UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, DC 20549-1004

                                   Form 10-QSB

                                   (Mark One)
 [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
                                   Act of 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005

                                       or

     [ ] 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 0-26455

                                ISECURETRAC CORP.
        (Exact name of small business issuer as specified in its charter)
                   (formerly Advanced Business Sciences, Inc.)

            DELAWARE                                87-0347787
 (State or other jurisdiction of        (I.R.S. Employer Identification No.)
 incorporation or organization)

                              5078 S. 111th Street
                              OMAHA, NEBRASKA 68137
                                 (402) 537-0022
               (Address, including zip code, and telephone number,
                      including area code, of registrant's
                           principal executive office)

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

                              YES [X]     NO [_]

      The  number  of  issuer's  shares  outstanding  as of  May  6,  2005,  was
90,531,867.

Transitional Small Business Disclosure Form (Check One): YES [ ] NO [X]


                                                                          Page 1
<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS


                           iSECUREtrac Corp. and SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>

                                                                                 (Unaudited)
                                                                                March 31, 2005  December 31, 2004
----------------------------------------------------------------------------------------------  -----------------
<S>                                                                            <C>             <C>
ASSETS
Current Assets
       Cash                                                                     $    181,600       $     44,997
       Cash - restricted                                                                  --            700,000
       Accounts receivable, net of allowance for doubtful accounts of $17,469      1,013,671          1,049,654
       Inventories                                                                   111,424            140,938
       Prepaid expenses and other                                                     53,312             75,734
                                                                                ------------       ------------
          Total current assets                                                     1,360,007          2,011,323
                                                                                ------------       ------------
Equipment, net of accumulated depreciation of $605,047
       in 2005 and $582,243 in 2004                                                  200,031            222,834
Leasehold Improvements, net of accumulated depreciation of $707
       in 2005 and $177 in 2004                                                        9,903             10,434
Monitoring Equipment, net of accumulated depreciation of $3,647,372
       in 2005 and $3,249,971 in 2004                                              2,613,762          2,496,657
Product Development Costs, net of accumulated amortization of $963,491
       in 2005 and $907,233 in 2004                                                   26,469             82,728
Intangibles, subject to amortization                                                 331,320            362,883
Goodwill                                                                           2,302,179          2,302,179
Other Assets                                                                         138,584            173,651
                                                                                ------------       ------------
          Total assets                                                          $  6,982,255       $  7,662,689
                                                                                ============       ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities

       Notes payable                                                            $  1,000,000       $    215,654
       Current maturities of long-term debt                                        1,499,096          1,410,647
       Accounts payable and accrued expenses                                         986,799          1,823,401
       Deferred gain on sale-leaseback transaction                                   925,637            870,383
       Accrued interest payable                                                      153,701            142,406
                                                                                ------------       ------------
          Total current liabilities                                                4,565,233          4,462,491
                                                                                ------------       ------------
Long-term debt, less current maturities                                            5,390,615          5,428,548
                                                                                ------------       ------------
Stockholders'  Deficit

       Series B convertible preferred stock                                               --            295,000
       Common stock                                                                   90,532             88,651
       Additional paid-in capital                                                 49,179,678         48,594,197
       Accumulated deficit                                                       (52,243,803   )    (51,206,198)
                                                                                ------------       ------------
          Total stockholders'  deficit                                            (2,973,593   )     (2,228,350)
                                                                                ------------       ------------
          Total liabilities and stockholders' deficit                           $  6,982,255       $  7,662,689
                                                                                ============       ============

</TABLE>

See Notes to Consolidated Financial Statements

                                                                          Page 2
<PAGE>


                          iSECUREtrac Corp. and SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      Three Months Ended March 31, 2005 and 2004
                                      (Unaudited)

                                                         2005            2004
--------------------------------------------------------------------------------
Revenues:

           Equipment sales                         $      9,610    $     16,506
           Equipment leasing & hosting                  988,744         782,459
           Gain on sale-leaseback transactions
              Related party                             181,884         100,675
              Other                                          --           5,653
           Service                                       20,484          18,731
                                                   ------------    ------------
              Total revenues                          1,200,722         924,024
                                                   ------------    ------------
Operating expenses:

           Cost of revenues                             670,805       1,954,530
           Research and development                     176,765         174,964
           Sales, general and administrative          1,196,867       2,384,681
                                                   ------------    ------------
              Total operating expenses                2,044,437       4,514,175
                                                   ------------    ------------
           Operating loss                              (843,715)     (3,590,151)
                                                   ------------    ------------
Other income (expense):

