**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, 2005**




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 √  No
__





The
number of shares outstanding of the registrant's common stock as of May 13, 2005
was 43,159,901.





**










**PART
      I - CONSOLIDATED FINANCIAL INFORMATION**
    **PAGE**ITEM
      1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTSCondensed
      Consolidated Balance SheetsAs
      of March 31, 2005 (unaudited) and June 30, 2004
    3Condensed
      Consolidated Statements of Operations for theThree
      months ended March 31, 2005 and 2004 (unaudited)
    4Condensed
      Consolidated Statements of Operations for theNine
      months ended March 31, 2005 and 2004 (unaudited)
    5Condensed
      Consolidated Statements of Cash Flows for theNine
      months ended March 31, 2005 and 2004 (unaudited)
    6Notes
      to Condensed Consolidated Financial StatementsAs
      of March 31, 2005 (unaudited)
    7ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLANS OF
    OPERATION
    11ITEM
      3. CONTROLS AND PROCEDURES
    16**PART
      II - OTHER INFORMATION**ITEM
      1. LEGAL PROCEEDINGS
    16ITEM
      2. CHANGES IN SECURITIES AND USE OF PROCEEDS
    16ITEM
      3. DEFAULTS UPON SENIOR SECURITIES
    16ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    16ITEM
      5. OTHER INFORMATION
    16ITEM
      6. EXHIBITS AND REPORTS ON FORM 8-K
    17**SIGNATURES**
    18


*2*





**COM-GUARD.COM,
INC. AND SUBSIDIARY**


**CONDENSED
CONSOLIDATED BALANCE SHEET** **S**


**March
      31, 2005**
    
    June
      30,
      2004**ASSETS**
    
    (unaudited)Current
      assetsCash
      and cash equivalents
    
    $
    3,000
    
    $
    394,000Accounts
      receivable
    
    
    690,000
    
    
    -Inventories
    
    
    7,000
    
    
    488,000Employee
      advances
    
    
    34,000
    
    
    -Prepaid
      expenses and other current assets
    
    
    17,000
    
    
    -Total
      Assets
    
    $
    751,000
    
    $
    882,000**LIABILITIES
      AND STOCKHOLDERS’ (DEFICIENCY) EQUITY**Current
      liabilitiesAccounts
      payable
    
    $
    179,000
    
    $
    163,000Accrued
      expenses
    
    
    889,000
    
    
    590,000Line
      of credit — bank
    
    
    24,000
    
    
    25,000Convertible
      notes payable to a related party, net of unamortized discount of $10,000
      as of June 30, 2004
    
    
    -
    
    
    10,000Loan
      payable - officer
    
    
    -
    
    
    3,000Total
      Liabilities
    
    
    1,092,000
    
    
    791,000Commitments
      and contingenciesStockholders’
      (deficiency) equityCommon
      stock, $.001 par value, 100,000,000 shares authorized, 43,159,901 and
      39,721,342 shares issued and outstanding, respectively
    
    
    43,000
    
    
    40,000Common
      stock to be issued, 400,000 and 293,559 shares,
    respectively
    
    
    -
    
    
    -Additional
      paid-in-capital
    
    
    9,775,000
    
    
    9,413,000Deferred
      consulting expense
    
    
    (172,000
    )
    
    -Accumulated
      deficit
    
    
    (9,987,000
    )
    
    (9,362,000
    )Total
      stockholders’ (deficiency) equity
    
    
    (341,000
    )
    
    91,000Total
      Liabilities and stockholders’ (deficiency) equity
    
    $
    751,000
    
    $
    882,000


See
accompanying notes to condensed consolidated financial statements.




****
 *3*





COM-GUARD.COM, INC. AND
SUBSIDIARY  **CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS**


**For
the Three Months Ended March 31, 2005 and 2004**


(Unaudited)





**2005**
    
    2004Net
      sales
    
    $1,940,000
    
    $2,000Cost
      of goods sold
    
    
    1,867,000
    
    
    1,000Gross
      profit
    
    
    73,000
    
    
    1,000Selling,
      general and administrative expenses
    
    
    354,000
    
    
    569,000Loss
      from operations
    
    
    (281,000
    )
    
    (568,000
    )Other
      income (expense)Interest
      expense
    
    
    -
    
    
    (29,000
    )Total
      other income (expense)
    
    
    -
    
    
    (29,000
    )Loss
      before provision for income taxes
    
    
    (281,000
    )
    
    (597,000
    )Less:
      provision for income taxes
    
    
    -
    
    
    -Net
      loss
    
    $
    (281,000
    )
    $
    (597,000
    )Net
      loss per share - basic and diluted
    
    $
    (0.01
    )
    $
    (0.03
    )Weighted
      average number of shares outstanding - basic and diluted
    
    
    43,472,679
    
    
    21,411,333






































See
accompanying notes to condensed consolidated financial statements.





