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


                                  FORM 10-QSB/A

                                   (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, 2004

                                       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)

                        5022 S. 114TH STREET, SUITE #103
                              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 April 30, 2004, was
55,203,674.

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


                                       1
<PAGE>

                                Explanatory Note


iSecureTrac  Corp.  hereby  amends its  Quarterly  Report on Form 10-QSB for the
quarter ended March 31, 2004, filed with the Securities and Exchange  Commission
on May 14, 2004.  The purpose of this  amendment  is to restate  portions of the
Form  10-QSB,  including  the  Consolidated  Balance  Sheets,  the  Consolidated
Statements  of  Operations,   the  Statement  of   Stockholders'   Equity,   the
Consolidated Statements of Cash Flows, Management's Discussion and Analysis, and
the Notes to the  Consolidated  Financial  Statements  as of and for the Quarter
ending March 31, 2004, as set forth in the original filing.

The  restatement  is related to the reduction of financing  fees and  additional
paid in capital of  approximated  $1.7  million for the quarter  ended March 31,
2004. This reduction of financing fees reduced the previously  reported net loss
of  approximately  $5,512,000 to $3,811,000.  The restatement  resulted from the
Company incorrectly  expensing the fair value of stock warrants related to stock
issuance  costs that were issued to an  individual  who  assisted the Company in
raising  additional  equity for the  Company in the  amount of  $1,346,536.  The
Company also  incorrectly  expensed  $354,557 of stock warrant expense issued to
another  individual in connection with contributing cash for common stock of the
Company.

In order to preserve the nature and  character of the  disclosures  set forth in
such items as originally filed, this report continues to speak as of the date of
the original filing,  and, unless otherwise stated to the contrary,  the Company
has not updated the disclosures in this report to speak as of a later date.

<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                       ISECURETRAC CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                    (Unaudited)
                                                                     Restated
                                                                  March 31, 2004    December 31, 2003
------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                <C>
ASSETS
Current Assets
     Cash                                                              $   110,133        $   125,399
     Accounts receivable, net of allowance for doubtful accounts of
       $15,600 in 2004 and $12,000 in 2003                                 628,610            602,367
     Inventories                                                           149,123            144,151
     Prepaid expenses and other                                             92,005             95,032
------------------------------------------------------------------------------------------------------
        Total current assets                                               979,871            966,949
------------------------------------------------------------------------------------------------------
Leasehold Improvements and Equipment, net                                  293,777            359,453
Monitoring Equipment, net of accumulated depreciation of $529,487
     in 2004 and $470,331 in 2003                                        2,545,013          4,078,419
Product Development Costs, net of accumulated amortization of $659,743
     in 2004 and $577,246 in 2003                                          330,218            367,338
Intangibles, subject to amortization                                       461,262            822,856
Goodwill                                                                 2,302,179          2,302,179
Other Assets                                                                29,110             32,488
------------------------------------------------------------------------------------------------------
        Total assets                                                   $ 6,941,430        $ 8,929,682
======================================================================================================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
     Notes payable                                                     $ 2,625,582        $ 2,994,476
     Current maturities of long-term debt                                1,516,871          1,645,494
     Accounts payable and accrued expenses                               1,247,571          1,319,884
     Deferred gain on sale-leaseback transaction                           662,821            677,125
     Accrued interest payable                                              209,951            195,587
     Preferred dividends payable                                           439,826            218,513
------------------------------------------------------------------------------------------------------
        Total current liabilities                                        6,702,622          7,051,079
------------------------------------------------------------------------------------------------------
Long-term debt, less current maturities                                  4,728,812          4,839,547
------------------------------------------------------------------------------------------------------
Stockholders'  Deficit
     Series A convertible preferred stock                                9,125,470          9,125,470
     Series B convertible preferred stock; 2004, $9,000 dividends
        in arrears; 2003, $7,500 dividends in arrears                      295,000            295,000
     Common stock                                                           55,191             48,904
     Additional paid-in capital                                         30,664,937         28,524,733
     Unearned consulting expense                                                --           (357,000)
     Accumulated deficit                                               (44,630,602)       (40,598,051)
------------------------------------------------------------------------------------------------------
        Total stockholders'  deficit                                    (4,490,004)        (2,960,944)
------------------------------------------------------------------------------------------------------
        Total liabilities and stockholders' deficit                    $ 6,941,430        $ 8,929,682
======================================================================================================
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.


