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 SEPTEMBER 30, 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 [ ]

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

         The number of issuer's shares outstanding as of October 31, 2005, was
10,673,785.

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

PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                       iSECUREtrac Corp. and SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                         (Unaudited)
                                                                      September 30, 2005  December 31, 2004
----------------------------------------------------------------------------------------  -----------------
<S>                                                                        <C>                 <C>
ASSETS

Current Assets

     Cash                                                                  $  2,531,571   $         44,997
     Cash - restricted                                                                -            700,000
     Investments                                                              3,391,836                  -
     Accounts receivable, net of allowance for doubtful accounts
       of $62,000 in 2005 and $13,869 in 2004                                 1,182,266          1,049,654
     Inventories                                                                152,038            140,938
     Prepaid expenses and other                                                 127,879             75,734
----------------------------------------------------------------------------------------  -----------------
        Total current assets                                                  7,385,590          2,011,323
----------------------------------------------------------------------------------------  -----------------
Equipment, net of accumulated depreciation of $637,254
     in 2005 and $582,243 in 2004                                               224,609            222,834
Leasehold Improvements, net of accumulated depreciation of $1,817
     in 2005 and $177 in 2004                                                    14,669             10,434
Monitoring Equipment, net of accumulated depreciation of $3,105,904
     in 2005 and $3,249,971 in 2004                                           2,666,637          2,496,657
Product Development Costs, net of accumulated amortization of $971,054
     in 2005 and $907,233 in 2004                                                18,907             82,728
Intangibles, net of accumulated amortization of $643,328
     in 2005 and $548,639 in 2004                                               268,194            362,883
Goodwill                                                                      2,302,179          2,302,179
Other assets                                                                    146,630            173,651
----------------------------------------------------------------------------------------  -----------------
        Total assets                                                       $ 13,027,415   $      7,662,689
----------------------------------------------------------------------------------------  -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities

     Notes payable                                                         $          -   $        215,654
     Current maturities of long-term debt                                       780,434          1,410,647
     Accounts payable and accrued expenses                                      780,807          1,823,401
     Deferred gain on sale-leaseback transaction                                557,825            870,383
     Accrued interest payable                                                     7,462            142,406
----------------------------------------------------------------------------------------  -----------------
        Total current liabilities                                             2,126,528          4,462,491
----------------------------------------------------------------------------------------  -----------------
Long-term debt, less current maturities                                       1,422,584          5,428,548
----------------------------------------------------------------------------------------  -----------------
Redeemable convertible Series C preferred stock                               9,313,461                  -
----------------------------------------------------------------------------------------  -----------------
Stockholders'  Equity (Deficit)

     Series B convertible preferred stock                                             -            295,000
     Common stock                                                                10,636             88,651
     Additional paid-in capital                                              54,643,987         48,594,197
     Accumulated deficit                                                    (54,489,781)       (51,206,198)
----------------------------------------------------------------------------------------  -----------------
        Total stockholders' equity (deficit)                                    164,842         (2,228,350)
----------------------------------------------------------------------------------------  -----------------
        Total liabilities and stockholders' equity (deficit)               $ 13,027,415   $      7,662,689
========================================================================================  =================
</TABLE>

See Notes to Consolidated Financial Statements.

                                                                          Page 2
<PAGE>

                iSECUREtrac Corp. and SUBSIDIARIES
        CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>

                                                                       Three Months Ended          Nine Months Ended
                                                                          September 30                September 30
                                                                       2005          2004          2005          2004
-------------------------------------------------------------------------------- ------------- ------------- -------------
<S>                                                                 <C>           <C>           <C>            <C>
 Revenues:

      Equipment sales                                              $      4,306   $   126,729  $     24,792   $   278,520
      Equipment leasing & hosting                                     1,181,548       949,386     3,204,607     2,587,360
      Gain on sale-leaseback transactions
         Related party                                                  172,759       162,184       549,701       390,618
         Other                                                                -         7,051             -        18,685
      Service                                                            10,065        49,018        50,584        99,544
-------------------------------------------------------------------------------- ------------- ------------- -------------
          Total revenues                                              1,368,678     1,294,368     3,829,684     3,374,727
-------------------------------------------------------------------------------- ------------- ----------2--- -------------
 Operating expenses:

