SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-QSB


                X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15d
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2004

                 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15d
                     OF THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from: ____________ to ____________

                             Commission file number:
                                   33-55254-26

                                 POWERLINX, INC.
             (exact name of registrant as specified in its charter)

                      NEVADA                          50-0006815
           (State or other jurisdiction of          (IRS Employer
            incorporation or organization)        Identification No.)

                                 POWERLINX, INC.
                              200 MADONNA BOULEVARD
                             ST.PETERSBURG, FL 33701

                                 (727) 866-7440
              (Registrant's telephone number, including area code)


              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15d of the Securities and Exchange Act of 1934
during the preceding 12 months (or 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. [X] Yes [ ] No


APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practical date.

Total number of shares of Common Stock, as of May 13, 2004: 137,703,265

TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (check one): Yes [  ]  No [X]


                                       1
<PAGE>
                                 POWERLINX, INC.


                                      INDEX



Part I.  FINANCIAL INFORMATION                                          Page No.


         Item 1. Financial Statements

                        Powerlinx, Inc. Condensed
                        Balance Sheets.......................................F-1

                        Powerlinx, Inc. Condensed
                        Statements of Operations (Unaudited).................F-2

                        Powerlinx, Inc.
                        Statement of Stockholders'
                        Equity (Deficit).....................................F-3

                        Powerlinx, Inc. Condensed
                        Statements of Cash Flows (Unaudited).................F-5

                        Powerlinx, Inc. Notes to
                        Condensed Financial Statements March 31,
                        2004 and 2003 (Unaudited)............................F-7

         Item 2. Management's Discussion and Analysis or Plan
                 of Operations.................................................3

         Item 3. Controls and Procedures......................................13

Part II. OTHER INFORMATION

         Item 1. Legal Proceedings............................................19

         Item 2. Changes in Securities and use of Proceeds....................20

         Item 3. Defaults Upon Senior Securities..............................21

         Item 4. Submission of Matters to a Vote of Security Holders..........21

         Item 5. Other Information............................................21

         Item 6. Exhibits and Reports on Form 8-K.............................21

Signatures....................................................................22




                                       2

<PAGE>
PART I.  FINANCIAL INFORMATION
                                 POWERLINX, INC.
                            CONDENSED BALANCE SHEETS
                   AS OF MARCH 31, 2004 AND DECEMBER 31, 2003
<TABLE>
<CAPTION>


                                     ASSETS
                                                                                    March 31,
                                                                                      2004       December 31,
                                                                                (Unaudited)         2003
                                                                                ------------  ---------------
<S>                                                                             <C>           <C>
Current assets:
   Cash and cash equivalents                                                    $   535,239   $     160,157
   Accounts receivable, net                                                         366,915         201,853
   Accounts receivable, officer                                                      20,000          20,000
   Inventories                                                                      555,136         557,947
   Prepaid expenses                                                                 194,892          19,079
                                                                                ------------  ---------------
     Total current assets                                                         1,672,182         959,036

Intangible assets, net                                                            1,237,358       1,213,430
Property and equipment, net                                                         319,357         325,160
     Total assets                                                               $ 3,228,897   $   2,497,626
                                                                                ============  ===============
                                          LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                             $   412,545   $     557,524
   Accrued expenses                                                                 182,020         447,381
   Deferred revenue                                                                  86,600          86,600
   Litigation settlement                                                            300,000         300,000
                                                                                ------------  ---------------
     Total current liabilities                                                      981,165       1,391,505
                                                                                ------------  ---------------
Commitments and contingencies (Note 10)                                                   -               -
Stockholders' equity:
   Series A convertible preferred stock, $1.00 par value;
     authorized 10,000,000 shares; 1,825,520 shares
     issued and outstanding                                                       1,609,740               -
   Common stock, $.001 par value, authorized
     250,000,000 shares; issued (137,966,840 - 2004;
     135,837,887 - 2003) outstanding (137,493,265 -
     2004; 135,364,312 - 2003)                                                      137,967         135,837
   Additional paid-in capital                                                    16,452,995      15,834,345
   Treasury stock, at cost, 473,575 shares                                         (287,757)       (287,757)
   Unearned restricted stock compensation                                            (9,467)        (29,422)
   Stock subscription receivable                                                          -          (3,250)
   Equity units subscribed                                                                -         250,000
   Accumulated deficit                                                          (15,655,746)    (14,793,632)
                                                                                ------------  ---------------
   Total stockholders' equity                                                     2,247,732       1,106,121
     Total liabilities and stockholders' equity                                 $ 3,228,897   $   2,497,626
                                                                                ============  ===============
The accompanying notes are an integral part of these financial statements.
</TABLE>
                                      F-1
<PAGE>
                                 POWERLINX, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                         Three Months Ended
                                                                                             March 31,

