<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[Mark One]

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 for the quarterly period ended: December 31, 2002


[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 for the transition period from         to
                                                            --------    -------
                        Commission file number :000-24447

                           MARKLAND TECHNOLOGIES, INC.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

                          49 QUINNIPIAC AVENUE, UNIT H
                              NORTH HAVEN, CT 06473
                    ----------------------------------------
                    (Address of principal executive offices)

                                 (203) 946-3058
                         -------------------------------
                         (Registrant's telephone number)



       Florida                             [4813]                  84-1331134
(State of Incorporation)        Primary Standard Industrial       IRS Employer
                                (Classification Code Number       I.D. Number)

         Securities registered under Section 12(b) of the Exchange Act:
                                      None

         Securities registered under Section 12(g) of the Exchange Act:
                    Common Stock, par value $0.0001 per share
                                (Title of class)


      Indicate by check mark whether the Registrant:(1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [ ]

      The number of shares outstanding of each of the issuer's classes of equity
as of December 31, 2002, 307,109,179 shares of Common Stock, par value $0.0001
per share; and, 5,225 shares of Preferred Convertible Stock, $.0001 par value.

<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

                              INDEX TO FORM 10-QSB

                               DECEMBER 31, 2002


                                                                       Page Nos.
                                                                        --------
PART I - FINANCIAL INFORMATION:

   ITEM 1 - FINANCIAL STATEMENTS

   CONDENSED CONSOLIDATED BALANCE SHEETS                                   1
     At December 31, 2002 (Unaudited) and June 30, 2002

   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)             2
     For the Six Months Ended December 31, 2002 and 2001

   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)             3
     For the Three Months Ended December 31, 2002 and 2001

   CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS'
     DEFICIENCY (Unaudited)                                                4
      For the Six Months Ended December 31, 2002

   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)           5 - 6
     For the Six Months Ended December 31, 2002 and 2001

   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     (UNAUDITED)                                                        7 - 21

   ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
              OPERATIONS                                               22 - 24

   ITEM 3 - CONTROLS AND PROCEDURES                                      25


PART II - OTHER INFORMATION

   ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEDURES                  25

   ITEM 5 - OTHER INFORMATION                                            25

   ITEM 6 - EXHIBITS AND REPORTS ON 8-K                                25 - 26

   SIGNATURES                                                            27

   CERTIFICATIONS                                                      28 - 29

<PAGE>

<TABLE>
                              MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

                                  CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>

                                                 ASSETS
                                                 ------

                                                                         At December 31,     At June 30,
                                                                              2002              2002
                                                                         ---------------    ------------
                                                                           (Unaudited)
<S>                                                                        <C>              <C>
  CURRENT ASSETS:
    Cash                                                                   $   304,631      $     4,911
    Prepaid expenses and other current assets                                       --           21,750
                                                                           ------------     ------------
        TOTAL CURRENT ASSETS                                                   304,631           26,661

  TECHNOLOGY RIGHTS (Acoustic Core)                                          1,300,000               --
                                                                           ------------     ------------
        TOTAL ASSETS                                                       $ 1,604,631      $    26,661
                                                                           ============     ============

                                LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                                ----------------------------------------

CURRENT LIABILITIES:
  Accounts payable                                                         $   115,217      $    95,348
  Accrued expenses and other current liabilities                                47,739               --
  Note payable                                                                  11,500        1,367,027
  Secured line of credit                                                            --        4,171,437
  Liabilities from discontinued operations                                   1,298,713        1,298,713
                                                                           ------------     ------------
      TOTAL CURRENT LIABILITIES                                              1,473,169        6,932,525

SECURED CONVERTIBLE PROMISSORY NOTE, less debt
  discount of $125,000 at December 31, 2002                                    375,000               --
                                                                           ------------     ------------
      TOTAL LIABILITIES                                                      1,848,169        6,932,525
                                                                           ------------     ------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY:
  Series B convertible preferred stock -
    $.0001 par value; 10 authorized and -0-
    issued and outstanding at December 31,
    2002 and June 30, 2002, respectively                                            --               --
  Series C 5% cumulative convertible
    preferred stock - $.0001 par value; 8,000 and -0- authorized
    at December 31, 2002 and June 30, 2002, respectively; 5,225 and
    -0- issued and outstanding at December 31, 2002 and June 30, 2002,
    respectively                                                                     1               --
  Common stock - $.0001 par value;
    500,000,000 authorized at December 31, 2002 and June 30, 2002,
    respectively; 307,109,179 and 299,909,179 shares issued and
    outstanding at December 31, 2002 and June 30, 2002, respectively            30,710           29,990
  Additional paid-in capital                                                 6,977,290               --
  Accumulated deficit                                                       (7,251,539)      (6,935,854)
                                                                           ------------     ------------
      TOTAL STOCKHOLDERS' DEFICIENCY                                          (243,538)      (6,905,864)
                                                                           ------------     ------------
      TOTAL LIABILITIES AND STOCKHOLDERS'
        DEFICIENCY                                                         $ 1,604,631      $    26,661
                                                                           ============     ============

                 See accompanying notes to condensed consolidated financial statements.

                                                   1
</TABLE>
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

               FOR THE SIX MONTHS ENDED DECEMBER 31, 2002 AND 2001
                                   (UNAUDITED)


REVENUES                                       $          --      $          --

COST OF SALES                                             --                 --
                                               --------------     --------------
GROSS PROFIT                                              --                 --
                                               --------------     --------------
OPERATING EXPENSES:
  Selling, general and administrative                171,552                 --
  Depreciation and amortization                           --                 --
                                               --------------     --------------
    TOTAL OPERATING EXPENSES                         171,552                 --
                                               --------------     --------------
OPERATING LOSS FROM CONTINUING OPERATIONS           (171,552)                --
                                               --------------     --------------
OTHER EXPENSES, NET:
  Interest expense                                   169,786            250,433
  Other expense (income)                             (25,653)            (4,249)
                                               --------------     --------------
    TOTAL OTHER EXPENSES, NET                        144,133            246,184
                                               --------------     --------------
LOSS FROM CONTINUING OPERATIONS                     (315,685)          (246,184)

LOSS FROM DISCONTINUED OPERATIONS                         --         (1,219,408)
                                               --------------     --------------
    NET LOSS                                        (315,685)        (1,465,592)

DEEMED DIVIDEND TO PREFERRED STOCKHOLDERS             48,380                 --

PREFERRED STOCK DIVIDEND                              15,989                 --
                                               --------------     --------------
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS     $    (380,054)     $  (1,465,592)
                                               ==============     ==============

BASIC AND DILUTED LOSS PER COMMON SHARE:

   Loss from continuing operations             $       (0.00)     $       (0.00)
   Loss from discontinued operations                   (0.00)             (0.00)
                                               --------------     --------------
     Net loss                                  $       (0.00)     $       (0.00)
                                               ==============     ==============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING                                    299,991,400        299,909,713
                                               ==============     ==============

     See accompanying notes to condensed consolidated financial statements.