                                       2
<PAGE>

                       ISECURETRAC CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   Three Months Ended March 31, 2004 and 2003
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                 Restated
                                                                                   2004                  2003
-------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                    <C>
REVENUES:
       Equipment                                                               $     16,506           $     29,268
       Leasing                                                                      277,456                 15,039
       Hosting                                                                      505,003                 21,355
       Gain on sale-leaseback transactions
          Related party                                                             100,675                     --
          Other                                                                       5,653                     --
       Service                                                                       18,731                  2,057
-------------------------------------------------------------------------------------------------------------------
          Total revenues                                                            924,024                 67,719
-------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
       Cost of revenues                                                           1,954,530                126,556
       Research and development                                                     174,964                180,487
       Sales, general and administrative                                          2,384,681              1,034,139
-------------------------------------------------------------------------------------------------------------------
          Total operating expenses                                                4,514,175              1,341,182
-------------------------------------------------------------------------------------------------------------------
       Operating loss                                                            (3,590,151)            (1,273,463)
-------------------------------------------------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
       Interest income                                                                    8                    109
       Interest expense                                                            (199,497)               (65,265)
       Financing fees                                                               (21,598)                    --
-------------------------------------------------------------------------------------------------------------------
       Total other income (expense)                                                (221,087)               (65,156)
-------------------------------------------------------------------------------------------------------------------
       Loss before provision for income taxes                                    (3,811,238)            (1,338,619)
       Provision for income taxes                                                        --                     --
-------------------------------------------------------------------------------------------------------------------
NET LOSS                                                                       $ (3,811,238)          $ (1,338,619)
===================================================================================================================
Preferred dividends                                                                (221,313)              (203,463)
===================================================================================================================
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS                                      $ (4,032,551)          $ (1,542,082)
===================================================================================================================
BASIC AND DILUTED LOSS PER COMMON SHARE                                             $ (0.08)               $ (0.04)
===================================================================================================================
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING                              52,685,898             35,973,163
===================================================================================================================
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.


                                       3
<PAGE>

                       ISECURETRAC CORP. AND SUBSIDIARIES
                        STATEMENT OF STOCKHOLDERS' EQUITY
                    For the Three Months Ended March 31, 2004
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                 SERIES A                SERIES B
                                                               CONVERTIBLE             CONVERTIBLE
                                                             PREFERRED STOCK         PREFERRED STOCK           COMMON STOCK
                                                             ---------------         ---------------           ------------
                                                          SHARES      AMOUNT       SHARES     AMOUNT        SHARES       AMOUNT
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>      <C>              <C>    <C>           <C>           <C>
Balance, December 31, 2003                                  9,126    $ 9,125,470      300    $ 295,000     48,904,299    $ 48,904
    Shares issued for cash, net of offering costs               -              -        -            -      6,214,893       6,215
    Shares issued for director's fees and services              -              -        -            -         71,879          72
    Amortization of unearned consulting expense                 -              -        -            -              -           -
    Paid-in capital for cost of options issued                  -              -        -            -              -           -
    Series A preferred stock dividends                          -              -        -            -              -           -
    Net loss                                                    -              -        -            -              -           -
-----------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2004                                     9,126    $ 9,125,470      300    $ 295,000     55,191,071    $ 55,191
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>


                                                           ADDITIONAL       UNEARNED
                                                            PAID -IN       CONSULTING     ACCUMULATED
                                                             CAPITAL        EXPENSE         DEFICIT           TOTAL
------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>              <C>           <C>               <C>
Balance, December 31, 2003                                $ 28,524,733     $ (357,000)   $ (40,598,051)    $ (2,960,944)
    Shares issued for cash, net of offering costs            2,055,109              -                -        2,061,324
    Shares issued for director's fees and services              32,261              -                -           32,333
    Amortization of unearned consulting expense                      -        357,000                -          357,000
    Paid-in capital for cost of options issued                  52,834              -                -           52,834
    Series A preferred stock dividends                               -              -         (221,313)        (221,313)
    Net loss                                                         -              -       (3,811,238)      (3,811,238)
------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2004                                   $ 30,664,937     $        -    $ (44,630,602)    $ (4,490,004)
------------------------------------------------------------------------------------------------------------------------
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                       4
<PAGE>


                        ISECURETRAC CORP AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               For the Three Months Ended March 31, 2004 and 2003
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                         Restated
                                                                           2004                   2003
-----------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                    <C>
Cash flow from operating activities:
     Net loss                                                          $ (3,811,238)          $ (1,338,619)
     Depreciation and amortization                                          554,310                114,958
     Impairment charge of monitoring equipment                            1,341,251                     --
     Impairment charge of intangibles subject to amortization               302,298                     --
     Other                                                                  339,154                345,401
-----------------------------------------------------------------------------------------------------------
        Net cash used in operating activities                            (1,274,225)              (878,260)
-----------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                      (194,185)                (5,600)
-----------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
     Increase (decrease) in notes payable                                  (368,894)               622,000
     Net proceeds from issuance of common stock                           2,061,313                428,155
     Other                                                                 (239,275)              (172,236)
-----------------------------------------------------------------------------------------------------------
        Net cash provided by financing activities                         1,453,144                877,919
-----------------------------------------------------------------------------------------------------------
        Decrease in cash                                                    (15,266)                (5,941)
Cash, beginning of period                                                   125,399                 47,374
-----------------------------------------------------------------------------------------------------------
Cash, end of period                                                    $    110,133           $     41,433
===========================================================================================================
Supplemental Disclosures of Cash Flow Information:
     Cash payments for:
        Interest                                                       $    185,133           $     35,323
        Income Taxes                                                             --                     --
</TABLE>

             See Notes to Condensed Consolidated Financial Statements.


