----

----

| þ                                                         |  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  |
|----------------------------------------------------------------|------------------------------------------------------------------------------------------------|
| For the quarterly period ended: June 30, 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  ̈ |       | Accelerated Filer  ̈               |
|--------------------------------|--------------------------------|----------------------------------------|
| Accelerated Filer  ̈       |                           |  Smaller Reporting Company þ |

----

----

|       |                                                                                                                                             | PAGE   |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|       | PART 1 – FINANCIAL INFORMATION                                                                                                             |   |
|       |                                                                                                                                             |   |
| Item 1.    | Financial Statements                                                                                                                             | 3      |
|       |                                                                                                                                             |   |
|       | Condensed Balance Sheets, June 30, 2011 (unaudited) and December 31, 2010                                                                        | 3      |
|       |                                                                                                                                             |   |
|       | Condensed Statements of Operations, for the three and six months ended June 30, 2011 and 2010 (unaudited)                                        | 4      |
|       |                                                                                                                                             |   |
|       | Condensed Statement of Changes in Stockholders’ Equity for the year ended December 31, 2010 and six months ended June 30, 2011 (unaudited) | 5      |
|       |                                                                                                                                             |   |
|       | Condensed Statements of Cash Flows for the six months ended June 30, 2011 and 2010 (unaudited)                                                   | 6      |
|       |                                                                                                                                             |   |
|       | Notes to condensed financial statements (unaudited)                                                                                              | 8      |
|       |                                                                                                                                             |   |
| Item 2.    | Management’s Plan of Operation                                                                                                             | 17     |
|       |                                                                                                                                             |   |
| Item 3.    | Quantitative and Qualitative Disclosures About Market Risk                                                                                       | 22     |
|       |                                                                                                                                             |   |
| Item 4.    | Controls and Procedures                                                                                                                          | 22     |
|       |                                                                                                                                             |   |
|       | PART I1 – OTHER INFORMATION                                                                                                                |   |
|       |                                                                                                                                             |   |
| Item 1.    | Legal Proceedings.                                                                                                                               | 23     |
|       |                                                                                                                                             |   |
| Item 1A.   | Risk Factors                                                                                                                                     | 23     |
|       |                                                                                                                                             |   |
| Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds.                                                                                     | 24     |
|       |                                                                                                                                             |   |
| Item 3.    | Defaults upon Senior Securities.                                                                                                                 | 25     |
|       |                                                                                                                                             |   |
| Item 4.    | Submission of Matters to a Vote of Security Holders.                                                                                             | 25     |
|       |                                                                                                                                             |   |
| Item 5.    | Other Information.                                                                                                                               | 25     |
|       |                                                                                                                                             |   |
| Item 6.    | Exhibits                                                                                                                                         | 26     |
|       |                                                                                                                                             |   |
| Signatures |                                                                                                                                             | 27     |

