SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
 QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT OF 1934
 For The Quarterly Period Ended March 31, 2004
 or
 TRANSITION REPORT UNDER SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file No. 0-29501
 
  Com-Guard.com, Inc.
 (Exact name of registrant as specified in its charter)
 
 NEVADA
33-0879853(State or other jurisdiction of incorporation or organization)
(IRS Employer ID No.) 
 2075 Corte del Nogal, Suite R
 Carlsbad, California 92009
 (Address of principal executive offices)
 Registrant's Telephone Number, Including Area Code: (760) 431-2206
 
 Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 v No
 
 The number of shares outstanding of the registrant's common stock as of May 14, 2004 was 24,706,424.
   PAGE
 PART I - FINANCIAL INFORMATION
  ITEM 1. CONDENSED FINANCIAL STATEMENTS
Condensed Balance Sheets
as of March 31, 2004 (unaudited) and June 30, 2003 2
Condensed Statements of Operations for the
three months ended March 31, 2004 and 2003 (unaudited) 3
Condensed Statements of Operations for the
nine months ended March 31, 2004 and 2003 (unaudited) 4
Condensed Statements of Cash Flows for the
nine months ended March 31, 2004 and 2003 (unaudited) 5
Notes to Condensed Financial Statements as of March 31, 2004 (unaudited) 7

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 11


ITEM 3. CONTROLS AND PROCEDURES 17


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS 17

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 17

ITEM 3. DEFAULTS UPON SENIOR SECURITIES 17

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 17

ITEM 5. OTHER INFORMATION 17

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 17


SIGNATURES  18



COM-GUARD.COM, INC.CONDENSED BALANCE SHEETS



ASSETS
March

June31, 2004

30, 2003(unaudited)CURRENT ASSETSCash and cash equivalents
$ 32,502

$
141,504Accounts receivable
-

2,125Inventories
240,830

240,795Related party receivables
15,819

15,319$ 289,151

$ 399,743TOTAL ASSETSLIABILITIES AND STOCKHOLDERS DEFICIENCYCURRENT LIABILITIESLine of credit  bank
$ 24,782

$
21,443Accounts payable
191,988

177,673Accrued payroll liabilities
365,236

181,541Accrued interest
8,542

5,907Accrued consulting fees
396,489

681,489Notes payable  stockholders, net of debt discount of $72,752
64,398

15,000Total Current Liabilities
1,051,435

1,083,053LONG-TERM LIABILITIESNotes payable  stockholders
-

27,150TOTAL LIABILITIES
1,051,435

1,110,203COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS DEFICIENCYCommon stock, $.001 par value, 100,000,000 shares authorized, 24,416,641 and 17,890,006 shares issued and outstanding, respectively
24,416

17,890Additional paid-in-capital
7,899,225

6,620,976Deferred consulting expenses
(11,338
)
-Accumulated deficit
(8,674,587
)
(7,349,326
)Total Stockholders Deficiency
(762,284
)
(710,460
)TOTAL LIABILITIES AND STOCKHOLDERS DEFICIENCY
$ 289,151

$
399,743
See accompanying notes to condensed financial statements.



COM-GUARD.COM, INC.CONDENSED STATEMENTS OF OPERATIONS(unaudited)Three months ended
March 31,
2004

2003SALES  NET

$
2,524

$
62,630COST OF GOODS SOLD

1,131

58,645GROSS PROFIT

1,393

3,985OPERATING EXPENSESConsulting fees

310,900

107,500Payroll and related costs

176,993

248,864Other general and administrative

71,754

167,811Research and development

-

34,945Sales and marketing

9,083

52,139TOTAL OPERATING EXPENSES

568,730

611,259LOSS FROM OPERATIONS

(567,337
)
(607,274
)OTHER EXPENSEInterest expense

(29,249
)
(97
)TOTAL OTHER EXPENSE

(29,249
)
(97
)Loss before provision for income taxes

(596,586
)
(607,177
)Provision for income taxes

-

-NET LOSS

$
(596,586
)
$
(607,177
)Net loss per share  basic and diluted

$
(0.03
)
$
(0.03
)Weighted average number of shares outstanding during the period basic and diluted

21,411,333

16,977,618
See accompanying notes to condensed financial statements.


