           Interest income                                    5               8
           Interest expense                            (225,732)       (199,497)
           Financing fees                                    --         (21,598)
           Other, net                                    31,837              --
                                                   ------------    ------------
           Total other income (expense)                (193,890)       (221,087)
                                                   ------------    ------------
           Loss before provision for income
             taxes                                   (1,037,605)     (3,811,238)
           Provision for income taxes                        --              --
                                                   ------------    ------------
Net loss                                           $ (1,037,605)   $ (3,811,238)
                                                   ============    ============
Preferred dividends                                          --        (221,313)
                                                   ------------    ------------
Net loss available to common stockholders          $ (1,037,605)   $ (4,032,551)
                                                   ============    ============
Basic and diluted loss per common share            $      (0.01)   $      (0.08)
                                                   ============    ============
Weighted average shares of common stock
  outstanding                                        90,156,488      52,685,898
                                                   ============    ============


See Notes to Consolidated Financial Statements.


                                                                          Page 3
<PAGE>

                       iSECUREtrac Corp. AND SUBSIDIARIES
                       STATEMENT OF STOCKHOLDERS' DEFICIT
                    For the Three Months Ended March 31, 2005

<TABLE>
<CAPTION>

                                                                                Series B
                                                                               Convertible
                                                                             Preferred Stock            Common Stock
                                                                             ---------------            ------------
                                                                         Shares        Amount        Shares        Amount
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>          <C>               <C>          <C>
Balance, December 31, 2004                                                300    $    295,000      88,651,536   $     88,651
     Shares issued upon conversion of notes                                --              --         521,740            522
     Shares issued upon exercise of options                                --              --          61,000             61
     Shares issued upon exercise of warrants                               --              --         760,869            761
     Shares issued for director's fees                                     --              --          36,622             37
     Compensation related to stock options issued                          --              --              --             --
     Shares issued upon conversion of Series B preferred stock           (300)       (295,000)        500,100            500
     Net loss                                                              --              --
                                                                   ----------      ----------      ----------   ------------
Balance, March 31, 2005                                                    --    $         --      90,531,867   $     90,532
                                                                   ==========      ==========      ==========   ============

<CAPTION>



                                                                   Additional
                                                                     Paid -in     Accumulated
                                                                      Capital        Deficit           Total
---------------------------------------------------------------------------------------------------------------
<S>                                                              <C>            <C>              <C>
Balance, December 31, 2004                                        $ 48,594,197    $(51,206,198)   $ (2,228,350)
     Shares issued upon conversion of notes                            105,466              --         105,988
     Shares issued upon exercise of options                             17,114              --          17,175
     Shares issued upon exercise of warrants                           174,239              --         175,000
     Shares issued for director's fees                                   8,963              --           9,000
     Compensation related to stock options issued                      (14,801)             --         (14,801)
     Shares issued upon conversion of Series B preferred stock         294,500              --              --
     Net loss                                                                      (1,037,605)      (1,037,605)
                                                                  ------------    ------------    ------------
Balance, March 31, 2005                                           $ 49,179,678    $(52,243,803)   $ (2,973,593)
                                                                  ============    ============    ============

</TABLE>

See Notes to Consolidated Financial Statements



                                                                          Page 4
<PAGE>

                        iSECUREtrac CORP AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               For the Three Months Ended March 31, 2005 and 2004
                                   (Unaudited)


                                                          2005          2004
--------------------------------------------------------------------------------
Cash flow from operating activities:
      Net loss                                       $(1,037,605)   $(3,811,238)
      Depreciation and amortization                      526,934        554,310
      Impairment charge of monitoring equipment               --      1,341,251
      Impairment charge of intangibles subject to
        amortization                                          --        302,298
      Other                                               78,695        339,154
                                                     -----------    -----------
          Net cash used in operating activities         (431,976)    (1,274,225)
                                                     -----------    -----------
Net cash used in investing activities                   (564,446)      (194,185)
                                                     -----------    -----------
Cash flows from financing activities:

      Increase (decrease) in notes payable               784,346       (368,894)
      Proceeds from long term debt                       400,000             --
      Principal payments on long term debt              (243,496)            --
      Net proceeds from issuance of common stock         192,175      2,061,313
      Other                                                   --       (239,275)
                                                     -----------    -----------
          Net cash provided by financing activities    1,133,025      1,453,144
                                                     -----------    -----------
          Increase (decrease) in cash                    136,603        (15,266)
Cash, beginning of period                                 44,997        125,399
                                                     -----------    -----------
Cash, end of period                                  $   181,600    $   110,133
                                                     ===========    ===========
Supplemental Disclosures of Cash Flow Information:
      Cash payments for:
          Interest                                   $   214,437    $   185,133
          Income Taxes                                         --             --


See Notes to Consolidated Financial Statements.


