----

----

| þ                                             |  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  |
|----------------------------------------------------|------------------------------------------------------------------------------------------------|
|                                               |                                                                                           |
| For the quarterly period ended: March 31, 2011     |
|                                               |
| OR                                                 |
|                                               |                                                                                           |
| o                                                  |  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|                                               |                                                                                           |
| For the transition period from: ______ to ________ |

| Colorado                                                       |   | 84-1506325                        |
|----------------------------------------------------------------|--------|-----------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (IRS Employer Identification No.) |

| Large Accelerated Filer | o | Accelerated Filer         |  o      |
|-------------------------|---|---------------------------|--------------|
| Accelerated Filer       | o | Smaller Reporting Company |  þ |

----

----

----

|                                 |                                                                                                                                                          |   | PAGE   |   |
|--------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| PART 1 – FINANCIAL INFORMATION |                                                                                                                                                          |   |   |
|                                 |                                                                                                                                                          |   |   |
|  Item 1.                        | Financial Statements                                                                                                                                          |   |   |   |
|                                 |                                                                                                                                                          |   |   |   |
|                                 | Condensed balance sheets, March 31, 2011 (unaudited) and December 31, 2010                                                                     |   |   | 3      |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|                                 | Condensed statements of operations, for the three months ended March 31, 2011 (unaudited) and 2010                                                       |   |   | 4      |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|                                 | Condensed statement of changes in stockholders’ equity for the year ended December 31, 2010 and three months ended March 31, 2011 (unaudited) |   |   | 5      |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|                                 | Condensed statements of cash flows for the three months ended March 31, 2011 (unaudited) and 2010                                                             |   |   | 6      |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|                                 | Notes to condensed financial statements (unaudited)                                                                                                           |   |   | 7      |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|  Item 2.                        | Management’s Plan of Operation                                                                                                                     |   |   | 19     |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|  Item 3.                        | Quantitative and Qualitative Disclosures About Market Risk                                                                                               |   |   | 25     |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|  Item 4.                   | Controls and Procedures                                                                                                                                  |   |   | 25     |   |
|                                 |                                                                                                                                                          |   |   |   |   |
| PART I1 – OTHER INFORMATION    |                                                                                                                                                          |   |   |   |
|  Item 1.                        | Legal Proceedings.                                                                                                                                       |   |   | 26     |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|  Item 1A.                       | Risk Factors                                                                                                                                             |   |   | 26     |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|  Item 2                         | Unregistered Sales of Equity Securities and Use of Proceeds.                                                                                             |   |   | 26     |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|  Item 3.                        | Defaults upon Senior Securities.                                                                                                                         |   |   | 27     |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|  Item 4.                        | Submission of Matters to a Vote of Security Holders.                                                                                                     |   |   | 27     |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|  Item 5.                        | Other Information.                                                                                                                                       |   |   | 27     |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|  Item 6.                   |  Exhibits                                                                                                                                           |   |   | 27     |   |
|                                 |                                                                                                                                                          |   |   |   |   |
|  Signatures                |                                                                                                                                                          |   |   | 28     |   |

----

|                                                                         |   | March 31,   |        |   | December 31, |   |
|------------------------------------------------------------------------------|--------|-------------|-------------|--------|--------------|--------|
|                                                                         |   | 2011        |        |   | 2010         |   |
|                                                                         |   | (unaudited) |        |   | (audited)    |   |
| Assets                                                                       |   |        |        |   |         |   |
| Current assets                                                               |   |        |        |   |         |   |
| Cash                                                                         |   | $           | 225,742     |   |         | $      | 46,382 |   |
| Accounts receivable                                                          |   |        | 21,373      |   |         |   | 342 |   |
| Inventory                                                                    |   |        | 302,248     |   |         |   | 51,290 |   |
| Deposits and other current assets                                            |   |        | 87,747      |   |         |   | - |   |
| Prepaid expenses                                                             |   |        | 5,847       |   |         |   | - |   |
| Total current assets                                                         |   |        | 642,957     |   |         |   | 98,014 |   |
|                                                                         |   |        |        |   |         |   |   |   |
| Property & equipment, net of accumulated                                 |   |        |        |   |         |   |   |   |
| depreciation                                                                 |   |        | 143,982     |   |         |   | 64 |   |
|                                                                         |   |        |        |   |         |   |   |   |
| Notes payable to Shareholder                                                 |   |        | 743,494     |   |         |   | - |   |
| Intangible property, net of accumulated                                      |   |        |        |   |         |   |   |   |
| amortization                                                                 |   |        | 571,639     |   |         |   | 24,344 |   |
| Deferred patent costs                                                        |   |        | 209,896     |   |         |   | 203,535 |   |
| Goodwill                                                                     |   |        | 1,808,215   |   |         |   | - |   |
| Deposits                                                                     |   |        | 300         |   |         |   | 300 |   |
| Total Assets                                                                 |   | $           | 4,120,483   |   |         | $      | 326,257 |   |
|                                                                         |   |        |        |   |         |   |   |   |
| Liabilities and Stockholders' Equity                                         |   |        |        |   |         |   |   |   |
| Current liabilities                                                          |   |        |        |   |         |   |   |   |
| Accounts payable                                                             |   | $           | 1,384,224   |   |         | $      | 249,087 |   |
| Accrued expenses                                                             |   |        | 364,565     |   |         |   | 385,094 |   |
| Current portion notes payable                                                |   |        | 1,155,501   |   |         |   | 729,652 |   |
| Loans and notes payable, related parties                                     |   |        | -           |   |         |   | 14,421 |   |
| Total current liabilities                                                    |   |        | 2,904,290   |   |         |   | 1,378,254 |   |
|                                                                         |   |        |        |   |         |   |   |   |
| Contingent liability                                                         |   |        | 1,239,284   |   |         |   | - |   |
| Notes payable, net of current portion                                        |   |        | -           |   |         |   | - |   |
| Total liabilities                                                            |   |        | 3,996,446   |   |         |   | 1,378,254 |   |
|                                                                         |   |        |        |   |         |   |   |   |
| Stockholders' Equity                                                         |   |        |        |   |         |   |   |   |
| Preferred Stock:                                                             |   |        |        |   |         |   |   |   |
| Preferred Stock, 1,000,000 shares authorized;                                |   |        |        |   |         |   |   |   |
|      $100 par value; 0 and 0 issued and outstanding |   |        | -           |   |         |   | - |   |
| Common Stock, $.001 par value,  100,000,000 shares                 |   |        |        |   |         |   |   |   |
|    authorized; 70,940,142 and 50,586,142 shares               |   |        |        |   |         |   |   |   |
|    issued and outstanding, respectively                       |   |        | 70,940      |   |         |   | 56,086 |   |
| Additional paid-in capital                                                   |   |        | 13,932,437  |   |         |   | 12,560,249 |   |
| Minority interest                                                            |   |        | (36,488     | )      |         |   | - |   |
| Accumulated deficit                                                          |   |        | (13,989,978 | )      |         |   | (13,668,332 | ) |
| Total stockholders' deficit                                                  |   |        | (23,090     | )      |         |   | (1,051,997 | ) |
|                                                                         |   |        |        |   |         |   |   |   |
| Total Liabilities and Stockholders' Equity                                   |   | $           | 3,973,358   |   |         | $      | 326,257 |   |