COM-GUARD.COM, INC.CONDENSED STATEMENTS OF OPERATIONS(unaudited)Nine months ended
March 31,
2004

2003SALES  NET

$
11,153

$
63,451PROVISION TO WRITE DOWN INVENTORY


-


75,000COST OF GOODS SOLD

2,861

58,645GROSS PROFIT (LOSS)

8,292

(70,194
)OPERATING EXPENSESConsulting fees

480,059

290,100Payroll and related cost

563,330

473,653Other general and administrative

234,011

377,961Research and development

2,678

87,962Sales and marketing

22,726

125,071TOTAL OPERATING EXPENSES

1,302,804

1,354,747LOSS FROM OPERATIONS

(1,294,512
)
(1,424,941
)OTHER INCOME (EXPENSE)Interest expense

(30,892
)
(600
)Interest income

142TOTAL OTHER EXPENSE

(30,750
)
(600
)Loss before provision for income taxes

(1,325,262
)
(1,425,541
)Provision for income taxes

-

-NET LOSS

$
(1,325,262
)
$
(1,425,541
)Net loss per share  basic and diluted

$
(0.07
)
$
(0.11
)Weighted average number of shares outstanding during the period basic and diluted

19,616,155

13,490,222
See accompanying notes to condensed financial statements.













COM-GUARD.COM, INC.CONDENSED STATEMENTS OF CASH FLOWS(unaudited)
Nine months ended
2004

2003CASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(1,325,262
)
$
(1,425,541
)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation

-

11,786Provision to write down inventory

-

75,000Impairment of deferred offering costs

-

5,000Stock issued for services

314,617

37,539Accretion of debt discount

26,618

-Changes in operating assets and liabilities:Accounts receivable

2,125

-Inventories

(35)

(11,286
)Related party receivables

(500
)
(12,230
)Accounts payable and accrued payroll liabilities

401,195

117,625Accrued consulting fees

156,400

184,100Net Cash Used In Operating Activities

(424,841
)
(1,018,007
)CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures

-

-Net Cash Used In Investing Activities

-

-CASH FLOWS FROM FINANCING ACTIVITIES:Repayments on notes payable  bank

-

(854
)Proceeds from issuance of stock

217,500

1,317,700Repayments on notes payable  stockholders

(15,000
)
(37,000
)Proceeds from notes payable - stockholders

110,000

33,000Net proceeds from line of credit  bank

(3,339
)
-NET CASH PROVIDED BY FINANCING ACTIVITIES

315,839

1,312,846NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

(109,002
)
294,839CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

141,504

82,281CASH AND CASH EQUIVALENTS AT END OF PERIOD

$
32,502

$
377,120



Supplemental disclosure of cash flow information

Supplemental disclosure of non-cash investing and financing activities :

On March 24, 2004, the Company settled $10,000 of accounts payable by issuing 50,000 shares of common stock at $.20 per share. The number of shares issued were based on the fair market value of the services provided.

During the nine months ended March 31, 2004, the Company settled $441,400 of accrued consulting expenses by issuing 2,207,000 shares of common stock at $.20 per share. The number of shares issued were based on the fair market value of the services provided.

During the nine months ended March 31, 2004, the Company issued 1,650,000 shares of common stock at $.20 per share for consulting services totaling $330,000. The number of shares issued were based on the fair market value of the services provided. $90,000 of this amount is being amortized over the life of the agreements resulting in consulting expense of $78,661 for the nine months ended March 31, 2004. The unamortized balance of $11,339 is presented in the accompanying condensed balance sheet as a contra equity account.

During the nine months ended March 31, 2004, the Company settled $190,550 of accrued payroll by issuing 952,750 shares of common stock at $.20 per share. The number of shares issued were based on the value of the services provided.

During the nine months ended March 31, 2003, the Company settled $985,500 of accounts payable and accrued expenses with seven stockholders by issuing 1,407,716 shares of common stock @ $.70 per share and also settled $157,011 of accounts payable and accrued expenses with nine stockholders by issuing 448,603 shares of common stock @ @$.35 per share. Stock values based on agreement between the Company and stockholders.

During the nine months ended March 31, 2003, the Company was forgiven $1,400,000 of accrued consulting expenses.

During the nine months ended March 31, 2003, the Company settled $100,000 of notes payable and $8,600 of accrued interest by issuing 335,000 shares of common stock at approximately $.30 per share based on
agreement between the Company and stockholders.

During the nine months ended March 31, 2003, $15,000 of notes payable was reclassified as notes payable  stockholder since the noteholder became a stockholder during the period.

During the nine months ended March 31, 2003, the Company settled $223,910 of note payable  stockholders and $29,700 of accrued interest by issuing 350,000 shares of common stock @ approximately $.70 per share and also settled $33,000 of notes payable - stockholders by issuing 94,285 shares of common stock @ approximately $.35 per share. Stock values based on agreement between the Company and stockholders.

See accompanying notes to condensed financial statements.