                                                                                      2004                2003
                                                                                -------------  -----------------
<S>                                                                             <C>                  <C>
Net revenue                                                                     $    351,199         $  345,601
Cost of goods sold                                                                   214,366            262,833
                                                                                -------------  -----------------
            Gross profit                                                             136,833             82,768
                                                                                -------------  -----------------
Operating expenses:
   Salaries and wages                                                                333,736            220,825
   Professional and consulting fees                                                  169,492            140,253
   Depreciation and amortization                                                     147,932            130,318
   Research and development                                                           18,673             13,866
   Advertising and promotions                                                         24,889             30,204
   Rent and utilities                                                                 23,055             25,913
   Postage and delivery                                                               20,982             41,693
   Royalties expense                                                                  75,000             40,000
   Financing fees                                                                     68,750             10,313
   Other expenses                                                                    116,569            102,605
                                                                                -------------  -----------------
     Total operating expenses                                                        999,078            755,990
                                                                                -------------  -----------------
Loss from operations                                                                (862,245)          (673,222)

Interest income (expense), net                                                           131           (304,265)
                                                                                -------------  -----------------
Loss before income taxes                                                            (862,114)          (977,487)

Income tax (expense) benefit                                                               -                  -
                                                                                -------------  -----------------
Net loss                                                                        $   (862,114)  $       (977,487)
                                                                                =============  =================
Net loss per common share                                                       $       (.01)  $           (.02)

Weighted average common shares outstanding, basic
   and diluted                                                                   136,225,783         39,992,524

The accompanying notes are an integral part of these financial statements.
</TABLE>
                                      F-2
<PAGE>
                                 POWERLINX, INC.
              UNAUDITED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
                                                                                  Unearned
                                            Common    Additional                 Restricted      Stock        Equity
                               Common       Stock      Paid-In      Treasury       Stock      Subscription     Units
                               Stock       ($.001 par) Capital       Stock      Compensation   Receivable   Subscribed
                           -------------- ---------- ------------- ----------- ---------------------------- ------------
<S>                           <C>          <C>        <C>           <C>              <C>           <C>         <C>
Balances, January 1, 2004    135,837,887  $ 135,837  $ 15,834,345  $ (287,757)      $ (29,422)    $ (3,250)   $ 250,000

Net loss                               -          -             -           -               -            -            -

Issuance of stock for
 patents                         441,176        441       149,559           -               -            -            -

Issuance of stock to
 directors                       900,000        900       179,100           -               -            -            -

Issuance of stock for
 royalties                       223,897        224        74,776           -               -            -            -

Issuance of stock and
 warrants under
 Equity Unit offering            456,380        456       215,324           -               -            -     (250,000)

Sales of common stock            107,500        107          (107)          -               -        3,250            -

Adjustment                             -          2            (2)          -               -            -            -

Amortization of unearned
  restricted stock
  compensation                         -          -             -           -          19,955            -            -
                           -------------- ---------- ------------- ----------- ----------------- ----------- ------------

Balances, March 31, 2004     137,966,840  $ 137,967  $ 16,452,995  $ (287,757)       $ (9,467)         $ -          $ -
                           ============== ========== ============= =========== ================= =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                      F-3
<PAGE>
                                 POWERLINX, INC.
              UNAUDITED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                                  (Continued)
<TABLE>
<CAPTION>
                                           Series A
                                         Convertible
                            Accumulated   Preferred
                              Deficit       Stock          Total
                            ------------ ------------- ---------------
<S>                          <C>                   <C>     <C>
Balances, January 1, 2004   $ (14,793,632)        $ -     $ 1,106,121