----

|                                 |   | For the Three Months Ended |                                                                                                                            |
|--------------------------------------|--------|----------------------------|---------------------------------------------------------------------------------------------------------------------------------|
|                                 |   | March 31,                  |                                                                                                                            |
|                                 |   |                       | 2011                                                                                                                            |   |   |   | 2010 |   |
|                                 |   |                       |                                                                                                                            |   |   |   |   |   |
| Revenues                             |   | $                          |               20,241                                      |   |   | $ |          25,555 |   |
| Direct costs                         |   |                       |               21,142                                      |   |   |   |          23,797 |   |
|                                 |   |                       |                                                                                                                            |   |   |   |   |   |
| Gross Profit                         |   |                       |                  (901                      | ) |   |   |            1,758 |   |
|                                 |   |                       |                                                                                                                            |   |   |   |   |   |
| Operating expenses:                  |   |                       |                                                                                                                            |   |   |   |   |   |
| General and administrative           |   |                       |             573,057                                                 |   |   |   |        121,831 |   |
| Amortization and depreciation        |   |                       |               43,762                                      |   |   |   |               571 |   |
| Total operating expenses             |   |                       |             616,819                                                 |   |   |   |        122,402 |   |
|                                 |   |                       |                                                                                                                            |   |   |   |   |   |
| Operating loss                       |   |                       |           (617,719                                                            | ) |   |   |      (120,644 | ) |
|                                 |   |                       |                                                                                                                            |   |   |   |   |   |
| Non-operating activity               |   |                       |                                                                                                                            |   |   |   |   |   |
| Other income (expense)               |   |                       |             (35,431                                                 | ) |   |   |            6,446 |   |
| Gains (losses) on settlement of debt |   |                       |             248,754                                                 |   |   |   |                 - |   |
| Gain (loss) on derivative liability  |   |                       |             174,141                                                 |   |   |   |                 - |   |
| Interest expenses                    |   |                       |           (127,878                                                            | )  |   |   |                 - |   |
| Interest income                      |   |                       |                      - |   |   |   |        (12,668 | ) |
| Total other income (expense)         |   |                       |             259,585                                                 |   |   |   |          (6,222 | )  |
|                                 |   |                       |                                                                                                                            |   |   |   |   |   |
| Loss before income taxes             |   |                       |           (358,134                                                            | )  |   |   |      (126,866 | ) |
|                                 |   |                       |                                                                                                                            |   |   |   |   |   |
| Minority interest loss               |   |                       |               (3,671                                      | ) |   |   |   |   |
| Provision for income taxes           |   |                       |                      - |   |   |   |                 - |   |
|                                 |   |                       |                                                                                                                            |   |   |   |   |   |
| Net loss                             |   | $                          |           (354,463                                                            | )  |   | $ |      (126,866 | ) |
|                                 |   |                       |                                                                                                                            |   |   |   |   |   |
| Earnings (loss) per share:           |   |                       |                                                                                                                            |   |   |   |   |   |
| Basic                                |   | $                          |                 (0.01                           | ) |   | $ |            (0.00 | ) |
| Dilutive                             |   | $                          | (0.01                                                                                                                           | )  |   | $ |            (0.00 | ) |
|                                 |   |                       |   (0.00                                                                                                                    | ) |   |   |   |   |
| Weighted average shares outstanding  |   |                       |                                                                                                                            |   |   |   |   |   |
| Basic                                |   |                       |        62,822,942                                                                            |   |   |   |   50,363,920 |   |
| Dilutive                             |   |                       |        62,822,942                                                                            |   |   |   |   50,363,920 |   |