      Cost of revenues                                                  672,833       738,397     2,006,840     3,507,055
      Research and development                                          200,849       162,850       612,335       519,322
      Sales, general and administrative                               1,454,829     1,048,626     3,767,588     4,536,504
-------------------------------------------------------------------------------- ------------- ------------- -------------
          Total operating expenses                                    2,328,511     1,949,873     6,386,763     8,562,881
-------------------------------------------------------------------------------- ------------- ------------- -------------
      Operating loss                                                   (959,833)     (655,505)   (2,557,079)   (5,188,154)
-------------------------------------------------------------------------------- ------------- ------------- -------------
 Other income (expense):

      Interest income                                                    27,759            23        29,725            32
      Interest expense                                                  (91,618)     (958,968)     (559,025)   (2,571,373)
      Financing fees                                                          -             -             -       (21,598)
      Other, net                                                              -             -        31,837             -
-------------------------------------------------------------------------------- ------------- ------------- -------------
      Total other income (expense)                                      (63,859)     (958,945)     (497,463)   (2,592,939)
-------------------------------------------------------------------------------- ------------- ------------- -------------
      Loss before provision for income taxes                         (1,023,692)   (1,614,450)   (3,054,542)   (7,781,093)
      Provision for income taxes                                              -             -             -             -
-------------------------------------------------------------------------------- ------------- ------------- -------------
 Net loss                                                          $ (1,023,692)  $(1,614,450) $ (3,054,542)  $(7,781,093)
-------------------------------------------------------------------------------- ------------- ------------- -------------
 Preferred stock dividends and accretion                               (270,937)     (234,470)     (278,170)     (682,338)
-------------------------------------------------------------------------------- ------------- ------------- -------------
 Net loss available to common stockholders                         $ (1,294,629)  $(1,848,920) $ (3,332,712)  $(8,463,431)
-------------------------------------------------------------------------------- ------------- ------------- -------------
 Basic and diluted loss per common share                           $      (0.12)  $     (0.32) $      (0.35)  $     (1.62)
-------------------------------------------------------------------------------- ------------- ------------- -------------
 Weighted average shares of common stock outstanding                 10,635,864     5,772,115     9,656,142     5,213,212
-------------------------------------------------------------------------------- ------------- ------------- -------------
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                                                          Page 3
<PAGE>

                       iSECUREtrac Corp. AND SUBSIDIARIES
                   STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                  For the Nine Months Ended September 30, 2005

<TABLE>
<CAPTION>

                                                                     Convertible
                                              Common Stock         Preferred Stock    Additional
                                       -------------------------      Series B          Paid-in       Accumulated
                                          Shares         Amount       --------          Capital         Deficit           Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>               <C>            <C>          <C>             <C>              <C>
Balance, December 31, 2004             88,651,536       $ 88,651       $ 295,000    $ 48,594,197    $ (51,206,198)   $ (2,228,350)
 Issuance of warrants,
   net of offering costs                        -              -               -       1,543,395                -       1,543,395
 Shares issued upon
   conversion of notes                 16,320,366         16,320               -       3,825,992                -       3,842,312
 Shares issued upon exercise
   of options                              61,000             61               -          17,114                -          17,175
 Shares issued upon exercise
   of warrants                            760,869            761               -         174,239                -         175,000
 Shares issued for director's
   fees                                    66,885             67               -          14,933                -          15,000
 Compensation related to stock
   options issued                               -              -               -         133,022                -         133,022
 Adjustment for reverse split         (95,724,372)       (95,724)              -          95,724                -               -
 Series C preferred stock
   dividends                                    -              -               -               -         (229,041)       (229,041)
 Accretion to redemption value
   of preferred stock                           -              -               -         (49,129)               -         (49,129)
 Shares issued upon conversion
   of Series B preferred stock            500,100            500        (295,000)        294,500                -               -
 Net loss                                       -              -               -               -       (3,054,542)     (3,054,542)
------------------------------------------------------------------------------------------------------------------------------------
Balance, September 30, 2005            10,636,384       $ 10,636       $       -    $ 54,643,987    $ (54,489,781)   $    164,842
====================================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements.

