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


                                   FORM 10-QSB

                                   (MARK ONE)
 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934


                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006

                                       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 shares of issuer's common stock outstanding as of May 5,
2006, was 10,770,691.

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)
                                                                    March 31, 2006  December 31, 2005
-----------------------------------------------------------------------------------------------------
ASSETS
Current Assets
<S>                                                                  <C>              <C>
     Cash and cash equivalents                                       $      142,612   $      742,626
     Investments                                                          2,839,025        3,445,776
     Accounts receivable, net of allowance for doubtful accounts
       of $248,195 in 2006 and $175,000 in 2005                           1,593,094        1,618,473
     Investment interest receivable                                           2,764            3,555
     Inventories                                                            142,514          122,739
     Prepaid expenses and other                                             128,974           83,360
-----------------------------------------------------------------------------------------------------
        Total current assets                                              4,848,983        6,016,529
-----------------------------------------------------------------------------------------------------
Equipment, net of accumulated depreciation of $279,062
     in 2006 and $258,105 in 2005                                           263,184          220,231
Leasehold Improvements, net of accumulated depreciation of $3,998
     in 2006 and $2,537 in 2005                                              56,072           18,950
Monitoring Equipment, net of accumulated depreciation of $3,817,024
     in 2006 and $3,456,803 in 2005                                       2,545,469        2,563,193
Intangibles, net of accumulated amortization of $698,068
     in 2006 and $674,891 in 2005                                           213,454          236,631
Goodwill                                                                  2,302,179        2,302,179
Other assets                                                                 88,362          118,260
-----------------------------------------------------------------------------------------------------

        Total assets                                                 $   10,317,703   $   11,475,973
=====================================================================================================

LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities
     Current maturities of long-term debt                            $    1,241,348   $    1,326,502
     Accounts payable and accrued expenses                                  757,306          539,343
     Deferred gain on sale-leaseback transaction                            335,519          435,840
     Accrued interest payable                                                 4,305           12,738
-----------------------------------------------------------------------------------------------------
        Total current liabilities                                         2,338,478        2,314,423
-----------------------------------------------------------------------------------------------------

Long-term debt, less current maturities                                     210,381          546,290
-----------------------------------------------------------------------------------------------------
Redeemable convertible Series C preferred stock                           9,850,514        9,584,398
-----------------------------------------------------------------------------------------------------

Stockholders'  (Deficit)
     Common stock                                                            10,769           10,685
     Additional paid-in capital                                          54,850,199       54,551,133
     Accumulated deficit                                                (56,942,638)     (55,530,956)
-----------------------------------------------------------------------------------------------------
        Total stockholders' (deficit)                                    (2,081,670)        (969,138)
-----------------------------------------------------------------------------------------------------
        Total liabilities and stockholders' (deficit)                $   10,317,703   $   11,475,973
=====================================================================================================
</TABLE>


See Notes to Condensed Consolidated Financial Statements.

                                                                          Page 2


<PAGE>


                       ISECURETRAC CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   Three Months Ended March 31, 2006 and 2005
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                    2006           2005
--------------------------------------------------------------------------------------------
REVENUES:
<S>                                                           <C>             <C>
         Equipment sales                                      $       7,989   $       9,610
         Equipment leasing & hosting                              1,653,472         988,744
         Gain on sale-leaseback transactions - related party        100,321         181,884
         Service                                                     42,712          20,484
--------------------------------------------------------------------------------------------
            Total revenues                                        1,804,494       1,200,722
--------------------------------------------------------------------------------------------

OPERATING EXPENSES:
         Cost of revenues                                           696,134         670,805
         Research and development                                   307,240         176,765
         Sales, general and administrative                        1,970,624       1,196,867
--------------------------------------------------------------------------------------------
            Total operating expenses                              2,973,998       2,044,437
--------------------------------------------------------------------------------------------
         Operating loss                                          (1,169,504)       (843,715)
--------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE):
         Interest income                                             36,621               5
         Interest expense                                           (61,812)       (225,732)
         Other, net                                                      --          31,837
--------------------------------------------------------------------------------------------
         Total other income (expense)                               (25,191)       (193,890)
--------------------------------------------------------------------------------------------
         Loss before provision for income taxes                  (1,194,695)     (1,037,605)
         Provision for income taxes                                      --              --
--------------------------------------------------------------------------------------------

NET LOSS                                                      $  (1,194,695)  $  (1,037,605)
============================================================================================
Preferred stock dividends and accretion                            (266,116)             --
--------------------------------------------------------------------------------------------
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS                     $  (1,460,811)  $  (1,037,605)
============================================================================================
BASIC AND DILUTED LOSS PER COMMON SHARE                       $       (0.14)  $       (0.12)
============================================================================================
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING              10,698,688       9,015,649
============================================================================================
</TABLE>


See Notes to Condensed Consolidated Financial Statements.