----

| Item 1. | Financial Statements |
|---------|----------------------|

|                                                                         |   |        |        |   |         |   |
|------------------------------------------------------------------------------|--------|-------------|-------------|--------|--------------|--------|
|                                                                         |   | June 30,    |        |   | December 31, |   |
|                                                                         |   | 2011        |        |   | 2010         |   |
|                                                                         |   | (unaudited) |        |   | (audited)    |   |
| Assets                                                                       |   |        |        |   |         |   |
| Current assets                                                               |   |        |        |   |         |   |
| Cash                                                                         |   | $           | 202,875     |   |         | $      | 46,382 |   |
| Accounts receivable                                                          |   |        | 3,136       |   |         |   | 342 |   |
| Inventory                                                                    |   |        | 300,686     |   |         |   | 51,290 |   |
| Deposits and other current assets                                            |   |        | 94,482      |   |         |   | - |   |
| Net related party loans receivable                                           |   |        | 671,045     |   |         |   | - |   |
| Total current assets                                                         |   |        | 1,272,224   |   |         |   | 98,014 |   |
|                                                                         |   |        |        |   |         |   |   |   |
| Property & equipment, net of accumulated                                 |   |        |        |   |         |   |   |   |
| depreciation of  ($236,533) and ($75,700), respectively            |   |        | 137,778     |   |         |   | 64 |   |
| Intangible property, net of accumulated                                      |   |        |        |   |         |   |   |   |
| amortization of  ($87,078) and ($4,642), respectively              |   |        | 576,908     |   |         |   | 24,344 |   |
| Deferred patent costs                                                        |   |        | 209,896     |   |         |   | 203,535 |   |
| Investments                                                                  |   |        | 112,832     |   |         |   | - |   |
| Goodwill                                                                     |   |        | 2,323,010   |   |         |   | - |   |
| Deposits                                                                     |   |        | 793         |   |         |   | 300 |   |
| Total Assets                                                                 |   | $           | 4,633,441   |   |         | $      | 326,257 |   |
|                                                                         |   |        |        |   |         |   |   |   |
| Liabilities and Stockholders' Equity                                         |   |        |        |   |         |   |   |   |
| Current liabilities                                                          |   |        |        |   |         |   |   |   |
| Accounts payable                                                             |   | $           | 1,468,677   |   |         | $      | 249,087 |   |
| Accrued expenses                                                             |   |        | 298,542     |   |         |   | 385,094 |   |
| Current portion notes payable                                                |   |        | 962,357     |   |         |   | 729,652 |   |
| Loans and notes payable, related parties                                     |   |        | -           |   |         |   | 14,421 |   |
| Total current liabilities                                                    |   |        | 2,729,576   |   |         |   | 1,378,254 |   |
|                                                                         |   |        |        |   |         |   |   |   |
| Contingent liability                                                         |   |        | 1,239,384   |   |         |   | - |   |
| Derivative liability                                                         |   |        | 1,743,109   |   |         |   | - |   |
| Total liabilities                                                            |   |        | 5,712,069   |   |         |   | 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; 83,886,036 and 50,586,142 shares               |   |        |        |   |         |   |   |   |
|    issued and outstanding, respectively                       |   |        | 83,886      |   |         |   | 56,086 |   |
| Additional paid-in capital                                                   |   |        | 14,375,582  |   |         |   | 12,560,249 |   |
| Minority interest                                                            |   |        | (44,888     | )      |         |   | - |   |
| Accumulated deficit                                                          |   |        | (15,493,208 | )      |         |   | (13,668,332 | ) |
| Total stockholders' deficit                                                  |   |        | (1,078,628  | )      |         |   | (1,051,997 | ) |
|                                                                         |   |        |        |   |         |   |   |   |
| Total Liabilities and Stockholders' Equity                                   |   | $           | 4,633,441   |   |         | $      | 326,257 |   |