----

|                                             |   |   |       |   |    |   |   | Additional |   |   |        |   |   |     |    |   | Stock-  |   |
|--------------------------------------------------|--------|--------|------------|--------|---------|--------|--------|------------|--------|--------|-------------|--------|--------|----------|---------|--------|---------|--------|
|                                             |   | Common |       |   | Paid in |   |   | Minority   |   |   | Accumulated |   |   | Holders' |    |
|                                             |   | shares |       |   | Par     |   |   | Capital    |   |   | Interest    |   |   | Deficit  |    |   | Deficit |   |
|                                             |   |   |       |   |    |   |   |       |   |   |        |   |   |     |    |   |    |   |
| Balance at December 31, 2009                     |   |   | 50,086,142 |   |    |   | 50,086 |       |   |   | 12,351,249  |   |   |     | -       |   |    |   | (13,204,719 | ) |   |   | (803,384 | ) |
|                                             |   |   |       |   |    |   |   |       |   |   |        |   |   |     |    |   |    |   |   |   |   |   |   |   |
| Board member compensation                        |   |   | 500,000    |   |    |   | 500    |       |   |   | 49,500      |   |   |     |    |   |    |   |   |   |   |   | 50,000 |   |
| Sale of stock                                    |   |   | 5,500,000  |   |    |   | 5,500  |       |   |   | 159,500     |   |   |     |    |   |    |   |   |   |   |   | 165,000 |   |
| Net loss                                         |   |   |       |   |    |   |   |       |   |   |        |   |   |     |    |   |    |   | (463,613 | ) |   |   | (463,613 | ) |
|                                             |   |   |       |   |    |   |   |       |   |   |        |   |   |     |    |   |    |   |   |   |   |   |   |   |
| Balance at December 31, 2010                     |   |   | 56,086,142 |   |    |   | 56,086 |       |   |   | 12,560,249  |   |   |     | -       |   |    |   | (13,668,332 | ) |   |   | (1,051,997 | ) |
|                                             |   |   |       |   |    |   |   |       |   |   |        |   |   |     |    |   |    |   |   |   |   |   |   |   |
| Sale of stock                                    |   |   | 5,033,334  |   |    |   | 5,033  |       |   |   | 145,967     |   |   |     |    |   |    |   |   |   |   |   | 151,000 |   |
| Stock issued for acquisition of HighCom Security |   |   | 9,820,666  |   |    |   | 9,821  |       |   |   | 481,179     |   |   |     |    |   |    |   |   |   |   |   | 491,000 |   |
| Options issued for compensation                  |   |   |       |   |    |   |   |       |   |   | 310,232     |   |   |     |    |   |    |   |   |   |   |   | 310,231 |   |
| Record discount on new loans                     |   |   |       |   |    |   |   |       |   |   | 434,810     |   |   |     |    |   |    |   |   |   |   |   | 434,810 |   |
| Reclassify minority interest                     |   |   |       |   |    |   |   |       |   |   |        |   |   |     | (32,817 | )      |    |   | 32,817 |   |   |   | - |   |
| Net loss                                         |   |   |       |   |    |   |   |       |   |   |        |   |   |     | (3,671  | )      |    |   | (354,463 | ) |   |   | (358,134 | ) |
|                                             |   |   |       |   |    |   |   |       |   |   |        |   |   |     |    |   |    |   |   |   |   |   |   |   |
| Balance at March 31, 2011                        |   |   | 70,940,142 |   |    | $      | 70,940 |       |   |   | 13,932,437  |   |   |     | (36,488 | )      |    |   | (13,989,978 | ) |   | $ | (23,090 | ) |