Net loss                       (862,114)                     (862,114)

Issuance of stock for
 patents                              -                       150,000

Issuance of stock to
 directors                            -                       180,000

Issuance of stock for
 royalties                            -                        75,000

Issuance of stock and
 warrants under
 Equity Unit offering                 -     1,609,740       1,575,520

Sales of common stock                 -                         3,250

Adjustment                            -                             -

Amortization of unearned
  restricted stock
  compensation                        -             -          19,955
                            ------------ ------------- ---------------

Balances, March 31, 2004    $ (15,655,746)$ 1,609,740     $ 2,247,732
                            ============ ============= ===============

The accompanying notes are an integral part of these financial statements.
</TABLE>

                                      F-4
<PAGE>

                                 POWERLINX, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                       Three Months Ended
                                                                                            March 31,
                                                                             ---------------------------------
                                                                                    2004             2003
                                                                             ---------------  ----------------
<S>                                                                          <C>              <C>
Cash flows from operating activities:
   Net loss                                                                  $     (862,114)  $      (977,487)
   Adjustments to reconcile net loss to net cash flows
     from operating activities:
       Depreciation                                                                  21,860            15,496
       Amortization                                                                 126,072           182,232
       Stock based compensation                                                     274,955            27,620
       Accretion of debt discount                                                         -           213,489
       Changes in operating assets and liabilities:
         Accounts receivable                                                       (165,062)           22,245
         Inventories                                                                  2,811            (2,973)
         Prepaid expenses                                                          (175,813)          (12,399)
         Accounts payable                                                          (123,979)          171,972
         Accrued expenses                                                           (25,841)           99,879
         Deferred revenue                                                                 -            80,500

Net cash flows from operating activities                                           (927,111)         (179,426)
                                                                             ---------------  ----------------
Cash flows from investing activities:
   Purchases of property and equipment                                              (16,057)           (2,400)
                                                                             ---------------  ----------------
Net cash flows from investing activities                                            (16,057)           (2,400)
                                                                             ---------------  ----------------
Cash flows from financing activities:
   Proceeds from sales of equity units                                            1,315,000                 -
   Proceeds from stock subscription receivable                                        3,250                 -
   Repayments of related party debt                                                       -          (128,655)
   Proceeds from factoring receivables                                                    -            42,000
   Proceeds from sales of common stock                                                    -             6,500
   Proceeds from convertible debentures                                                   -           258,998
                                                                             ---------------  ----------------
Net cash flows from financing activities                                          1,318,250           178,843
                                                                             ---------------  ----------------
Net change in cash and cash equivalents                                             375,082            (2,983)
Cash and cash equivalents at beginning of period                                    160,157             5,364
                                                                             ---------------  ----------------
Cash and cash equivalents at end of period                                   $      535,239   $         2,381
                                                                             ===============  ================
The accompanying notes are an integral part of these financial statements.
</TABLE>
                                      F-5
<PAGE>
                                 POWERLINX, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                   (Unaudited)
<TABLE>
<CAPTION>

                   NONCASH INVESTING AND FINANCING ACTIVITIES

                                                                                  Three Months Ended
                                                                                      March 31,
                                                                             ---------------------------
                                                                                  2004         2003
                                                                             -------------  ------------
<S>                                                                          <C>            <C>
Conversion of vendor debt to equity units                                    $     21,000   $         -
                                                                             =============  ============
Conversion of accrued payroll to equity units                                $    239,520   $         -
                                                                             =============  ============
Conversion of equity units subscribed to equity
   units issued                                                              $    250,000   $         -
                                                                             =============  ============
Issuance of common stock for patents                                         $    150,000   $         -
                                                                             =============  ============
Conversion of convertible debentures to common stock                         $          -   $    56,000
                                                                             =============  ============
Issuance of common stock for licensing rights                                $          -   $    37,500
                                                                             =============  ============
Issuance of common stock in connection
  with distributorship agreement                                             $          -   $    25,000
                                                                             =============  ============
Issuance of common stock for financing fees                                  $          -   $    10,313
                                                                             =============  ============
Deferred finance costs funded through proceeds from
   convertible debentures                                                    $          -   $     4,500
                                                                             =============  ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
                                      F-6
<PAGE>