COM-GUARD.COM, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF MARCH 31, 2004
(unaudited)


NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements of Com-Guard.com, Inc. (the "Company") have been prepared pursuant to the rules of the Securities and Exchange Commission (the "SEC") for quarterly reports on Form 10-QSB and do not include all of the information and note disclosures required by generally accepted accounting principles. These condensed financial statements and notes herein are unaudited, but in the opinion of management, include all the adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the Companys financial position, results of operations, and cash flows for the periods presented. These financial statements should be read in conjunction with the Company's audited financial statements and notes thereto included in the Companys Form 10-KSB for the year ended June 30, 2003 as filed with the SEC on October 8, 2003. Interim operating results are not necessarily indicative of operating results for any future interim period or for the full year.

The Company was formed and incorporated in the state of Nevada on October 7, 1998 as e-WORLD SECURITY, INC. On April 16, 1999, the Company changed its name to COM-GUARD.COM, INC. The Company sells products that afford security protection to computer hardware and software in microcomputers.

Stock Options

On August 15, 2003, the Companys Board of Directors approved stock options to Officers, Directors and Employees of the Company. Officers were granted options to purchase an aggregate of up to 1,224,000 shares of common stock of the Company. 646,000 shares are vested and the balance vests equally monthly over the next eighteen months. Directors were granted options to purchase an aggregate of up to 2,160,000 shares of common stock of the Company. 1,140,000 shares are vested and the balance vests equally monthly over the next eighteen months. Employees were granted options to purchase an aggregate of up to 642,000 shares of common stock of the Company. 303,000 shares are vested and the balance vests equally monthly over the next eighteen months. The exercise price of these stock options is $0.20, which was approximate to their fair market value at the date of grant. The term of all options is ten years. The vesting schedule and the period required for full exercisability of the stock options is at the discretion of the Board of Directors.

The Company applies Accounting Principles Board ("APB") Opinion 25, Accounting for Stock Issued to Employees and related interpretations in accounting for options granted to employees, officers and directors. Under APB Opinion 25, if the exercise price of the Companys stock options equal or exceeds the market price of the underlying stock on the date of grant, no compensation cost is recognized. For the options granted in August 2003, the exercise price of each option approximated the market price of the Companys stock on the date of grant and the options expire in 9.5 years.

SFAS No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure, requires the Company to provide pro forma information regarding net income and earnings per share for each period presented as if compensation cost for the Companys stock options has been determined in accordance with the fair market value based method prescribed in SFAS No. 123. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option pricing model with the following weighted average assumptions used for the grants in August 2003; no dividend yield for all years; expected volatility of 183%; risk-free interest rate of 3%, and an expected life of 10 years.

Under the accounting provisions of SFAS No. 123, as amended by SFAS No. 148, the Companys net loss and net loss per common share would have been as follows:

For the nine months ended
Ended March 31, 2004Net loss
As reported
Pro forma
$ (1,325,262)
$ (1,720,083)Net loss per common share  basic and diluted
As reported
Pro forma
$ (.07)
$ (.09)
A summary of the status of the Companys option plan as of March 31, 2004 and the changes during the period ending on that date is presented below:

Shares
Weighted Average
Exercise PriceOutstanding at July 1, 2003
-
-Granted
4,026,000
$ .20Forfeited
-
-Outstanding at March 31, 2004
4,026,000
$.20Weighted average fair value of options granted to employees during the period
$ .19

The following table summarizes information about the stock options outstanding at March 31, 2004:

Options outstanding
Options exercisableExercise price
Number outstanding atMarch 31, 2004
Weighted average remainingcontractual life
Weighted averageexercise price
Number exercisable atMarch 31, 2004
Weighted averageexercise price$ .20
4,026,000
9.42 years
$ .20
2,089,000
$ .20

Use of Estimates

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


Loss Per Share

Basic and diluted net loss per common share for the three and nine months ended March 31, 2004 and 2003 is computed based upon the weighted average common shares outstanding as defined by SFAS No. 128, "Earnings Per Share". Common stock equivalents have not been included in the computation of diluted loss per share since the effect would be anti-dilutive.




NOTE 2: LINE OF CREDIT - BANK

At March 31, 2004, the Company had a line of credit from a bank for short-term borrowings in the amount of $25,000, which bears interest at floating rates. This line is unsecured and has an outstanding balance of $24,782. Total interest expense associated with the line of credit amounted to $795 for the nine months ended March 31, 2004.

NOTE 3: RELATED PARTY TRANSACTIONS

Related Party Receivable

From time to time, the Company advances monies to officers and directors for travel, personal expenditures, and other matters. These advances are non-interest bearing and have no specified terms of repayment.