----

|                                                          |   | For the Three Months Ended |                                                                                                                      |
|---------------------------------------------------------------|--------|----------------------------|---------------------------------------------------------------------------------------------------------------------------|
|                                                          |   | March 31,                  |                                                                                                                      |
|                                                          |   |                       | 2011                                                                                                                      |   |   |   | 2010 |   |
|                                                          |   |                       |                                                                                                                      |   |   |   |   |   |
| Cash Flows from Operating Activities:                         |   |                       |                                                                                                                      |   |   |   |   |   |
| Net (loss) income                                             |   | $                          |          (354,463)                                                           |   |   | $ |          (126,866) |   |
| Adjustment to reconcile Net Income to net                     |   |                       |                                                                                                                      |   |   |   |   |   |
|   cash provided by operations:                      |   |                       |                                                                                                                      |   |   |   |   |   |
| Minority interest loss                                        |   |                       |              (3,671)                                     |   |   |   |   |   |
|      Depreciation and amortization   |   |                       |              43,762                                      |   |   |   |                   571 |   |
|      Issuance of equity for services |   |                       |                     - |   |   |   |              50,000 |   |
| Changes in assets and liabilities:                            |   |                       |                                                                                                                      |   |   |   |   |   |
|    Accounts receivable                         |   |                       |              75,995                                      |   |   |   |              (9,558) |   |
|    Inventory                                   |   |                       |            (31,725)                                                |   |   |   |                   142 |   |
| Other operating assets                                        |   |                       |                     - |   |   |   |                 (398) |   |
|    Accounts payable and accruals               |   |                       |          (141,480)                                                           |   |   |   |            111,342 |   |
| Related party loans                                           |   |                       |            (14,421)                                                |   |   |   |              (8,299) |   |
|                                                          |   |                       |                     - |   |   |   |                     - |   |
| Net Cash (Used) Provided by Operating Activities              |   |                       |          (426,003)                                                           |   |   |   |              16,934 |   |
|                                                          |   |                       |                                                                                                                      |   |   |   |   |   |
| Cash Flows from Investing Activities:                         |   |                       |                                                                                                                      |   |   |   |   |   |
|    Purchase of property and equipment          |   |                       |                 (111)                     |   |   |   |                     - |   |
| Payment of deferred costs                                     |   |                       |              (6,361)                                     |   |   |   |            (19,274) |   |
| Cash purchased                                                |   |                       |                   834           |   |   |   |                     - |   |
| Net Cash (Used) by Operating Activities                       |   |                       |              (5,637)                                     |   |   |   |            (19,274) |   |
|                                                          |   |                       |                                                                                                                      |   |   |   |   |   |
| Cash Flows from Financing Activities:                         |   |                       |                                                                                                                      |   |   |   |   |   |
|    Proceeds from issuance of stock             |   |                       |            151,000                                                 |   |   |   |                     - |   |
|    Proceeds from issuance of note payable      |   |                       |            460,000                                                 |   |   |   |                     - |   |
| Net proceeds from line of credit                              |   |                       |                     - |   |   |   |                3,112 |   |
| Net Cash (Used) Provided by Operating Activities              |   |                       |            611,000                                                 |   |   |   |                3,112 |   |
|                                                          |   |                       |                                                                                                                      |   |   |   |   |   |
|                                                          |   |                       |                                                                                                                      |   |   |   |   |   |
| Net increase/decrease in Cash                                 |   |                       |            179,360                                                 |   |   |   |                   772 |   |
|                                                          |   |                       |                                                                                                                      |   |   |   |   |   |
| Cash at beginning of period                                   |   |                       |              46,382                                      |   |   |   |                1,739 |   |
|                                                          |   |                       |                                                                                                                      |   |   |   |   |   |
| Cash at end of period                                         |   | $                          |            225,742                                                 |   |   | $ |                2,511 |   |
|                                                          |   |                       |                                                                                                                      |   |   |   |   |   |
|                                                          |   |                       |                                                                                                                      |   |   |   |   |   |
| Supplemental cash flow information:                           |   |                       |                                                                                                                      |   |   |   |   |   |
| Interest paid                                                 |   | $                          |                     - |   |   | $ |                2,171 |   |
| Taxes paid                                                    |   | $                          |                     - |   |   | $ |                     - |   |

| On March 4, 2011, the Company issued 9,820,666 shares of common stock, $200,000 in notes and $1,262,000 contingent liabilities in exchange for the stock of HighCom Security, Inc. valued as follows: |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                  |         |    |       |         |
|---------------------------------------|--------------|---------|------------|--------------|
| Cash                                  |    | $       | 834        |    |
|                                  |         |
| Accounts receivable                   |    |    | 97,026     |    |
|                                  |         |
| Performance bond                      |    |    | 50,500     |    |
|                                  |         |
| Inventory                             |    |    | 119,233    |         |
|                                  |         |
| Shareholder loans receivable          |    |    | 335,685    |         |
|                                  |         |    |       |         |
| Property and equipment - net          |    |    | 206,159    |    |
|                                  |         |
| Other assets                          |    |    | 37,738     |    |
|                                  |         |
| Accounts payable and accrued expenses |    |    | (1,668,695 | )       |
|                                  |         |
| Long term debt                        |    |    | (655,311   | )       |
|                                  |         |
| Deficit equity acquired               |    | $  | 1,476,829  |    |