                                       5
<PAGE>

                        ISECURETRAC CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1.  GENERAL

The condensed  consolidated  balance sheet of  iSECUREtrac  Corp ("iSt" or "we",
"us", or "our") at December 31, 2003,  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,  2004,  and for the
three  months  ended March 31, 2003,  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, 2003. The results of operations and cash flows for the three months
ended  March 31,  2004 are not  necessarily  indicative  of the  results for the
entire fiscal year ending December 31, 2004. Where appropriate, items within the
condensed  consolidated  financial  statements have been  reclassified  from the
previous periods' presentation.

On August  17,  2004,  iSecureTrac  Corp.  announced  on Form 8-K and in a press
release that it would restate  financial results for the quarter ended March 31,
2004.  The  restatement  is  related  to the  reduction  of  financing  fees and
additional  paid in capital of  $1,701,093.  The  restatement  resulted from the
Company incorrectly  expensing the fair value of stock warrants related to stock
issuance  costs that were issued to an  individual  who  assisted the Company in
raising  additional  equity for the  Company in the  amount of  $1,346,536.  The
Company also  incorrectly  expensed  $354,557 of stock warrant expense issued to
another  individual in connection with contributing cash for common stock of the
Company.

                         BALANCE SHEET AT MARCH 31, 2004


<TABLE>
<CAPTION>
                                              As Previously      Increase
                                                 Reported        (Decrease)         Restated
                                               ------------     ------------     ------------
<S>                                            <C>                <C>            <C>
Total current assets                           $    979,871               --     $    979,871
Total assets                                      6,941,430               --        6,941,430
Total current liabilities                         6,702,622               --        6,702,622
Long term debt, less current maturities           4,728,812               --        4,728,812
Series A convertible preferred stock              9,125,470               --        9,125,470
Series B convertible preferred stock                295,000               --          295,000
Common Stock                                         55,191               --           55,191
Additional paid-in-capital                       32,366,028       (1,701,091)      30,664,937
Accumulated deficit                             (46,331,693)       1,701,091      (44,630,602)
Total stockholders' deficit                      (4,490,004)              --       (4,490,004)
Total liabilities and stockholders' deficit       6,941,430               --        6,941,430
</TABLE>


                      CONSOLIDATED STATEMENT OF OPERATIONS
                        Three Months Ended March 31, 2004


<TABLE>
<CAPTION>
                                            As Previously    Increase
                                               Reported      (Decrease)        Restated
                                            -------------    ----------     ------------
<S>                                          <C>             <C>            <C>
Total revenues                               $   924,024              --    $   924,024
Operating expenses                             4,514,175              --      4,514,175
Operating loss                                (3,590,151)             --     (3,590,151)
Interest expense                                (199,497)             --       (199,497)
Financing fees                                (1,722,691)      1,701,093        (21,598)
Total other (expense)                         (1,922,180)      1,701,093       (221,087)
Loss before provision for income taxes        (5,512,331)      1,701,093     (3,811,238)
Provision for income taxes                            --              --             --
Net loss                                      (5,512,331)      1,701,093     (3,811,238)
Preferred dividends                             (221,313)             --       (221,313)
Net loss available to common stockholders     (5,733,644)      1,701,093     (4,032,551)
Basic and diluted loss per common share      $     (0.11)    $      0.03    $     (0.08)
</TABLE>

The accompanying  financial statements of iSECUREtrac Corp have been prepared on
a  going-concern  basis,  which  contemplates   profitable  operations  and  the
satisfaction  of  liabilities  in the  normal  course  of  business.  There  are
uncertainties  that raise substantial doubt about the ability of iSt to continue
as a going concern.  As shown in the  statements of operations,  iSt has not yet
achieved  profitable  operations.  As of March 31,  2004,  iSt has  insufficient
working  capital to execute its  business  plan.  These items raise  substantial
doubt about the ability of iSt to continue as a going concern.  Management plans
to continue  financing  operations and development of our technology through the
plan described herein.