Legal Counsel

The Companys legal counsel is a stockholder of the Company. For the three months ended March 31, 2004 and 2003, services rendered amounted to $ -0- and $71,259 respectively, and are included in other general and administrative expenses. For the nine months ended March 31, 2004 and 2003, services rendered amounted to $6,032 and $94,157 respectively, and are included in other general and administrative expenses. The decrease is due to reduced legal service mainly in regard to a registration statement filed in fiscal year 2003.


Consulting Services

During the nine months ended March 31, 2004 and 2003, the Company incurred consulting fees for various corporate and administrative services performed by officers, directors, and stockholders.


NOTE 4 : NOTES PAYABLE - STOCKHOLDERS

Notes payable from stockholders, as of March 31, 2004 and June 30, 2003, consisted of the following:

MarchJune
2004                                    2003

$13,5$13,566 convertible note payable, 7.5% interest rate, principal and interest d due November 30, 2004
$ 13,566
$
13,566$13,584 convertible note payable, 7.5% interest rate, principal and interest
due November 30, 2004
13,584
13,584$48,000 convertible note payable, 7.0% interest rate, principal and interest
due May 19, 2004
15,000
15,000$25,000 convertible note payable, 7.0% interest rate, principal and interest
due December 9, 2004 (net of discount on note of $17,467)
7,533
-$25,000 convertible note payable, 7.0% interest rate, principal and interest
due December 23, 2004 (net of discount on note of $18,066)
6,934
-$50,000 convertible note payable, 7.0% interest rate, principal and interest
due December 31, 2004 (net of discount on note of $37,219)
7,781
-64,398
42,150Current portion
64,398
15,000Long term portion
$ -
$
27,150
The holders of the above convertible notes above have the option to convert at any time only the entire amount of the unpaid principal and interest of the note into the shares of the Companys common stock at a conversion price of $0.20 to $0.35 per share.

The $25,000, $25,000 and the $50,000 convertible notes payable have detachable warrants to purchase 166,667, 166,667 and 333,333 shares of common stock, respectively, at a price of $0.30 per share. As of March 31, 2004, no warrants have been exercised. The warrants were valued using the Black-Scholes pricing model and resulted in a fair value of $32,613, $24,790 and $49,580, respectively, however the value of the warrants are being limited to the face value of each note. These values were recorded as discounts on notes payable and are being amortized over the life of the notes.


NOTE 5: GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the nine months ended March 31, 2004, the Company incurred a net loss of $1,325,262 and negative cash flows from operating activities of $457,341, has a stockholders deficiency of $762,284, an accumulated deficit of $8,674,587 and a working capital deficiency of $762,284 at March 31, 2004. These conditions raise substantial doubt about the Companys ability to continue as a going concern.

In view of these matters, realization of a major portion of the assets in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Companys ability to meet its working capital requirements, and the success of its future operations. Managements current plans are: (1) to further commercialize its own products,(2) to market new products, including products from other manufacturers, and (3) to continue to operate and improve e-commerce sites to sell its products. In addition, as described in Note 7, the Company has raised additional equity capital of $1,110,000 ($957,000 net of commissions). Management believes that the action presently being taken to revise the Companys operating and financial requirements provide the opportunity for the Company to continue as a going concern.

NOTE 6: STOCKHOLDERS DEFICIENCY

(A) Private Placement

During December 2003, the Company entered into a Private Offering Memorandum with several accredited investors for additional equity capital. The Company raised a total of $250,000 ($217,500 net of commissions). The Memorandum offered to accredited investors units for a minimum amount of 3,333,333 shares and 3,333,333 warrants. Each unit consists of 333,333 shares of common stock at $.15 and 333,333 three-year warrants convertible at $.30, although the Company may accept, at their discretion, subscriptions for lesser amounts. As of March 31, 2004, the Company sold 1,666,667 shares and 1,666,667 warrants for net proceeds of $217,500. As of March 31, 2004, no warrants have been exercised. The warrants were valued using the Black-Scholes pricing model and resulted in a fair value of $216,858. The following weighted average assumptions were used: expected dividend yield 0%, volatility 355%, risk-free interest rate 3.75%, expected option life 3 years. The net proceeds of $217,500 were allocated between the fair value of the warrants issued with the common stock and the common stock. The Company issued the 1,666,667 shares of stock on March 24, 2004.

(B) Other

On March 24, 2004, the Company settled $10,000 of accounts payable by issuing 50,000 shares of common stock at $.20 per share. The number of shares issued were based on the fair market value of the services provided.

During the nine months ended March 31, 2004, the Company settled $441,400 of previously accrued consulting expenses by issuing 2,207,000 shares of common stock at $.20 per share. The number of shares issued were based on the fair market value of the services provided.