                                       2
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

              FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
                                   (UNAUDITED)


REVENUES                                       $          --      $          --

COST OF SALES                                             --                 --
                                               --------------     --------------
GROSS PROFIT                                              --                 --
                                               --------------     --------------
OPERATING EXPENSES:
  Selling, general and administrative                125,156                 --
  Depreciation and amortization                           --                 --
                                               --------------     --------------
    TOTAL OPERATING EXPENSES                         125,156                 --
                                               --------------     --------------
OPERATING LOSS FROM CONTINUING OPERATIONS           (125,156)                --
                                               --------------     --------------
OTHER EXPENSES, NET:
  Interest expense                                    63,354            150,483
  Other expense (income)                              (8,453)                --
                                               --------------     --------------
    TOTAL OTHER EXPENSES, NET                         54,901            150,483
                                               --------------     --------------
LOSS FROM CONTINUING OPERATIONS                     (180,057)          (150,843)

LOSS FROM DISCONTINUED OPERATIONS                         --           (655,712)
                                               --------------     --------------
    NET LOSS                                        (180,057)          (806,195)

DEEMED DIVIDEND TO PREFERRED STOCKHOLDERS             48,380                 --

PREFERRED STOCK DIVIDEND                              15,989                 --
                                               --------------     --------------
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS     $    (244,426)     $    (806,195)
                                               ==============     ==============

BASIC AND DILUTED LOSS PER COMMON SHARE:

   Loss from continuing operations             $       (0.00)     $       (0.00)
   Loss from discontinued operations                   (0.00)             (0.00)
                                               --------------     --------------
      Net loss                                 $       (0.00)     $       (0.00)
                                               ==============     ==============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING                                    299,991,400        299,909,713
                                               ==============     ==============

     See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

<TABLE>
                                   MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

                           CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY

                                    FOR THE SIX MONTHS ENDED DECEMBER 31, 2002
<CAPTION>

                                                                                         Series C Convertible
                                                         Common Stock                       Preferred Stock
                                                -------------------------------     ------------------------------
                                                    Shares            Amount            Shares          Amount
                                                -------------     -------------     -------------    -------------
<S>                                             <C>               <C>                     <C>        <C>
Balance - June 30, 2002                          299,909,179      $     29,900                --     $         --

Stock cancelled in connection with
  December 9, 2002 exchange agreement           (269,918,261)          (26,992)               --               --

Stock issued in connection with
  December 9, 2002 exchange agreement            269,918,261            26,992                --               --

Conversion of promissory notes and interest
  into Series C Convertible Preferred stock               --                --             5,225                1

Stock issued for directors' compensation             400,000                40                --               --

Stock issued in connection with private
  placement                                        6,800,000               680                --               --

Value assigned to beneficial conversion
  feature of convertible debt                             --                --                --               --

Preferred stock dividend                                  --                --                --               --

Preferred stock dividend - beneficial
  conversion feature                                      --                --                --               --

Value allocated to Preferred stock -
  beneficial conversion feature dividend                  --                --                --               --

Net loss                                                  --                --                --               --
                                                -------------     -------------     -------------    -------------
Balance - December 31, 2002                      307,109,179      $     30,710             5,225     $          1
                                                =============     =============     =============    =============

                      See accompanying notes to condensed consolidated financial statements.

                                                        4
</TABLE>
<PAGE>

<TABLE>
                           MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY

                            FOR THE SIX MONTHS ENDED DECEMBER 31, 2002
<CAPTION>

                                                     Additional                          Total
                                                      Paid-in        Accumulated      Stockholders'
                                                      Capital          Deficit         Deficiency
                                                    ------------     ------------     ------------
<S>                                                 <C>              <C>              <C>
Balance - June 30, 2002                             $        --      $(6,935,854)     $(6,905,864)

Stock cancelled in connection with
  December 9, 2002 exchange agreement                    26,992               --               --

Stock issued in connection with
  December 9, 2002 exchange agreement                 1,273,008               --        1,300,000

Conversion of promissory notes and interest
  into Series C Convertible Preferred stock           5,224,999               --        5,225,000

Stock issued for director's compensation                  3,960               --            4,000

Stock issued in connection with private
  placement                                             339,320               --          340,000

Value assigned to beneficial conversion
  feature of convertible debt                           125,000               --          125,000

Preferred stock dividend                                (15,989)              --          (15,989)

Preferred stock dividend - beneficial
  conversion feature                                    (48,380)              --          (48,380)

Value allocated to Preferred stock - beneficial
  conversion feature dividend                            48,380           48,380

Net loss                                                     --         (315,685)        (315,685)
                                                    ------------     ------------     ------------
Balance - December 31, 2002                         $ 6,977,290      $(7,251,539)     $  (243,538)
                                                    ============     ============     ============

              See accompanying notes to condensed consolidated financial statements.

                                                5
</TABLE>
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

               FOR THE SIX MONTHS ENDED DECEMBER 31, 2002 AND 2001
                                   (UNAUDITED)


                                                       2002             2001
                                                   ------------     ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                         $  (315,685)     $(1,465,592)
  Loss from discontinued operations                         --        1,219,408
                                                   ------------     ------------
  Loss from continuing operations                     (315,685         (246,184)

  Adjustment to reconcile net loss to net cash
    used in operating activities:
      Issuance of common stock to directors              4,000               --
  Changes in operating assets and
    liabilities:
      Prepaid expenses and other current
        assets                                          21,750               --
      Accounts payable                                  19,869               --
      Accrued expenses and other current                                     --
        liabilities                                    229,786          246,184
                                                   ------------     ------------
  NET CASH USED BY CONTINUING OPERATIONS               (40,280)              --

  NET CASH USED BY DISCONTINUED OPERATIONS                  --         (542,009)
                                                   ------------     ------------
        NET CASH USED IN OPERATING
          ACTIVITIES                                   (40,280)        (542,009)
                                                   ------------     ------------
CASH USED IN INVESTING ACTIVITIES:
  Purchases of property and equipment                       --           (1,379)
                                                   ------------     ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Secured line of credit                                    --          395,617
  Proceeds from sale of common stock in
    private placement                                  340,000               --
                                                   ------------     ------------
      NET CASH PROVIDED BY FINANCING
        ACTIVITIES                                     340,000          395,617
                                                   ------------     ------------
NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                          299,720         (147,771)

CASH AND CASH EQUIVALENTS - BEGINNING                    4,911          173,567
                                                   ------------     ------------
CASH AND CASH EQUIVALENTS - ENDING                 $   304,631      $    25,796
                                                   ============     ============

     See accompanying notes to condensed consolidated financial statements.

                                       6
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

               FOR THE SIX MONTHS ENDED DECEMBER 31, 2002 AND 2001
                                   (UNAUDITED)


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
-------------------------------------------------

Cash paid during the years for:
  Interest                                       $        --     $        --
                                                 ============    ============
   Taxes                                         $        --     $        --
                                                 ============    ============
Non-cash investing and financing activities:
    Conversion of notes payable and
      accrued interest into preferred
      stock                                      $ 5,225,000     $        --
                                                 ============    ============
    Acquisition of technology rights by
      issuance of common stock                   $ 1,300,000     $        --
                                                 ============    ============
    Deemed dividend preferred stock -
      beneficial conversion feature              $    48,380     $        --
                                                 ============    ============
    Dividends on preferred stock                 $    15,989     $        --
                                                 ============    ============

     See accompanying notes to condensed consolidated financial statements.

                                       7
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1 - DESCRIPTION OF COMPANY AND BASIS OF PRESENTATION

Markland Technologies, Inc. ("Markland" or the "Company"), previously known as
Quest Net, was incorporated in Colorado in November 1995, under the name "A.P.
Sales Inc." In December 1998, A.P. Sales dissolved as a Colorado corporation,
redomiciled in Florida and changed its name to Quest Net Corp.

In March of 2000, the Company acquired CWTel, Inc., a Florida-based
telecommunication corporation. On November 11, 2001, CWTel filed a voluntary
bankruptcy petition under Chapter 7 in the State of Florida. On March 11, 2002,
a final decree was issued, the trustee discharged and the case closed.

On March 15, 2001, the Company acquired all of the outstanding capital stock of
Vidikron. As a result of this acquisition, the sole stockholder of Vidikron,
Market LLC, controlled a majority of the common stock of the Company and,
accordingly, the transaction was accounted for as a reverse acquisition as a
recapitalization of Vidikron, pursuant to which Vidikron was treated as the
continuing entity. Vidikron became a wholly-owned subsidiary of the Company.
Subsequently, Quest Net changed its name to Markland Technologies, Inc. and
Vidikron adopted the year-end of Quest Net.