****
 *4*








**COM-GUARD.COM,
INC. AND SUBSIDIARY**


**CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS**


**For
the Nine Months Ended March 31, 2005 and 2004**


(Unaudited)





**2005**
    
    2004Net
      sales
    
    $
    5,998,000
    
    $
    11,000Cost
      of goods sold
    
    
    5,697,000
    
    
    3,000Gross
      profit
    
    
    301,000
    
    
    8,000Selling,
      general and administrative expenses
    
    
    928,000
    
    
    1,302,000Loss
      from operations
    
    
    (627,000
    )
    
    (1,294,000
    )Other
      income (expense)Interest
      expense
    
    
    (10,000
    )
    
    (31,000
    )Gain
      on conversion of debt
    
    
    12,000
    
    
    -Total
      other income (expense)
    
    
    2,000
    
    
    (31,000
    )Loss
      before provision for income taxes
    
    
    (625,000
    )
    
    (1,325,000
    )Less:
      provision for income taxes
    
    
    -
    
    
    -Net
      loss
    
    $
    (625,000
    )
    $
    (1,325,000
    )Net
      loss per share - basic and diluted
    
    $
    (0.01
    )
    $
    (0.07
    )Weighted
      average number of shares outstanding - basic and diluted
    
    
    41,643,848
    
    
    19,616,155



































See
accompanying notes to condensed consolidated financial statements.





****
 *5*





**COM-GUARD.COM,
INC. AND SUBSIDIARY**


**CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS**


**For
the Nine Months Ended March 31, 2005 and 2004**


(Unaudited)


2005
    
    2004Cash
      Flows From Operating Activities:Net
      loss
    
    $
    (625,000
    )
    $
    (1,325,000
    )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Stock
      and options issued for services
    
    
    49,000
    
    
    314,000Amortization
      of discount on convertible notes payable
    
    
    10,000
    
    
    27,000Amortization
      of deferred consulting expense
    
    
    69,000
    
    
    -Gain
      on conversion of accounts payable
    
    
    (12,000
    )
    
    -Changes
      in operating assets and liabilities:Accounts
      receivable
    
    
    (690,000
    )
    
    2,000Inventories
    
    
    481,000
    
    
    -Employee
      advances, prepaid expenses and other current assets
    
    
    (51,000
    )
    
    -Accounts
      payable and accrued expenses
    
    
    391,000
    
    
    557,000Net
      cash used in operating activities
    
    
    (378,000
    )
    
    (425,000
    )Cash
      Flows From Financing Activities:Proceeds
      from the sale of common stock
    
    
    10,000
    
    
    218,000Proceeds
      from the sale of warrants
    
    
    1,000
    
    
    -Proceeds
      from convertible notes payable to a related party
    
    
    -
    
    
    110,000Repayment
      of convertible notes payable to a related party
    
    
    (20,000
    )
    
    (15,000
    )Repayment
      of loan payable to officer
    
    
    (3,000
    )Net
      proceeds (repayments) from bank line of credit
    
    
    (1,000
    )
    
    3,000Net
      cash (used in) provided by financing activities
    
    
    (13,000
    )
    
    316,000Net
      (decrease) increase in cash and cash equivalents
    
    
    (391,000
    )
    
    (109,000
    )Cash
      and cash equivalents at beginning of period
    
    
    394,000
    
    
    142,000Cash
      and cash equivalents at end of period
    
    $
    3,000
    
    $
    33,000Supplemental
      disclosure of cash flow information:Interest
      paid
    
    $
    -
    
    $
    -Taxes
      paid
    
    $
    -
    
    $
    -Supplemental
      disclosure of non-cash investing and financing activities:Common
      stock issued for accounts payable and accrued expenses
    
    $
    64,000
    
    $
    326,000Common
      stock issued for deferred consulting services, of which $24,000 has been
      amortized
    
    $
    83,000
    
    $
    -Options
      issued for deferred consulting services, of which $45,000 has been
      amortized
    
    $
    158,000
    
    $
    -




See
accompanying notes to condensed consolidated financial statements.