                                                                          Page 4
<PAGE>

                        iSECUREtrac CORP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             For the Nine Months Ended September 30, 2005 and 2004
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                      2005           2004
-------------------------------------------------------------------------------------------------------------
Cash flow from operating activities:
<S>                                                                             <C>             <C>
     Net loss                                                                    $ (3,054,542)   $ (7,781,093)
     Depreciation and amortization                                                  1,375,910       1,475,877
     Impairment charge of monitoring equipment                                             --       1,341,251
     Impairment charge of intangibles subject to amortization                              --         302,298
     Interest expense related to convertible debt                                          --       1,900,000
     Decrease in accounts payable and accrued expenses                             (1,042,594)       (303,067)
     Decrease in restricted cash                                                      700,000              --
     (Decrease) increase in accrued interest                                         (134,944)         73,551
     Other                                                                           (333,376)        222,500
-------------------------------------------------------------------------------------------------------------
        Net cash used in operating activities                                      (2,489,546)     (2,768,683)
-------------------------------------------------------------------------------------------------------------
Net cash used in investing activities:

     Product purchases                                                             (1,393,389)     (1,077,705)
     Investments                                                                   (3,391,836)             --
     Other                                                                                 --         648,481
-------------------------------------------------------------------------------------------------------------
        Net cash used in investing activities                                      (4,785,225)       (429,224)
-------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:

     Decrease in notes payable                                                       (215,654)       (657,397)
     Proceeds from long term debt                                                     400,000       3,025,000
     Principal payments on long term debt                                          (1,193,863)     (1,223,624)
     Net proceeds from issuance of common stock                                            --       3,148,592
     Proceeds from the exercise of options and warrants                               192,175         387,277
     Proceeds from issuance of Series C preferred stock, net of offering costs     10,578,687              --
     Other                                                                                 --      (1,374,750)
-------------------------------------------------------------------------------------------------------------
        Net cash provided by financing activities                                   9,761,345       3,305,098
-------------------------------------------------------------------------------------------------------------
        Increase in cash                                                            2,486,574         107,191
Cash, beginning of period                                                              44,997         125,399
-------------------------------------------------------------------------------------------------------------
Cash, end of period                                                              $  2,531,571    $    232,590
=============================================================================================================
Supplemental Disclosures of Cash Flow Information:
     Cash payments for:

        Interest                                                                 $    693,969    $    597,822
        Income Taxes                                                                       --              --
</TABLE>

See Notes to Consolidated Financial Statements.

                                                                          Page 5
<PAGE>

                        iSECUREtrac CORP AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

Note 1.  General

The  consolidated  balance sheet of iSECUREtrac  Corp  ("Company",  or "iSt") at
December 31, 2004, has been taken from audited consolidated financial statements
at that  date.  The  consolidated  financial  statements  for the three and nine
months  ended  September  30,  2005,  and for the  three and nine  months  ended
September 30, 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 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 and nine months ended  September 30, 2005,  are not
necessarily indicative of the results for the entire fiscal year ending December
31, 2005. Where appropriate,  items within the consolidated financial statements
have been reclassified from the previous periods' presentation.

On September  19, 2005,  the Company  effected a 1 for 10 reverse stock split of
the  Company's  common  stock.  Each  outstanding  ten (10) shares of our common
stock, par value $.001 per share, was automatically  combined and converted into
one (1) share of our common stock, par value $.001. There was no decrease in the
total number of shares of  authorized  capital  stock as a result of the Reverse
Stock Split and no  fractional  shares  resulted  from the Reverse  Stock Split,
rather  any  holder of shares  not evenly  divisible  by ten (10)  received  one
additional  whole share of common stock for such fractional share resulting from
the  combination  and  such  additional  share  duly  issued,   fully  paid  and
nonassessable. All share and per share amounts have been retro-actively restated
to reflect the reverse stock split.