On May 28, 2002, the Company received a notice of default from Market LLC
relating to a loan and security agreement and a related secured convertible
revolving credit note due to the Company's failure to make payments of principal
and interest due under the note. In addition, as a result of the defaults under
the note, Market LLC declared all outstanding principal and interest under the
note, totaling $4,213,300, to be immediately due and payable. In June of 2002,
all of the shares of the Vidikron subsidiary, including all of its operating
asses and liabilities, were transferred to Market LLC in partial satisfaction of
the indebtedness due Market LLC of $50,000. As a result, the Company had no
active business following such event. The assets and liabilities and operating
results of Vidikron have been treated as a discontinued operation in the
accompanying consolidated financial statements. The consolidated financial
statements for the period ended December 31, 2001 have been restated, where
applicable, to reflect Vidikron as a discontinued operation.

On November 21, 2002, Secured Technology, Inc. ("STI") was incorporated as a
Delaware C corporation and is a wholly-owned subsidiary of Markland
Technologies, Inc.

                                       8
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1 - DESCRIPTION OF COMPANY AND BASIS OF PRESENTATION (Continued)

On December 9, 2002, the Company, Eurotech Ltd. ("Eurotech"), ipPartners, Inc.
("ipPartners"), Markland LLC and James LLC, entered into an exchange agreement.
On December 19, 2002, the transactions contemplated by the exchange agreement
were consummated. Pursuant to the agreement, Eurotech transferred to the Company
certain rights to Eurotech's Acoustic Core technology, relating to illicit
materials detection, and certain cryptology technology. 90% of the Company's
issued and outstanding common stock held by Markland LLC and James LLC, the
holders of 100% of the issued and outstanding common stock of the Company, was
retired. The Company issued 239,927,344 shares of common stock, representing
approximately eighty percent (80%) of its outstanding common stock, to Eurotech,
and 29,990,917 shares of common stock, representing approximately ten percent
(10%) of its outstanding common stock, to ipPartners. As a result of this
transaction, a change of control occurred and the Company became an 80%-owned
subsidiary of Eurotech (see Note 3).

In satisfaction of a condition to the above transaction, the Company issued
$5.225 million in stated value of a new series of preferred stock, designated
Series C Cumulative Convertible Preferred Stock, to Market LLC and James LLC in
exchange for $5.225 million of convertible promissory notes held by Market LLC
and James LLC.

In January of 2003, the Company acquired all of the common stock of Ergo
Systems, Inc., a provider of security logistic support and related product
development services (see Note 8).

As a result of the technology acquired from Eurotech in December of 2002, and
the acquisition of Ergo Systems, Inc. in January of 2003, Markland Technologies,
Inc. plans to build a comprehensive offering of integrated security technologies
and services to provide tools necessary to protect personnel, data and
infrastructure assets as part of Homeland Security.

The accompanying unaudited condensed consolidated financial statements have been
prepared in conformity with accounting principles generally accepted in the
United States of America, which contemplate continuation of the Company as a
going concern. However, for the six months ended December 31, 2002, the Company
incurred a net loss of $315,685 and, as of December 31, 2002, had a working
capital deficiency of $1,168,538. The Company has limited finances and requires
additional funding in order to market and license its products. There is no
assurance that the Company can reverse its operating losses, or that it can
raise additional capital to allow it to continue its planned operations. These
factors raise substantial doubt about the Company's ability to continue as a
going concern.

These unaudited condensed consolidated financial statements do not include any
adjustments relating to the recoverability of recorded asset amounts that might
be necessary as a result of the above uncertainty.

In December of 2002, the Company received proceeds of $340,000 from a private
equity financing of 6,800,000 shares of the Company's common stock.

                                       9
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1 - DESCRIPTION OF COMPANY AND BASIS OF PRESENTATION (Continued)

The accompanying unaudited condensed consolidated financial statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted in accordance with such rules and regulations. The
information furnished in the interim condensed financial statements includes
normal recurring adjustments and reflects all adjustments, which, in the opinion
of management, are necessary for a fair presentation of such financial
statements. Although management believes the disclosures and information
presented are adequate to make the information not misleading, it is suggested
that these interim condensed financial statements be read in conjunction with
the Company's most recent audited financial statements and notes thereto
included in its June 30, 2002 Annual Report on Form 10-KSB. Operating results
for the six months ended December 31, 2002 are not necessarily indicative of the
results that may be expected for the year ending June 30, 2003.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates
----------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Consolidation Policy
--------------------

The accompanying unaudited condensed consolidated financial statements include
the accounts of the Company and a majority-owned subsidiary, Secured Technology,
Inc. ("STI"). All significant inter-company balances and transactions have been
eliminated.

Research and Development
------------------------

Research and development expenditures are charged to expense as incurred, unless
they are reimbursed under specific contracts. The Company capitalizes costs
related to acquired technologies that have achieved technological feasibility
and have alternative uses. Acquired technologies, which are in-process at the
date of acquisition or have no alternative uses are expensed as research and
development costs.

                                       10
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loss Per Share
--------------

Basic net loss per common share has been computed based on the weighted average
number of shares of common stock outstanding during the periods presented.

Common stock equivalents, consisting of convertible note and Series C 5%
Cumulative Convertible, discussed in the notes to the condensed consolidated
financial statements, were not included in the calculation of the diluted loss
per share because their inclusion would have had the effect of decreasing the
loss per share otherwise computed.

Capitalized Software Development Costs
--------------------------------------

Capitalization of computer software development costs begins upon the
establishment of technological feasibility. Technological feasibility for the
Company's computer software is generally based upon achievement of a detail
program design free of high risk development issues and the completion of
research and development on the product hardware in which it is to be used. The
establishment of technological feasibility and the ongoing assessment of
recoverability of capitalized computer software development costs requires
considerable judgment by management with respect to certain external factors,
including, but not limited to, technological feasibility, anticipated future
gross revenue, estimated economic life and changes in software and hardware
technology.

Amortization of capitalized computer software development costs commences when
the related products become available for general release to customers.
Amortization is provided on a product by product basis. The annual amortization
is the greater of the amount computed using (a) the ratio that current gross
revenue for a product bear to the total of current and anticipated future gross
revenue for that product, or (b) the straight-line method over the remaining
estimated economic life of the product.

The Company periodically performs reviews of the recoverability of such
capitalized software costs. At the time a determination is made that capitalized
amounts are not recoverable based on the estimated cash flows to be generated
from the applicable software net realizable value, any remaining capitalized
amounts are written off.

Reclassifications
-----------------

Certain prior year balances have been reclassified to conform to the current
year presentation.

                                       11
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Impact of Recently Issued Accounting Standards
----------------------------------------------

In April 2002, the Financial Accounting Standards Board ("FASB") issued SFAS No.
145, "Rescission of FASB Statement No. 4, 44 and 64, Amendment of FASB Statement
No. 13, and Technical Corrections". SFAS No. 145 requires that gains and losses
from extinguishment of debt be classified as extraordinary items only if they
meet the criteria in Accounting Principles Board Opinion No. 30 ("Opinion No.
30"). Applying the provisions of Opinion No. 30 will distinguish transactions
that are part of an entity's recurring operations from those that are unusual
and infrequent that meet the criteria for classification as an extraordinary
item. The Company is required to adopt SFAS No. 145 no later than the first
quarter of fiscal 2003, although early adoption is allowed. The Company does not
expect the adoption of SFAS No. 145 to have a material impact on its
consolidated financial position or results of operations.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS No. 146 addresses financial accounting
and reporting for costs associated with exit or disposal activities and
nullified Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including certain costs incurred in a restructuring." SFAS No. 146 requires
that a liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred. These costs include lease, costs to
consolidate facilities or relocate employees, and certain termination benefits
provided to employees that are involuntarily terminated under the terms of a
one-time benefit arrangement. A fundamental conclusion reached by the FASB in
this statement is that an entity's commitment to a plan, by itself, does not
create a present obligation to others that meets the definition of a liability.
SFAS No. 146 also establishes that fair value is the objective for initial
measurement of the liability. The provisions of this statement are effective for
exit or disposal activities that are initiated after December 31, 2002, with
early application encouraged. The Company has not yet determined the impact of
SFAS No. 146 on its financial position and results of operations, if any.