----

|                                 |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
|--------------------------------------|--------|----------------------------|---------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|---------------------------------------------------------------------------------------------------|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|---------------------------------------------------------------------------------------------------|--------|
|                                 |   | For the Three Months Ended |                                                                                                          |   | For the Six Months Ended |   |
|                                 |   | June 30,                   |                                                                                                          |   | June 30,                 |   |
|                                 |   |                       | 2011                                                                                                          |   |                     |   | 2010                                                                                              |   |   |   | 2011                                                                                                                                        |   |   |   | 2010                                                                                              |   |
|                                 |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| Revenues                             |   | $                          |          3,052                                                   |   |                     | $      |        18,828                                                  |   |   | $      |             23,293                                                              |   |   | $      |        44,383                                                  |   |
| Direct costs                         |   |                       |          991                                                     |   |                     |   |        10,622                                                  |   |   |   |             22131                                                               |   |   |   |         34,419                                            |   |
|                                 |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| Gross Profit                         |   |                       | 2,061                                                                                                         |   |                     |   |           8,206                                 |   |   |   |            1,162                                                                     |   |   |   |           9,964                                 |   |
|                                 |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| Operating expenses:                  |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| General and administrative           |   |                       | 204,410                                                                                                       |   |                     |   |         81,750                                            |   |   |   | 777,471                                                                                                                                     |   |   |   |       203,482                                                       |   |
| Research and Development             |   |                       | 1,191                                                                                                         |   |                     |   |              888                 |   |   |   | 1,191                                                                                                                                       |   |   |   |              888                 |   |
| Amortization and depreciation        |   |                       |         93,929                                                        |   |                     |   |              538                 |   |   |   |            137,691                                                                   |   |   |   |           1,109                                 |   |
| Total operating expenses             |   |                       | 299,530                                                                                                       |   |                     |   |          83,176                                      |   |   |   | 916,353                                                                                                                                     |   |   |   |        205,479                                                 |   |
|                                 |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| Operating loss                       |   |                       |     (297,469)                                                                             |   |                     |   |       (74,970)                                                      |   |   |   |          (915,191)                                                                             |   |   |   |     (195,515)                                                                 |   |
|                                 |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| Non-operating activity               |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| Other income (expense)               |   |                       |          37,718                                                  |   |                     |   |               742           |   |   |   |                2,287                                             |   |   |   |            7,089                           |   |
| Gains (losses) on settlement of debt |   |                       |                 -             |   |                     |   | -                                                                                                 |   |   |   |            248,754                                                                   |   |   |   |                 - |   |
| Gain (loss) on derivative liability  |   |                       |       (66,203)                                                                  |   |                     |   |                                                                                              |   |   |   |         (240,344)                                                                                   |   |   |   |                 - |   |
| Gain (loss) on settlement of assets  |   |                       |       (70,621)                                                                  |   |                     |   |                                                                                              |   |   |   |          (70,621)                                                                              |   |   |   |                                                                                              |   |
| Interest expenses                    |   |                       |     (772,585)                                                                             |   |                     |   |       (18,639)                                                      |   |   |   |          (894,649)                                                                             |   |   |   |       (31,307)                                                      |   |
| Interest income                      |   |                       |                   1 |   |                     |   |                                                                                              |   |   |   |                        1 |   |   |   |                                                                                              |   |
| Total other income (expense)         |   |                       |     (871,690)                                                                             |   |                     |   |       (17,897)                                                      |   |   |   |          (954,572)                                                                             |   |   |   |       (24,218)                                                      |   |
|                                 |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| Loss before income taxes             |   |                       |  (1,169,159)                                                                                             |   |                     |   |       (92,867)                                                      |   |   |   |       (1,869,763)                                                                                             |   |   |   |     (219,733)                                                                 |   |
|                                 |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| Minority interest loss               |   |                       |        (6,014)                                                             |   |                     |   | -                                                                                                 |   |   |   |             (9,581)                                                             |   |   |   | -                                                                                                 |   |
| Provision for income taxes           |   |                       |                 -             |   |                     |   |                 - |   |   |   |                      -             |   |   |   |                 - |   |
|                                 |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| Net loss                             |   | $                          | (1,163,145)                                                                                                   |   |                     | $      |      (92,867)                                                            |   |   | $      |      (1,860,182)                                                                                                   |   |   | $      |    (219,733)                                                                       |   |
|                                 |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| Earnings (loss) per share:           |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| Basic and dilutive                   |   | $                          |           (0.02)                                            |   |                     | $      | (0.00)          (0.00)                          |   |   | $      |                (0.03)                                            |   |   | $      |           (0.00)                                |   |
|                                 |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| Weighted average shares outstanding  |   |                       |                                                                                                          |   |                     |   |                                                                                              |   |   |   |                                                                                                                                        |   |   |   |                                                                                              |   |
| Basic and dilutive                   |   |                       | 76,448,911                                                                                                    |   |                     |   | 50,586,112                                                                                        |   |   |   |       69,525,071                                                                                              |   |   |   |  50,475,031                                                                                  |   |

----

|                                |   | Common |       |   |   |                       |   |              |       |                |   |
|-------------------------------------|--------|--------|------------|--------|--------|----------------------------|--------|-------------------|------------|---------------------|--------|
|                                |   | shares |       | Par    |   | Additional Paid in Capital |   | Minority Interest |       | Accumulated Deficit |   | Stock-Holders' 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                       |   |   | 9,166,667  |   |   | 9,167                      |   |              | 265,833    |                |   |   |   |   |   |   |   | 275,000 |   |
| Stock issued for acquisition of     |   |   |       |   |   |                       |   |              |       |                |   |   |   |   |   |   |   |   |   |
| HighCom Security                    |   |   | 9,820,666  |   |   | 9,821                      |   |              | 481,179    |                |   |   |   |   |   |   |   | 491,000 |   |
| Stock issued for conversion of debt |   |   | 7,812,561  |   |   | 7,813                      |   |              | 226,564    |                |   |   |   |   |   |   |   | 234,377 |   |
| Stock issued for compensation       |   |   | 1,000,000  |   |   | 1,000                      |   |              | 49,000     |                |   |   |   |   |   |   |   | 50,000 |   |
| Options issued for compensation     |   |   |       |   |   |                       |   |              | 327,945    |                |   |   |   |   |   |   |   | 327,945 |   |
| Record discount on new loans        |   |   |       |   |   |                       |   |              | 464,810    |                |   |   |   |   |   |   |   | 464,810 |   |
| Reclassify minority interest        |   |   |       |   |   |                       |   |              |       |                |   | (35,307 | ) |   | 35,307 |   |   | — |   |
| Net loss                            |   |   |       |   |   |                       |   |              |       |                |   | (9,581 | ) |   | (1,860,182 | ) |   | (1,869,763 | ) |
|                                |   |   |       |   |   |                       |   |              |       |                |   |   |   |   |   |   |   |   |   |
| Balance at June 30, 2011            |   |   | 83,886,036 |   | $      | 83,886                     |   |              | 14,375,581 |                |   | (44,888 | ) |   | (15,493,207 | ) | $ | (1,078,628 | ) |