During the nine months ended March 31, 2004, the Company issued 1,650,000 shares of common stock at $.20 per share for consulting services totaling $330,000. The number of shares issued were based on the fair market value of the services provided. $90,000 of this amount is being amortized over the life of the agreements resulting in consulting expense of $78,661 for the nine months ended March 31, 2004. The unamortized balance of $11,339 is presented in the accompanying condensed balance sheet as a contra equity account.

During the nine months ended March 31, 2004, the Company settled $190,550 of accrued payroll by issuing 952,750 shares of common stock at $.20 per share. The number of shares issued were based on the value of the services provided.

NOTE 7: SUBSEQUENT EVENTS

During April 2004, the Company entered into a Private Offering Memorandum with several accredited investors for additional equity capital. The Company raised a total of $1,110,000 ($957,000 net of commissions). The Memorandum offered to accredited investors units for a minimum amount of 500,000 shares and 500,000 warrants. Each unit consists of 500,000 shares of common stock at $.10 and 500,000 three-year warrants convertible at $.15, although the Company may accept, at their discretion, subscriptions for lesser amounts. As of May 13, 2004, the Company sold 11,100,000 shares and 11,100,000 warrants for net proceeds of $957,000.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLANS OF OPERATION.

The following discussion and analysis should be read in conjunction with the condensed financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-QSB. The discussion of the Companys business contained in this Quarterly Report on Form 10-QSB may contain certain projections, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed below at "Risks and Uncertainties." While this outlook represents managements current judgment on the future direction of the business, such risks and uncertainties could cause actual results to differ materially from any future performance suggested below. The Company undertakes no obligation to release publicly the results of any revisions to these forward-looking statements to reflect events or circumstances arising after the date hereof.

OVERVIEW

The Company has limited operating history and is no longer in the development stage. Its principal business is the exploitation of niche products for the microcomputer industry that provide enhanced system security for both individual users and network administrators. The Companys initial product, Com-Guard?, includes unique software and hardware that enables users to protect and limit access to data; and to provide a security system against tampering and unauthorized use of computers.

The Com-Guard? system monitors a computer or network and detects, through proprietary software and hardware, unauthorized attempts to use, tamper with, or remove data or equipment. The system is designed to generate an alarm, which can be sent to any receiving device, including pagers, telephones, and other computers.

The market for Com-Guard? consists of individual users and industry. The popularity of the Internet has created a need for both data security and access limitations. Limiting access to sensitive and/or confidential files has grown to be a need for all users of microcomputers.

Home automation, including systems to provide "internal" security to certain areas of a home or office, represents an additional market for Com-Guard?. The system, installed in a PC, has the ability to function as an internal home security system, controlling a series of sensors to protect against theft and intrusion.

The Company has commenced the marketing of its products. However, quarter-to-quarter financial comparisons may be of limited usefulness now and for the next several quarters as the Company continues to market its products.

The Company markets and sells its products through the Companys website:www.com-guard.com and a number of other commercial websites. In addition, the Company is working on other avenues of distribution and sales for its products.

Also See "Risks and Uncertainties " included in this discussion.

RESULTS OF OPERATIONS

Sales
****
Sales were $2,524 and $62,630 for the three month period ended March 31, 2004 and 2003, respectively. Sales were $11,153 and $63,451 for nine month period ended March 31, 2004 and 2003, respectively. The decrease in sales was primarily related to a decrease in working capital for marketing.

Provision to Write Down Inventories

For the nine month period ended March 31, 2004 and 2003, provision to write down inventories were $0 and $75,000, respectively. The write down in fiscal year 2003 was based on the Companys estimate of current market values of inventory.

Costs of Goods Sold

Cost of goods sold were $1,131 and $58,645 for the three month period ended March 31, 2004 and 2003, respectively. Cost of goods sold were $2,861 and $58,645 for the nine month period ended March 31, 2004 and 2003, respectively. The decrease in Costs of goods sold was primarily due to decreased sales that was related to a decrease in working capital for sales and marketing.

Consulting fees.

For the three months ended March 31, 2004 and 2003, consulting fees were $310,900 and $107,500. For the nine months ended March 31, 2004 and 2003, consulting fees were $480,059 and $290,100. Fluctuations are due to the Companys use of consultants during various times as projects develop and end.

Payroll and related costs.

Payroll and related costs for the three months ended March 31, 2004 and 2003 were $176,993 compared to $248,864 for the previous year. Payroll and related costs for the nine months ended March 31, 2004 and 2003 were $563,330 compared to $473,653 for the previous year. Payroll for the Company commenced on September 1, 2003.

Other general and administrative expenses.