                                       12
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Impact of Recently Issued Accounting Standards (Continued)
----------------------------------------------

On December 31, 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure." SFAS No. 148 amends SFAS Statement
No. 123, Accounting for Stock-Based Compensation, to provide alternative methods
of transition to SFAS No. 123's fair value method of accounting for stock-based
employee compensation. SFAS No. 148 also amends the disclosure provisions of
SFAS No. 123 and APB Opinion No. 28, Interim Financial Reporting, to require
disclosure in the summary of significant accounting policies of the effects of
an entity's accounting policy with respect to stock-based employee compensation
on reported net income and earnings per share in annual and interim financial
statements. While the statement does not amend SFAS No. 123 to require companies
to account for employee stock options using the fair value method, the
disclosure provisions of SFAS No. 148 are applicable to all companies with
stock-based employee compensation, regardless of whether they account for that
compensation using the fair value method of SFAS No. 123, or the intrinsic value
method of APB Opinion 25. The Company will continue to account for stock-based
compensation according to APB Opinion 25, while its adoption of SFAS No. 148
requires the Company to provide prominent disclosures about the effect of SFAS
No. 123 on reported income and will require the Company to disclose these
effects in the interim financial statements as well.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others" (" FIN 45"). FIN 45 requires a company, at the time it
issues a guarantee, to recognize an initial liability for the fair value of
obligations assumed under the guarantee and elaborates on existing disclosure
requirements related to guarantees and warranties. The initial recognition
requirements of FIN 45 are effective for guarantees issued or modified after
December 31, 2002. Adoption of the disclosure requirements were effective for
interim and annual periods ending after December 15, 2002 and did not have a
significant impact on the Company's consolidated financial statements. The
Company does not expect the adoption of the initial recognition requirements of
FIN 45 to have a significant impact on its consolidated financial position or
results of operations.

In January 2003, the FASB issued FASB Interpretation No. 46 (" FIN 46"),
"Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51."
FIN 46 requires certain variable interest entities to be consolidated by the
primary beneficiary of the entity if the equity investors in the entity do not
have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional financial support from other parties. FIN 46 is effective for all new
variable interest entities created or acquired after January 31, 2003. For
variable interest entities created or acquired prior to February 1, 2003, the
provisions of FIN 46 must be applied for the first interim or annual period
beginning after June 15, 2003. The Company is currently evaluating the effect
that the adoption of FIN 46 will have on its results of operations and financial
condition.

                                       13
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 3 - TECHNOLOGY ACQUISITION AND CHANGE IN CONTROL

On December 9, 2002, in connection with the Exchange Agreement dated as of
December 9, 2002, by and among Eurotech, the Company, Crypto.com, Inc.,
("Crypto" - a wholly-owned subsidiary of Eurotech), Secured Technology, Inc.
("STI"), ipPartners, Inc., Market LLC and James LLC (the "Exchange"), Eurotech
and Crypto agreed to license and transfer certain intellectual property to a
newly-formed subsidiary of the Company, STI, in exchange for 239,927,344 shares
of the Company's newly issued common stock (the "Exchange Shares"). The Exchange
Shares constitute 80% of the Company's outstanding common stock making the
Company a majority-owned subsidiary of Eurotech. In addition, as part of the
agreement, ipPartners was issued 29,990,917 shares of common stock in exchange
for their forgiveness and discharge of certain obligations owed to ipPartners
with respect to the property transferred to STI.

As a result of the Exchange, Eurotech beneficially owns 80% of the Company's
voting securities. Eurotech is a development-stage, Washington, D.C.-based,
technology company, whose common stock is registered under the Exchange Act.
Prior to the Exchange, Market LLC and James LLC controlled the Company.

In connection with the Exchange, on December 9, 2002, the Company, Market LLC
and James LLC agreed to a recapitalization of the Company, whereby $5,225,000 in
stated value of new series of preferred stock designated Series C Cumulative
Convertible Preferred Stock (the "Series C Preferred") was issued by the
Company, in exchange for $5,225,000 of convertible promissory notes, inclusive
of accrued interest, as well as, for the agreement by James LLC and Market LLC
to collectively surrender 269,918,261 shares of the Company's common stock prior
to the consummation of the above Exchange agreement between the Company and
Eurotech, among others.

The rights licensed from Eurotech in the Exchange consist of certain proprietary
technology known as Acoustic Core used to detect illicit substances, and certain
cryptology technology held by Eurotech's subsidiary, Crypto.com, Inc. Since
Eurotech owned 80% of the common stock of the Company, the technology acquired
from Eurotech was recorded by the Company at Eurotech's carrying value of
$1,300,000.

NOTE 4 - SECURED LINE OF CREDIT

On May 28, 2002, the Company received a notice of default from its secured
lender, Market LLC, relating to a loan and security agreement and a related
secured convertible revolving credit note due to the Company's failure to make
payments of principal and interest due under the note. (See Note 1) As
settlement for this default, on June 4, 2002, the Company entered into a Debt
Restructuring Agreement, whereby the Company agreed to transfer legal title to
the Vidikron shares to the lender in partial satisfaction of the indebtedness in
the amount of $50,000.

                                       14
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 4 - SECURED LINE OF CREDIT (Continued)

In addition, on June 4, 2002, the Company entered into an Amended Secured
Convertible Revolving Credit Note Agreement, whereby the Company could borrow up
to $4,500,000. Interest under this agreement accrued at the annual interest rate
of 6% per annum, calculated on the basis of a 360-day year and actual number
days elapsed. The maturity date of this amended note was December 31, 2002 and
was secured by various liens on the Company's assets. The balance outstanding at
the date of this agreement was $4,163,300.

On December 9, 2002, as part of the Company's recapitalization, in accordance
with the Exchange Agreement entered between the Company and Market LLC ,
$3,812,000 representing principal and accrued interest under this line of credit
was converted into 3,812 shares of the Company's newly issued Series C
Cumulative Convertible Preferred Stock (see Note 6).

On December 10, 2002, the Company entered into a Restated and Amended Secured
Convertible Revolving Credit Note Agreement for $500,000. Interest under this
note accrues at the annual interest rate of 6% per annum, calculated on the
basis of a 360-day year and actual number of days elapsed. The principal and
accrued interest under this note is due on June 30, 2004, however, may be
prepaid by the Company at any time without penalty. As of December 31, 2002,
approximately $2,000 of interest has been accrued on this note and is included
in accrued expenses on the condensed consolidated balance sheet.

The note may be converted at any time, in whole or in part, into shares of the
Company's common stock. The total number of shares of common stock issuable upon
conversion will be determined by dividing the principal amount of this note
being converted by 80% of the closing bid price of the common stock based on the
average of the five trading days immediately preceding the date of conversion.
The value of the beneficial conversion feature of $125,000 will be amortized as
interest expense over the period ending June 30, 2004.

NOTE 5 - NOTES PAYABLE

At June 30, 2002, notes payable consisted of a convertible note payable of
$1,367,027, due to James LLC, which bore interest at 8% per annum. Principal and
any accrued interest were due on December 31, 2002. The note payable was
convertible into shares of common stock of the Company at a conversion price for
each share of common stock equal to the current market price on the date of
notice of conversion.

On December 9, 2002, in accordance with the Exchange Agreement between the
Company and James LLC, $1,413,000, including accrued interest of $45,973, was
converted into 1,413 shares of the Company's newly issued Series C Cumulative
Convertible Preferred Stock (see Note 6). As of December 31, 2002, there is no
principal or interest remaining outstanding under the above note.