*6*





**COM-GUARD.COM,
INC. AND SUBSIDIARY**


**NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**AS
OF MARCH 31, 2005**


(Unaudited)







**NOTE
1 - THE COMPANY AND BASIS OF PRESENTATION**




The
accompanying interim condensed consolidated financial statements of
Com-Guard.com, Inc. and subsidiary (collectively, the "Company" or “Com-Guard”)
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 consolidated 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 condensed consolidated 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, 2004 as filed with the SEC on October 13, 2004. Interim operating
results are not necessarily indicative of operating results for any future
interim period or for the full year.




Com-Guard was
incorporated in the state of Nevada on October 7, 1998 as E-WORLD SECURITY, INC
and on April 16, 1999, the Company changed its name to COM-GUARD.COM, INC. The
Company’s planned principal operations commenced during the year ended June 30,
2003. The Company sells products that afford security protection to computer
hardware and software in microcomputers. The Company’s initial product,
Com-GuardTM, 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. At the end of the fiscal year ended June 30,
2004, the Company formed its PC Products subsidiary, which started formal
operating activities during the first quarter of fiscal year 2005. In addition
to generating potential sales of computers and accessories, which may include
Com-GuardTM security products, this subsidiary will be used to generate end-user
awareness of the Company’s security products.




The
accompanying condensed consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. During the nine
months ended March 31, 2005, the Company suffered a net loss of $625,000 and had
negative cash flows from operating activities of $378,000. As of March 31, 2005,
the Company had a working capital deficiency of $341,000 and an accumulated
deficit of $9,987,000. The Company has sustained its operations primarily
through equity and debt financing. 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
consolidated  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
its e-commerce sites to sell its products. Management believes that the actions
presently being taken to revise the Company's operating and financial
requirements may provide the opportunity for the Company to continue as a going
concern.







**NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**




***(A)
Principles of Consolidation***




The
accompanying condensed consolidated financial statements include the accounts of
Com-Guard.com, Inc. and its wholly owned subsidiary, PC Products, Inc. All
significant inter company accounts and transactions have been eliminated in
consolidation.




***(B)
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 periods. Actual results
could differ from those estimates.





*7*




***(C)
Reclassifications***




Certain
amounts from prior periods have been reclassified to conform to the current
period’s presentation.




***(D)
Stock Options and Warrants***




In accordance
with Statement of Financial Accounting Standards ("SFAS") No. 123, " *Accounting
for Stock-Based Compensation* ," the
Company has elected to account for Stock Options issued to employees under
Accounting Principles Board Opinion No. 25 ("APB Opinion No. 25") and related
interpretations. The Company accounts for stock options issued to non-employees
under the fair value method of SFAS No. 123. Under APB Opinion No. 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.




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
was 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. The estimated
fair value of each stock option granted in fiscal 2004 using the Black-Scholes
option pricing model was based on the following weighted average assumptions: no
dividend yield; expected volatility of 183%; risk-free interest rate of 3%, and
an expected life of 6 years. The estimated fair value of each stock option
granted in fiscal 2005 using the Black-Scholes option pricing model was based on
the following weighted average assumptions: no dividend yield; expected
volatility of 173%; risk-free interest rate of 3%, and an expected life of 6
years.





Under the
accounting provisions of SFAS No. 123, as amended by SFAS No. 148, the Company’s
pro forma net loss and net loss per common share reflects the expense related to
options issued to employees which is recognized over the vesting period. For the
nine months ended March 31, 2005 and 2004, the pro forma net loss and net loss
per common share would have been as follows:











Net
      loss:
    
    **2005**
    
    2004As
      reported
    
    $
    (625,000
    )
    $
    (1,325,000
    )Pro
      forma
    
    $
    (823,000
    )
    $
    (1,720,000
    )Net
      loss per common share - basic and fully diluted:As
      reported
    
    $
    (0.01
    )
    $
    (0.07
    )Pro
      forma
    
    $
    (0.02
    )
    $
    (0.09
    )




***(E)
Loss Per Share***




Basic and
diluted net loss per share for all periods presented is computed based upon the
weighted average number of common shares outstanding as defined by SFAS No. 128,
"Earnings Per Share". Common stock equivalents, consisting of vested options as
of March 31, 2005 and 2004 of 4,073,000 and 2,084,000, respectively, have not
been included in the computation of diluted loss per share since the effect
would be anti-dilutive for all periods presented.