Other general and administrative expenses for the three months ended March 31, 2004 were $71,754. Other general and administrative expenses for the three months ended March 31, 2003 were $167,811, a decrease of $96,057. Other general and administrative expenses for the nine months ended March 31, 2004 were $234,011. Other general and administrative expenses for the three months ended March 31, 2003 were $377,961, a decrease of $143,950. The decrease in general and administrative expenses were due mainly to reductions in depreciation, travel and entertainment, legal and accounting fees, and general office expenses.




Research and development expenses.

For the three months ended March 31, 2004 and 2003, research and development expenses were $-0- and $34,945, respectively. For the nine months ended March 31, 2004 and 2003, research and development expenses were $2,678 and $87,962, respectively. Overall costs decreased due to the Company completing certain of its products and therefore requiring less research and development expenses.



Sales and marketing

Sales and marketing for the three months ended March 31, 2004 and 2003 were $9,083 and $52,139, respectively. Sales and marketing for the nine months ended March 31, 2004 and 2003 were $22,726 and $125,071, respectively. The decrease in sales and marketing was due mainly to decreased working capital in the Company.


Liquidity and capital resources.

We have financed our operations primarily through cash generated from the sale of our stock and loans to us. We are no longer classified as a development stage company and have commenced the sales and marketing of our products.


During the nine months ended March 31, 2004, the Company incurred a net loss of $1,325,262 and negative cash flows from operating activities of $457,341, has a stockholders deficiency of $762,284, an accumulated deficit of $8,674,587 and a working capital deficiency of $762,284 as of March 31, 2004. These conditions raise substantial doubt about the Companys ability to continue as a going concern.

During the year ended June 30, 2000, the Company acquired certain hardware ISA circuit boards from a current shareholder for approximately $638,000. This inventory has since been written down to $60,000 based on its current value. During the year ended June 30, 2001, the Company acquired a new series of PCI circuit boards from another shareholder for $600,000. As of March 31, 2003, this inventory has been reduced to $165,000. The Company is the sole licensee outside of Korea for these circuit board products. We are not aware that either vendor has ever sold these same products to any other third party. The Company has the license rights to manufacture (outsource) these products from other outside vendors. The Company will, based on sales and demand, determine whether to outsource manufacturing to another vendor or reorder from its Korean vendor.

In addition to the software developed for the hardware circuit boards, the Company also has software applications that can be sold as separate products. Since hardware related products have a higher cost to manufacture than stand-alone software products, the Company is currently placing a strong emphasis on its standard software products to generate revenue. The Company continues to set strategies in certain key target areas to market its hardware/software products.

Our auditors have expressed their uncertainty as to our ability to continue as a going concern. They cite the minimal capital resources available to meet existing and anticipated obligations. Managements current plans are: (1) to further commercialize its own products, (2) to market new products, including products from other manufacturers, and (3) to continue to operate and improve e-commerce sites to sell its products. To successfully execute its current plans, the Company will need to improve its working capital position. The Company plans to overcome the circumstances that impact our ability to remain a going concern through a combination of achieving profitability, raising additional debt and equity financing, and renegotiating existing obligations.

During April 2004, the Company entered into a Private Offering Memorandum with several accredited investors for additional equity capital. The Company raised a total of $1,110,000 ($957,000 net of commissions). The Memorandum offered to accredited investors units for a minimum amount of 500,000 shares and 500,000 warrants. Each unit consists of 500,000 shares of common stock at $.10 and 500,000 three-year warrants convertible at $.15, although the Company may accept, at their discretion, subscriptions for lesser amounts. As of May 13, 2004, the Company sold 11,100,000 shares and 11,100,000 warrants for net proceeds of $957,000.

There can be no assurance, however, that the Company will be able to complete any additional debt or equity financing on favorable terms or at all, or that any such financings, if completed, will be adequate to meet the Companys capital requirements. Any additional equity or convertible debt financings could result in substantial dilution to our stockholders. If adequate funds are not available, the Company will be required to delay, reduce or eliminate some or all of our planned activities. The Companys inability to fund its capital requirements would have a material adverse effect on the Company. The Company currently has adequate cash resources to continue through May 31, 2005.



CRITICAL ACCOUNTING POLICIES

The Company believes the following are its most critical accounting policies in that they are the most important to the portrayal of the Companys financial condition and results and requires managements most difficult, subjective or complex judgments.

Inventory Valuation

The Company regularly monitors and assesses our risk of not incurring any material sales of its inventory in the future. This evaluation is based upon the Companys sales force efforts and information the Company receives from potential customers. Based upon the results of the analysis, the Company records a valuation reserve for this risk. This analysis requires the Company to make significant estimates, and changes in facts and circumstances could result in material changes in the valuation reserve.