                                       15
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 5 - NOTES PAYABLE (Continued)

On December 4, 2002, the Company entered into a note payable agreement with
Market LLC for the principal amount of $11,500. Principal, together with
interest, which accrues at the rate of 10% per annum, are both due upon demand.
As of December 31, 2002, accrued interest under this note was approximately
$100.

NOTE 6 - STOCKHOLDERS' EQUITY

Preferred Stock
---------------

The Company is authorized to issue five million shares of $.0001 par value
preferred stock which may be issued in series with such designations,
preferences, stated values, rights, qualifications or limitations as determined
by the Board of Directors.

Series A Preferred Stock
------------------------

On February 25, 2000, the Company entered into a Stock Purchase Agreement,
effective March 1, 2000 to purchase CWTel, Inc. from Charles Wainer for the sum
of $1,200,000. Of the purchase price $200,000 was paid at closing, $700,000 was
paid by the issuance of 360,000 shares of the Company's restricted common stock
and $300,000 was to be paid in three equal payments at 90 days, 180 days, and
270 days from closing. These payments were represented by a promissory note in
the amount of $300,000, which have been included in the liabilities from
discontinued operations at December 31, 2002 and collateralized by 30,000 shares
of preferred stock with a face value of $10 per share to be issued pursuant to
the stock purchase agreement.

Series B Preferred Stock
------------------------

On March 16, 2001, the Company issued 10 shares of its Series B convertible
preferred stock to Market LLC in connection with the acquisition of Vidikron of
America, Inc. The preferred stock was convertible into approximately 85% of the
Company's outstanding common stock, on a non-diluted basis upon the
effectiveness of a reverse stock split of the Company's outstanding common
stock. The reverse stock split was effective June 21, 2001. The automatic
conversion resulted in the Company's issuance of an aggregate of 254,911,356
shares of the Company's common stock to Market LLC on that date. As of December
31, 2002, there are no shares of Series B Preferred Stock issued and
outstanding.

                                       16
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 6 - STOCKHOLDERS' EQUITY (Continued)

Series C Cumulative Convertible Preferred Stock
-----------------------------------------------

On December 9, 2002, the Company entered into an Exchange Agreement, among the
Company and Market LLC and James LLC who agreed to exchange a note payable in
the amount of $3,812,000 and $1,413,000, respectively ($5,225,000 in value) of
convertible promissory notes, inclusive of accrued interest for 5,225 shares
(8,000 authorized, $.0001 par value, $1,000 stated value) of the Company's newly
issued Series C Cumulative Convertible Preferred Stock, ("Series C Preferred
Stock").

The aggregate purchase price of the Preferred Stock of $5,225,000 was allocated
to the Preferred Stock with a par value of $1.00 and the balance of $5,224,999
was allocated to additional paid in capital. The holders of the Series C
Preferred Stock are entitled to receive dividends on each share of preferred
stock, which shall accrue on a daily basis at the rate of 5% per annum on the
sum of the liquidation preference plus all accumulated and unpaid dividends
thereon. These dividends shall accrue whether or not they have been declared or
there are legally available funds with which to pay them, and at the option of
the holders are payable either in cash or in unrestricted common stock.

The Series C Preferred Stock is redeemable at any time by the Company, and
cannot be converted by the holders without written permission for a period of 6
months following the issuance of the shares and then only 10% may be converted
per month thereafter. The Series C Preferred Stock is convertible at the option
of the holder at a conversion price ranging from 65% to 80% of the common
stock's market price at the time of the conversion, subject to an adjustment
pursuant to any stock split. The amount of the associated discount is dependent
upon the market price at the time of the conversion.

As of the date of issuance in accordance with EITF 98-5, "Accounting for
Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios," the Company calculated that as of the date of
issuance there was a beneficial conversion feature in the amount of $1,306,250.
In accordance, with the EITF, the Company has recorded a deemed dividend of
$48,380, in the quarter ended December 31, 2002, relating to the accretion of
the beneficial conversion feature of the Preferred Stock. The deemed dividend
increases the loss applicable to common stockholders in the calculation of basic
and diluted net loss per common share and is included in stockholders' deficit
as a charge to retained earnings and a credit to additional paid-in capital. As
the Series C Preferred Stock is convertible in stages over a period of 16
months, the Company will record the accrual of the deemed dividend of the
beneficial conversion feature over this same period.

In addition, the Company has determined that the maximum potential exposure
under the beneficial conversion feature using the assumptions that the fair
market value is $.15 at the date of conversion and accordingly a conversion
price at 65% of market value should be used, amounts to approximately
$2,800,000.

                                       17
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 6 - STOCKHOLDERS' EQUITY (Continued)

Series C Cumulative Convertible Preferred Stock (Continued)
-----------------------------------------------

The Preferred Stock includes a liquidation preference of $1,000 per share. For
the quarter ended December 31, 2002, dividends of approximately $16,000 were
accrued for the Preferred Stock.

The holders are not subject to any limitations on the number of conversions of
Preferred Stock or subsequent sales of the corresponding Common Stock that they
can effect, other than a prohibition on any holder having a beneficial ownership
of more than 9.999% of the outstanding shares of the Company's common stock.

Common Stock
------------

-  Private Placement of Common Stock
   ---------------------------------

In December 2002, the Company entered into a private equity-financing agreement
with two investors in order to raise $340,000 of new capital to finance
operations. In exchange for the capital, the investors received an aggregate of
6,800,000 shares of the Company's common stock.

-  Director's Compensation
   -----------------------

In December 2002, in connection with their prior services performed on behalf of
the Company two of the Company's former directors were each issued 400,000
shares of its common stock, which shares will be registered with the next filed
registration statement. Accordingly, the Company issued an aggregate 400,000
shares, $.0001 par value, common stock to its directors. Included in the
Statement of Operations as of December 31, 2002 is a charge to compensation
expense in the amount of $4,000 to record the issuance of these shares.

                                       18
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 6 - STOCKHOLDERS' EQUITY (Continued)

Net Loss Per Share
------------------

Securities that could potentially dilute basic earnings per share ("EPS") in the
future, and that were not included in the computation of diluted EPS because to
do so would have been anti-dilutive for the periods presented, consists of the
following:

<TABLE>
<CAPTION>
                                                                                 Assumed Average Market
                                                      At December 31,             Price at December 31,
                                                           2002                       2002 ($0.012)
                                                      ---------------            ----------------------
<S>                                                     <C>                             <C>
Convertible notes payable
  (Converted at 80% of market)                          $  500,000                       52,083,000

Series C Cumulative Convertible
  5% Preferred Stock
   (Converted at 80% of market)                          5,240,989                      545,936,000
                                                        -----------                    -------------
  Total as of December 31, 2002                         $5,740,989                      598,019,000
                                                        ===========                    =============
Subsequent commitments after
  December 31, 2002 through
  February 11, 2003:

    Common shares potentially
      issuable to management,
      directors and a consultant
      pursuant to compensation
      agreements                                                                         21,705,000
                                                                                       =============
</TABLE>

NOTE 7 - COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

Concentration of Credit Risk
----------------------------

Financial instruments, which potentially subject the Company to concentration of
credit risk, consist principally of cash, which is at one bank. At December 31,
2002, there was a concentration of credit risk in the cash accounts in the
amount of $113,047.

                                       19
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 7 - COMMITMENTS, CONTINGENCIES AND OTHER MATTERS (Continued)

Business Risks
--------------

The Company requires additional funds to commercialize its technologies and
continue research and development efforts. Until the commencement of sales, the
Company will have no operating revenues, but will continue to incur substantial
expenses and operating losses. No assurances can be given that the Company can
complete development of any technology not yet completely developed or that,
with respect to any technology that is fully developed, products incorporating
the technology can be manufactured on a large scale or at a feasible cost.
Further, no assurance can be given that any technology will receive market
acceptance. The Company is subject to all of the risks inherent in the
establishment of a new enterprise and the marketing and manufacturing of a new
product, many of which are beyond the control of the Company.