                                 POWERLINX, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

1.   Basis of presentation and significant accounting policies:

     The accompanying unaudited condensed financial statements have been
     prepared in accordance with generally accepted accounting principles for
     interim financial information and with the instructions to Form 10-Q and
     Rule 10-01 of Regulation S-X. Accordingly, they do not contain all of the
     information and footnotes required by generally accepted accounting
     principles for complete financial statements

     In the opinion of management, the accompanying unaudited condensed
     financial statements reflect all adjustments (consisting only of normal
     recurring adjustments) considered necessary for a fair presentation of
     Powerlinx, Inc.'s (the "Company") financial position and the results of its
     operations and its cash flows for the three months ended March 31, 2004 and
     2003. These unaudited condensed financial statements should be read in
     conjunction with the Company's audited 2003 financial statements, including
     the notes thereto, and the other information set forth therein in the
     Company's Annual Report on Form 10-KSB for the year ended December 31,
     2003. Operating results for the three month period ended March 31, 2004,
     are not necessarily indicative of the results that can be expected for a
     full fiscal year.

     Revenue recognition:

     Sales revenue is recognized when the earnings process is complete and the
     risks and rewards of ownership of the product, including title, have been
     transferred to the customer, which is generally considered to have occurred
     upon delivery of the product to the customer's premises. Shipping costs,
     which have been nominal, are billed to the customer and are included as a
     component of cost of goods sold. Returns are provided for as reductions of
     revenue recorded based upon the Company's historical return experience. Any
     related deferred revenue represents sales transactions where all of the
     conditions necessary for revenue recognition have not been met.

     Fee revenue is recognized over the life of the respective agreements. The
     related deferred revenue represents fees received for which the revenue has
     not been earned.

     Stock based compensation:

     Compensation expense related to the grant of equity instruments and
     stock-based awards to employees are accounted for using the intrinsic
     method in accordance with Accounting Principles Board Opinion No. 25,
     Accounting for Stock Issued to 1. Basis of presentation and significant
     accounting policies (continued):

                                      F-7
<PAGE>
1.   Basis of presentation and significant accounting policies (continued):

     Stock based compensation (continued):

     Employees and related interpretations. Stock based compensation
     arrangements involving non-employees are accounted for using the fair value
     methodology under Financial Accounting Standards No. 123, Accounting for
     Stock-Based Compensation.

     The Black-Scholes option pricing model was developed for use in estimating
     the fair value of traded options that have no vesting restrictions and are
     fully transferable. In addition, option valuation models require the input
     of highly subjective assumptions including the expected stock price
     volatility. Because the Company's employee stock options have
     characteristics significantly different from those of traded options, and
     because changes in the subjective input assumptions can materially affect
     the fair value estimate, in management's opinion, the existing models do
     not necessarily provide a reliable single measure of the fair value of its
     employee stock options. The Company accounts for unregistered common stock
     issued for services or asset acquisitions at the estimated fair value of
     the stock issued. Fair value is determined based substantially on the
     average cash price of recent sales of the Company's unregistered common
     stock.