----

| (1)  | Basis of Presentation |
|-----------|-----------------------|

----

----

----

----

| (2) | Notes Payable |
|-----|---------------|

|                                                                    |   | (Unaudited)    |     |   |              |   |
|-------------------------------------------------------------------------|--------|----------------|----------|--------|-------------------|--------|
|                                                                    |   | March 31. 2011 |     |   | December 31, 2010 |   |
| $500,000 convertible promissory note issued                             |   |           |     |   |              |   |
|    December 2, 2004, due on November 30, 2009, |   |           |     |   |              |   |
|    8% annual interest rate, net of unamortized           |   |           |     |   |              |   |
|    Discount of $0                                        |   | $              | 150,166  |   |              | $      | 150,166 |   |
|                                                                    |   |           |     |   |              |   |   |   |
| $93,096 convertible promissory note (1/4 of                             |   |           |     |   |              |   |   |   |
|    previous outstanding notes) issued December           |   |           |     |   |              |   |   |   |
|    2, 2004, due November 30, 2009, 8% interest      |   |           |     |   |              |   |   |   |
|    Net of unamortized discount of $0                     |   |           | 93,096   |   |              |   | 93,096 |   |
|                                                                    |   |           |     |   |              |   |   |   |
| $50,000 convertible promissory note issued                              |   |           |     |   |              |   |   |   |
|    December 2, 2004, due on November 30, 2009, |   |           |     |   |              |   |   |   |
|    8% annual interest rate, net of unamortized           |   |           |     |   |              |   |   |   |
|    Discount of $0                                        |   |           | 17,325   |   |              |   | 17,325 |   |
|                                                                    |   |           |     |   |              |   |   |   |
| $50,000 convertible promissory note issued                              |   |           |     |   |              |   |   |   |
|    December 2, 2004, due on November 30, 2009, |   |           |     |   |              |   |   |   |
|    8% annual interest rate, net of unamortized           |   |           |     |   |              |   |   |   |
|    Discount of $0                                        |   |           | 15,241   |   |              |   | 15,241 |   |
|                                                                    |   |           |     |   |              |   |   |   |
| $10,000 convertible promissory note issued                              |   |           |     |   |              |   |   |   |
|    December 2, 2004, due on November 30, 2009, |   |           |     |   |              |   |   |   |
|    8% annual interest rate, net of unamortized           |   |           |     |   |              |   |   |   |
|    Discount of $0                                        |   |           | 3,464    |   |              |   | 3,464 |   |
|                                                                    |   |           | 279,292  |   |              |   | 279,292 |   |
| Less: current maturities                                                |   |           | (279,292 | )      |              |   | (279,292 | ) |
|                                                                    |   | $              | -        |   |              | $      | - |   |

----

|                                         |   | (Unaudited)    |     |   |              |   |
|----------------------------------------------|--------|----------------|----------|--------|-------------------|--------|
|                                         |   | March 31. 2011 |     |   | December 31, 2010 |   |
| $160,000 convertible promissory note issued  |   |           |     |   |              |   |
| February 3, 2011, due on August 31, 2011,    |   |           |     |   |              |   |
| 10% annual interest rate, net of unamortized |   |           |     |   |              |   |
| Discount of $110,497                         |   | $              | 49,503   |   |              | $      | - |   |
|                                         |   |           |     |   |              |   |   |   |
| $300,000 convertible promissory note issued  |   |           |     |   |              |   |   |   |
| March 3, 2011, due on March 3, 2012,         |   |           |     |   |              |   |   |   |
| 10% interest, net of unamortized             |   |           |     |   |              |   |   |   |
| discount of $110,820                         |   |           | 189,180  |   |              |   | - |   |
|                                         |   |           |     |   |              |   |   |   |
| $160,000 convertible promissory note issued  |   |           |     |   |              |   |   |   |
| January 31, 2011, due on demand              |   |           |     |   |              |   |   |   |
| 0% annual interest rate, net of unamortized  |   |           |     |   |              |   |   |   |
| Discount of $48,397                          |   |           | 111,603  |   |              |   | - |   |
|                                         |   |           |     |   |              |   |   |   |
| $160,000 convertible promissory note issued  |   |           |     |   |              |   |   |   |
| January 31, 2011, due on demand              |   |           |     |   |              |   |   |   |
| 0% annual interest rate, net of unamortized  |   |           |     |   |              |   |   |   |
| Discount of $53,655                          |   |           | 106,345  |   |              |   | - |   |
|                                         |   |           |     |   |              |   |   |   |
| $67,025 convertible promissory note issued   |   |           |     |   |              |   |   |   |
| January 31, 2011, due on demand              |   |           |     |   |              |   |   |   |
| 0% annual interest rate, net of unamortized  |   |           |     |   |              |   |   |   |
| Discount of $20,274                          |   |           | 46,752   |   |              |   | - |   |
|                                         |   |           | 503,383  |   |              |   | - |   |
| Less: current maturities                     |   |           | (503,383 | )      |              |   | - |   |
|                                         |   | $              | -        |   |              | $      | - |   |

----

|                                                           |   | (Unaudited)    |     |   |              |   |
|----------------------------------------------------------------|--------|----------------|----------|--------|-------------------|--------|
|                                                           |   | March 31. 2011 |     |   | December 31, 2010 |   |
| $450,000 line of credit from Fifth Third Bank,                 |   |           |     |   |              |   |
| interest only at 6.2% annually, due on demand                  |   | $              | 451,697  |   |              | $      | - |   |
|                                                           |   |           |     |   |              |   |   |   |
| $150,000 revolving credit card facility with Wells Fargo Bank, |   |           |     |   |              |
| interest only at 7.5% annually, due on demand                  |   |           | 150,524  |   |              |   | - |   |
|                                                           |   |           |     |   |              |   |   |   |
| $50,000 revolving credit card facility with California Bank    |   |           |     |   |              |
| & Trust (non-assumable), interest only at 5%, due          |   |           |     |   |              |   |   |   |
| on demand                                                      |   |           | 49,750   |   |              |   | - |   |
|                                                           |   |           | 651,971  |   |              |   |   |   |
| Less: current maturities                                       |   |           | (651,971 | )      |              |   | - |   |
|                                                           |   | $              | -        |   |              | $      | - |   |

| (3) | Subordinated Convertible Notes Payable |
|-----|----------------------------------------|

|                                                                      |   | (Unaudited)    |   |   |              |   |
|---------------------------------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                                                      |   | March 31, 2011 |   |   | December 31, 2010 |   |
| $600,000 subordinated, convertible promissory note                        |   | 2010           |   |   | 2009              |   |
|      issued June 22, 2006, due on June 22, 2008, |   |           |   |   |              |   |
|      8% annual interest rate, net of unamortized |   |           |   |   |              |   |
|      discount of $0 and $0, respectively         |   | $              | -      |   |              | $      | 355,000 |   |
|                                                                      |   |           | -      |   |              |   | 355,000 |   |
|                                                                      |   |           |   |   |              |   |   |   |
| Less: current maturities                                                  |   |           | -      |   |              |   | (355,000 | ) |
|                                                                      |   | $              | -      |   |              | $      | - |   |