***(F)
Fair Value of Financial Instruments***




SFAS No. 107,
“Disclosures about Fair Value of Financial Instruments”, requires disclosures of
information about the fair value of certain financial instruments for which it
is practicable to estimate that value. For purposes of this disclosure, the fair
value of a financial instrument is the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a
forced sale or liquidation.




The carrying
amounts of the Company’s financial instruments, including cash and cash
equivalents, accounts receivable, accounts payable and accrued expenses, line of
credit and notes payable, approximate fair value due to the relatively short
period to maturity for these instruments.




*8*


***(G) Rounding***




All amounts
have been rounded to the nearest $1,000 except for share
amounts.




***(H)
Recent Accounting Pronouncements***




In December
2004, the FASB issued SFAS No. 123 (R), “Share-Based Payment”. SFAS No. 123 (R)
revises SFAS No. 123, “Accounting for Stock-Based Compensation” and supersedes
APB Opinion No. 25, “Accounting for Stock Issued to Employees”. SFAS No. 123 (R)
focuses primarily on the accounting for transactions in which an entity obtains
employee services in share-based payment transactions. SFAS No. 123 (R) requires
companies to recognize in the statement of operations the cost of employee
services received in exchange for awards of equity instruments based on the
grant-date fair value of those awards (with limited exceptions). SFAS No. 123
(R) is effective as of the first interim or annual reporting period that begins
after June 15, 2005 for non-small business issuers and after December 15, 2005
for small business issuers. Accordingly, the Company will adopt SFAS No. 123 (R)
in its quarter ending March 31, 2006. The Company is currently evaluating the
provisions of SFAS No. 123 (R) and has not yet determined the impact, if any,
that SFAS No. 123 (R) will have on its financial statement presentation or
disclosures.




**NOTE
3 - LINE OF CREDIT - BANK**




At March 31,
2005, the Company had a line of credit from a bank for short-term borrowing in
the amount of $25,000, which bears interest at floating rates. This line is
unsecured and as of March 31, 2005, the balance due was $24,000. Total interest
expense associated with the line of credit amounted to $1,000 and $1,000 for the
nine months ended March 31, 2005 and 2004, respectively.




**NOTE
4 - RELATED PARTY TRANSACTIONS**




***Convertible
Notes Payable - Related Party***




During fiscal
years 2003 and 2004, the Company issued convertible notes to certain
individuals, at par, maturing at various dates throughout 2004, for an original
principal amount of $214,000. The notes bore interest at 7.0% and 7.5%, and were
convertible, at the option of the holder, into shares of the Company's common
stock at prices from $0.15 to $0.35 per share. During fiscal 2004, the holders
of the convertible notes converted outstanding debt and accrued interest of
approximately $124,000 into 1,234,642 shares of the Company's common stock of
which 293,559 shares were to be issued as of June 30, 2004. These 293,559 shares
were issued in July 2004.




In August and
November 2004, the Company repaid the final $20,000 of the convertible notes
payable to a stockholder.




In
conjunction with the sale of convertible notes payable during fiscal 2004, the
Company issued warrants to purchase an aggregate of 666,667 shares of the
Company’s common stock at a price of $0.15 per share. The warrants were valued
using the Black-Scholes pricing model and the aggregate fair value of $99,000
(limited to the face value of the notes) was recorded as a discount on notes
payable and amortized as additional interest expense over the life of the notes.
During the nine monthly periods ended March 31, 2005, aggregate interest expense
associated with the amortization of the discount of notes payable was $10,000.
As of December 31, 2004 there was no remaining unamortized discount on notes
payable.




*9*




**NOTE
5 - STOCKHOLDERS’ EQUITY**




***Common
Stock***




In January
2005, the Company issued 850,000 shares of its common stock to a consultant for
the exercise of an option of $.05 per share, for which the Company received
$10,000 in cash and the balance was a reduction in accrued consulting fees
of  $32,500 owed to the consultant.