     The following table reflects supplemental financial information related to
     stock-based employee compensation, as required by Statement of Financial
     Accounting Standards No. 148, Accounting for Stock-Based Compensation -
     Transition and Disclosure:
<TABLE>
<CAPTION>
                                                                                    March 31,            March 31,
                                                                                      2004                   2003
                                                                                -----------------  -----------------
<S>                                                                             <C>                <C>
       Net loss, as reported                                                    $       (862,114)  $       (977,487)
                                                                                -----------------  -----------------
       Stock-based compensation, as reported                                    $              -   $              -
                                                                                -----------------  -----------------
       Stock-based compensation under fair value method                         $              -   $              -
                                                                                -----------------  -----------------
       Pro-forma net loss under fair value method                               $       (862,114)  $       (977,487)
                                                                                -----------------  -----------------
       Net loss per share, as reported                                          $           (.01)  $           (.02)
                                                                                -----------------  -----------------
       Pro-forma net loss per share under fair value method                     $           (.01)  $           (.02)
                                                                                -----------------  -----------------
     Concentrations:
</TABLE>

     Accounts receivable are concentrated in the security products industry and
     credit losses have been within management's expectations. Although the

                                      F-8
<PAGE>
                         SEAVIEW VIDEO TECHNOLOGY, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (Unaudited)

     Company serves a large and varied group of customers, one customer
     accounted for 39% of total

1.   Basis of presentation and significant accounting policies (continued):

     Concentrations (continued):

     revenue for the three months ended March 31, 2004 while two customers
     accounted for 37% of total revenue for the three months ended March 31,
     2003.

     The Company's product assembly is dependent upon the operations of two
     primary labor suppliers, one of which is outside the United States. At
     March 31, 2004 and December 31, 2003 approximately $166,000 and $173,000,
     respectively of the Company's inventory was held off-site at these
     locations. If the Company should lose these suppliers of assembly servicing
     there could be a disruption in the operations of the Company. The Company
     is in the process of securing alternative sources of these services.

     Reclassifications

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

2.   Liquidity and management's plans:

     The accompanying condensed financial statements have been prepared assuming
     that the Company will continue as a going concern. However, the Company has
     incurred operating losses of $862,245 and $673,222 during the three months
     ended March 31, 2004 and 2003, respectively. In addition, during those
     quarters, the Company has used cash of $927,111 and $179,426 in its
     operating activities. These conditions raise substantial doubt about the
     Company's ability to continue as a going concern.

     The Company has devoted significant efforts in the further development and
     marketing of products in its Security and DC Transportation Products
     Segments, which, while now showing improved revenues cannot yet be
     considered as sufficient to fund operations for any sustained period of
     time.

     The Company's ability to continue as a going concern is dependent upon (i)
     raising additional capital to fund operations (ii) the further development
     of products in the Security and DC Transportation Products Segments and
     (iii) ultimately the achievement of profitable operations. During the year

                                      F-9
<PAGE>
                         SEAVIEW VIDEO TECHNOLOGY, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (Unaudited)


     ended December 31, 2003, the Company generated net cash flows of $3,238,832
     from financing activities, consisting mainly of sales of common stock and
     the issuance of convertible debt securities.

2. Liquidity and management's plans (continued):

     Additionally, during the three months ended March 31, 2004, the Company
     generated net cash flows of 1,318,250 from financing activities primarily
     through sales of equity units (see Note 8). Management is currently
     addressing several additional financing sources to fund operations until
     profitability can be achieved. However, there can be no assurance that
     additional financing can be obtained on conditions considered by management
     to be reasonable and appropriate, if at all. The financial statements do
     not include any adjustments that might arise as a result of this
     uncertainty.

3.   Segment information:

     Beginning in March 31, 2003, the Company operates in three identifiable
     industry segments. The Company's Marine Products Segment is engaged in the
     sale of underwater video cameras, lights and accessories, principally to
     retail sporting goods businesses throughout the United States. The
     Company's Security Products Segment is engaged in the development and sale
     of video security systems to retail, commercial and governmental entities
     throughout the United States. The Company's DC Transportation Products
     Segment is engaged in the development and sale of powerline rear and side
     vision systems for all classes of vehicles in the transportation industry
     to distributors and original equipment manufacturers throughout the United
     States. There are no significant concentrations of revenue with any one
     customer. The Company's facilities and other assets are, generally, not
     distinguished among the identifiable segments. Other financial information
     about the Company's segments is as follows:
<TABLE>
<CAPTION>
                                                                                       2004
                                                                                  -----------------
                                            Security                Marine            DC Trans
                                            Products               Products           Products              Total
      -------------------------             ----------------  ------------------  -----------------  ----------------
<S>                                         <C>               <C>                 <C>                <C>
      Net revenue                           $       202,575   $          87,599   $         61,025   $        351,199
      Cost of sales                                 143,828              43,790   $         26,748   $        214,366
      Gross profit                          $        58,747   $          43,809   $         34,277   $        136,833
      Research and development:
           Stock-based                      $             -   $               -   $              -   $              -
           Other                            $        16,023   $               -   $          2,650   $         18,673
</TABLE>