----

| (4) | Shareholders’ Equity |
|-----|----------------------------|

|   | Preferred stock |
|--------|-----------------|

|                                            |   | Numberof Shares |      |   | WeightedAverageExercisePrice |   |   | WeightedAverageRemainingContractual Life |   |           | AggregateIntrinsicValue |   |
|-------------------------------------------------|--------|-----------------|-----------|--------|------------------------------|--------|--------|-----------------------------------------------|--------|----------------|-------------------------|--------|
| Options Outstanding - January 1, 2010           |   |            | 2,850,000 |   |                         | $      | 0.10   |                                          |   | 1.2 years      |                    |   |   | - |   |
| Granted                                         |   |            | 6,250,000 |   |                         | $      | 0.03   |                                          |   |           |                    |   |   |   |   |
| Exercised                                       |   |            | -         |   |                         |   | -      |                                          |   |           |                    |   |   |   |   |
| Forfeited/expired/cancelled                     |   |            | -         |   |                         |   |   |                                          |   |           |                    |   |   |   |   |
|                                            |   |            |      |   |                         |   |   |                                          |   |           |                    |   |   |   |   |
| Options Outstanding – December 31, 2010   |   |            | 9,100,000 |   |                         | $      | 0.05   |                                          |   | 3.6 years |                    |   | $ | 0 |   |
|                                            |   |            |      |   |                         |   |   |                                          |   |           | -                       |   |   |   |   |   |
| Outstanding Exercisable – January 1, 2010 |   |            | 2,850,000 |   |                         | $      | 0.10   |                                          |   | 1.2 years      |                    |   | $_ |   |
| Outstanding Exercisable – March 31, 2011  |   |            | 9,100,000 |   |                         | $      | 0.05   |                                          |   | 3.6 years      |                    |   | $ | 0 |   |

----

| (5)  | Line of Credit |
|-----------|----------------|

| (6)  | Income Taxes |
|-----------|--------------|

| (7)  | Commitments and Contingencies |
|-----------|-------------------------------|

----

| (8)  | Inventory |
|-----------|-----------|

|                                            |   | March31,    |    |   | December 31, |   |
|-------------------------------------------------|--------|-------------|---------|--------|--------------|--------|
|                                            |   | 2011        |    |   | 2010         |   |
|                                            |   | (unaudited) |    |   |         |   |
| Raw materials                                   |   | $           | 280,895 |   |         | $      | 17,370 |   |
| Work in process                                 |   |        | -       |   |         |   | - |   |
| Finished Goods                                  |   |        | 21,352  |   |         |   | 33,920 |   |
|                                            |   |        |    |   |         |   |   |   |
|        TOTAL |   | $           | 302,247 |   |         | $      | 51,290 |   |

| (9)  | Acquisition of HighCom Security, Inc. |
|-----------|---------------------------------------|

----

| Cash                                                                                                                                                                                                                                                                                                                                                                |   | $      | 1,000     |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|
|  Accounts receivable                                                                                                                                                                                                                                                                                                                                           |   |   | 97,000    |   |
|  Contract performance bonds                                                                                                                                                                                                                                                                                                                                    |   |   | 51,000    |   |
|  Inventory                                                                                                                                                                                                                                                                                                                                                     |   |   | 119,000   |   |
|                                                                                                                                                                                                                                                                                                                                                                |   |   |      |   |
|  Fixed assets                                                                                                                                                                                                                                                                                                                                                  |   |   | 148,000   |   |
|  Investments                                                                                                                                                                                                                                                                                                                                                   |   |   | 121,000   |   |
|  Deposits                                                                                                                                                                                                                                                                                                                                                      |   |   | 38,000    |   |
|  Customer lists                                                                                                                                                                                                                                                                                                                                                |   |   | 500,000   |   |
|  Website                                                                                                                                                                                                                                                                                                                                                       |   |   | 80,000    |   |
|  Goodwill                                                                                                                                                                                                                                                                                                                                                      |   |   | 3,075,000 |   |
|                                              -               |   |   | -         |   |
|  Total assets                                                                                                                                                                                                                                                                                                                                                  |   | $      | 4,230,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                |   |   |      |   |
|  Accounts payable                                                                                                                                                                                                                                                                                                                                              |   | $      | 1,265,000 |   |
|  Accrued expenses                                                                                                                                                                                                                                                                                                                                              |   |   | 403,000   |   |
|  Notes and loans payable                                                                                                                                                                                                                                                                                                                                       |   |   | 600,000   |   |
|  Acquisition debt                                                                                                                                                                                                                                                                                                                                              |   |   | 200,000   |   |
|  Contingent consideration                                                                                                                                                                                                                                                                                                                                      |   |   | 1,262,000 |   |
|  Stock given at closing                                                                                                                                                                                                                                                                                                                                        |   |   | 500,000   |   |
|                                                                                                                                                                                                                                                                                                                                                                |   |   |      |   |
|  Total liabilities assumed and consideration given                                                                                                                                                                                                                                                                                                             |   | $      | 4,230,000 |   |