NOTE 2.  COMMON STOCK OPTIONS AND WARRANTS

During  the  quarter  ended  March 31,  2004,  we granted  options  to  purchase
2,947,750 shares of common stock to fifteen employees and one outside consultant
pursuant to their stock option  agreements.  The  exercise  prices are at 85% of
fair value of iST's  common  stock and vest ratably over one month to two years.
We had 685,109  options  forfeited  and  157,495  options  exercised  during the
quarter ended March 31, 2004.


iSECUREtrac Corp., at March 31, 2004, had 11,250,397  outstanding stock options,
9,403,561 outstanding warrants, 9,125,470 shares issuable upon the conversion of
Series  A  Convertible   Preferred  Stock,  500,100  shares  issuable  upon  the
conversion of Series B Convertible  Preferred  Stock,  2,000,000 shares issuable
upon  conversion of a Subordinated  Convertible  Note and 4,950 shares  issuable
upon conversion of a convertible subordinated debenture,  that could potentially
dilute  basic EPS in the future  that were not  included in the  computation  of
diluted  EPS  because  to do so would  have been  anti-dilutive  for the  period
presented.

NOTE 3.  STOCK-BASED COMPENSATION

Stock-based  compensation:  As of March 31,  2004,  iSt had various  stock-based
compensation  plans.  iSt  accounts  for those plans 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  value of the  stock at the date of award  and the
amount  required to be paid for the stock.  Stock-based  compensation of $52,834
and $36,077 has been reflected in net loss for the three months ending March 31,
2004, and 2003, respectively.  The following table illustrates the effect on net
loss for the three months ending March 31, 2004, and 2003, as if iSt had applied
the  fair  value  recognition   provisions  of  SFAS  No.  123,  Accounting  for
Stock-Based Compensation, to stock-based compensation.


                                       6
<PAGE>

<TABLE>
<CAPTION>
                                                                                      THREE MONTHS ENDED MARCH 31,
                                                                                          2004             2003
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>              <C>
Net loss, as reported                                                                 $ (3,811,238)    $ (1,338,619)
Add:  Stock-based employee compensation expense included in reported net loss               52,834           36,077
Deduct:  Total stock-based employee compensation expense determined under fair
         value based method for all awards                                                (712,077)         (84,803)
--------------------------------------------------------------------------------------------------------------------
Pro forma net loss                                                                    $ (4,470,481)    $ (1,387,345)
--------------------------------------------------------------------------------------------------------------------
Basic and diluted loss per share:
     As reported                                                                           $ (0.08)         $ (0.04)
--------------------------------------------------------------------------------------------------------------------
     Pro forma                                                                             $ (0.08)         $ (0.04)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

In  determining  the pro forma amounts above during 2004 and 2003,  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 89.85%
and 80.93%.

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

Warrants  and common stock issued in  consideration  for notes  payable and debt
guarantee  fees is expensed in the period  incurred due to the short term nature
of the related notes.

NOTE 4.  MANAGEMENT PLANS

Because  of a  limited  operating  history,  it is  difficult  to  evaluate  the
business.  Factors that may cause a failure to meet  business  goals include the
following:  the ability to raise adequate  capital to finance the business plan;
the future financial condition,  liquidity and business prospects generally;  an
inability to respond to competitive  market conditions;  marketplace  acceptance
and market  demand of the Company's  products;  perceived  opportunities  in the
marketplace  for  the  Company's  current  products  and  other  products  under
development;  future  sales  levels  and other  business  plans for the  future.
Profitability will require the successful  commercialization  of the Series 2100
Personal Tracking Unit (PTU) and tracNET24 software.  No assurances can be given
when this will occur or that the Company will ever be profitable.

To date,  the Company has  generated  limited  revenue from  operations  and has
accumulated significant losses. Consequently, it has had difficulty in obtaining
funding from  commercial  lenders,  resulting in the need to obtain funding from
private  sources.  Management  plans to continue  financing  development  of the
technology and operations through external and related party financing. On March
3, 2004,  iSt received a private  placement  commitment  of $5,000,000 in equity
financing  from a private  investor group to continue to fund the operations and
production of tracking  devices and related  services.  As of May 13, 2004, this
funding had not been received by the Company and there is substantial doubt that
it will be received.

                                       7
<PAGE>

iSt entered into a common stock purchase  agreement on March 7, 2003, as amended
and restated on April 14, 2003,  with Fusion  Capital Fund II, LLC  (Fusion),  a
Chicago-based  institutional investor. Under the agreement, Fusion was to buy up
to $12  million of common  stock  over a period of up to 40  months,  subject to
iSt's right to extend the agreement for six months. iSt had the right to control
the timing and amount of stock sold to Fusion with the purchase price based upon
the market price of the  Company's  common stock at the time of sale without any
discount.  On March 3, 2004,  iSt elected to terminate its common stock purchase
agreement with Fusion. Prior to terminating the agreement,  the Company had sold
8,175,207 shares of Common Stock for total proceeds of $3,324,084.

iSt's  continuation  as a  going  concern  is  dependent  upon  its  ability  to
satisfactorily  meet its debt obligations,  meet its product  development goals,
secure new financing and generate  sufficient  cash flows from  operations.  The
financial  statements do not include any adjustments  that may result from these
uncertainties.