NOTE 8 - DISPOSITION OF VIDIKRON SUBSIDIARY

The following unaudited information summarizes the operating results of Vidikron
included in the condensed consolidated statements of operation for the three and
six months ended December 31, 2001:

                                          Three Months Ended   Six Months Ended
                                          -------------------------------------
                                                     December 31, 2001
                                          -------------------------------------

Revenues                                  $  687,671               $ 1,209,962

Cost of Sales                                490,729                   819,715
                                          -----------              ------------
Gross Profit                                 196,942                   390,247
                                          -----------              ------------
Operating Expenses:
  Selling, general and administrative        595,439                 1,094,227
  Depreciation and amortization              257,215                   515,428
                                          -----------              ------------
    Total Operating Expenses                 852,654                 1,609,655
                                          -----------              ------------
Net Loss                                  $ (655,712)              $(1,219,408)
                                          ===========              ============

                                       20
<PAGE>

                  MARKLAND TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 9 - SUBSEQUENT EVENTS

Acquisition of Ergo Systems, Inc.
---------------------------------

On January 14th, 2003, the Company completed the acquisition of Ergo Systems,
Inc., a Virginia corporation ("Ergo") from Ocean Data Equipment Corporation, a
Delaware corporation ("ODEC"). The Company agreed to pay ODEC $400,000 dollars
in cash, payable without interest over a period of one year. The funds for this
acquisition are expected to come from operating capital and future earnings. The
purchase price was determined through arms-length negotiations, and was based on
estimated future earnings from the contract.

Ergo's only asset is a US government General Services Administration multi-year
contract to provide border security logistic support and product development
services to the United States Government. Markland will continue to provide
these support services to five US Border ports of entry in the states of
California, Texas, Michigan and New York.

New Compensation Agreements
---------------------------

Effective January of 2003, the Company entered into four new compensation
agreements with two officers and two consultants to the Company, which provide
for aggregate monthly remuneration of $47,500.

In addition, these agreements provide for the issuance of 7.07% of the Company's
outstanding common stock and 2.4% of the Company's outstanding common stock, of
which 4.67% is scheduled to be issued by October 31, 2003, and 2.4% is issuable
after the first anniversary of the compensation agreements. Based on the total
common shares outstanding as of December 31, 2002, a total of approximately
21,705,000 shares of common stock are issuable under these compensation
agreements.

                                       21
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS


Cautionary Statements Regarding Forward-Looking Statements
----------------------------------------------------------

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the financial statements and the
related notes included in this Form 10-QSB. This quarterly report on Form 10-QSB
contains many forward-looking statements, which involve risks and uncertainties,
such as our plans, objective, expectations and intentions. You can identify
these statements by our use of words such as "may," "expect," "believe,"
"anticipate," "intend," "could,", "estimate," "continue," "plans," or their
negatives or cognates. Some of these statements include discussions regarding
our future business strategy and our ability to generate revenue, income and
cash flow. We wish to caution the reader that all forward-looking statements
contained in this Form 10-QSB are only estimates and predictions. Our actual
results could differ materially from those anticipated as a result of risk
facing us or actual events differing from the assumptions underlying such
forward looking statements. Some factors that may affect our results are
discussed in this section and elsewhere this Form 10-QSB.

Readers are cautioned not to place undue reliance on any forward-looking
statements contained in this Quarterly Report on Form 10-QSB. We will not update
these forward-looking statements unless the securities laws and regulations
require us to do so.

Plan of Operation / Business Overview
-------------------------------------

Markland has assembled a blend of innovative technology assets, which form
unique products and services directed towards providing integrated solutions to
the Homeland Security marketplace. The company is focused on providing certain
emerging technology services to address the country's needs to protect borders,
infrastructure assets and personnel. Our mission is to build world-class
integrated solutions for border security through the further development of our
emerging technologies and the acquisition of revenue producing assets. In
addition, we manage comprehensive engineering and scientific development
programs designed to identify products and processes that have unique or
superior characteristics for use in Homeland Security. Our portfolio of emerging
technologies includes: (a) technology for the automatic detection of explosives
and illicit materials, and (b) cryptographic systems for secure communications.

Due to the acquisition of Ergo during January 2003, the company has ongoing
contracts in the area of border security with the INS to implement maintenance
and evolutionary design enhancements to the Dedicated Commuter Lane (DCL)
systems installed at San Ysidro, CA; Otay Mesa, CA; El Paso, TX; Detroit, MI;
and Buffalo, NY. These systems are part of a larger U.S. Customs and INS
initiative to increase security, reduce wait times, improve data accuracy, and
improve overall efficiencies at all border crossings for both freight and
passengers by creating and implementing a "trusted traveler" concept of traffic
flow.

The DCL employs automatic vehicle identification (AVI) technology, which allows
participants to pass through the border crossing more efficiently. Participants
run a card through a swipe card reader, which instantaneously sends patron
information, including a photograph, to the Inspector's screen for clearance.
The gate rises and allows the patron through. The whole process takes about 30
seconds. The DCL software also controls a variety of security subsystems,
including video surveillance, gates, and tire shredders.

The Company is presently engaged in the design of system wide enhancements
including the Vehicle Stopping System (VSS). The VSS is being designed to
address the increasing risks of un-authorized and illegal entry into the
country. The VSS is designed to safely capture individuals who are trying to
cross through border entries without authorization, "port runners". Port runners
constitute a threat to border integrity and capturing them with minimal danger
and threat to United States INS and Customs Border Patrol agents has become a
priority. The Vehicle Stopping System is capable of stopping a vehicle
attempting to gain illegal entry at speeds up to and exceeding 65 miles per hour
safely; and without personal injury to occupants and United States government
border personnel.

                                       22
<PAGE>

In the area of infrastructure asset protection Markland has emerging
technologies in the form of acoustic remote sensing and cryptology, which are
being further developed for commercial use. The company and its parent Eurotech,
Ltd. are now engaged in a project with the United States Air Force via a
Co-Operative Research and Development Agreement (CRADA) to utilize its
proprietary Acoustic Core(TM) technology to inspect cargo. The concepts
presently being designed and tested for use in the cargo area combine acoustics
and gas vapor trace sensing technologies.

The Company is also involved in the design and testing of a product named
APTIS(TM). The APTIS Screening Portal is designed to perform primary screening
of humans for the detection of concealed weapon threats. The device incorporates
multi-sensor data fusion techniques, conventional metal detection technology,
and Acoustic Core based detection of non-metallic threats.

The Company's cryptology assets in the form of cryptographic algorithms and
software are under development for telecommunications and commercial encryption
applications. The technology has successfully demonstrated its double-cipher,
keyless transmission encryption system. The Company plans to actively work on
the commercialization of the cryptology assets.

The Company requires additional funds to commercialize its technologies and
continue research and development efforts. Until the commencement of sales, the
Company will have no operating revenues, but will continue to incur substantial
expenses and operating losses. No assurances can be given that the Company can
complete development of any technology not yet completely developed or that,
with respect to any technology that is fully developed, products incorporating
the technology can be manufactured on a large scale or at a feasible cost.
Further, no assurance can be given that any technology will receive market
acceptance. The Company is subject to all of the risks inherent in the
establishment of a new enterprise and the marketing and manufacturing of a new
product, many of which are beyond the control of the Company.