                                                                          Page 5

<PAGE>


                        iSECUREtrac CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1.  General

The condensed  consolidated  balance sheet of iSECUREtrac  Corp  ("Company",  or
"iSt",  or "we",  "us",  or "our") at  December  31,  2004,  has been taken from
audited  consolidated  financial  statements  at that  date and  condensed.  The
condensed consolidated financial statements for the three months ended March 31,
2005,  and for the three months ended March 31, 2004,  are unaudited and reflect
all normal and recurring  accruals and adjustments  which are, in the opinion of
management,  necessary  for a  fair  presentation  of  the  financial  position,
operating  results  and cash flows for the  interim  periods  presented  in this
quarterly report. The condensed consolidated financial statements should be read
in conjunction  with the  consolidated  financial  statements and notes thereto,
together with  management's  discussion and analysis of financial  condition and
results of  operations,  contained  in our Annual  Report on Form 10-KSB for the
year ended  December 31, 2004.  The results of operations and cash flows for the
three months ended March 31, 2005 are not necessarily  indicative of the results
for the entire fiscal year ending December 31, 2005.  Where  appropriate,  items
within the condensed  consolidated  financial  statements have been reclassified
from the previous periods' presentation.

The Company's  financial  statements have been presented on the basis that it is
able to continue as a going  concern,  which  contemplates  the  realization  of
assets and the satisfaction of liabilities in the normal course of business.

As shown in the  accompanying  financial  statements,  the  Company  has not yet
achieved  profitable  operations and does not have adequate  working  capital to
meet its ongoing  liquidity  needs. As a result,  there are  uncertainties  that
raise  substantial  doubt that the  Company  will be able to continue as a going
concern. The financial statements do not include any adjustments relating to the
recoverability  or  classification  of recorded  asset amounts or the amounts or
classification  of recorded  liabilities  that may result  should the Company be
unable to continue as a going concern.

The  Company  implemented  a plan in 2004 to address  its  working  capital  and
liquidity  issues.  Among other  things,  the plan is designed to increase  cash
flows from operations and to strengthen the Company's  balance sheet. As part of
this plan, the Company signed a non-binding term sheet for an equity  investment
in the Company by a private  investment  company.  Closing of the transaction is
contingent  upon:  (i)  elimination  of all of the  Company's  debt  (except for
capital  leases  and  trade  payables);  (ii)  satisfactory  completion  of  due
diligence by the investor;  (iii) an opinion by an independent  analyst that the
transaction  is fair to the  existing  shareholders  of the  Company;  and  (iv)
completion  and execution of a definitive  agreement.  As of March 31, 2005, the
investor  has  extended a $1 million  bridge loan to the Company  which is to be
repaid  from the  proceeds  of the  transaction.  In April  2005,  the  investor
extended an additional  $400,000  bridge loan to the Company which is also to be
repaid from the  proceeds of the  transaction.  If the proposed  transaction  is
consummated,  the Company  believes it will have  sufficient  working capital to
meet its liquidity needs for the foreseeable future.  There is no assurance that
the proposed  transaction  will close and, if it does not, the Company will need
to secure  alternative  sources of  financing  to meet its  immediate  liquidity
needs.


                                                                          Page 6
<PAGE>

Note 2.  Common Stock Options and Warrants

During the quarter ended March 31, 2005, we granted options to purchase  203,500
shares  of  common  stock to eight  employees  pursuant  to their  stock  option
agreements.  The exercise  prices are at 85% of the daily closing price of iST's
common stock on the date when the options were granted. The options granted vest
ratably over two years. We had 9,312 options forfeited by the holders and 61,000
options were exercised during the quarter ended March 31, 2005.

During the quarter  ended March 31, 2005,  no new warrant  grants were issued by
the Company.  We had 4,171,654 warrants expire and 760,869 warrants exercised by
the holders during the quarter ended March 31, 2005.

At March 31, 2005,  we had  11,276,729  outstanding  stock  options,  17,956,468
outstanding  warrants and  3,202,096  shares  issuable  upon the  conversion  of
subordinated  convertible  notes that were not  included in the  computation  of
diluted EPS because the exercise price or conversion  price exceeded the closing
sale price of our common stock reported on the OTCBB on that date.