                                                                          Page 3


<PAGE>


                       ISECURETRAC CORP. AND SUBSIDIARIES
                      STATEMENT OF STOCKHOLDERS' (DEFICIT)
                    For the Three Months Ended March 31, 2006

<TABLE>
<CAPTION>
                                                                                   ADDITIONAL
                                                              COMMON STOCK          PAID -IN       ACCUMULATED
                                                          SHARES        AMOUNT       CAPITAL         DEFICIT          TOTAL
===============================================================================================================================
<S>                                                     <C>         <C>           <C>            <C>              <C>
Balance, December 31, 2005                              10,684,529  $     10,685  $ 54,551,133   $  (55,530,956)  $   (969,138)
    Shares issued upon conversion of notes                  83,958            83       189,337               --        189,420
    Shares issued for director's fees                          996             1         1,999               --          2,000
    Compensation related to stock options issued                --            --       156,859               --        156,859
    Series C preferred stock dividends                          --            --            --         (216,987)      (216,987)
    Accretion to redemption value of preferred stock            --            --       (49,129)              --        (49,129)
    Net loss                                                    --            --            --       (1,194,695)    (1,194,695)
-------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2006                                 10,769,483  $     10,769  $ 54,850,199   $  (56,942,638)  $ (2,081,670)
===============================================================================================================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                                                          Page 4


<PAGE>


                       ISECURETRAC CORP. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three
                      Months Ended March 31, 2006 and 2005
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                       2006            2005
---------------------------------------------------------------------------------------------------------------
Cash Flows From Operating Activities
<S>                                                                                <C>            <C>
     Net loss                                                                      $ (1,194,695)  $ (1,037,605)
        Depreciation and amortization                                                   405,816        526,934
        Expenses paid by issuance of stock, warrants, and options in lieu of cash       158,859             --
        Accretion of investment discount                                                (30,879)            --
        Gain on sale - leaseback transactions                                          (100,321)      (181,884)
        Increase (decrease) in accounts payable and accrued expenses                    217,963       (836,602)
        Decrease in restricted cash                                                          --        700,000
        Other                                                                           (47,652)       160,037
---------------------------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES                                                  (590,909)      (669,120)
---------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
     Purchases of leasehold improvements and equipment                                 (102,493)            --
     Purchases of monitoring equipment                                                 (342,497)      (285,362)
     Proceeds from maturity of investments                                            6,350,000             --
     Purchase of investments                                                         (5,712,370)            --
     Decrease (increase) in other assets                                                 29,898        (41,940)
---------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                     222,538       (327,302)
---------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
     Principal proceeds from notes                                                           --      1,000,000
     Principal payments on notes                                                             --       (215,654)
     Principal proceeds from long-term debt                                                  --        400,000
     Principal payments on long-term debt                                              (231,643)      (243,496)
     Proceeds from the exercise of options and warrants                                      --        192,175
---------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                    (231,643)     1,133,025
---------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH                                                            (600,014)       136,603
CASH AT BEGINNING OF PERIOD                                                             742,626         44,997
---------------------------------------------------------------------------------------------------------------
CASH AT END OF PERIOD                                                              $    142,612   $    181,600
===============================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS FOR
     Interest                                                                            70,245        214,437
</TABLE>

See Notes to Condensed 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, 2005, has been taken from audited consolidated financial statements
at that date. The consolidated  financial  statements for the three months ended
March 31, 2006, and for the three months ended March 31, 2005, 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, 2005.  The results of operations and cash flows for the
three months ended March 31, 2006, are not necessarily indicative of the results
for the entire fiscal year ending December 31, 2006.  Where  appropriate,  items
within the consolidated  financial  statements have been  reclassified  from the
previous periods' presentation.