Revenue Recognition

The Company accounts for the licensing of software in accordance with American Institute of Certified Public Accountants (AICPA) Statement of Position (SOP 97-2, Software Revenue Recognition). The Company recognizes revenue when (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the sales price is fixed or determinable; and (iv) collectibility is reasonably assured. Post customer support (PCS), if applicable, is recognized on delivery of applicable software. The Company accrues all estimated costs of providing the PCS services, including upgrades/enhancements.

At the time of the transaction, the Company assesses whether the fee is fixed and determinable based on the payment terms associated with the transaction and whether collectibility is reasonably assured. If a significant portion of a fee is due after our normal payment terms, the Company accounts for the fee as not being fixed and determinable. In these cases, the Company recognizes revenue as the fees become due. Where the Company provides or delivers a product or service at a specific point in time and there are no remaining obligations, the Company recognizes revenue upon the delivery of the product or completion of the service.

RISKS AND UNCERTAINTIES

Our business is capital intensive and will require additional financing which will result in dilution to existing shareholders which would in turn reduce the share price of earlier issued shares

Our operations are capital intensive and growth will consume a substantial portion of available working capital. We may require additional capital in order to fund are operations. We do not have any commitments for additional financing and there can be no assurance that such additional funding, if required, will be available, or if available, will be available upon favorable terms. With respect to our ability to obtain financing on favorable terms, we do not have significant assets to serve as loan collateral. Still further, we presently do not have a sufficient cash flow to qualify for reasonable debt financing. Insufficient funds may prevent us from implementing our business strategy. In the event we raise additional funds through the issuance of equity securities, dilution to the then existing stockholders will result and future investors may be granted rights superior to those of existing stockholders. Accordingly, such dilution would reduce the share price of the earlier issued shares.

Lack of operations, positive cash flow and profitability may continue which will affect our ability to remain in business

As of March 31, 2003, planned principal operations commenced. As such we have a limited history of operations, the generation of positive cash flow or profits in the industries in which we participate. If we do not generate positive cash flow and hence become profitable, we may not be able to remain in business.


Uncertainty of commercial success may affect our ability to remain in business

With respect to our revenue and profitability prospects, we may not be able to achieve commercial success with our Com-Guard product. Furthermore, the computer industry is characterized by rapid change and growth. Accordingly, we may not be able to keep up with the pace of technological change or fund its growth. If we fail to achieve commercial success, we will continue to suffer net losses and we will have to go out of business.

Competition may have an adverse effect on our business

We are subject to competition from other companies that may try to emulate or compete with similar products or services. These competitors have been in the business longer than us and may have large executive and operating staffs. Our prospects may be adversely affected by competition from these companies. The introduction of similar or superior products by current or future competitors could have a material adverse effect on our business and financial condition.

Dependence on management will affect our profitability

Future success depends on the continued services of Dr. Edward W. Savarese, Chief Executive Officer and Joe Sigismonti, President and Chief Operating Officer. While we intend to enter into customary employment agreements with each of them, the loss of any of their services would be detrimental and could have a material adverse effect on the business, financial condition and results of operations. Future success is also dependent on our ability to identify, hire, train and retain other qualified managerial and other employees. Competition for these individuals is intense and increasing. We may not be able to attract, assimilate, or retain qualified technical and managerial personnel and our failure to do so could have a material adverse effect on the business, financial condition and results of operations.

Dependence on proprietary technology and risks of third party infringement claims could adversely affect our business and results of operations

Although we have received patent protection, our measures to protect our current proprietary rights may be inadequate to prevent misappropriation of such rights or that our competitors will not independently develop or patent technologies that are substantially equivalent to or superior to our technologies. Additionally, although we believe that our products and technologies do not infringe upon the proprietary rights of any third parties, that third parties may assert infringement claims against products and technologies that we license, or has the rights to use, from third parties. Any such claims, if proved, could materially and adversely affect our business and results of operations. In addition, though any such claims may ultimately prove to be without merit, the necessary management attention to, and legal costs associated with litigation or other resolution of such claims could materially and adversely affect our business and results of operations.

The results of research and development efforts are uncertain and we may not be able to compete effectively in the marketplace

We will need to make significant research and development expenditures to remain competitive. While we perform extensive usability and beta testing of new products, the products we are currently developing or may develop in the future may not be technologically successful. If they are not technologically successful, the resulting products may not achieve market acceptance and these products may not compete effectively with products of competitors currently in the market or introduced in the future. If we are unsuccessful in the marketplace, it may affect our ability to remain in business.