Note 3. Stock-Based Compensation

The Company has a stock-based  compensation  plan titled the 2001 Omnibus Equity
Incentive Plan. The Company also grants stock-based compensation under executive
employment  agreements.  iSt accounts  for  stock-based  compensation  under the
recognition  and  measurement  principles of APB Opinion No. 25,  Accounting for
Stock  Issued  to  Employees,  and  related   interpretations,   which  measures
compensation as the difference between the fair market value of the stock at the
date of award and the amount required to be paid for the stock  (intrinsic value
method). Stock-based compensation of ($14,801) and $52,834 has been reflected in
net loss for the three months  ending March 31,  2005,  and 2004,  respectively.
During  2004,  the Company  reduced  the  exercise  price of certain  previously
awarded stock  options.  The Company  accounts for  modifications  of previously
issued  fixed  stock  option  awards  under  the  accounting   consequences   of
modifications to a fixed stock option or award of APB Opinion No. 25 and related
interpretations. Accordingly, the options are accounted for as variable from the
date of the  modification  to the date the option is  exercised,  forfeited,  or
expires unexercised. $353,124 of the stock-based compensation for the year ended
December 31, 2004, is attributable to variable  accounting for stock options for
which the exercise price had been reduced.

The  following  table  illustrates  the effect on net loss for the three  months
ending  March  31,  2005,  and  2004,  as if iSt  had  applied  the  fair  value
recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation,
to stock-based compensation.


                                                  Three Months Ended March 31,
                                                       2005           2004
------------------------------------------------------------------------------
Net loss, as reported                              $(1,037,605)   $(3,811,238)

Add: Stock-based employee compensation expense
       included in reported net loss                   (14,801)        52,834

Deduct: Total stock-based employee compensation
          expense determined under fair value
           based method for all awards                 (42,971)      (712,077)
                                                   -----------    -----------
Pro forma net loss                                  (1,095,377)    (4,470,481)

Preferred dividends                                         --       (221,087)
                                                   -----------    -----------
Pro forma net loss available to common
  stockholders                                     $(1,095,377)   $(4,691,568)

Basic and diluted loss per share:

     As reported                                   $     (0.01)   $     (0.08)
                                                   ===========    ===========
     Pro forma                                     $     (0.01)   $     (0.09)
                                                   -----------    -----------


                                                                          Page 7

<PAGE>

In  determining  the pro forma amounts above during 2005 and 2004,  the value of
each grant is estimated at the grant date using the fair value method prescribed
in SFAS No. 123 with the following assumptions: no dividends, risk free interest
rate of 5%; expected life of 3.5 years and; expected price volatility of 106.55%
and 89.85%.

The fair value of stock warrants issued to  non-employees is being accounted for
using SFAS No.  123.  Related  compensation  expense  is charged to income  when
incurred.

Note 4.  Monitoring Equipment

Monitoring equipment at March 31, 2005, is as follows:


<TABLE>
<CAPTION>

                                   Active        Passive        MEMS 2000     MEMS 2001        Other           Total
                                   ------        -------        ---------     ---------        -----           -----
<S>                            <C>            <C>            <C>            <C>            <C>            <C>
Monitoring Equipment                940,648      2,755,718        964,897      1,278,816        321,056      6,261,134

Less accumulated depreciation      (308,513)    (1,485,153)      (450,160)    (1,278,816)      (124,730)    (3,647,372)
                                   --------     ----------       --------     ----------       --------     ----------
Monitoring Equipment, net       $   632,134    $ 1,270,565    $   514,736    $        --    $   196,326    $ 2,613,762
                                   ========     ==========       ========     ==========       ========     ==========

</TABLE>


Because of the high costs  associated  with  maintaining  MEMS 2001 home  arrest
product,  the Company  began  development  in April,  2004 of a  tracNET24-based
replacement  home arrest product.  This  development was completed in the fourth
quarter of 2004 and the Company immediately  commenced moving customers from the
MEMS 2001 to the tracNET24 platform.

During the three  months ended March 31,  2004,  the Company took an  impairment
charge of $1,129,627  against its MEMS 2001 monitoring  equipment to reflect its
obsolescence.  At the same  time,  the  Company  took an  impairment  charge  of
$211,624  against its MEMS 2000 monitoring  equipment to reflect the uncertainty
of its viability as a profitable  offering.  These impairment  charges have been
included in the cost of revenues in the  consolidated  statement of  operations.
The Company used the discounted cash flow method for revenues  generated by this
equipment to determine its fair value.

Note 5.  Goodwill and Intangibles, Subject to Amortization

Goodwill  is the  excess  of the cash  paid  over the net fair  value of  assets
acquired  and  liabilities  assumed  in  an  acquisition,  less  the  amount  of
identifiable  intangible  assets.  Goodwill is not amortized,  but is tested for
impairment  on an annual  basis.  The  Company has  determined  that there is no
impairment of goodwill as of December 31, 2004.