In December
2004, the Company issued 1,500,000 shares of common stock at $0.05 per share
totaling $75,000 and had agreed to issue an additional 150,000 shares at $0.05
per share totaling $7,500. The number of shares issued was based on the fair
market value of the services provided. These shares, with an aggregate value of
$82,500, were to be issued as compensation for consulting services to be
provided during the succeeding twelve months. As of March 31, 2005, the
unamortized balance, included in deferred consulting expense in the condensed
consolidated balance sheets, was $58,000.




In December
2004, the Company agreed to convert $24,000 of accounts payable into 250,000
shares of its common stock to be issued having a value of $12,000 resulting in a
gain of $12,000, representing the difference in the aggregate conversion price
and the market value of the shares on the conversion date.




In July 2004,
the Company issued 595,000 shares of common stock at prices ranging from $0.09
and $0.10 per share for consulting services totaling $49,000. The number of
shares issued was based on the fair market value of the services
provided.




In July 2004,
the Company issued 293,559 shares of its common stock which represented the
common stock to be issued as of June 30, 2004 as part of the June 2004
conversion of convertible notes payable and accrued interest (see Note 4
above).




***Stock
Options***




In January
2005, the Company’s Board of Directors approved the following stock options at
$.05 per share to Officers, Directors and Employees of the Company. Officers
were granted options to purchase an aggregate of up to 1,250,000 shares of
common stock of the Company. Directors were granted options to purchase an
aggregate of up to 1,800,000 shares of common stock of the Company. Employees
were granted options to purchase an aggregate of up to 400,000 shares of common
stock of the Company. No compensation expense was recognized or
deferred.




In January
2005, the Company granted options to acquire an aggregate of 1,000,000 shares of
the Company’s common stock at $0.05 per share, the fair value of the common
stock at the date of grant, to a consultant as compensation for consulting
services to be provided during succeeding twelve months. These options were
valued at $31,000 using the Black-Scholes pricing model. In December 2004, the
Company granted options to acquire an aggregate of 3,400,000 shares of the
Company’s common stock at $0.05 per share, the fair value of the common stock at
the date of grant, to certain consultants as compensation for consulting
services to be provided during succeeding twelve months. These options were
valued at $127,000 using the Black-Scholes pricing model. As of March 31, 2005,
the unamortized balance, included in deferred consulting expense in the
condensed consolidated balance sheets, was $114,000.




During the
quarter ended March 31, 2005, 200,000 options with an exercise price of $0.05
were exercised with the conversion of accrued expenses in the aggregate of
$10,000.




**NOTE
6 -  SUBSEQUENT EVENTS**




Subsequent to
March 31, 2005, the Company announced that its wholly owned subsidiary PC
Products, Inc. entered into certain agreements that would allow the Company to
sell personal computers with built-in security features (the “Agreements”).
Under the terms of the Agreements, PC Products, Inc. would be established as the
exclusive seller of personal computers manufactured by Wintergreen Systems and
Wintergreen Systems would assign certain of its existing customers to PC
Products, Inc. Wintergreen would continue to manufacture and support the
personal computers which may be equipped with Com-Guard's ComputerSafeTM software
or its trial version software and PC Products, Inc. would provide the component
parts, security technology and perform various management functions. These
Agreements would become effective upon the successful closing of a funding of
the PC Products, Inc. subsidiary of at least $3 million and be in effect for
five (5) years.




*10*




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




The following
discussion and analysis should be read in conjunction with the condensed
consolidated 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. Its’
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-GuardTM, 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-GuardTM 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-GuardTM 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-GuardTM. 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 initial marketing of its products. However, period-to-period
financial comparisons may be of limited usefulness now and for the near future
as the Company continues to market its products.




We have
started efforts to market and sell our products through our website:
www.com-guard.com and a number of other commercial websites. In addition, we are
working on other avenues of distribution and sales for our products. At the end
of fiscal 2004, we formed our PC Products subsidiary that started formal
operating activities during the first quarter of fiscal year 2005. In addition
to generating potential sales of computers and accessories, which may include
the Company’s security products, the objective of this subsidiary is to generate
end-user awareness of our security products. As more fully described below, our
PC Products subsidiary accounted for a preponderance of our sales and gross
profit during the nine months ended March 31, 2005. We anticipate that this
trend will continue for at least the next several quarters.