The Company's  financial  statements have been presented on the basis that it is
able to continue as a going  concern,  which  contemplates  the  realization  of
assets and the  satisfaction  of  liabilities  in the normal course of business.
After  completing the transaction with Mykonos and the conversion and payment of
long-term debt in 2005, the Company  believes it has sufficient  working capital
to meet its liquidity needs for the foreseeable future.

NOTE 2.  COMMON STOCK OPTIONS AND WARRANTS

During the quarter ended March 31, 2006, the Company granted options to purchase
65,175 shares of common stock to sixty-two  employees  pursuant to the Company's
2001 Omnibus Equity  Incentive  Plan.  The exercise  prices were set at the fair
market value of iSt's common stock on each  respective  grant date. In addition,
four executives received options to purchase 183,000 shares of common stock that
were issued  outside the  Company's  2001 Omnibus  Equity  Incentive  Plan.  The
exercise  prices for the options  granted to the four executives were set at the
fair market  value of iSt's  common  stock on each  respective  grant date.  The
options granted vest ratably over two years.  During the quarter ended March 31,
2006,  17,225  options  were  forfeited  by option  holders and no options  were
exercised.

During the quarter ended March 31, 2006, 47,658 warrants expired and no warrants
were exercised by warrant holders.

At March  31,  2006,  the  Company  had  1,352,362  outstanding  stock  options,
6,287,045  shares  issuable upon exercise of warrants to be issued upon exchange
of Preferred  Stock,  4,957,510 shares issuable upon the exercise of outstanding
warrants  and  189,775  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

In December 2004, the Financial  Accounting  Standards Board ("FASB")  published
FASB Statement No. 123 (revised  2004),  "Share-Based  Payment" ("FAS 123(R)" or
the  "Statement").  FAS 123(R) requires that the  compensation  cost relating to
share-based payment transactions, including grants of employee stock options, be
recognized in financial statements. That cost will be measured based on the fair
value of the equity or liability  instruments  issued.  FAS 123(R) covers a wide
range  of  share-based   compensation   arrangements  including  stock  options,
restricted share plans, performance-based awards, share appreciation rights, and
employee share purchase plans. FAS 123(R) is a replacement of FASB Statement No.
123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees,  and its related interpretive guidance
(APB 25).

                                                                          Page 6


<PAGE>


The  Company  adopted  FAS123(R)  as of  January  1,  2006,  using the  modified
prospective  transition  method for valuing  stock  options.  Under this method,
stock  based  compensation  expense is  recognized  using the  fair-value  based
accounting method for all employee awards granted, modified, or settled during a
period.  The effect of the  Statement  is to require  the Company to measure the
cost of its employee  services  received in exchange for stock  options based on
the  grant-date  fair value of the  award,  and to  recognize  the cost over the
period the employee is required to provide  services for the award.  The Company
is not restating any of the prior period stock based compensation disclosures.

Compensation expense related to the unvested portion of awards outstanding as of
January 1,  2006,  were based on the  grant-date  fair value of those  awards as
calculated under the original provisions of Statement No. 123. Accordingly,  the
Company did not remeasure  the  grant-date  fair value  estimate of the unvested
portion of awards granted prior to January 1, 2006.  The Company  determined the
fair value of these awards using the Black-Scholes option pricing model.

As a result of adopting  FAS123(R),  the Company  recorded  pretax  compensation
expense of $156,859 for the three  months ended March 31, 2006.  The Company has
recorded a full valuation allowance therefore no tax benefit is recognized.

At March 31, 2006, the Company had in place one  stock-based  compensation  plan
titled the 2001 Omnibus Equity  Incentive Plan (the "Plan") that was approved by
shareholders in June,  2001. The Plan provides for the granting of stock options
and other equity incentives to the Company's officers, employees,  directors and
consultants  who  provide  services  to the  Company.  The  Company  also grants
stock-based compensation under executive employment agreements.