Reliance on third party technologies may result in a decreasing demand for our products and our ability to remain in business affect the value of your investment

Our software products are designed to run on multiple operating systems and integrate with security products from other vendors. Businesses in the corporate market may not adopt such technologies as anticipated or will in the future migrate to other computing technologies that we do not support. Moreover, if our products and technology are not compatible with new developments from these companies, as to which there can be no assurances, the business, results of operations and financial condition could be materially and adversely affected. If we are unable to successfully and timely develop products that operate under existing or new operating systems, or if pending or actual releases of the new operating systems delay the purchase of products, future net revenues and operating results could be materially adversely affected. Additionally, as hardware vendors incorporate additional server- based network management and security tools into network operating systems, the demand may decrease for some products, including those currently under development. In the event such demand decreases, we will continue to suffer net losses and we will have to go out of business.

Our auditors have expressed doubts about our ability to continue as a going concern which may result in the loss of your entire investment

In preparing our audited financial statements, our auditors have expressed doubts about our ability to continue as a going concern. If we discontinue operations, you will lose your entire investment.

Risks Relating to Our Common Stock

Because our common stock has recently been listed on the NASD OTC Bulletin Board there can be no assurance that a regular trading market for our common stock will ever be developed and as such the investors must be able to bear the financial risk of losing their entire investment

Our common stock was listed on December 24, 2003 on the NASD OTC Bulletin Board under the trading symbol "CGUD." There has been only limited trading activity in our securities at this time and a regular trading market for our common stock may never be developed. We do not know if a market for our common stock will be established or that, if established, a market will be sustained. Therefore, investors should realize that they may be unable to sell our common stock if they purchase it. Accordingly, investors must be able to bear the financial risk of losing their entire investment in our common stock.

Potential volatility of stock price will affect the value of our common stock

There can be no assurance that an active public trading market can be established or sustained. Furthermore, if a regular trading market for the common stock is established, the shares could be subject to significant fluctuations in response to operating results and other factors, many of which are not within our control. Accordingly, you may not be able to obtain a satisfactory price for your shares if you need to sell some or all of your shares at a time when the shares may be depressed.


Dividends

We have never paid a cash dividend on our common stock. We are not obligated to pay a dividend on our common stock and do not anticipate payment of any dividends for the foreseeable future. We anticipate retaining our earnings to finance our operations, growth, and expansion.

ITEM 3. CONTROLS AND PROCEDURES
****
Evaluation of disclosure controls and procedures. Edward W. Savarese, our Chief Executive Officer and Gerry B. Berg, our Chief Financial Officer, have preformed an evaluation of the Companys disclosure and procedures, as that term is defined in Rule 13a-14 © of the Securities Exchange Art of 1934, as amended (the "Exchange Act"), as of the end of the period covered by this report and each has concluded that such disclosure controls and procedures are effective to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time period specified by the Securities and Exchange Commissions rules and regulations.

Changes in internal controls. No significant changes in the Companys internal controls or in other factors that could significantly affect these controls were made as a result of the evaluation.


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
None.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
None

(b) Reports on Form 8-K:
None.



CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned certifies that this periodic report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operations of Com-Guard.com, Inc.

COM-GUARD.com, INC.By:
/s/  EDWARD W. SAVARESE

Edward W. Savarese Chief Executive OfficerBy:
/s/  GERRY B. BERG

Gerry B. Berg Chief Financial Officer (Principal Financial and Accounting Officer)
SIGNATURES
****
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.

Dated: May 17, 2004
COM-GUARD.com, INC.

By:
/s/  EDWARD W. SAVARESE

Edward W. Savarese Chief Executive OfficerBy:
/s/  GERRY B. BERG

Gerry B. Berg Chief Financial Officer (Principal Financial and Accounting Officer)

CERTIFICATIONS

I, Edward W. Savarese, certify that:

1. I have reviewed this Form 10-QSB of Com-Guard.com, Inc.

2. Based on my knowledge, the Amendment 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 report.

3. Based on my knowledge, the financial statements, and the financial information included in this Amendment, 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 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-15(e) and 15d-15(e)) and internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervisions, 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 Amendment is being prepared;

(b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposed in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and

5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, 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 and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information 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 control over financial reporting.

DATED: May 17, 2004/s/ Edward W. SavareseEDWARD W. SAVARESEChief Executive Officer
I, Gerry B. Berg, certify that:

1. I have reviewed this Form 10-QSB of Com-Guard.com, Inc.

2. Based on my knowledge, the Amendment 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 report.

3. Based on my knowledge, the financial statements, and the financial information included in this Amendment, 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 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-15(e) and 15d-15(e)) and internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervisions, 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 Amendment is being prepared;

(b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposed in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and

5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, 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 and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information 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 control over financial reporting.

DATED: May 17, 2004/s/ Gerry B. BergGERRY B. BERGChief Financial Officer