Change of Control
-----------------

On or about December 9, 2002:

-        Markland Technologies, Inc. (the "Company"); Eurotech Ltd., a District
         of Columbia corporation; ip Partners, Inc., a Rhode Island corporation,
         Market LLC, a Cayman Island limited liability company; James LLC, a
         Cayman Island limited liability company and others entered into an
         exchange agreement;

-        Markland Technologies, Inc.; Market LLC, a Cayman Island limited
         liability company and James LLC, a Cayman Island limited liability
         company entered into a separate exchange agreement and

-        the Markland Board of Directors appointed Kenneth P. Ducey, Robert
         Tarini and Delmar R. Kintner to serve on the board, Lawrence Shatsoff
         resigned as Director and President, and David E. Danovitch resigned as
         director of Markland. Delmar R. Kintner was appointed President of
         Markland and Kenneth P. Ducey, Jr. was appointed Executive Vice
         President and Secretary. Messrs. Shatsoff and Danovitch did not resign
         because of any disagreement with Markland on any matter.

On December 19, 2002:

-        Markland consummated the transactions contemplated by the above
         referenced agreements:

-        Eurotech transferred to Markland certain rights to Eurotech's Acoustic
         Core(TM) technology, relating to illicit materials detection, and
         certain cryptology technology;

-        90% of the Markland issued and outstanding common stock held by
         Markland LLC and James LLC, the holders of 100% of the issued and
         outstanding common stock of Markland, was retired;

-        Markland issued 239,927,344 shares of common stock, representing
         approximately eighty percent (80%) of its outstanding common stock, to
         Eurotech, and 29,990,917 shares of common stock, representing
         approximately ten percent (10%) of its outstanding common stock, to
         ipPartners and

                                       23
<PAGE>

-        Markland issued $5.25 million in stated value of a new series of
         preferred stock, designated Series C Cumulative Convertible Preferred
         Stock, to Market LLC and James LLC in exchange for $5.25 million of
         convertible promissory notes held by Market LLC and James LLC. The
         Series C preferred stock accrues dividends at the rate of 5% per year,
         payable in cash or common stock at the option of the holder, is
         redeemable at any time by the Company, and cannot be converted prior to
         6 months after issuance without the Company's consent. The Series C
         preferred stock is convertible into common stock at the option of the
         holder, at a conversion price ranging from 65% to 80% of the common
         stock's market price at the time of conversion.

Ergo Systems Acquisition
------------------------

On January 14th, 2003, Markland completed the acquisition of Ergo Systems, Inc.,
a Virginia corporation from Ocean Data Equipment Corporation, a Delaware
corporation, for $400,000.00, payable without interest over a period of one
year. The funds for this acquisition are expected to come from operating capital
and future earnings. The purchase price was determined through arms-length
negotiations, and was based on Ergo's estimated future earnings. Robert Tarini,
the Chairman of the Board of Directors of Markland, is also the President of
Ocean Data Equipment Corporation.

Ergo's only asset is a US government General Services Administration multi-year
contract to provide border security logistic support and product development
services to the United States Government. Markland will continue to provide
these support services to five US border ports of entry in the states of
California, Texas, Michigan and New York. The contract has historically
generated revenues of approximately $2 million annually and Markland anticipates
that the contract will generate not less than $2 million dollars of gross
revenue in 2003.

Liquidity and Capital Resources
-------------------------------

On December 10, 2002, the Company entered into a Restated and Amended Secured
Convertible Revolving Credit Note Agreement for $500,000. Interest under this
note accrues at the annual interest rate of 6% per annum, calculated on the
basis of a 360-day year and actual number of days elapsed. The principal and
accrued interest under this note is due on June 30, 2004, however, may be
prepaid by the Company at any time without penalty. As of December 31, 2002,
approximately $2,000 of interest has been accrued on this note and is included
in accrued expenses on the condensed consolidated balance sheet.

The note may be converted at any time, in whole or in part, into shares of the
Company's common stock. The total number of shares of common stock issuable upon
conversion will be determined by dividing the principal amount of this note
being converted by 80% of the closing bid price of the common stock based on the
average of the five trading days immediately preceding the date of conversion.

In December of 2002 the company completed a private placement of 6,800,000
shares of the company's common stock for $.05 per share. The net proceeds of
$340,000 will be used by the Company to fund its ongoing operations.

Change of Auditor
-----------------

Effective January 23, 2003, the Board of Directors of Markland dismissed Sherb &
Co., LLP from serving as the Company's independent auditor for the year ending
June 30, 2003.

On January 24, 2003, Marcum & Kliegman LLP ("MKLLP") was engaged as the
Company's new independent auditor. During the two most recent fiscal years and
the interim period preceding their engagement, the company has not consulted
with MKLLP regarding either: (1) the application of accounting principles to a
specified transaction, either completed or proposed; or the type of audit
opinion that might be rendered on the Company's financial statements, and either
a written report or oral advice was provided to the Company by MKLLP that MKLLP
concluded was an important factor considered by the Company in reaching a
decision as to the accounting, auditing, or financial reporting issue; or (ii)
any matter that was either the subject of a "disagreement" or a reportable
event, as those terms are used in Item 304(a)(1)(iv) of Regulation S-B and the
related instructions to Item 304 of Regulation S-B.

                                       24
<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

Kenneth P. Ducey, Jr., our Executive Vice President and Chief Financial Officer,
has evaluated our disclosure controls and procedures within 90 days of the
filing of this report. These controls and procedures are designed to ensure that
all of the information required to be disclosed by us in our periodic reports
filed with the Securities and Exchange Commission is recorded, processed,
summarized and reported within the time periods specified by the commission and
that the information is communicated to the Chief Executive Officer and Chief
Financial Officer on a timely basis. Based on his evaluation, the Executive Vice
President and Chief Financial Officer concluded that our disclosure controls and
procedures were suitable and effective.

Subsequent to the date of his evaluation, there have been no significant changes
in our internal controls or in other factors that could significantly affect the
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

PART II - OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

The information required under this item is incorporated by reference to Part 1,
Item 2. "Management's Discussion and Analysis or Plan of Operation - Change of
Control," and "Management's Discussion and Analysis or Plan of Operation -
Liquidity and Capital Resources."

ITEM 5 OTHER EVENTS
In December 2002, in connection with their prior services performed on behalf of
the Company two of the Company's former directors were each issued 10,000 shares
of its common stock (computed after giving effect to the Company's proposed 1
for 20 reverse split of its common stock), which shares will be registered with
the next filed registration statement. Accordingly, the Company issued an
aggregate 400,000 shares, $.0001 par value, common stock to its directors.
Included in the Statement of Operations as of December 31, 2002 is a charge to
compensation expense in the amount of $4,000.

ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:
    --------

The following is a list of exhibits filed as part of this Form 10-QSB.

3.1      Articles of Amendment to the Articles of Incorporation of Quest Net
         Corp., filed with the Florida Secretary of State on April 4, 2001,
         incorporated by reference to Exhibit 3.1 to Quest Net Corp.'s Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on April 10, 2001.

3.2      Articles of Amendment to the Articles of Incorporation of Quest Net
         Corp., filed with the Florida Secretary of State on April 4, 2001,
         incorporated by reference to Exhibit 3.3 to Markland Technologies,
         Inc.'s Annual Report on Form 10-KSB, filed with the Securities and
         Exchange Commission on October 15, 2001.

3.3      Articles of Amendment to the Articles of Incorporation of Quest Net
         Corp., filed with the Florida Secretary of State on June 21, 2001,
         incorporated by reference to Exhibit 3.4 to Markland Technologies,
         Inc.'s Annual Report on Form 10-KSB, filed with the Securities and
         Exchange Commission on October 15, 2001

3.4      Certificate of Designations of Rights and Preferences of the Series C
         Cumulative Convertible Preferred Stock of Markland Technologies, Inc.,
         filed with the Florida Secretary of State on December 12, 2002,
         incorporated by reference to Exhibit 3.5 to Markland Technologies,
         Inc.'s Current Report on Form 8-K, filed with the Securities and
         Exchange Commission on December 20, 2002.

4.1*     Form of common stock certificate of the Company.