Intangible  assets are those that can be  separately  identified  and assigned a
value.  Intangible assets consist of customer monitoring contracts.  The Company
is amortizing the intangible  assets based on the revenue stream of the existing
contracts. Amortization expense is included in sales, general and administrative
expenses in the  consolidated  statements of operations  and was $31,562 for the
three month period ended March 31, 2005 and $459,973, including a $302,298 write
down of the  customer  monitoring  contracts  on the MEMS  2001  and  MEMS  2000
equipment to fair value,  in 2004.  The  $302,298  write down was to reflect the
uncertainty  of customer  retention as the Company began  replacing the products
with the tracNET24-based product.

                                                                          Page 8

<PAGE>

The  composition  of goodwill and  intangible  assets at March 31,  2005,  is as
follows:

                                                      Intangibles, subject
                                             Goodwill    to Amortization
                                             --------    ---------------
Gross Carrying Amount                       $2,302,179      $  911,522
   Accumulated Amortization, including
     $302,298 of impairment loss                    --        (580,202)

   Impairment losses - Goodwill                     --              --
                                            ----------      ----------
Balance at March 31, 2005                   $2,302,179      $  331,320
                                            ==========      ==========


                                                                          Page 9
<PAGE>

Item 2. Management's Discussion and Analysis.

General

Discussions of certain matters contained in this Quarterly Report on Form 10-QSB
may contain  statements that plan for or anticipate the future.  Forward-looking
statements include statements about the future of our products and the industry,
statements  about our  future  business  plans and  strategies,  and most  other
statements   that  are  not   historical   in  nature.   In  this  Form  10-QSB,
forward-looking  statements are generally  identified by the words "anticipate,"
"plan," "believe," "expect,"  "estimate," and the like. Because  forward-looking
statements involve future risks and uncertainties,  there are factors that could
cause actual results to differ  materially from those expressed or implied.  The
actual  outcomes of these  matters may differ  significantly  from the  outcomes
expressed  or  implied  in these  forward-looking  statements  and  other  risks
detailed in "ITEM 1.  Description  of  Business"  contained in iSt's Form 10-KSB
filed for the year ended December 31, 2004.

The following  discussion is intended to provide a better  understanding  of the
significant  changes in trends relating to iSt's financial condition and results
of  operations.   Management's   Discussion  and  Analysis  should  be  read  in
conjunction with the accompanying  Condensed  Consolidated  Financial Statements
and Notes thereto.

The Company develops,  markets, and distributes  electronic  monitoring products
employing global  positioning  satellite ("GPS") technology and related services
to criminal justice agencies, both in the United States and internationally, for
use in offender  management  programs.  The Company's three principal sources of
revenues  are: (i) selling and leasing of monitoring  units to criminal  justice
agencies,  (ii)  providing  agencies the use of Company's  proprietary  software
including its web-based  tracking and monitoring  system known as  tracNET24(TM)
and (iii)  providing  ancillary  services such as  training,monitoring  and data
archiving.

Results of Operations

Equipment Sales Revenue

Equipment  Sales  Revenue  is  derived  from  the  sale of  offender  monitoring
equipment.  For the three months ended March 31, 2005,  equipment sales revenues
were $9,610  compared to $16,506  during the same period in 2004. The reason for
the decrease is the  reduction  in units sold during 2005,  compared to the same
period of 2004.  This reduction is  attributable  to the continual  shift in the
Company's  business  model from  selling to  leasing  of  monitoring  equipment.
Revenues  from  equipment  sold in  conjunction  with a  hosting  agreement  for
tracking and monitoring  services on tracNet24 are  recognized  ratably over the
initial term of the hosting agreement which is typically for one year.  Revenues
from  equipment sold without a hosting  agreement are recognized  when goods are
received by the customer. Equipment is shipped FOB destination.

Equipment Leasing and Hosting Revenue

Equipment  Leasing  and  Hosting  Revenue  is derived  from the fees  charged to
customers for the use of the Company's  offender  monitoring  software including
tracNET24,  hosting offender data, the rental of offender monitoring  equipment,
and ancillary  charges directly related to the monitoring of offenders.  For the
three month period ended March 31, 2005,  equipment leasing and hosting revenues
were $988,744 compared to $782,459 for the same period in 2004. This increase is
attributable to the increase in the number of units under lease, which is due in
part to the shift in the  Company's  business  model  from  selling  to  leasing
monitoring equipment. Leasing, hosting, and service revenues are recognized upon
performance  of the  respective  service.  Leasing  and hosting  contracts  with
customers are typically for twelve months.