On June 27, 2005,  the Company  closed on a Securities  Purchase  Agreement with
Mykonos  6420,  LP  ("Mykonos"),  an  affiliate of Sponsor  Investments,  LLC of
Dallas,  TX. As part of this  agreement,  Mykonos  invested  $11  million in the
Company  in  exchange  for  1,000,000  shares of its newly  created  Series C 8%
Cumulative  Compounding  Exchangeable  Preferred  Stock plus warrants to acquire
3,234,248  shares of the Company's  common stock at exercise prices ranging from
$2.30 to $16.50 per share.  The Preferred  Stock is  exchangeable  for 4,782,609
shares of Common Stock and warrants to acquire  6,287,045 shares of Common Stock
at an  exercise  price of $2.30 per share.  The  listed  share  amounts  reflect
post-reverse  split  amounts.  An opinion by an  independent  analyst deemed the
transaction as fair to the existing shareholders of the Company.

A total of $1,749,076 of the  transaction  proceeds were paid at closing to Opus
5949 LLC  ("Opus"),  an affiliate of Mykonos,  in repayment of three  short-term
loans made by Opus to the Company.  In addition,  the Company has eliminated all
of its debt except for notes  totaling  $736,000,  its capital  leases and trade
payables through a combination of common stock issuances and cash payments.

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.
After  completing the transaction with Mykonos and the conversion and payment of
long-term debt, the Company  believes it has sufficient  working capital to meet
its liquidity needs for the foreseeable future.

                                                                          Page 6
<PAGE>

Note 2.  Common Stock Options and Warrants

During the quarter ended  September  30, 2005,  the Company  granted  options to
purchase  2,900  shares of common  stock to fifteen  employees  pursuant  to the
Company's 2001 Omnibus Equity  Incentive Plan. One employee  received options to
purchase  20,000  shares of common stock that were issued  outside the Company's
2001 Omnibus Equity  Incentive  Plan. The exercise prices were set at 85% of the
daily closing price of iSt's common stock on each respective  grant. The options
granted vest  ratably over two years.  During the quarter  ended  September  30,
2005,  10,335  options  were  forfeited  by option  holders and no options  were
exercised.

During the quarter ended June 30, 2005, warrants to purchase 3,234,248 shares of
common stock were issued by the Company, all to Mykonos 6420, LP pursuant to the
Securities  Purchase  Agreement that the Company  entered into on June 21, 2005.
These warrant grants  mirrored the terms of the Company's  existing  outstanding
warrants and options,  including  amounts and  exercise  prices,  as of June 27,
2005.  The applicable  exercise  period for these warrants shall be March 1st of
the year following the calendar year of the expiration date.  During the quarter
ended September 30, 2005,  3,000 warrants expired and no warrants were exercised
by warrant holders.

At September 30, 2005,  the Company had  1,130,942  outstanding  stock  options,
6,287,045  shares  issuable upon exercise of warrants to be issued upon exchange
of Preferred  Stock,  4,684,958 shares issuable upon the exercise of outstanding
warrants  and  320,210  shares  issuable  upon the  conversion  of  subordinated
convertible  notes 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

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 $132,719  and  $133,021  and $25,612 and
$96,489  has been  reflected  in net loss for the three and nine  months  ending
September 30, 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.  There was $126,622 and
$91,961  and $0 and $0  stock-based  compensation  for the three and nine  month
periods  ending  September  30, 2005,  and  September  30,  2004,  respectively,
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 and nine
months ending September 30, 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.

                                                                          Page 7
<PAGE>

<TABLE>
<CAPTION>
                                                                Three Months Ended September 30,  Nine Months Ended September 30,
                                                                      2005             2004             2005             2004
------------------------------------------------------------------------------------------------  --------------------------------
<S>                                                               <C>              <C>              <C>              <C>
Net loss, as reported                                             $ (1,023,692)    $ (1,614,450)    $ (3,054,542)    $ (7,781,093)
Add:  Stock-based employee compensation expense included
      in reported net loss                                             132,719           25,612          133,021           96,489
Deduct:  Total stock-based employee compensation expense
         determined under fair value based method for
         all awards                                                    (70,177)          (3,645)        (114,878)      (1,475,673)
------------------------------------------------------------------------------------------------  --------------------------------
Pro forma net loss                                                    (961,150)      (1,592,483)      (3,036,399)      (9,160,277)
Preferred dividends                                                   (270,937)        (234,470)        (278,170)        (682,338)
------------------------------------------------------------------------------------------------  --------------------------------
Pro forma net loss available to common stockholders               $ (1,232,087)    $ (1,826,953)    $ (3,314,569)    $ (9,842,615)