4.2      Certificate of Designations of Rights and Preferences of the Series C
         Cumulative Convertible Preferred Stock of Markland Technologies, Inc.,
         filed with the Florida Secretary of State on December 12, 2002,
         incorporated by reference to Exhibit 3.5 to Markland Technologies,
         Inc.'s Current Report on Form 8-K, filed with the Securities and
         Exchange Commission on December 20, 2002.

                                       25
<PAGE>

10.1     Stock Purchase Agreement made as of, December 9, 2002, between Ocean
         Data Equipment Corporation, a Delaware Corporation; Ergo Systems, a
         Virginia Corporation; Markland Technologies, Inc., a Florida
         Corporation and Security Technology Inc., a Delaware Corporation,
         incorporated by reference to Exhibit 10.1 to Markland Technologies,
         Inc.'s Current Report on Form 8-K, filed with the Securities and
         Exchange Commission on January 28, 2003.

10.2*    Restated and Amended Convertible Revolving Credit Note Agreement, dated
         as of December 10, 2002, between Markland Technologies, Inc. and Market
         LLC.

10.3*    Textual description of Employment Agreements.

10.4     Exchange Agreement, dated as of December 9, 2002, among Markland
         Technologies, Inc., Market LLC and James LLC, incorporated by reference
         to Exhibit 10.4 to Markland Technologies, Inc.'s Current Report on Form
         8-K, filed with the Securities and Exchange Commission on December 20,
         2002.

10.5     Exchange Agreement, dated as of December 9, 2002, by and among Eurotech
         Ltd., Crypto.com, Inc., Markland Technologies, Inc., Security
         Technology, Inc., ipPartners, Inc., Markland LLC and James LLC,
         incorporated by reference to Exhibit 10.5 to Markland Technologies,
         Inc.'s Current Report on Form 8-K, filed with the Securities and
         Exchange Commission on December 20, 2002.

10.6*    First Amendment to Exchange Agreement, dated as of December 9, 2002, by
         and among Eurotech Ltd., Crypto.com, Inc., Markland Technologies, Inc.,
         Security Technology, Inc., ipPartners, Inc., Markland LLC and James
         LLC, dated as of December 19, 2002.

21*      Subsidiaries of the Company.

99.1*    Certification of Kenneth P. Ducey, Director, Executive Vice President,
         Secretary and Chief Financial Officer

99.2*    Certification of Delmar R. Kintner, Director, President and Chief
         Executive Officer

---------------------------------------------------------------------------

* Filed herewith.


(b) Reports on Form 8-K
     -------------------

On December 20, 2002, the Company filed a Current Report on Form 8-K to disclose
the following items:

Item 1.  Changes in Control of Registrant.

Item 2.  Acquisition or Disposition of Assets.

Item 5.  Other Events.

On February 12, 2003, the Company filed a Current Report on Form 8-K/A to
disclose the following items:

Item 2.  Acquisition or Disposition of Assets.

Item 4.  Changes in Registrant's Certifying Accountant.

                                       26
<PAGE>

SIGNATURE

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


                                     Markland Technologies, Inc.
                                             (Registrant)


Dated : February 14, 2003


/s/ Kenneth P. Ducey, Jr.
----------------------------------
Kenneth P. Ducey, Jr.
Director, Executive Vice President, Secretary and Chief Financial Officer


Date February 14, 2003

/s/ Delmar R. Kintner
----------------------------------
Delmar R. Kintner
Director, President and Chief Executive Officer

                                       27
<PAGE>

                             CERTIFICATIONS
                             --------------


I, Kenneth P. Ducey, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Markland
Technologies, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.



 /s/ Kenneth P. Ducey, Jr.
------------------------
Director, Executive Vice President, Secretary
  and Chief Financial Officer

                                       28
<PAGE>

                             CERTIFICATIONS
                             --------------


I, Delmar R. Kintner, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Markland
Technologies, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date February 14, 2003



/s/ Delmar R. Kintner
-----------------------------------------------
Director, President and Chief Executive Officer

                                       29
<PAGE>

                                  EXHIBIT INDEX

3.1      Articles of Amendment to the Articles of Incorporation of Quest Net
         Corp., filed with the Florida Secretary of State on April 4, 2001,
         incorporated by reference to Exhibit 3.1 to Quest Net Corp.'s Current
         Report on Form 8-K, filed with the Securities and Exchange Commission
         on April 10, 2001.

3.2      Articles of Amendment to the Articles of Incorporation of Quest Net
         Corp., filed with the Florida Secretary of State on April 4, 2001,
         incorporated by reference to Exhibit 3.3 to Markland Technologies,
         Inc.'s Annual Report on Form 10-KSB, filed with the Securities and
         Exchange Commission on October 15, 2001.

3.3      Articles of Amendment to the Articles of Incorporation of Quest Net
         Corp., filed with the Florida Secretary of State on June 21, 2001,
         incorporated by reference to Exhibit 3.4 to Markland Technologies,
         Inc.'s Annual Report on Form 10-KSB, filed with the Securities and
         Exchange Commission on October 15, 2001

3.4      Certificate of Designations of Rights and Preferences of the Series C
         Cumulative Convertible Preferred Stock of Markland Technologies, Inc.,
         filed with the Florida Secretary of State on December 12, 2002,
         incorporated by reference to Exhibit 3.5 to Markland Technologies,
         Inc.'s Current Report on Form 8-K, filed with the Securities and
         Exchange Commission on December 20, 2002.

4.1*     Form of common stock certificate of the Company.

4.2      Certificate of Designations of Rights and Preferences of the Series C
         Cumulative Convertible Preferred Stock of Markland Technologies, Inc.,
         filed with the Florida Secretary of State on December 12, 2002,
         incorporated by reference to Exhibit 3.5 to Markland Technologies,
         Inc.'s Current Report on Form 8-K, filed with the Securities and
         Exchange Commission on December 20, 2002.

10.1     Stock Purchase Agreement made as of, December 9, 2002, between Ocean
         Data Equipment Corporation, a Delaware Corporation; Ergo Systems, a
         Virginia Corporation; Markland Technologies, Inc., a Florida
         Corporation and Security Technology Inc., a Delaware Corporation,
         incorporated by reference to Exhibit 10.1 to Markland Technologies,
         Inc.'s Current Report on Form 8-K, filed with the Securities and
         Exchange Commission on January 28, 2003.

10.2*    Restated and Amended Convertible Revolving Credit Note Agreement, dated
         as of December 10, 2002, between Markland Technologies, Inc. and Market
         LLC.

10.3*    Textual description of Employment Agreements.

10.4     Exchange Agreement, dated as of December 9, 2002, among Markland
         Technologies, Inc., Market LLC and James LLC, incorporated by reference
         to Exhibit 10.4 to Markland Technologies, Inc.'s Current Report on Form
         8-K, filed with the Securities and Exchange Commission on December 20,
         2002.

10.5     Exchange Agreement, dated as of December 9, 2002, by and among Eurotech
         Ltd., Crypto.com, Inc., Markland Technologies, Inc., Security
         Technology, Inc., ipPartners, Inc., Markland LLC and James LLC,
         incorporated by reference to Exhibit 10.5 to Markland Technologies,
         Inc.'s Current Report on Form 8-K, filed with the Securities and
         Exchange Commission on December 20, 2002.

10.6*    First Amendment to Exchange Agreement, dated as of December 9, 2002, by
         and among Eurotech Ltd., Crypto.com, Inc., Markland Technologies, Inc.,
         Security Technology, Inc., ipPartners, Inc., Markland LLC and James
         LLC, dated as of December 19, 2002.

21*      Subsidiaries of the Company.

99.1*    Certification of Kenneth P. Ducey, Director, Executive Vice President,
         Secretary and Chief Financial Officer

99.2*    Certification of Delmar R. Kintner, Director, President and Chief
         Executive Officer

--------------------------------------------------------------------------------


* Filed herewith