During the three months ended March 31, 2006, the Company granted 248,175 common
stock options to its executives and employees.  The following  table  summarizes
the stock options outstanding:

<TABLE>
<CAPTION>
                                                                          WEIGHTED AVERAGE    AGGREGATE
                                                     Weighted Average  Remaining Contractual  Intrinsic
Options                                    Shares     Exercise Price        Life (Years)        Value
-------------------------------------------------------------------------------------------------------
<S>                                      <C>         <C>                        <C>  <C>
Outstanding at December 31, 2005         1,121,412   $           2.62            --                --
Granted                                    248,175               2.01            --                --
Exercised                                       --                 --            --                --
Forfeited                                  (17,225)              6.20            --                --
-------------------------------------------------------------------------------------------------------
Outstanding at March 31, 2006            1,352,362   $           2.46           4.9  $        518,072
=======================================================================================================
Exercisable at March 31, 2006            1,180,436   $           2.53           4.9  $        385,081
-------------------------------------------------------------------------------------------------------
</TABLE>

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option  pricing  model  with  the  following   weighted  average
assumptions:

The  risk-free  interest  rate was the  rate  paid by a  fixed-rate  payer on an
interest  rate swap with  maturity of one year on the date the stock  option was
issued as selected based on yields from U.S. Treasury zero-coupon issues.

Expected  volatilities  are based upon looking back at  historical  stock prices
over the two years prior to the stock option award. 12 observations per year are
used in the calculation with the 15th of the month stock price. The company does
a 2-year look back for the following reasons:  (i) 2 years is the option vesting
period;  (ii) the  stock  price  prior to two  years  ago is not  reflective  of
Company's expected future stock price; and (iii) the change in stock price prior
to two years ago is considered  abnormal  with respect to the Company's  current
state.

                                                                          Page 7


<PAGE>


Prior to adopting FAS123(R), the cancellation of stock options was accounted for
based on the actual  cancellations during the reporting period. Under FAS123(R),
the Company is required to estimate forfeitures. The forfeiture rate is the rate
at which options are expected to be forfeited prior to full vesting. For options
issued to senior  executives,  the forfeiture rate is 0%. For all other options,
the forfeiture rate is determined based on actual  forfeiture rate experience as
follows:  For each historical year of option issuance,  the total options issued
for the year is compared to the options  forfeited  prior to having vested.  For
option  years  in  which  the two  year  vesting  period  has not  passed,  past
experience  is used to  project  future  forfeitures.  The  total  of pro  forma
forfeitures  is then  compared  to  total  options  awarded  and  the  resultant
percentage is used as the  forfeiture  rate. The estimated  forfeiture  rate for
non-senior  executive  option  grants is 21%.  This rate is  recalculated  on an
annual basis.

The annual rate of  quarterly  dividends  is 0% since  iSECUREtrac  does not pay
dividends on common stock.

<TABLE>
<CAPTION>
                                         THREE MONTHS ENDED        YEAR ENDED
                                           March 31, 2006       December 31, 2005
-----------------------------------------------------------------------------------
<S>                                                     <C>                   <C>
Risk free interest rate                                 5.18%                 5.00%
Expected volatility factor                             99.71%               106.62%
Expected option term in years                           3.95                  3.50
Dividends                             $                 0.00  $               0.00
-----------------------------------------------------------------------------------
</TABLE>

As of March 31, 2006,  there was  approximately  $218,000 of total  unrecognized
compensation  costs  related to nonvested  share based  compensation  agreements
granted to the Company's executives and employees.

Stock-based  compensation  income of $14,801 has been  reflected in net loss for
the three months  ending March 31, 2005.  During 2004,  the Company  reduced the
exercise price of certain previously  awarded stock options.  Prior to 2006, the
Company  accounted 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  granted prior to 2006 were  accounted for as variable from the date
of the modification to the date the option was exercised,  forfeited, or expired
unexercised. However, with the implementation of FAS 123(R), variable accounting
for equity  awards has been  eliminated,  and instead a fair value is calculated
for our  stock  options  on the date  granted.

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

                                                                          Page 8


<PAGE>


<TABLE>
<CAPTION>
                                                                          THREE MONTHS ENDED
                                                                            MARCH 31, 2005
----------------------------------------------------------------------------------------------
<S>                                                                        <C>
Net loss, as reported                                                      $       (1,037,605)
Deduct:  Stock-based employee compensation income included in
reported net loss                                                                     (14,801)
Deduct:  Total stock-based employee compensation expense determined under
fair value based method for all awards                                                (42,971)
----------------------------------------------------------------------------------------------
Pro forma net loss                                                                 (1,095,377)
Preferred dividends and accretion                                                          --
----------------------------------------------------------------------------------------------
Pro forma net loss available to common stockholders                        $       (1,095,377)

Basic and diluted loss per share:

     As reported                                                           $            (0.12)
==============================================================================================
     Pro forma                                                             $            (0.12)
==============================================================================================
</TABLE>

In determining  the pro forma amounts above during 2005, 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%.