Funds raised
through a Private Placement offering have been utilized for marketing and
general working capital. We will need to improve our working capital position.
We will need to increase revenue or raise additional funds to fully develop our
business. There can be no assurance, however, that we 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 our capital
requirements. Any additional equity or convertible debt financings could result
in substantial dilution to our stockholders. If adequate funds are not
available, we will be required to delay, reduce or eliminate some or all of our
planned activities. Our inability to fund our capital requirements would have a
material adverse effect on the Company.




Also See
“Risks and Uncertainties” included in this discussion.





*11*




**Results
of Operations**




**Three
Months Ended March 31, 2005**




**Sales**




Sales for the
three months ended March 31, 2005 were $1,940,000 compared to $2,000 for the
three months ended March 31, 2004, an increase of $1,938,000. Sales during the
three-month period ended March 31, 2004 were entirely due to Internet sales of
our downloadable security products. During the three months ended March 31,
2005, such sales amounted to approximately $1,000. The remaining sales, during
the quarter ended March 31, 2005, were derived from sales of $1,939,000 of sales
of other manufacturers hardware and software products though the Company’s PC
Products subsidiary.




**Cost
of Goods Sold**




Cost of goods
sold for the three months ended March 31, 2005 was $1,867,000 and for the three
months ended March 31, 2004, such costs were $1,000. The increase is attributed
to the cost of goods sold of $1,866,000 of cost of goods sold for other
manufacturer’s hardware and software products though the Company’s PC Products
subsidiary.




**Selling,
general and administrative**




For three
months ended March 31, 2005, selling, general and administrative were $354,000
compared to $569,000 for the three months ended March 31, 2004, a decrease of
$215,000. This decrease was due to reductions in wages attributed to headcount
reductions during the periods, and reductions in consulting expenses, legal
expenses, and marketing expenses due to limited working capital during the
period which were partially offset by increases in insurance and audit fees
during the periods. In addition, during the quarter ended March 31, 2004, there
were one-time charges for the value of shares of the Company’s common stock for
outside consulting in the amount of $200,000.




**Nine
Months Ended March 31, 2005**




**Sales**




Sales for the
nine months ended March 31, 2005 were $5,998,000 compared to $11,000 for the
nine months ended March 31, 2004, an increase of $5,987,000. Sales during the
nine months ended March 31, 2004 were entirely due to Internet sales of our
downloadable security products. During the nine months ended March 31, 2005,
such sales only amounted to approximately $3,000. The remaining sales, during
the nine months ended March 31, 2005, were derived from sales of $30,000 of Com
Guard’s hardware products, and $5,965,000 of sales of other manufacturers
hardware and software products through the Company’s PC Products
subsidiary.




**Cost
of Goods Sold**




Cost of goods
sold for the nine months ended March 31, 2005 was $5,697,000 compared to $3,000
for the nine months ended March 31, 2004, an increase of $5,694,000. The
increase is attributed to the cost of goods sold for the Com Guard’s hardware
products of $11,000, and $5,686,000 of cost of goods sold for other
manufacturers hardware and software products though the Company’s PC Products
subsidiary.





S **elling,
general and administrative**




For nine
months ended March 31, 2005, selling, general and administrative were $928,000
compared to $1,302,000 for the nine months ended March 31, 2004, a decrease of
$374,000. This decrease was due to reductions in wages attributed to headcount
reductions during the periods, and reductions in consulting expenses, legal
expenses, and marketing expenses due to limited working capital during the
period which were partially offset by increases in insurance and audit fees
during the periods and one-time charges for the value of shares of the Company’s
common stock for outside consulting in the amount of $200,000 during the nine
month period ended March 31, 2004.




*12*


**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, 2005, the Company incurred a net loss of $625,000
and had negative cash flows from operating activities of $378,000.




Our security
products contain software developed for the hardware circuit boards and we also
have software applications that can be sold as separate products. Since hardware
related products (1) have a higher cost to manufacture than stand-alone software
products, and (2) recent trends showing that end-users are less likely to
purchase and install hardware-based products, we are currently placing a strong
emphasis on our standard software products to generate revenue. We are
developing strategies in certain key target areas to market our
hardware/software products.




For the year
ended June 30, 2004, our auditors expressed their uncertainty as to our ability
to continue as a going concern. They cite the cash flow deficiency from
operations and 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; (3) to continue to operate and improve e-commerce
sites to sell its products; and (4) to continue to generate profitable sales and
end-user awareness of our security products through our PC Products subsidiary.
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.