NOTE 5.  MONITORING EQUIPMENT

Monitoring  equipment,  including  leased  equipment,  is carried at cost and is
being  depreciated  by the  straight  line method  over useful  lives of up to 5
years.  Depreciation expense on assets acquired under capital leases is included
with depreciation expense on owned assets. As of March 31, 2004 and December 31,
2003,  leased  equipment  totaled   $1,744,895  and  $1,551,809,   respectively.
Accumulated  depreciation  on iSt's  leased  equipment  as of March 31, 2004 and
December 31, 2003 totaled $469,374 and $260,171, respectively.

NOTE 6.  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, 2003.

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.  For the three months  ending  March 31, 2004 and 2003,  amortization
expense was $361,594 and none,  respectively.  The  composition  of goodwill and
intangible assets at March 31, 2004, is as follows:

                                    GOODWILL    OTHER INTANGIBLES      TOTAL
--------------------------------------------------------------------------------
Balance at December 31, 2003      $ 2,302,179      $ 822,856       $ 3,125,035

   Amortization                             -       (361,594)         (361,594)
--------------------------------------------------------------------------------
Balance at March 31, 2004         $ 2,302,179      $ 461,262       $ 2,763,441
--------------------------------------------------------------------------------


                                       8
<PAGE>

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

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 with the SEC March 30, 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.

iSt is an emerging  technology  company that has developed a Global  Positioning
Satellite (GPS) based tracking and monitoring  system for criminal  offenders on
parole,  probation or  pre-trial  release,  consisting  of a PTU and a web-based
automated monitoring system.  Direct sales of the Company's Series 2100 PTUs and
tracNET24  services  began in December  2002 and  revenues  from such sales have
increased  throughout  2003 and 2004.  2003  marked the first full year of iSt's
reporting as an operating company.  Previously, it had reported as a development
stage company.

iSt's  product,  which  utilizes GPS  technology,  wireless  communications  and
proprietary  computer  software,  provides  real-time  monitoring,  tracking and
reporting of adult and juvenile  offenders as a criminal justice  rehabilitative
alternative.  Based on  patented  technology,  it is the  latest  generation  of
software and hardware  available for the  monitoring  of  offenders.  The system
tracks the geographic  location of offenders,  reports  specific  activities and
identifies violations against customer-established  parameters. This information
is  then  delivered  to  the  appropriate  authorities  using  various  methods,
including  telephone calls,  paging,  e-mail and web-based  reports.  Use of the
system can offer  substantial  cost savings over the cost of  incarceration  and
improve the  efficiency  of probation  and parole  officers.  It also offers the
backlogged  criminal  justice  systems a more secure solution to the problems of
rapidly growing criminal populations,  overcrowded  correctional  facilities and
more lenient sentencing alternatives.

Revenues are derived from selling and leasing monitoring units; selling services
such as training, monitoring services, and data archiving; and providing the use
of a web-based tracking and monitoring system, known as tracNET24(TM). tracNET24
is a hosted application,  accessible with a standard web browser to distributors
and their justice agency  customers  through secured logins.  It allows tracking
and monitoring of all electronically  activated PTUs. For each monitoring system
hosted on the company's servers,  a daily fee is charged.  Agreements exist with
distributors, service providers (i.e. private companies which operate monitoring
centers for state and county agencies), and state and county agencies. The usual
term of such  agreements  is from one to three years,  with  automatic  one year
renewals thereafter.

On August 12, 2003,  iSt entered into a share  exchange  agreement with Tracking
Systems Corporation,  Harrisburg,  Pennsylvania (TSC), a privately held provider
of  criminal  offender  monitoring  equipment  services.  Under the terms of the
agreement,  iSt  exchanged  4,423,077  shares its common  stock  (valued at $2.3
million  based upon the average of the bid and asked  prices for 20 trading days
preceding  the  closing)  for  100%  of the  common  stock  of TSC  and  assumed
$4,152,239 of TSC debt. The transaction was approved by the  stockholders of TSC
on August 21, 2003, and was closed on August 28, 2003. TSC is now a wholly owned
subsidiary  of iSt and the results of their  operations  from  August 29,  2003,
through  December  31,  2003,  are  included  in  the   consolidated   financial
statements.