----

|                                             |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
|--------------------------------------------------|--------|--------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|--------|
|                                             |   | For the Six Months Ended                                                             |                                                                                                                      |
|                                             |   | June 30,                                                                             |                                                                                                                      |
|                                             |   |                                                                                 | 2011                                                                                                                      |   |   |                                                                                                            | 2010                                                                                                                      |   |
|                                             |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
| Cash Flows from Operating Activities:            |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
| Net (loss) income                                |   | $                                                                                    |       (1,860,182)                                                                           |   |   | $                                                                                                               |          (219,733)                                                           |   |
| Adjustment to reconcile Net Income to net        |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
| cash provided by operations:                     |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
| Minority interest loss                           |   |                                                                                 |              (9,681)                                     |   |   |                                                                                                            |                                                                                                                      |   |
| Depreciation and amortization                    |   |                                                                                 |            137,691                                                 |   |   |                                                                                                            |                                                                                                                      |   |
| Amortization of debt discount                    |   |                                                                                 |            845,945                                                 |   |   |                                                                                                            |                                                                                                                      |   |
| Other stock comp                                 |   |                                                                                 |            377,944                                                 |   |   |                                                                                                            |                                                                                                                      |   |
| Gain on sattlement of debt                       |   |                                                                                 |          (248,754)                                                           |   |   |                                                                                                            |                                                                                                                      |   |
| Loss on disposal of equipment                    |   |                                                                                 |              70,621                                      |   |   |                                                                                                            |                                                                                                                      |   |
| Loss on derivative                               |   |                                                                                 |            240,344                                                 |   |   |                                                                                                            |                                                                                                                      |   |
| Changes in assets and liabilities:               |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
| Accounts receivable                              |   |                                                                                 |            114,116                                                 |   |   |                                                                                                            |                     - |   |
| Note receivable                                  |   |                                                                                 |            (46,351)                                                |   |   |                                                                                                            |                                                                                                                      |   |
| Inventory                                        |   |                                                                                 |            (30,163)                                                |   |   |                                                                                                            |                   824           |   |
| Other operating assets                           |   |                                                                                 |              (6,738)                                     |   |   |                                                                                                            |                1,773                           |   |
| Accounts payable and accruals                    |   |                                                                                 |          (230,669)                                                           |   |   |                                                                                                            |            199,686                                                 |   |
| Related party loans                              |   |                                                                                 |                     - |   |   |                                                                                                            |              (8,775)                                     |   |
| Other liabilities                                |   |                                                                                 |                     - |   |   |                                                                                                            |                     - |   |
| Net Cash (Used) Provided by Operating Activities |   |          (645,877)                      |                                                                                                                      |   |   |            (26,225)                                      |                                                                                                                      |
|                                             |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
| Cash Flows from Investing Activities:            |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
| Purchase of property and equipment               |   |                                                                                 |              (5,686)                                     |   |   |                                                                                                            |                     - |   |
| Payment of deferred costs                        |   |                                                                                 |            (61,361)                                                |   |   |                                                                                                            |            (26,594)                                                |   |
| Proceeds from sales of assets and intangibles    |   |              12,355 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |
| Cash purchased                                   |   |                                                                                 |                   843           |   |   |                                                                                                            |                     - |   |
| Net Cash (Used) by Operating Activities          |   |                                                                                 |            (53,849)                                                |   |   |                                                                                                            |            (26,594)                                                |   |
|                                             |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
| Cash Flows from Financing Activities:            |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
| Proceeds from issuance of stock                  |   |                                                                                 |            275,000                                                 |   |   |                                                                                                            |                     - |   |
| Proceeds from issuance of note payable           |   |                                                                                 |            760,000                                                 |   |   |                                                                                                            |                     - |   |
| Net proceeds from line of credit                 |   |                                                                                 |                     - |   |   |                                                                                                            |                   572           |   |
| Repayments of notes payable                      |   |                                                                                 |          (178,781)                                                           |   |   |                                                                                                            |                     - |   |
| Net Cash (Used) Provided by Operating Activities |   |            856,219            |                                                                                                                      |   |   |                   572 |                                                                                                                      |
|                                             |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
|                                             |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
| Net increase/decrease in Cash                    |   |                                                                                 |            156,493                                                 |   |   |                                                                                                            |            (52,247)                                                |   |
|                                             |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
| Cash at beginning of period                      |   |                                                                                 |              46,382                                      |   |   |                                                                                                            |                1,739                           |   |
|                                             |   |                                                                                 |                                                                                                                      |   |   |                                                                                                            |                                                                                                                      |   |
| Cash at end of period                            |   | $                                                                                    |            202,875                                                 |   |   | $                                                                                                               |            (50,508)                                                |   |