NOTE 4.  MONITORING EQUIPMENT

Monitoring equipment at March 31, 2006, is as follows:

<TABLE>
<CAPTION>
                                Active GPS     Passive GPS    Breath Alcohol       Other          Total
-----------------------------------------------------------------------------------------------------------
<S>                               <C>            <C>                 <C>            <C>          <C>
Monitoring Equipment              1,957,445      2,986,007           964,897        454,144      6,362,493
Less accumulated depreciation      (788,313)    (2,237,480)         (600,815)      (190,416)    (3,817,024)
-----------------------------------------------------------------------------------------------------------
Monitoring Equipment, net      $  1,169,132   $    748,527   $       364,082   $    263,728   $  2,545,469
-----------------------------------------------------------------------------------------------------------
</TABLE>

No impairment charges were taken in 2005 or the three months ended March 31,
2006.

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, 2005.


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  $23,177 and
$31,562 for the three month  periods  ended March 31, 2006,  and March 31, 2005,
respectively.

                                                                          Page 9


<PAGE>


The composition of goodwill and intangible assets at March 31, 2006, 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            --                  (698,068)
-----------------------------------------------------------------------------------------------------------
Balance at March 31, 2006                                           $  2,302,179  $                213,454
-----------------------------------------------------------------------------------------------------------
</TABLE>

NOTE 6.  REDEEMABLE CONVERTIBLE SERIES C PREFERRED STOCK

On June 27, 2005,  the Company  issued  1,000,000  shares of its $0.01 par value
Series C 8% Cumulative  Compounding  Exchangeable Preferred Stock. 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.

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 will equal 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
March 31, 2006, the accretion  amount charged to Additional  Paid-In Capital was
$49,129, while the Series C Preferred dividend accrual was $216,987.

Upon any liquidation of the  Corporation,  no distribution  shall be made to the
holders of shares of Common Stock or other 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%.

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,  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 500,000 shares of Series C Preferred Stock are  outstanding,  the
Series C  Preferred  Stockholders  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, 2005.

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

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

RESULTS OF OPERATIONS

EQUIPMENT SALES REVENUE

Equipment  Sales  Revenue  is  derived  from  the  sale of  offender  monitoring
equipment.  For the three months ended March 31, 2006,  equipment sales revenues
were $7,989  compared to $9,610  during the same period in 2005.  The reason for
the decrease is the  reduction  in units sold during 2006,  compared to the same
periods of 2005 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 month period ended March 31, 2006,  equipment leasing and hosting revenues
were $1,653,472  compared to $988,744 for the same period in 2005. 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.

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GAIN ON SALE-LEASEBACK TRANSACTIONS

The Company  finances much of its monitoring  equipment  through  sale-leaseback
agreements, primarily with a leasing company owned by an affiliated party. Under
these  agreements,  the Company  purchases  the  monitoring  equipment  from the
manufacturer, sells it to the leasing company at a gain, and then leases it back
from the leasing  company.  This gain is recorded as a liability  and  amortized
into  income  over the life of the  lease  (typically  2-3  years).  The Gain on
Sale-leaseback  Transactions consists of amortization of this deferred gain. For
the three months ended March 31, 2006, the Gain on  Sale-leaseback  Transactions
with related parties was $100,321 compared to $181,884 during the same period in
2005.  This decrease is attributable to the maturity of two of the seven capital
leases  associated with these  transactions.  As of March 31, 2006 and March 31,
2005, the Company had five and seven capital  leases in  conjunction  with these
transactions, respectively.

SERVICE REVENUE

Service  Revenue  consists  of  sales  of  non-core  services  including  server
maintenance  agreements and monitoring  equipment repairs.  For the three months
ended March 31, 2006,  Service  Revenue was $42,712  compared to $20,484 for the
comparable  period of 2005.  This  increase  is  attributable  to an increase in
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 months ending March 31, 2006,  Cost of Revenues was
$696,134,  compared to $670,805 during the same period in 2005. This increase is
primarily due to the increased  amortization  and cost of supporting  additional
units in the field.

