         to purchase for $750,000.

                                      A-10
<PAGE>

Note 6   OTHER ASSETS, LONG-TERM

         Other assets, long-term is summarized as follows:

<TABLE>
<CAPTION>
                              June 30,      December 31,
                                2004           2003
                             (unaudited)      (audited)
                            ------------    ------------
<S>                         <C>             <C>
Rental property             $      75,000   $      75,000
Land held for development       1,137,460       1,137,460
Land contract receivable           71,140          77,458
Other                               4,200           4,201
                            -------------   -------------
Total                       $   1,287,800   $   1,294,119
                            =============   =============
</TABLE>

Note 7   LONG TERM DEBT

         Long-term obligations consist of the following:

<TABLE>
<CAPTION>
                                                                            June 30,        December 31,
                                                                              2004             2003
                                                                           (unaudited)       (audited)
                                                                          -------------    -------------
<S>                                                                       <C>             <C>
Note payable to a bank, monthly installments of interest at 7.5%
   through October 2003, and monthly payments of principal and interest
   at 2 - 1/2% above prime (effective rate of 6 - 3/4 % and 6 - 1/2%
   at June 30, 2004 and December 31, 2004, respectively) through
   October 2008; secured by a mortgage on related property                $     442,403    $     485,770
Mortgage payable to a bank, interest at prime plus 2%, with a floor
   of 8.0% (effective rate of 8.0% at June 30, 2004 and December 31,
   2003) annual principal payments of $50,000 plus interest due
   quarterly, through September 2004; secured by
   underlying property                                                           50,000           50,000
Term loans payable to finance companies, monthly installments
   include interest approximating 8.0% through November 2007,
   collateralized by the related transportation equipment                       453,751          512,002
                                                                          -------------    -------------
            Total                                                               946,154        1,047,772
Less current portion                                                           (263,431)        (256,578)
                                                                          -------------    -------------
Long-term                                                                 $     682,723    $     791,194
                                                                          =============    =============
</TABLE>

                                      A-11
<PAGE>

Note 8   ACCRUED EXPENSES

         Accrued expenses consist of the following:

<TABLE>
<CAPTION>
                                          June 30,      December 31,
                                            2004           2003
                                         (unaudited)      (audited)
                                        ------------    ------------
<S>                                     <C>             <C>
Accrued settlements                     $         --    $     78,329
Accrued interest                               2,559           3,387
Royalties                                     76,156         151,053
Professional fees                             53,525         180,000
Advance ticket sales/deferred revenue        887,904              --
Other                                        258,003         154,713
                                        ------------    ------------
 Total                                  $  1,278,147    $    567,482
                                        ============    ============
</TABLE>

Note 9   INCOME TAXES

         The Company provides for deferred income taxes under the asset and
         liability method, whereby deferred income taxes result from temporary
         differences between the tax bases of assets and liabilities and their
         reported amounts in the financial statements that will result in
         taxable or deductible amounts in the future. Such deferred income tax
         asset and liability computations are based on enacted tax laws and
         rates applicable to periods in which the differences are expected to
         affect taxable income. A valuation allowance is established to reduce
         deferred income tax assets to the amount expected to be realized.

         On March 9, 2002, the Job Creation and Worker Assistance Act of 2002
         (the "Act") was enacted which extends the carryback period for net
         operating losses from two years to five years. Based on this new
         legislation, the Company carried back net operating losses for which
         there was a valuation allowance. In addition, the Company realized the
         tax benefit of certain deferred taxes for which there was a valuation
         allowance. In 2003 the Company performed a cost segregation study. A
         cost segregation study reclassifies assets originally classified as
         real property into other more appropriate asset categories which allow
         for shorter, more accelerated methods of depreciation as allowed by the
         Internal Revenue Service. Accordingly, the Company was able to
         accelerate its depreciation deduction for Federal income tax reporting
         purposes and increase the carry back allowed under the Act in
         connection with the completion of its 2002 consolidated Federal income
         tax return. As a result, the valuation reserve on deferred tax assets
         was reduced by $1,098,800 during year ending December 31, 2003. In
         connection with the passage of this legislation and the performance of
         the cost segregation study, the Company amended certain of its prior
         year returns. The Company received a refund of $1,570,234 in the second
         quarter of 2004 from its amended returns.