|             |   | Years ended December 31, |       |
|------------------|--------|--------------------------|------------|
|             |   | 2009                     |       |   | 2010 |   |
|             |   |                     |       |   |   |   |
| Revenues         |   | $                        | 3,886,692  |   |   | $ | 5,512,174 |   |
|             |   |                     |       |   |   |   |   |   |
| Net income(loss) |   | $                        | (1,881,925 | ) |   | $ | (944,653 | ) |
|             |   |                     |       |   |   |   |   |   |
| EPS              |   | $                        | (0.03      | ) |   | $ | (0.01 | ) |
|             |   |                     |       |   |   |   |   |   |

----

|   Three months ended March 31, 2010 |     |
|-----------------------------------------------|----------|
| BlastGard                                     |     |   | HighCom |   |   | Combined |   |
|                                          |     |   |   |   |   |   |   |
|                                          | 25,555   |   |   |   | 2,463,720 |   |   |   | 2,489,275 |   |
|                                          | 23,797   |   |   |   | 1,887,489 |   |   |   | 1,911,286 |   |
|                                          | 1,758    |   |   |   | 576,231 |   |   |   | 577,989 |   |
|                                          | -        |   |   |   | - |   |   |   | - |   |
|                                          | 122,303  |   |   |   | 897,647 |   |   |   | 1,019,950 |   |
|                                          | 100,712  |   |   |   | 34,249 |   |   |   | 134,961 |   |
|                                          | -        |   |   |   | 1,942 |   |   |   | 1,942 |   |
|                                          | (221,257 | ) |   |   | (357,606 | ) |   |   | (578,863 | ) |

| (10)  | Subsequent events |
|------------|-------------------|

----

| ITEM 2. | MANAGEMENT’S PLAN OF OPERATION |
|---------|--------------------------------------|

----

----

|   | · | Mitigated Bomb Receptacles and MBR Gard Cart; |
|--------|--------|-----------------------------------------------|

|   | · | Blast Mitigated Unit Load Device (“BMULD”) – LD3 Container; |
|--------|--------|-------------------------------------------------------------------------------|

|   | · | Insensitive Munitions (IM) Weapons Container; |
|--------|--------|-----------------------------------------------|

|   | · | Mitigated Trash Receptacle; and |
|--------|--------|---------------------------------|

|   | · | BlastGard Barrier System (“BBS”). |
|--------|--------|-----------------------------------------------|

----

| ·      | Type IIA body armor- minimal protection against smaller caliber handgun threats. |
|--------------------------------------|----------------------------------------------------------------------------------|

| ·      | Type II body armor – provides protection against many handgun threats, including many common smaller caliber pistols with standard pressure ammunition, and against many revolvers. |
|--------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·      | Type IIIA body armor- provides a higher level of protection and will generally protect against most pistol calibers including many law enforcement ammunitions, and against many higher powered revolvers. |
|--------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·      | Type III and IV body armor – provides protection against rifle rounds and are generally only used in tactical situations. |
|--------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|

| §   | Ballistic helmets |
|--------------------|-------------------|

| §   | Body armor and hard armor plates |
|--------------------|----------------------------------|

| §   | Riot helmets and shields |
|--------------------|--------------------------|

| §   | Mounted patrol, vehicular crew, and general duty helmets |
|--------------------|----------------------------------------------------------|

| §   | Uniforms, Apparel and Duty Gear |
|--------------------|---------------------------------|

| §   | Metal detectors:  walk-through and handheld |
|--------------------|-------------------------------------------------------|

| §   | Explosive ordinance disposal equipment:  bomb suits & gear, hook & line kits, detectors and search mirrors, under vehicle surveillance systems |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Range & training equipment:  robots and targets |
|--------------------|---------------------------------------------------------------|

| §   | Safety equipment:  gas masks, respirators, chemical detectors, medical equipment & supplies |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| §   | X-Ray screening systems:  luggage, parcel, freight and cargo scanners, mobile systems, transportation securities administration test objects |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Dry storage systems for ordnance and heavy equipment |
|--------------------|------------------------------------------------------|

| §   | Outdoor equipment:  gear, flashlights, GPS systems |
|--------------------|--------------------------------------------------------------|

| §   | Vision and optics:  binoculars, goggles, night vision equipment |
|--------------------|---------------------------------------------------------------------------|

| §   | Communication systems |
|--------------------|-----------------------|

| §   | Emergency lighting and warning systems |
|--------------------|----------------------------------------|