----

| Supplemental cash flow information:                                                                                                                                                                   |   |   |       |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Interest paid                                                                                                                                                                                         |   | $      | 56,177     |   |   | $      | 6,974 |   |
| Taxes paid                                                                                                                                                                                            |   | $      | -          |   |   | $      | - |   |
|                                                                                                                                                                                                  |   |   |       |   |   |   |   |   |
|                                                                                                                                                                                                  |   |   |       |   |   |   |   |   |
| Supplemental Schedule of Noncash Investing and Financing Activities                                                                                                                                   |   |   |       |   |   |
| Issuance of common stock in exchange of debt                                                                                                                                                          |   | $      | 203,609    |   |   | $      | - |   |
| Issuance of common stock in exchange for payables                                                                                                                                                     |   | $      | 769,829    |   |   | $      | - |   |
| Issuance of common stock for compensation                                                                                                                                                             |   | $      | 50,000     |   |   | $      | - |   |
|                                                                                                                                                                                                  |   |   |       |   |   |   |   |   |
| On March 4, 2011, the Company issued 9,820,666 shares of common stock, $196,400 in notes and $1,262,000 contingent liabilities in exchange for the stock of HighCom Security, Inc. valued as follows: |   |
|                                                                                                                                                                                                  |   |   |       |   |   |   |   |   |
| Cash                                                                                                                                                                                                  |   | $      | 834        |   |   |   |   |   |
| Accounts receivable                                                                                                                                                                                   |   |   | 116,910    |   |   |   |   |   |
| Performance bond                                                                                                                                                                                      |   |   | 50,500     |   |   |   |   |   |
| Inventory                                                                                                                                                                                             |   |   | 119,233    |   |   |   |   |   |
| Investments                                                                                                                                                                                           |   |   | 121,287    |   |   |   |   |   |
| Property and equipment - net                                                                                                                                                                          |   |   | 206,159    |   |   |   |   |   |
| Related party loans                                                                                                                                                                                   |   |   | 224,696    |   |   |   |   |   |
| Other assets                                                                                                                                                                                          |   |   | 37,738     |   |   |   |   |   |
| Accounts payable and accrued expenses                                                                                                                                                                 |   |   | (1,668,695 | )      |   |   |   |   |
| Customer deposits                                                                                                                                                                                     |   |   | (19,884    | )      |   |   |   |   |
| Long term debt                                                                                                                                                                                        |   |   | (665,607   | )      |   |   |   |   |
| Deficit equity acquired                                                                                                                                                                               |   |   | 1,476,829  |   |   |   |   |   |
|                                                                                                                                                                                                  |   |   | -          |   |   |   |   |   |

----

----

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

|                                                                    |   | (Unaudited) |     |   |              |   |
|-------------------------------------------------------------------------|--------|-------------|----------|--------|-------------------|--------|
|                                                                    |   | 30-Jun-11   |     |   | 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 |   |
|                                                                    |   |        |     |   |              |   |   |   |
| $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                     |   |        | 108,338  |   |              |   | 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 |   |
|                                                                    |   |        |     |   |              |   |   |   |
| $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 |   |
|                                                                    |   |        | 125,663  |   |              |   | 279,292 |   |
| Less: current maturities                                                |   |        | (125,663 | )      |              |   | (279,292 | ) |
|                                                                    |   | $           | -        |   |              | $      | - |   |