There can be
no assurance, however, that we 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 our capital requirements. Any additional
equity or convertible debt financings could result in substantial dilution to
our stockholders. If adequate funds are not available, we will be required to
delay, reduce or eliminate some or all of our planned activities. Our inability
to fund our capital requirements would have a material adverse effect on the
Company.




**Recent
Accounting Pronouncements**




In
December 2004, the FASB issued SFAS No. 123 (R), “Share-Based Payment”. SFAS No.
123 (R) revises SFAS No. 123, “Accounting for Stock-Based Compensation” and
supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees”. SFAS
No. 123 (R) focuses primarily on the accounting for transactions in which an
entity obtains employee services in share-based payment transactions. SFAS No.
123 (R) requires companies to recognize in the statement of operations the cost
of employee services received in exchange for awards of equity instruments based
on the grant-date fair value of those awards (with limited exceptions). SFAS No.
123 (R) is effective as of the first interim or annual reporting period that
begins after June 15, 2005 for non-small business issuers and after December 15,
2005 for small business issuers. Accordingly, the Company will adopt SFAS No.
123 (R) in its quarter ending March 31, 2006. The Company is currently
evaluating the provisions of SFAS No. 123 (R) and has not yet determined the
impact, if any, that SFAS No. 123 (R) will have on its financial statement
presentation or disclosures.













**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 its 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 writedown 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
inventory valuation.




*13*


***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**




**Risks
Relating to Com-Guard.Com, Inc.**




**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
our 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 have 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 (1)
achieve commercial success with our Com-Guard product; or (2) continue
profitable sales through our PC Products Subsidiary. 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. 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.




*14*


****


**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, that 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 additional research and development expenditures to remain
competitive. While we perform 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 not 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**




**Due to the
fact that our common stock is 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. 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, 2002 on the NASD OTC Bulletin Board
under the trading symbol "CGUD." There has been only limited trading activity in
our securities at this time. 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.




**Since a
significant portion of our common stock is being registered and may be available
for resale, a significant overhang on the market could depress the market price
of our stock, which will reduce the value of your investment.** Following
the effective date of the July 14, 2004 registration statement, a maximum of
33,116,331 shares of our common stock will be eligible for resale to the public.
This amount of common stock represents a significant overhang on any market that
may develop for our common stock. If a substantial number of shares in this
overhang were sold in a short period of time, any market for our common stock
could be dramatically depressed which will result in a reduction of the value of
your investment.




*15*


**Lack of
dividends may affect the value of your investment when compared to comparable
stock, which does pay a dividend.** 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. The value of your stock may be reduced in
that prospective buyers may prefer a stock, which does pay a dividend.




**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**




The Company
has never paid any cash dividends on its capital stock. The Company currently
anticipates that it will retain all available earnings for use in the operation
and expansion of its business, and does not anticipate paying any cash dividends
in the foreseeable future.






**ITEM
3. CONTROLS AND PROCEDURES**






Evaluation
of disclosure controls and procedures . Edward
W. Savarese, our Chief Executive Officer and acting Chief Financial Officer, has
preformed an evaluation of the Company’s disclosure and procedures, as that term
is defined in Rule 13a-14(c) 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**




In July
2004, a total of 595,000 shares of common stock were issued in consideration of
various consulting services provided to Com Guard with an aggregate value of
$59,000.




In
December 2004, the Company issued 1,500,000 shares of common stock at $0.05 per
share for consulting services totaling $75,000.




In
January 2005, the Company issued 850,000 shares of its common stock to a
consultant for the exercise of an option of $.05 per share, for which the
Company received $10,000 in cash and the balance was a reduction in accrued
consulting fees of  $32,500 owed to the consultant. The Company issued an
additional 200,000 shares of its common stock for the exercise of an option with
a fair market value of $0.05 per share to a consultant for
services.




**ITEM
3. DEFAULTS UPON SENIOR SECURITIES**




None




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




None.




**ITEM
5. OTHER INFORMATION**




None.




*16*


****


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




(a) Exhibits:




None




(b) Reports
on Form 8-K:




None.














****
 *17*









**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 13, 2005






COM-GUARD.com,
INC.




By:
    /s/  EDWARD
      W. SAVARESE
      
      Edward
      W. Savarese
      *Chief
      Executive Officer and Acting Chief Financial Officer*


















*18*