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 $307,240 for the three
months ended March 31,  2006,  compared to $176,765 for the same period in 2005.
This increase in research and development  expenses was the result of additional
testing  and   configuration   expenses  and  increased  costs  related  to  the
development of our next generation  product,  as well as an increase in research
and development  staff from nine employees at March 31, 2005, to 12 employees at
March 31, 2006.

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 months ended March 31, 2006, SG&A expenses
were  $1,970,624  compared to $1,196,867 in the  comparable  period of 2005. The
reason for the three month increase was due to the increase in bad debt expense,
increased stock based  compensation  expense and the payroll associated with the
hiring of additional  non-Research  and  Development  staff from 31 employees at
March 31, 2005, to 57 employees at March 31, 2006.

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OPERATING LOSS

For the three  months  ended  March 31,  2006,  operating  loss was  $1,169,504,
compared to  $843,715  for the same period in 2005.  The  increase is  primarily
attributable  to  increases  in Research and  Development  and SG&A  expenses as
described above.

INTEREST INCOME

For the three months ended March 31, 2006, interest income was $36,621, compared
to interest income of $5 in the comparable period of 2005. This increase was due
to 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  securities and
certificates of deposits with the Company's primary bank.

INTEREST EXPENSE

For the three  months  ended  March 31,  2006,  interest  expense  was  $61,812,
compared to interest expense of $225,732 in the comparable  period of 2005. This
decrease  was  due to a  significant  reduction  in the  Company's  debt in 2005
pursuant to the Company's recapitalization plan.

NET LOSS

For the  three  months  ended  March 31,  2006,  the  Company  had a net loss of
$1,194,695,  compared to a net loss of  $1,037,605 in the  comparable  period of
2005, for the reasons described above.

PREFERRED STOCK DIVIDENDS AND ACCRETION

For the three  months  ended  March 31,  2006,  preferred  stock  dividends  and
accretion were $266,116,  as compared to none for the comparable period of 2005.
This change was due to all Series B Convertible  Preferred Stock being converted
into common stock in January 2005,  with the current  preferred  dividend amount
accrued in regards to the newly created Series C Convertible Preferred Stock.

NET LOSS AVAILABLE TO COMMON STOCKHOLDERS

For the three  months ended March 31,  2006,  there was a net loss  available to
common  stockholders  of $1,460,811  compared to $1,037,605 in 2005. The reasons
for these changes are described above.

LIQUIDITY AND CAPITAL RESOURCES

For the three months ended March 31, 2006,  the Company used $590,909 of cash in
operating  activities,  generated  $222,538 in  investing  activities,  and used
$231,643  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, 2006 of $600,014.  For the same period of 2005, the Company used
$669,120  of  cash  in  operating  activities,  another  $327,302  in  investing
activities,  and generated  $1,133,025 of cash from  financing  activities.  The
total of all cash flow  activities  in the first  quarter of 2005 resulted in an
increase in the balance of cash of $136,603.


The Company's principal uses of cash are the payment of operating expenses,  the
acquisition  of monitoring  equipment and the financing of its  receivables.  In
general,  the Company meets its liquidity needs from its current revenues,  from
cash and cash equivalents, and through capital leasing arrangements. As of March
31,  2006,  the  Company  had  approximately  $3.0  million  in  cash  and  cash
equivalents.  To a large degree,  these resources were the result of the sale of
1,000,000  shares of Series C preferred  stock in June 2005,  which resulting in
net proceeds to the Company of $10,578,686.

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As of March 31, 2006,  the Company had five capital  lease  facilities  in place
which  were used to finance  offender  monitoring  equipment.  All five 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 October 2006 to March 2008.  As of March 31, 2006,  the
aggregate balance on these five capital leases totaled $1,015,247.

As of March 31, 2006, the Company had notes payable totaling  $436,482 issued to
two  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.

Based on the foregoing,  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

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                           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 March 27,  2006,  the  Company  issued  996  shares  of  common  stock to two
directors in partial  payment of directors'  fees. The shares had a market value
on the date of the board  meeting of $2,000.  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 (1)

3.02  Restated Bylaws of the Company (2)

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

4.01  Form of Common Stock Certificate (2)

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.

                                                                         Page 15


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


      (1)   Incorporated by reference from the registrant's current report under
            Form  10-QSB  filed  on  November  9,  2005.  (Commission  File  No.
            0-26455).

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

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


                                    SIGNATURE

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

                                       iSECUREtrac Corp.

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

                                       Dated:  May 10, 2006