                                                                         Page 10
<PAGE>

Gain on Sale-leaseback Transactions

The Company  finances much of its monitoring  equipment  through  sale-leaseback
agreements, primarily with a leasing company owned by an affiliated party. Under
these  agreements,  the Company  purchases  the  monitoring  equipment  from the
manufacturer, sells it to the leasing company at a gain, and then leases it back
from the leasing  company.  This gain is recorded as a liability  and  amortized
into  income  over the life of the  lease  (typically  2-3  years).  The Gain on
Sale-leaseback  Transactions consists of amortization of this deferred gain. For
the three months ended March 31, 2005, the Gain on  Sale-leaseback  Transactions
with related parties was $181,884 compared to $100,675 during the same period in
2004.  This  increase is  attributable  to the rise in total  amount under these
transactions. The Gain on Sale-leaseback Transactions with unrelated parties for
the three months ended March 31, 2005,  was none  compared to $5,653  during the
same period of 2004. This decrease is due to no Sale-leaseback Transactions with
unaffiliated  parties during the first quarter of 2005. As of March 31, 2005 and
March 31, 2004, the Company had seven and six capital leases in conjunction with
these transactions, respectively.

Service Revenue

For 2005,  Service  Revenue  consisted of sales of non-core  services  including
server maintenance  agreements and monitoring  equipment repairs.  For the three
months ended March 31, 2005, Service Revenue was $20,484 compared to $18,731 for
the  comparable  period of 2004.  This  increase is  attributable  to the larger
number of deployed monitoring units.

Cost of Revenues

Cost of Revenues  represents all direct costs  associated with the generation of
equipment and hosting  revenue,  including  cost of goods for equipment  that is
sold and leased,  the direct  variable  communications  and  hardware  equipment
expenses  associated  with  the  webcentric  hosting  services,   the  costs  of
distribution  of  software  and  equipment,  and  the  maintenance  expenses  on
equipment repaired under service  agreements.  Costs of revenues are recorded as
products  are  delivered  or services  are  performed.  A portion of the cost of
revenues consists of the amortization of product  development costs, which began
in March 2002. For the three months ending March 31, 2005,  Cost of Revenues was
$670,805,  compared to  $1,954,530  during the same  period in 2004.  During the
first quarter of 2004, the Company  initiated  strategies of migrating away from
the MEMS 2001 to its  tracNET24  based House Arrest  product and  systematically
upgrading its MEMS 2000 product.  To reflect these strategies,  the Company took
impairment  charges of  $1,129,627  and $211,624  against the MEMS 2001 and MEMS
2000  product,  respectively.  Not  considering  the  effects of the  impairment
charges  taken in 2004,  Cost of Revenues grew by $57,526 from the first quarter
of 2004 to the first  quarter of 2005  primarily  due to the  overall  growth in
deployment of tracking units.

Research and Development

Research and  Development  expenses are the direct costs  associated  with iSt's
development of its proprietary  products.  Expenses in this category include the
cost of outside contracted  engineering and design,  staffing expenses for iSt's
own  engineers  and software  developers,  and the actual  costs of  components,
prototypes,  and testing equipment and services used in the product  development
functions.  The Research and  Development  expenses  were $176,765 for the three
months ended March 31,  2005,  compared to $174,964 for the same period in 2004.
This increase in research and development  expenses was the result of additional
testing and configuration expenses.

Sales, General and Administrative

Sales,  General  and  Administrative   (SG&A)  expenses  are  all  the  expenses
associated with the operations of the Company, other than the expenses described
above.  These expenses include executive,  sales,  administrative and accounting
staff payroll,  taxes and benefits,  rent on property,  travel,  communications,


                                                                         Page 11
<PAGE>

office leases and supplies, marketing,  advertising,  attendance at trade shows,
production of marketing and related collateral  material,  as well as recruiting
and training expenses.  For the three months ended March 31, 2005, SG&A expenses
decreased to $1,196,867 from $2,384,681 in the comparable  period of 2004. These
decreases were the result of  streamlining  of operations and other cost cutting
measures, such as renegotiating communication contracts, lowering rent expenses,
reducing headcount, and eliminating non-essential expenses.

Operating Loss

For the three months ended March 31, 2005, operating loss was $843,715, compared
to  $3,590,151   for  the  same  period  in  2004.  The  decrease  is  primarily
attributable  to higher  overall  revenues,  especially  equipment  leasing  and
hosting  revenues,  and  decreases  in Cost of  Revenues  and SG&A  expenses  as
described above.

Interest Expense

For the three months ended March 31, 2005,  interest  expense totaled  $225,732,
compared to interest expense of $199,497 in the comparable  period of 2004. This
increase was due to higher borrowings by the Company in 2005.

Financing Fees

During  the first  quarter of 2004,  we  incurred  financing  fees of $21,598 in
connection with equity financing. We did not incur any financing fees during the
first quarter of 2005.

Net Loss

For the  three  months  ended  March 31,  2005,  the  Company  had a net loss of
$1,037,605,  compared to a net loss of  $3,811,238 in the  comparable  period of
2004, for the reasons described above.