----

|                                                           |   | (Unaudited)   |     |   |              |   |
|----------------------------------------------------------------|--------|---------------|----------|--------|-------------------|--------|
|                                                           |   | June 30, 2011 |     |   | December 31, 2010 |   |
| $160,000 convertible promissory note issued                    |   |          |     |   |              |   |
|    February 3, 2011, due on August 3, 2011,     |   |          |     |   |              |   |
| 10% annual interest rate, net of unamortized                   |   |          |     |   |              |   |
|    Discount of $30,055                          |   | $             | 79,945   |   |              | $      | - |   |
|                                                           |   |          |     |   |              |   |   |   |
| $300,000 convertible promissory note issued                    |   |          |     |   |              |   |   |   |
|    March 3, 2011, due on March 3, 2012,         |   |          |     |   |              |   |   |   |
| 10% interest, net of unamortized                               |   |          |     |   |              |   |   |   |
|    discount of $80,984                          |   |          | 219,016  |   |              |   | - |   |
|                                                           |   |          |     |   |              |   |   |   |
| $300,000 convertible promissory note issued                    |   |          |     |   |              |   |   |   |
|   June 16, 2011, due on June 17, 2012,               |   |          |     |   |              |   |   |   |
|    10% annual interest rate, net of unamortized |   |          |     |   |              |   |   |   |
|    Discount of $28,934                          |   |          | 271,066  |   |              |   | - |   |
|                                                           |   |          |     |   |              |   |   |   |
| $210,000 convertible promissory note issued                    |   |          |     |   |              |   |   |   |
|    January 31, 2011, due on September 30, 2011, |   |          |     |   |              |   |   |   |
|    10% annual interest rate, net of unamortized |   |          |     |   |              |   |   |   |
|    Discount of $24,331                          |   |          | 185,669  |   |              |   | - |   |
|                                                           |   |          |     |   |              |   |   |   |
| $160,000 convertible promissory note issued                    |   |          |     |   |              |   |   |   |
|    January 31, 2011, due on 1/31/2012,          |   |          |     |   |              |   |   |   |
|    10% annual interest rate, net of unamortized |   |          |     |   |              |   |   |   |
|    Discount of $37,699                          |   |          | 122,301  |   |              |   | - |   |
|                                                           |   |          |     |   |              |   |   |   |
| $67,025 convertible promissory note issued                     |   |          |     |   |              |   |   |   |
|    January 31, 2011, due on September 30, 2011, |   |          |     |   |              |   |   |   |
|    10% annual interest rate, net of unamortized |   |          |     |   |              |   |   |   |
|    Discount of $10,192                          |   |          | 56,833   |   |              |   | - |   |
|                                                           |   |          | 934,830  |   |              |   | - |   |
| Less: current maturities                                       |   |          | (934,830 | )      |              |   | - |   |
|                                                           |   | $             | -        |   |              | $      | - |   |
|                                                           |   |          |     |   |              |   |   |   |

----

|                                                           |   | (Unaudited)   |     |   |              |   |
|----------------------------------------------------------------|--------|---------------|----------|--------|-------------------|--------|
|                                                           |   | June 30, 2011 |     |   | December 31, 2010 |   |
|                                                           |   |          |     |   |              |   |
| $100,000 line of credit from Regions Bank,                     |   |          |     |   |              | -      |   |
|  interest only at 8% annually, due on demand              |   | $             | 92,950   |   |              | $      | 95,380 |   |
|                                                           |   |          |     |   |              |   |   |   |
| $450,000 line of credit from Fifth Third Bank,                 |   |          |     |   |              |   |   |   |
| interest only at x% annually, due on demand                    |   |          | 434,011  |   |              |   | - |   |
|                                                           |   |          |     |   |              |   |   |   |
| $150,000 revolving credit card facility with Wells Fargo Bank, |   |          |     |   |              |
| interest only at x% annually, due on demand                    |   |          | 148,376  |   |              |   | - |   |
|                                                           |   |          |     |   |              |   |   |   |
| $50,000 revolving credit card facility with California Bank    |   |          |     |   |              |
| & Trust (non-assumable), interest only, due                |   |          |     |   |              |   |   |   |
| on demand                                                      |   |          | 49,750   |   |              |   | - |   |
|                                                           |   |          |     |   |              |   |   |   |
| Three credit card accounts with major finanical institutions   |   |          |     |   |              |
| varying monthly minimum payments including interest            |   |          |     |   |              |   |   |   |
| due on demand                                                  |   |          | 76,819   |   |              |   | - |   |
|                                                           |   |          | 801,906  |   |              |   | 95,380 |   |
| Less: current maturities                                       |   |          | (801,906 | )      |              |   | (95,380 | ) |
|                                                           |   | $             | -        |   |              | $      | - |   |
|                                                           |   |          |     |   |              |   |   |   |