EQUIPMENT REVENUE

Equipment  Revenue is derived  from the sale of  product.  For the three  months
ended March 31, 2004, equipment revenues were $16,506 compared to $29,268 during
the same period in 2003.  The reason for the decrease is the  reduction in units
sold  during  2004,  compared  to the same  period of 2003.  This  reduction  is
attributable  to the shift in the  company's  business  model  from  selling  to
leasing of its product.


                                       9
<PAGE>

LEASING REVENUE

Leasing  Revenue is derived from the leasing of  monitoring  equipment.  For the
three month period ended March 31, 2004, leasing revenues were $277,456 compared
to  $15,039  for  the  same  period  in  2003.  $191,800  of  this  increase  is
attributable  to the  acquisition  of TSC with the balance due to an increase in
units under lease.

HOSTING REVENUE

Hosting Revenue is derived from the fees charged to customers for the use of ASP
and  monitoring  center  services.  For the three  months  ended March 31, 2004,
hosting  revenues  were $505,003  compared to $21,355  during the same period in
2003.  $397,895 of this increase is  attributable to the acquisition of TSC with
the balance due to the increased deployment of PTUs.

GAIN ON SALE-LEASEBACK TRANSACTIONS

The Gain on Sale-leaseback Transactions consists of amortization of the deferred
gain  that  is  recorded  upon  delivery  of  units  in  conjunction   with  the
sale-leaseback transactions the Company entered into. For the three months ended
March 31, 2004, the gain on sale-leaseback  transactions for related parties was
$100,675  compared to none during the same period in 2003. The gain on all other
sale-leaseback  transactions  for the three  months  ended March 31,  2004,  was
$5,653  compared  to  none  during  the  same  period  of  2003.  There  were no
sale-leaseback agreements in place until 2003.

SERVICE REVENUE

For 2004,  Service Revenue  consisted of sales of non-core product that included
various ancillary  computer  equipment and the maintenance  associated with such
equipment.  For the three  months  ended  March 31,  2004,  Service  Revenue was
$18,731 compared to $2,057 for the comparable period of 2003.

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.  A portion of the cost of revenues
consists of the amortization of product  development costs, which began in March
2002. This amortization amounted to $78,715 for the three months ended March 31,
2004 and 2003 respectively.  For the three months ending March 31, 2004, Cost of
Revenues was  $1,954,530,  compared to $126,556  during the same period in 2003.
$1,341,251 of this increase is attributable to the write down to market value of
certain host monitoring  equipment  pursuant to the company's strategy of moving
to the tracNET24  platform for all  electronic  monitoring.  Other  contributing
factors  include the overall  increase in  deployment  of PTUs and the increased
product development cost amortization.

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 $174,964 for the three
months ended March 31,  2004,  compared to $180,487 for the same period in 2003.
This decrease in research and  development  expenses was the result of the shift
from development to operations.

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<PAGE>

SALES, GENERAL AND ADMINISTRATIVE

Sales,  General  and  Administrative   (SG&A)  expenses  are  all  the  expenses
associated  with the  operations  and  marketing of the Company,  outside of the
expenses   described   above.   These   expenses   include   executive,   sales,
administrative  and  accounting  staff  payroll,  taxes  and  benefits,  rent on
property,  all travel,  fixed  telephone  expenses,  office leases and supplies,
marketing, advertising in magazines and periodicals,  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, 2004, SG&A expenses
increased  to  $2,384,681  from  $1,034,139  in the  comparable  period of 2003.
$994,345 of this increase was due to the  acquisition  of TSC and the write down
of  $302,298  of  certain  monitoring  contracts,  with  the  balance  primarily
attributable to the  amortization  of unearned  consulting fees and increases in
salaries and wages due to addition of sales personnel.

OPERATING LOSS

For the three  months  ended  March 31,  2004,  operating  loss was  $3,590,151,
compared to  $1,273,463  for the same period in 2003.  The increase is primarily
attributable  to increases  in Cost of Revenues  and SG&A  expenses as described
above.

INTEREST EXPENSE

For the three months ended March 31, 2004,  interest  expense totaled  $199,497,
compared to interest  expense of $65,265 in the comparable  period of 2003. This
increase was due to higher borrowings by the Company in 2004.

FINANCING FEES

For the three months ended March 31, 2004,  financing  fees expense was $21,598,
compared to none for the comparable period of 2003. There were no financing fees
in the first quarter of 2003.

NET LOSS

For the  three  months  ended  March 31,  2004,  the  Company  had a net loss of
$3,811,238,  compared to a net loss of  $1,338,619 in the  comparable  period of
2003, for the reasons described above.

PREFERRED DIVIDENDS

For the three months ended March 31, 2004, preferred dividends totaled $221,313,
as compared to $203,463 for the comparable  period of 2003.  This change was due
to more outstanding Series A Convertible Preferred Stock during 2004.