Preferred Dividends

For the three months ended March 31, 2005,  preferred  dividends  were none,  as
compared to $221,313 for the comparable  period of 2004.  This change was due to
all Series A  Convertible  Preferred  Stock being  converted  to common stock in
December 2004.

Net Loss Available to Common Stockholders

For the three  months ended March 31,  2005,  there was a net loss  available to
common  stockholders  of $1,037,605  compared to $4,032,551 in 2004. The reasons
for these changes are described above.

Liquidity and Capital Resources

For the three months ended March 31, 2005,  the Company used $431,976 of cash in
operating activities,  another $564,446 in investing  activities,  and generated
$1,133,025  in cash  from  financing  activities.  The  total of all  cash  flow
activities  resulted in an increase in the balance of cash for the three  months
ended March 31, 2005 of $136,603.  For the same period of 2004, the Company used
$1,274,225 of cash in operating activities, $194,185 in investing activities and
generated  $1,453,144 of cash from financing  activities.  The total of all cash
flow  activities  in the first  quarter of 2004  resulted  in a decrease  in the
balance of cash of $15,266.

As of March 31,  2005,  the Company had ten capital  lease  facilities  in place
which were used to finance offender monitoring equipment. Seven of these capital
leases   were   sale-leaseback   transactions.    Under   these   sale-leaseback
arrangements,  the Company sells the inventory to a third party leasing  company
(which is owned by a  shareholder  of the Company) and then leases the equipment
back.  All capital  leases are treated as  financing  transactions  and carrying
interest  rates  ranging from 9.50% to 14.36%.  Maturity  dates on these capital
leases run from August 2005 to March 2008.  As of March 31, 2005,  the aggregate
balance on these ten capital leases totaled $1,914,808.

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<PAGE>

As of March 31, 2005, the Company had the following  borrowing  arrangements  in
place:

o     A $2,538,421  note  payable  from  Westburg  Media  Capital,  LP which was
      assumed in connection  with the  acquisition  of TSC in August 2003.  This
      note was purchased by a group of investors,  which  includes  shareholders
      and unrelated parties, on January 3, 2005.


o     Notes  payable of  $700,000  issued to three  stockholders.  Each of these
      unsecured,  long-term  notes  mature on August 31,  2006,  and  carries an
      interest rate of 8% per annum which is payable annually in arrears.  These
      notes are subordinated to the Westburg Media Capital, LP note.

o     A $1,000,000 subordinated convertible note. This long term note carries an
      interest  rate of 10% with  quarterly  interest  payments  and  matures in
      October 2008.


o     Notes payable  totaling  $736,482 issued to three  institutional  lenders.
      These notes carry an  interest  rate of 4% which is payable  semi-annually
      and mature on May 26, 2006. These notes are convertible into shares of the
      Company's common stock at $0.23 per share; and

o     A $1,000,000 note payable from a private  investment  company.  This short
      term note  carries an  interest  rate of 400 basis  points  over the prime
      rate. The principal  amount and accrued  interest shall be due and payable
      on the maturity date of May 31, 2005.


The  Company  does  not have any  additional  capacity  to  borrow  under  these
borrowing arrangements, although it was able to borrow an additional $400,000 in
April 2005 from the private  investment  company that made the $1,000,000  short
term loan in order to meet its current cash requirements.

The  Company  implemented  a plan in 2004 to address  its  working  capital  and
liquidity  issues.  Among other  things,  the plan is designed to increase  cash
flows from operations and to strengthen the Company's  balance sheet. As part of
this plan, the Company signed a non-binding term sheet for an $11 million equity
investment  in the  Company  by a private  investment  company.  Closing  of the
transaction  is contingent  upon:  (i)  elimination of all of the Company's debt
(except for capital leases and trade payables);  (ii) satisfactory completion of
due diligence by the investor;  (iii) an opinion by an independent  analyst that
the transaction is fair to the existing  shareholders  of the Company;  and (iv)
completion  and execution of a definitive  agreement.  As of March 31, 2005, the
investor  has  extended a $1 million  bridge loan to the Company  which is to be
repaid  from the  proceeds  of the  transaction.  In April  2005,  the  investor
extended an additional  $400,000  bridge loan to the Company which is also to be
repaid from the  proceeds of the  transaction.  If the proposed  transaction  is
consummated,  the Company  believes it will have  sufficient  working capital to
meet its liquidity needs for the foreseeable future.  There is no assurance that
the proposed  transaction  will close and, if it does not, the Company will need
to secure  alternative  sources of  financing  to meet its  immediate  liquidity
needs.