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

|                                                                      |   | (Unaudited)   |   |   |              |   |
|---------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                                      |   | June 30, 2011 |   |   | December 31, 2010 |   |
| $600,000 subordinated, convertible promissory note                        |   |          |   |   |              |   |
|      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 |
|--------|-----------------|

|   | On January 24, 2011, the Company sold 4,166,667 shares to an unrelated party for $125,000. |
|--------|--------------------------------------------------------------------------------------------|

|   | Stock Compensation |
|--------|--------------------|

----

|                                            |   | Number of Shares |      | Weighted Average Exercise Price |   | Weighted Average Remaining Contractual Life |   | Aggregate Intrinsic Value |      |
|-------------------------------------------------|--------|------------------|-----------|---------------------------------|--------|---------------------------------------------|--------|---------------------------|-----------|
| Options Outstanding - January 1, 2011           |   |             | 2,850,000 |                            | $      | 0.10                                        |   |                      | 1.2 years |   |   | — |   |
| Granted                                         |   |             | 6,550,000 |                            | $      | 0.03                                        |   |                      |      |   |   |   |   |
| Exercised                                       |   |             | (80,000-  | )                               |   | —                                     |   |                      |      |   |   |   |   |
| Forfeited/expired/cancelled                     |   |             | —   |                            |   |                                        |   |                      |      |   |   |   |   |
|                                            |   |             |      |                            |   |                                        |   |                      |      |   |   |   |   |
|                                            |   |             |      |                            |   |                                        |   |                      |      |   |   |   |   |
| Options Outstanding – December 31, 2010   |   |             | 9,320,000 |                            | $      | 0.05                                        |   |                      | 3.3 years |   | $ | 321,500 |   |
|                                            |   |             |      |                            |   |                                        |   |                      |      |   |   |   |   |
|                                            |   |             |      |                            |   |                                        |   |                      |      |   |   |   |   |
| Outstanding Exercisable – January 1, 2011 |   |             | 2,850,000 |                            | $      | 0.10                                        |   |                      | 1.2 years |   | $ |   |   |
| Outstanding Exercisable – June 30, 2011   |   |             | 9,320,000 |                            | $      | 0.05                                        |   |                      | 3.3 years |   | $ | 321,500 |   |

----

|            |   | June 30,    |    |   | December 31, |   |
|-----------------|--------|-------------|---------|--------|--------------|--------|
|            |   | 2011        |    |   | 2010         |   |
|            |   | (unaudited) |    |   |         |   |
| Raw materials   |   | $           | 251,393 |   |         | $      | 17,370 |   |
| Work in process |   |        | -       |   |         |   | - |   |
| Finished Goods  |   |        | 49,293  |   |         |   | 33,920 |   |
|            |   |        |    |   |         |   |   |   |
| TOTAL           |   | $           | 300,686 |   |         | $      | 51,290 |   |

|                           |   |          |    |   |              |   |
|--------------------------------|--------|---------------|---------|--------|-------------------|--------|
|                           |   | June 30, 2011 |    |   | December 31, 2010 |   |
| :                              |   |          |    |   |              |   |
| Customer list                  |   | $             | 500,000 |   |              | $      | - |   |
| Product designs                |   |          | 55,000  |   |              |   | - |   |
| Websites                       |   |          | 80,000  |   |              |   | - |   |
| Patents                        |   |          | 28,651  |   |              |   | 28,651 |   |
| Trademarks                     |   |          | 335     |   |              |   | 335 |   |
|                           |   |          | 663,986 |   |              |   | 28,689 |   |
| Accumulated amortization       |   |          | 87,078  |   |              |   | 4,642 |   |
|       |   | $             | 576,908 |   |              | $      | 24,344 |   |
|                           |   |          |    |   |              |   |   |   |
| Future amortization:           |   |          |    |   |              |   |   |   |
| 2011                           |   | $             | 99,466  |   |              |   |   |   |
| 2012                           |   |          | 198,932 |   |              |   |   |   |
| 2013                           |   |          | 198,932 |   |              |   |   |   |
| 2014                           |   |          | 21,711  |   |              |   |   |   |
| 2015 and thereafter            |   |          | 57,866  |   |              |   |   |   |
|                           |   | $             | 576,908 |   |              |   |   |   |