Basic and diluted loss per share:

     As reported                                                  $      (0.12)    $      (0.32)    $      (0.35)    $      (1.62)
------------------------------------------------------------------------------------------------  --------------------------------
     Pro forma                                                    $      (0.12)    $      (0.32)    $      (0.34)    $      (1.78)
------------------------------------------------------------------------------------------------  --------------------------------
</TABLE>



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 94.11%.

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 September 30, 2005, is as follows:

<TABLE>
<CAPTION>
                                  Active         Passive         MEMS 2000         Other          Total
-------------------------------------------------------------------------------------------------------------
<S>                              <C>            <C>              <C>             <C>           <C>
Monitoring Equipment              1,496,469      2,926,016         964,897         385,159       5,772,541
Less accumulated depreciation      (504,675)    (1,945,632)       (525,488)       (130,109)     (3,105,904)
-----------------------------------------------------------------------------------------------------------
Monitoring Equipment, net        $  991,794      $ 980,384       $ 439,409       $ 255,050     $ 2,666,637
-----------------------------------------------------------------------------------------------------------
</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 $94,689 for the
nine month period  ended  September  30,  2005,  and $459,973 for the nine month
period ended September 30, 2004. Of the $459,973  amortization  expense in 2004,
$302,298 was a write down of the customer monitoring  contracts on the MEMS 2001
and MEMS 2000  equipment  to fair value 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 September 30, 2005, is as
follows:

<TABLE>
<CAPTION>
                                                                                             Intangibles,
                                                                                               subject
                                                                            Goodwill       to Amortization
-------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>                 <C>
Gross Carrying Amount                                                     $    2,302,179      $      911,522

   Accumulated Amortization, including $302,298 of impairment loss                     -           (643,328)
-------------------------------------------------------------------------------------------------------------
Balance at September 30, 2005                                             $    2,302,179      $      268,194
-------------------------------------------------------------------------------------------------------------
</TABLE>

Note 6.  Redeemable Convertible Series C Preferred Stock

On June 27, 2005, the Company issued 1,000,000 shares of its newly created $0.01
par value Series C 8% Cumulative  Compounding  Exchangeable Preferred Stock plus
warrants to acquire  3,234,248  shares of the Company's common stock at exercise
prices  ranging  from  $2.30  to  $16.50  per  share.  The  Preferred  Stock  is
exchangeable  for  4,782,609  shares of Common  Stock and  warrants  to  acquire
6,287,045 shares of Common Stock at an exercise price of $2.30 per share.  Total
proceeds from the issuance of the Preferred Stock of $11,000,000  were allocated
to Preferred  Stock and  Additional  Paid-In  Capital  Applicable To Warrants of
$9,393,407 and $1,606,593,  respectively.  In addition,  total offering costs of
$421,314  related to the  transaction  were  allocated  to  Preferred  Stock and
Additional  Paid-In  Capital  Applicable  to Warrants of $358,117  and  $63,197,
respectively.

If after June 27, 2010, the closing price of the common stock exceeds $20.00 per
share for at least 120  consecutive  trading  days,  the Company can require the
conversion of the Series C Preferred  Stock into common stock in accordance with
the above exchange provisions.

The Preferred Stock is redeemable on the tenth anniversary of the original issue
date.  The  redemption  price per share of the Preferred  Stock shall be the per
share  original  issue price ($11 per share) plus an amount equal to all accrued
but unpaid dividends  thereon (and any interest payable  thereon).  The interest
method will be utilized to accrete the carrying  amount of the  Preferred  Stock
over the ten year period to the  earliest  redemption  date so that the carrying
amount will equal the  redemption  amount at the  earliest  possible  redemption
date.  Due to the  accumulated  deficit  position of the  Company,  the periodic
accretion will be charged to Additional  Paid-In Capital.  For the quarter ended
September 30, 2005, the accretion  amount charged to Additional  Paid-In Capital
was $49,129.