NET LOSS AVAILABLE TO COMMON STOCKHOLDERS

For the three  months ended March 31,  2004,  there was a net loss  available to
common  stockholders  of $4,032,551  compared to $1,542,082 in 2003. The reasons
for these changes are described above.

LIQUIDITY AND CAPITAL RESOURCES

For the three months ended March 31, 2004,  the Company used  $1,274,225 of cash
in operating activities, another $194,185 in investing activities, and generated
$1,453,144  in cash  from  financing  activities.  The  total of all  cash  flow
activities  resulted in a decrease  in the balance of cash for the three  months
ended March 31, 2004 of $15,266.  For the same period of 2003,  the Company used
$878,260 of cash in operating  activities  and $5,600 in  investing  activities.
$877,919 of cash was generated from financing activities.  The total of all cash
flow activities resulted in a decrease in the balance of cash of $5,941.


                                       11
<PAGE>

The Company  completed a  sale-leaseback  transaction  with an  unrelated  party
involving  100 Series 2100 PTUs for $120,000  during the first  quarter of 2003.
This  transaction  generated  a gain of  approximately  $45,000  that  is  being
amortized into income over the term of the lease (24 months).

The Company completed a second  sale-leaseback  transaction with a related party
(consisting of various stockholders) involving 312 Series 2100 PTUs for $375,000
during  the  third  quarter  of  2003.  This  transaction  generated  a gain  of
approximately  $164,000 that is being amortized into income over the term of the
lease (24 months).

A  third   sale-leaseback   transaction  was  completed  with  a  related  party
(consisting of various stockholders) involving 417 Series 2100 PTUs for $500,000
during  the  fourth  quarter  of  2003.  This  transaction  generated  a gain of
approximately  $274,000 that is being amortized into income over the term of the
lease (24 months).

A  fourth  sale-leaseback   transaction  was  completed  with  a  related  party
(consisting of various stockholders) involving 300 Series 2100 PTUs for $360,000
during  the  fourth  quarter  of  2003.  This  transaction  generated  a gain of
approximately  $198,000 that is being amortized into income over the term of the
lease (24 months).

The Company  completed a fifth  sale-leaseback  transaction with a related party
(consisting of various stockholders) involving 100 Series 2100 PTUs for $125,000
during  the  fourth  quarter  of  2003.  This  transaction  generated  a gain of
approximately  $71,000 that is being  amortized into income over the term of the
lease (24 months).

The Company is in the process of completing one other sale-leaseback transaction
with a related party (consisting of various  stockholders)  involving 235 Series
2200 PTUs.  As of March 31,  2004,  iSt had  received  funding from this related
party  totaling  $375,000.  The  Company has sold and leased back 166 of the 235
units  under this lease  agreement.  This  transaction  has  generated a gain of
approximately  $140,000 that is being amortized into income over the term of the
lease (24 months).

Other  sale-leaseback  opportunities  are being pursued with various third party
leasing  companies.  Lease  funding of PTUs  units can be an  ongoing  source of
funding to meet cash requirements.

Management  plans  to  continue  financing  development  of the  technology  and
operations  through external and related party financing.  On March 3, 2004, iSt
has received a private  placement  commitment of $5,000,000 in equity  financing
from a private  investor group to continue to fund the operations and production
of tracking devices and related  services.  As of May 13, 2004, this funding had
not been received by the Company and there is substantial  doubt that it will be
received.

iSt entered into a common stock purchase  agreement on March 7, 2003, as amended
and restated on April 14, 2003,  with Fusion  Capital Fund II, LLC  (Fusion),  a
Chicago based institutional investor. Under the agreement,  Fusion was to buy up
to $12.0  million of common  stock over a period of up to 40 months,  subject to
iSt's right to extend the agreement for six months. iSt had the right to control
the timing and amount of stock sold to Fusion with the purchase price based upon
the market price of the  Company's  common stock at the time of sale without any
discount.  On March 3, 2004,  iSt elected to terminate its common stock purchase
agreement with Fusion.

As of May 13, 2004, the following additional borrowing facilities were in place:

A note  payable  from U.S.  Bank N.A.  of Omaha,  Nebraska.  This note calls for
monthly payments of $16,557,  including  interest,  through March 15, 2005, when
all  remaining  principal  and interest are due. The interest rate is a variable
rate based on the U.S. Bank N.A.  Reference  Rate (the "Index Rate") plus 1%. As
of March 31, 2004,  the Index Rate was 4% and the  outstanding  loan balance was
$252,118.  This loan is secured by a security interest in the Company's tangible
and intangible assets and the personal guarantees of various stockholders.


                                       12
<PAGE>

An unsecured note payable from Merrill Corporation resulting from the conversion
of accounts  payable.  This  short-term  note carries an interest rate of 5% and
matured on March 31, 2004. As of May 14, 2004, the outstanding  loan balance was
$57,210.