----

| Cash                                                    |   | $      | 834       |   |
|---------------------------------------------------------|--------|--------|-----------|--------|
|  Accounts receivable                               |   |   | 116,910   |   |
|  Contract performance bonds                        |   |   | 50,500    |   |
|  Inventory                                         |   |   | 219,233   |   |
| Related party loans                                     |   |   | 574,810.  |   |
|  Fixed assets                                      |   |   | 206,159   |   |
|  Investments                                       |   |   | 121,287   |   |
|  Deposits                                          |   |   | 37,738    |   |
|  Customer lists                                    |   |   | 500,000   |   |
|  Website                                           |   |   | 80,000    |   |
|  Goodwill                                          |   |   | 2,323,010 |   |
|  Total assets                                      |   | $      | 4,230,481 |   |
|                                                    |   |   |      |   |
|  Accounts payable                                  |   | $      | 1,265,693 |   |
|  Accrued expenses                                  |   |   | 403,000   |   |
|  Notes and loans payable                           |   |   | 665,607   |   |
|  Acquisition debt                                  |   |   | 196,400   |   |
|  Contingent consideration                          |   |   | 1,262,000 |   |
|  Stock given at closing                            |   |   | 491,000   |   |
|  Total liabilities assumed and consideration given |   | $      | 4,230,481 |   |

|             |   | 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 June 30, 2010 |      |   | Six months ended June 30, 2010 |   |
|               |   |                             |      |   |                           |   |
| Revenues           |   |                             | 2,436,237 |   |                           |   | 4,925,513 |   |
| Operating expenses |   |                             | 475,829   |   |                           |   | 1,495,779 |   |
| Net income (loss)  |   |                             | 213,103   |   |                           |   | (365,760 | ) |

----

| 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 poared 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 August 5, 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 are converted into demand notes; no commissions paid        |   | Section 4(2)                                                                                 |   | Notes payable on demand; convertible at $.05 per share                                                                                     |
|                                                               |   |                                                                                     |   |                                                                              |   |                                                                                                                              |   |                                                                                         |   |                                                                                                                                       |
| Jan 2011   Jan 2011    Jan 2011 |   | Common stock (1)  Common stock   Common stock purchase warrants |   | 866,667 shares  4,166,667shares   6,250,000 shares  |   | $26,000; no commissions paid  $125,000; nocommissions paid Services rendered; no commissions paid             |   |  Section 4(2   Section 4(2) and/or Rule 506   Section 4(2 |   |  Not applicable.    Not applicable.    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; no commissions paid                                                        |   | Section 4(2)                                                                                 |   | Notes payable on demand; convertible at $.05 per share                                                                                |
|                                                               |   |                                                                                     |   |                                                                              |   |                                                                                                                              |   |                                                                                         |   |                                                                                                                                       |
| June 2011                                                          |   | Notes (4)                                                                                |   | $300,000 in principal                                                             |   | $300,000; nocommissionspaid                                                                                                       |   | Section 4(2)                                                                                 |   | Notes due June 2012                                                                                                                        |
|                                                               |   |                                                                                     |   |                                                                              |   |                                                                                                                              |   |                                                                                         |   |                                                                                                                                       |
| August 2011                                                        |   | Common Stock                                                                             |   | 500,000 shares                                                                    |   | Accounts payable totaling $50,000 for acquisition of Acer product line.                                                           |   | Section 4(2)                                                                                 |   | Not applicable                                                                                                                             |

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| Item 3. | Defaults Upon Senior Securities. |
|---------|----------------------------------|

| Item 4. | Reserved. |
|---------|-----------|

| Item 5. | Other Information. |
|---------|--------------------|

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| Item 6. | Exhibits |
|---------|----------|

|  Exhibit Number |                           |  Description                                                                                                                                                                                     |
|----------------------|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |                           |                                                                                                                                                                                                       |
| 3.1                  |                           | The Company’s Articles of Incorporation, as amended and currently in effect. (Incorporated by reference to Exhibit 3.7 to the Company’s quarterly report on Form 10-QSB dated March 31, 2004). |
| 3.2                  |                           | The Company’s Bylaws, as amended and currently in effect. (Incorporated by reference to Exhibit 3.8 to the Company’s quarterly report on Form 10-QSB dated March 31, 2004).                    |
| 3.3                  |                           | Amendments to Articles of Incorporation, as amended and currently in effect. (Incorporated by reference to Form 8-K date of earliest event July 29, 2011, filed with the SEC on August 2, 2011).           |
| 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. |
|---|-----------------|

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|                   | BLASTGARD INTERNATIONAL, INC. |                                                   |
|------------------------|-------------------------------|--------------------------------------------------------|
|                   |                          |                                                   |   |
| Dated: August 15, 2011 | By:                           | /s/ Michael J. Gordon                             |   |
|                   |                          | Michael J. Gordon, Chief Executive and Chief Financial |   |
|                   |                          | Officer                                                |   |
|                   |                          |                                                   |   |