----

----

----

| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|---------|------------------------------------------------------------|

| ITEM 4. | CONTROLS AND PROCEDURES |
|---------|-------------------------|

----

| ITEM 1. | LEGAL PROCEEDINGS. |
|---------|--------------------|

| ITEM 1A. | RISK FACTORS |
|----------|--------------|

| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
|---------|--------------------------------------------------------------|

|   | (a) | From January 2011 to May 23, 2011, we had no sales or issuances of unregistered securities, except we made sales or issuances of unregistered securities listed in the table below: |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Date of Sale |   | Title ofSecurity               |   | Number Sold               |   | ConsiderationReceived andDescription ofUnderwriting orOther Discounts toMarket Price orConvertible Security,Afforded toPurchasers |   | Exemption fromRegistrationClaimed |   | If Option, Warrantor ConvertibleSecurity, terms ofexercise orconversion |
|--------------|--------|--------------------------------|--------|---------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|-------------------------------------------------------------------------|
|         |   |                           |   |                      |   |                                                                                                                              |   |                              |   |                                                                    |
| Jan 2011     |   | Notes                          |   | $387,025 principal amount |   | Accounts payable totaling $87,025 owed to directors and legal counsel were converted into demand notes.                           |   | Section 4(2)                      |   | Notes payable on demand; convertible at $.05 per share                  |
|         |   |                           |   |                      |   |                                                                                                                              |   |                              |   |                                                                    |
| Jan 2011     |   | Common stock (1)               |   | 866,667 shares            |   | $26,000; no commissions paid                                                                                                      |   |  Section 4(2                 |   |  Not applicable.                                                   |
|         |   |                           |   |                      |   |                                                                                                                              |   |                              |   |                                                                    |
| Jan 2011     |   | Common stock                   |   | 4,166,667 shares          |   |  $125,000; no commissions paid                                                                                               |   | Section 4(2) and/or Rule 506      |   |  Not applicable.                                                   |
|         |   |                           |   |                      |   |                                                                                                                              |   |                              |   |                                                                    |
| Jan 2011     |   | Common stock purchase warrants |   | 6,250,000 shares          |   | Services rendered; no commissions paid                                                                                            |   | Section 4(2                       |   | Five-year warrants exercisable at $.05 per share                        |
|         |   |                           |   |                      |   |                                                                                                                              |   |                              |   |                                                                    |
| Feb 2011     |   | Notes (2)                      |   | $160,000 in principal     |   | $160,000; no commissions paid                                                                                                     |   | Section 4(2)                      |   | Notes due August 31, 2011                                               |
|         |   |                           |   |                      |   |                                                                                                                              |   |                              |   |                                                                    |
| March 2011   |   | Notes (3)                      |   | $300,000 in principal     |   | $300,000; no commission paid                                                                                                      |   | Section 4(2)                      |   | Notes due March 3, 2012                                                 |
|         |   |                           |   |                      |   |                                                                                                                              |   |                              |   |                                                                    |
| April 2011   |   | Common stock(1)                |   | 800,000 shares            |   | $24,000; no commission paid                                                                                                       |   | Section 4(2)                      |   | Not applicable                                                          |
|         |   |                           |   |                      |   |                                                                                                                              |   |                              |   |                                                                    |
| May 2011     |   | Common stock (1)               |   | 3,333,333 shares          |   | Services rendered; no commission paid                                                                                             |   | Section 4(2)                      |   | Not applicable                                                          |
|         |   |                           |   |                      |   |                                                                                                                              |   |                              |   |                                                                    |
|         |   |                           |   |                      |   |                                                                                                                              |   |                              |   |                                                                    |
| May 2011     |   | Common stock                   |   | 1,000,000 shares          |   | Services rendered; no commission paid                                                                                             |   | Section 4(2)                      |   | Not applicable                                                          |
|         |   |                           |   |                      |   |                                                                                                                              |   |                              |   |                                                                    |
| Jan 2011     |   | Notes                          |   | $50,000 principal amount  |   | Accounts payable totaling $50,000 owed to a director.                                                                             |   | Section 4(2)                      |   | Notes payable on demand; convertible at $.05 per share                  |

----

| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES. |
|---------|----------------------------------|

| ITEM 4. | RESERVED. |
|---------|-----------|

| ITEM 5. | OTHER INFORMATION. |
|---------|--------------------|

| ITEM 6. | EXHIBITS |
|---------|----------|

| Exhibit Number |                           | Description                                                                                                       |
|----------------|--------------------------------|------------------------------------------------------------------------------------------------------------------------|
| 11.1           |       | Statement re: computation of earnings per share. See condensed consolidated statement of operations and notes thereto. |
| 31.1           |                           | Rule 13a-14(a) Certification – Chief Executive Officer and Chief Financial Officer *                        |
| 32.1           |                           | Section 1350 Certification – Chief Executive Officer and Chief Financial Officer *                          |

| * | Filed herewith. |
|---|-----------------|

----

|                     |                                                                                                                                                                                                                                                                                                                                                                                             | BLASTGARD INTERNATIONAL, INC. |                                                           |
|--------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|----------------------------------------------------------------|
|                     |                                                                                                                                                                                                                                                                                                                                                                                             |                          |                                                           |   |
|                     |                                                                                                                                                                                                                                                                                                                                                                                             |                          |                                                           |   |
| Dated: May 23, 2011 |                                                                  | By:                           | /s/ Michael J. Gordon                                          |   |
|                     |                                                                                                                                                                                                                                                                                                                                                                                             |                          | Michael J. Gordon, Chief Executive and Chief Financial Officer |   |