A $73,366 note payable from Nebraska State Bank of Omaha. This short-term note
matured on March 17, 2004, carried an interest rate of 7.25% which was due at
maturity, and is still outstanding. We are currently negotiating with this bank
to renew and extend this note payable.

A $3,452,239  note payable from Westburg Media Capital,  LP. This long-term note
calls for monthly payments  including interest of $67,000 with a balloon payment
for the  remaining  amount due in full in November  2007.  The interest  rate is
based on the U.S. Bank of  Washington  prime rate plus 4%. As of March 31, 2004,
the rate in effect was 8% and the outstanding loan balance was $3,038,030.  This
note payable is secured by all corporate assets.

A $200,000  note  payable from  Keystone  Venture IV, LP (a  stockholder).  This
unsecured,  long-term  note matures on August 31, 2006,  and carries an interest
rate  of 8%  which  is  payable  annually  in  arrears.  This  note  payable  is
subordinated to the Westburg Media Capital, LP note payable.

A $200,000  note  payable  from Penn Janney  Fund,  Inc. (a  stockholder).  This
unsecured,  long-term  note  matures on August 31,  2006 and carries an interest
rate  of 8%  which  is  payable  annually  in  arrears.  This  note  payable  is
subordinated to the Westburg Media Capital, LP note payable.

A $300,000 note payable from Oddyssey  Capital Group, LP (a  stockholder).  This
unsecured,  long-term  note  matures on August 31,  2006 and carries an interest
rate  of 8%  which  is  payable  annually  in  arrears.  This  note  payable  is
subordinated to the Westburg Media Capital, LP note payable.

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

A 10%,  convertible  debenture,  currently due, convertible into Common Stock at
$6.06 per share. iSt currently owes $30,000 on this debenture.

Six capital leases with related and unrelated  parties  carrying  interest rates
ranging from 10.475% to 10.50% and maturing in January 2005 to December 2005. As
of March 31,  2004,  the  aggregate  balance  on these  capital  leases  totaled
$1,381,674.

The majority of the remaining  $2,240,388  in notes payable  consists of amounts
owed to  individuals,  primarily  directors of iSt, which mature within one year
and carry interest rates of 5% to 10%.

As of March 31, 2004, the Company lacked  sufficient  operating  capital to fund
its ongoing  development and operations and did not have commitments  other than
the  following  for either  debt or share  purchases  to meet its  planned  2004
operating  capital  requirements.  On March 3,  2004,  iSt  received  a  private
placement  commitment of $5,000,000 in equity  financing from a private investor
group to continue to fund the operations and production of tracking  devices and
related  services.  Based on revenue  forecasts and expense budgets,  management
expects the proceeds from this  financing to fund operating  requirements  until
the Company achieves breakeven from operations by 2005. As of May 13, 2004, this
funding had not been received by the Company and there is substantial doubt that
it will be received.


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<PAGE>

ITEM 3.  DISCOLSURE 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.

The Company is subject to pending or  threatened  lawsuits  that are ordinary to
its business.  In the opinion of  management,  no material loss is expected from
any of such pending claims or lawsuits. The Company is also subject to a variety
of  federal  and  state  laws and  regulations,  especially  those  relating  to
electronic devices and wireless communications.

ITEM 2.  CHANGES IN 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 2004.

1.    Board members were  compensated in total with 9,524 shares of stock valued
      at $4,000 for attending (1) first quarter board meeting.  The 9,524 shares
      are  comprised  of four  board  members  receiving  2,381  shares  each on
      February 25, 2004.  Ken Macke,  retired  Chairman and CEO of Dayton Hudson
      Corp.,  was  also  compensated  for  being  an  Advisor  to the  Board  of
      Directors. He received 19,841 shares on February 25th valued at $8,333 for
      attending (1) first quarter board meeting.

2.    On January 15th and January 23, 2004,  we issued  30,014 and 12,500 shares
      of  common  stock  respectively  with  a  total  value  of  $20,000  to an
      individual for services per his consulting agreement.

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 AND REPORTS ON FORM 8-K.

(A)   Exhibits

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.

(B)   Reports on Form 8-K


                                       15
<PAGE>

On  February  19,  2004,  iSECUREtrac  filed a report on Form 8-K under  Item 5.
"Other  Events"  announcing a change of management  with the  resignation of Mr.
Michael P. May as Chairman and Chief Executive  Officer.  Mr. May's  resignation
was for personal  reasons.  The Board of Directors of the corporation  appointed
Mr.  Thomas E. Wharton,  Jr., a current  director,  as interim  Chief  Executive
Officer.

                                    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:  August 19, 2004



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