Note 10  EARNINGS (LOSS) PER SHARE

         Basic earnings (loss) per share is based upon the weighted average
         number of shares outstanding. Diluted earnings per share assumes the
         exercise of common stock options when dilutive.

                                      A-12
<PAGE>

Note 11  STOCK OPTIONS

         The Company has stock-based employee compensation plans, which are
         described more fully in Note 13 in the Company's 2003 Annual Report.
         The Company accounts for stock-based compensation consistent with SFAS
         No. 123, "Accounting for Stock-Based Compensation", and, as permitted
         by this standard, will continue to apply the recognition and
         measurement principles of Accounting Principles Board Opinion No. 25 to
         its stock-based compensation awards. Since stock options are granted at
         prices equal to fair market value, no compensation expense is
         recognized in connection with stock options granted to employees. The
         following illustrates the effect on net income (loss) and earnings
         (loss) per share if the Company applied the fair value recognition
         provisions of SFAS 123:

<TABLE>
<CAPTION>
                                             Six Months Ending            Three Months Ending
                                                 June 30                       June 30
                                               (unaudited)                   (unaudited)
                                        --------------------------    --------------------------
                                           2004           2003           2004           2003
                                        -----------    -----------    -----------    -----------
<S>                                     <C>            <C>            <C>            <C>
Net loss as reported                    $  (446,624)   $  (326,875)   $   (48,816)   $  (119,018)
Deduct:  Total stock-based employee
compensation expense determined
under fair value based method for all
awards, net of tax                               --         (9,014)            --             --
                                        -----------    -----------    -----------    -----------
Pro forma net loss                      $  (446,624)   $  (335,889)   $   (48,816)   $  (119,018)
                                        ===========    ===========    ===========    ===========
Basic and diluted loss per share:
   As reported                          $     (0.01)   $     (0.01)   $     (0.00)   $     (0.00)
   Pro forma                            $     (0.01)   $     (0.01)   $     (0.00)   $     (0.00)
</TABLE>

         No options were granted during the periods presented.


                                      A-13
<PAGE>

Note 12  SEGMENTS OF BUSINESS

         The Company's reportable segments are strategic business units that
         offer different products and services. The business units have been
         divided into two reportable segments: the manufacturing and sale of
         bedliners and other truck accessories ("Truck Accessories"), and
         operation of a multi-purpose motor sports facility in Brainerd,
         Minnesota ("Raceway").

         Operating segments are defined as components of an enterprise about
         which separate financial information is available that is evaluated
         regularly by the chief operating decision-maker, or decision making
         group, in deciding how to allocate resources and assessing performance.
         The Company's chief operating decision-maker is its Chief Executive
         Officer.

         The Company evaluates performance based on stand-alone product segment
         operating income. Intersegment sales and transfers, interest income and
         expenses are not significant.

         Financial information segregated by reportable product segment is as
         follows:

<TABLE>
<CAPTION>
                                      Six Months Ending             Three Months Ending
                                          June 30                         June 30
                                        (unaudited)                     (unaudited)
                                ----------------------------    ----------------------------
                                    2004            2003            2004            2003
                                ------------    ------------    ------------    ------------
<S>                             <C>             <C>             <C>             <C>
Sales:
   Truck Accessories            $  9,511,993    $  9,325,987    $  4,898,121    $  5,029,795
   Raceway                           929,822         885,034         821,593         742,056
                                ------------    ------------    ------------    ------------
   Total                        $ 10,441,815    $ 10,211,021    $  5,719,714    $  5,771,851
                                ============    ============    ============    ============

(Loss) Income from Operations
   Truck Accessories            $    520,664    $    430,702    $    490,543    $    283,740
   Raceway                        (1,122,113)       (902,277)       (617,025)       (474,928)
                                ------------    ------------    ------------    ------------
   Total                        $   (601,449)   $   (471,575)   $   (126,482)   $   (191,188)
                                ============    ============    ============    ============
</TABLE>

                                      A-14
<PAGE>

                                  Exhibit Index

<TABLE>
<CAPTION>
 No.                              Description
----                              -----------
<S>      <C>                                                                   <C>
31.1     Certification of Chief Executive Officer pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002

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

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

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

</TABLE>