Upon any liquidation of the  Corporation,  no distribution  shall be made to the
holders  of  shares of stock  ranking  junior to the  Series C  Preferred  Stock
unless,  prior thereto,  the holders of shares of Series C Preferred Stock shall
have  received an amount per share equal to the Per Share  Original  Issue Price
plus an amount equal to accrued and unpaid dividends and distributions  thereon,
whether or not declared, to the date of such payment,  multiplied by a factor of
105%.

                                                                          Page 9
<PAGE>

Except as otherwise required by law, the holders of shares of Series C Preferred
Stock shall vote  together with the holders of shares of the Common Stock of the
Corporation on all matters  submitted to the stockholders of the Corporation and
not as a separate class (other than the election of directors  discussed below),
and each share of Series C Preferred  Stock shall entitle the holder  thereof to
11 votes or the  equivalent  amount of voting power thereof as determined by the
Board of  Directors.  In addition,  until such time that less than 500 shares of
Series C Preferred  Stock is  outstanding,  the Series C Preferred  Stockholders
shall have the ability to appoint a majority of directors.


                                                                         Page 10
<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 and nine months ended  September  30, 2005,  equipment
sales revenues were $4,306 and $24,792  compared to $126,729 and $278,520 during
the same periods in 2004.  The reason for the decrease is the reduction in units
sold  during  2005,  compared to the same  periods of 2004 due 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 and nine month periods ended  September  30, 2005,  equipment  leasing and
hosting  revenues  were  $1,181,548  and  $3,204,607  compared to  $949,386  and
$2,587,360 for the same periods in 2004.  This increase is  attributable  to the
increase  in the number of units  under  lease.  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 11
<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 and nine months ended  September 30, 2005, the Gain on  Sale-leaseback
Transactions with related parties was $172,759 and $549,701 compared to $162,184
and $390,618  during the same periods 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  and  nine  months  ended
September 30, 2005,  was none and none compared to $7,051 and $18,685 during the
same periods of 2004.  This  decrease is due to no  Sale-leaseback  Transactions
with  unaffiliated  parties  during  the first  three  quarters  of 2005.  As of
September 30, 2005 and September 30, 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
and nine  months  ended  September  30,  2005,  Service  Revenue was $10,065 and
$50,584 compared to $49,018 and $99,544 for the comparable periods of 2004. This
decrease is  attributable  to a fewer  number of  equipment  repairs 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 and nine months ending  September 30, 2005, Cost of
Revenues was $672,833 and $2,006,840, compared to $738,397 and $3,507,055 during
the same  periods  in 2004.  During  the  first  quarter  of 2004,  the  Company
initiated  strategies  of  migrating  away  from the MEMS  2001  product  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.  After considering the effects of the impairment  charges taken in
2004, Cost of Revenues decreased by $65,564 and $158,964 from the three and nine
months ended September 30, 2004 to the three and nine months ended September 30,
2005,  respectively,  primarily due to the reduction of  amortization of certain
product development costs, which ended in February 2005.

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 $200,849 and $612,335 for
the three and nine months ended  September  30,  2005,  compared to $162,850 and
$519,322 for the same periods in 2004. This increase in research and development
expenses was the result of additional testing and configuration expenses.

                                                                         Page 12
<PAGE>

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,
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 and nine months ended September 30, 2005,
SG&A  expenses  were  $1,454,829  and  $3,767,588  compared  to  $1,048,626  and
$4,536,504  in the  comparable  periods of 2004.  The reason for the three month
increase was due to the increase in bad debt expense,  increased legal costs and
the  payroll  associated  with the hiring of  additional  staff.  The nine month
decrease was the result of  streamlining  of  operations  and other cost cutting
measures, such as renegotiating communication contracts, lowering rent expenses,
and eliminating non-essential expenses.

Operating Loss

For the three and nine months  ended  September  30,  2005,  operating  loss was
$959,833  and  $2,557,079,  compared to  $655,505  and  $5,188,154  for the same
periods in 2004. The primary reasons for the three-month increase were increases
in  certain  R&D and SG&A  expenses  as  described  above  while the  nine-month
decrease is  primarily  attributable  to  decreases in Cost of Revenues and SG&A
expenses as described above and higher overall  revenues,  especially  equipment
leasing and hosting revenues.