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<PAGE>

Item 3. Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure that
the information the Company must disclose in its filings with the Securities and
Exchange Commission is recorded, processed,  summarized and reported on a timely
basis. The Company's principal executive officer and principal financial officer
have reviewed and evaluated the Company's  disclosure controls and procedures as
defined in Rules  13a-15(e) and 15d-15(e)  under the Securities  Exchange Act of
1934,  as amended (the  "Exchange  Act") as of the end of the period  covered by
this report (the "Evaluation  Date").  Based on such  evaluation,  such officers
have  concluded  that,  as of the  Evaluation  Date,  the  Company's  disclosure
controls and procedures are effective in bringing to their attention on a timely
basis material  information  relating to the Company  required to be included in
the Company's periodic filings under the Exchange Act.

There have not been any changes in the Company's internal control over financial
reporting  (as defined in  Exchange  Act Rules  13a-15(f)  and  15d-15(f))  that
occurred  during the Company's most recent fiscal  quarter that have  materially
affected,  or are reasonably likely to materially affect, the Company's internal
control over financial reporting.


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<PAGE>

                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

On December 22, 2004, a lawsuit was filed by Satellite  Tracking of People,  LLC
("STOP")  against the  Company in United  States  District  Court for the Middle
District  of  Tennessee.  STOP plans to enter into the market for  tracking  and
monitoring  individuals  using  GPS  technology  in the  United  States  and has
acquired U.S. rights to the BluTag(R) remote electronic monitoring, tracking and
surveillance  technologies.  Among other  things,  STOP alleges that the Company
notified  STOP's  predecessor  in interest that the  technology  underlying  the
BluTag(R) system  infringes on two U.S. patents held by the Company.  The action
filed by STOP seeks a declaratory  judgment that (i) STOP's BluTag(R) technology
does not  infringe on the  Company's  patents,  (ii) the  Company's  patents are
invalid  and/or (iii) the Company has granted STOP a license  under its asserted
patents.  The Company has denied all material  allegations  made by STOP and has
filed  a  counter  claim  against  STOP  for  patent  infringement,  seeking  an
injunction  and  damages.  The  Company is unable to predict the outcome of this
lawsuit at this time.

The Company is not subject to any other pending or threatened lawsuits.

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

iST claims  exemption  under the  Securities  Act of 1933  Section  4(2) for the
following equity transactions which took place in the first quarter of 2005.

      1.    Board  members  were  compensated  with 36,622  shares of our common
            stock valued at $9,000 for attending two board  meetings  during the
            first  quarter of 2005.  19,230 of the  36,622  common  shares  were
            issued to five  board  members,  each  receiving  3,846  shares,  on
            February 16, 2005. The remaining  17,392 common shares were given to
            four board members, each receiving 4,348 shares on March 30, 2005.

      2.    On January 11, 2005, we issued 500,100 shares of our common stock to
            one  individual  for  converting  all of his  Series  B  Convertible
            Preferred Stock.


Item 3. Defaults Upon Senior Securities.

Not Applicable

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

Not Applicable

Item 5. Other Information.

Not Applicable

Item 6. Exhibits

3.01  Restated Certificate of Incorporation of the Company (1)

3.02  Restated Bylaws of the Company (2)

3.03  Certificate  of   Designations,   Preferences   and  Rights  of  Series  A
      Convertible Preferred Stock of iSt (3)

                                                                         Page 15
<PAGE>

3.04  Certificate  of   Designations,   Preferences   and  Rights  of  Series  B
      Convertible Preferred Stock of iSt (4)

4.01  Form of Common Stock Certificate (1)

10.10 Agreement Among Noteholders (5)


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

      (1)   Incorporated  by  reference  from  the   registrant's   registration
            statement under Form 10-SB,  filed on June 22, 1999 (Commission File
            No. 0-26455).

      (2)   Incorporated by reference from the registrant's current report under
            Form 8-K filed on June 10, 2001 (Commission File No. 0-26455).

      (3)   Incorporated  by  reference  from  the   registrant's   registration
            statement  under Form SB-2 filed on November  30,  2001  (Commission
            File No. 333-74762).

      (4)   Incorporated  by  reference  from  the   registrant's   registration
            statement under Form SB-2 filed on August 11, 2004  (Commission File
            No. 333-118135).

      (5)   Incorporated by reference from the registrant's current report under
            Form 8-K filed on February 10, 2005 (Commission File No. 0-26455)



                                    SIGNATURE

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

                                                   iSECUREtrac Corp.

                                                   By: /s/ Thomas E. Wharton Jr.
                                                       -------------------------
                                                       Thomas E. Wharton Jr.
                                                       President & CEO

                                                       Dated:  May 13, 2005


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