Interest Income

For the three and nine months  ended  September  30, 2005,  interest  income was
$27,759  and  $29,725,  compared  to  interest  income  of  $23  and  $32 in the
comparable  periods of 2004.  This  increase was due the  investment of the cash
received from the sale of Preferred  Stock and warrants in June 2005,  which was
not needed for immediate  working capital needs or debt  repayment.  These funds
have been invested in government notes and CD's held at the Company's  financial
institution.

Interest Expense

For the three and nine months ended  September  30, 2005,  interest  expense was
$91,618 and $559,025, compared to interest expense of $958,968 and $2,571,373 in
the comparable periods of 2004. This decrease was due to a significant reduction
in the Company's debt in 2005 pursuant to the Company's recapitalization plan.

Financing Fees

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

Net Loss

For the three and nine months ended  September  30, 2005,  the Company had a net
loss of $1,023,692  and  $3,054,542,  compared to a net loss of  $1,614,450  and
$7,781,093 in the comparable periods of 2004, for the reasons described above.

Preferred Stock Dividends and Accretion

For the three and nine months ended September 30, 2005, preferred dividends were
$270,937 and $278,170,  as compared to $234,470 and $682,338 for the  comparable
periods of 2004.  This  change was due to all Series A and Series B  Convertible
Preferred  Stock being  converted into common stock in December 2004 and January
2005,  respectively,  with the  current  preferred  dividend  amount  accrued in
regards to the newly created Series C Convertible Preferred Stock.

                                                                         Page 13
<PAGE>

Net Loss Available to Common Stockholders

For the three and nine months ended  September  30,  2005,  there was a net loss
available  to common  stockholders  of  1,294,629  and  $3,332,712  compared  to
$1,848,920  and  $8,463,431 in 2004. The reasons for these changes are described
above.

Liquidity and Capital Resources

For the nine months ended  September  30, 2005,  the Company used  $2,489,546 of
cash in operating activities,  another $4,785,225 in investing  activities,  and
generated  $9,761,345 in cash from financing  activities.  The total of all cash
flow  activities  resulted  in an  increase  in the balance of cash for the nine
months ended September 30, 2005 of $2,486,574.  For the same period of 2004, the
Company used $2,768,683 of cash in operating  activities,  $429,224 in investing
activities and generated $3,305,098 of cash from financing activities. The total
of all cash flow  activities  through the third  quarter of 2004  resulted in an
increase in the balance of cash of $107,191.

As of September  30, 2005,  the Company had seven  capital  lease  facilities in
place which were used to finance  offender  monitoring  equipment.  All seven of
these capital leases were sale-leaseback  transactions with an affiliated party.
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 of 9.50%.  Maturity  dates on these
capital  leases run from April 2006 to March 2008. As of September 30, 2005, the
aggregate balance on these seven capital leases totaled $1,466,537.

As of September 30, 2005, the Company had notes payable totaling $736,481 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 $2.30 per share.

After  completing the transaction with Mykonos and the conversion and payment of
long-term debt, the Company  believes it has sufficient  working capital to meet
its liquidity needs for the foreseeable future.

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.

                                                                         Page 14
<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 material pending or threatened lawsuits.

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

On August 26, 2005,  the Company issued 527 shares of common stock to a director
in partial payment of directors' fees. The shares had a market value on the date
of issuance of $1,000.  The issuance of these shares is exempt from registration
under Section 4(2) of the Securities Act of 1933.

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     Amended and Restated Certificate of Incorporation of the Company, as
         amended

3.02     Restated Bylaws of the Company (1)

3.03     Certificate of Designations, Preferences and Rights of Series C
         Convertible Preferred Stock of iSt (2)

4.01     Form of Common Stock Certificate (3)

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.

                                                                         Page 15
<PAGE>

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

(2)   Incorporated by reference from the registrant's current report under Form
      8-K, filed on June 23, 2005 (Commission File No. 0-26455).

(3)   Incorporated by reference from the registrant's registration statement
      under Form 10-SB, filed on June 22, 1999 (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:  November 9, 2005