                                      F-10
<PAGE>
                         SEAVIEW VIDEO TECHNOLOGY, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (Unaudited)


3.   Segment information (continued):
<TABLE>
<CAPTION>
                                                                                       2003
                                            Security                Marine            DC Trans
                                            Products               Products           Products              Total
      --------------------------            ----------------  ------------------  -----------------  ----------------
<S>                                         <C>               <C>                 <C>                <C>
      Net revenue                           $       149,878   $         137,890   $         57,833   $        345,601
      Cost of sales                                 179,713              63,610   $         19,510   $        262,833
      Gross profit                          $       (29,835)  $          74,280   $         38,323   $         82,768
      Research and development:
           Stock-based                      $         5,520   $               -   $              -   $          5,520
           Other                            $             -   $               -   $          8,346   $          8,346
</TABLE>

4.   Factored accounts receivable:

     During the third quarter of 2002, the Company entered into an accounts
     receivable financing facility under which cash collections on certain
     eligible accounts receivable are assigned to a financial institution. Under
     this arrangement, eligible customers make their payments directly to the
     financial institution. Upon receipt of payment, the financial institution
     remits the balance of the factored account, less its fees, to the Company.
     During the three months ended March 31, 2003, the Company received
     aggregate proceeds of $45,000 under the factoring arrangement, related to
     gross factored accounts receivable of $56,000. The Company is accounting
     for this accounts receivable factoring arrangement as a secured borrowing
     pursuant to SFAS No. 140, Accounting for Transfers and Servicing of
     Financial Assets and Extinguishments of Liabilities. The Company's assets,
     including accounts receivable, inventory and property and equipment secure
     the agreement. The related service charge is reflected in interest expense
     in the period that the accounts receivable are transferred. Factoring fees
     of approximately $2,000 were incurred during the three months ended March
     31, 2003. There were only nominal factored accounts receivable outstanding
     as of March 31, 2003.

5.   Inventories:

     Inventories consisted of the following:

                                      F-11

<PAGE>
                         SEAVIEW VIDEO TECHNOLOGY, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (Unaudited)




                                              March 31,        December 31,
                                                2004                 2003
                                         -----------------   -----------------
   Raw materials                         $         240,450   $        323,547
   Finished goods                                  314,686            234,400
                                         -----------------   -----------------
                                         $         555,136   $        557,947
                                         =================   =================


6.   Intangible assets:

     During the three months ended March 31, 2004, the Company issued 441,176
     shares of restricted common stock in conjunction with the purchase of
     patents. The restricted common stock issued was valued based upon the
     previous 20 day average closing price prior to the date of the purchase
     agreement. The fair value of the patents was capitalized as intangible
     assets and is being amortized over estimated useful lives of five years.

     During the three months ended March 31, 2003, the Company issued 750,000
     and 500,000 shares of restricted common stock in conjunction with a
     licensing agreement and a distributorship agreement, respectively. The
     restricted common stock issued was valued based upon the trading market
     prices on the dates of issuance, or $37,500 and $25,000, respectively, in
     the aggregate. The fair value of the licensing rights and the
     distributorship agreement were capitalized as intangible assets and are
     being amortized over their estimated useful lives of five years.

     Intangible assets consist of the following at March 31, 2004:
<TABLE>
<CAPTION>
                                               Security             Marine               DC
                                               Products            Products             Trans               Total
                                          ------------------  ------------------  -----------------  -----------------
<S>                                       <C>                 <C>                 <C>                <C>
       Patents                            $       1,577,813   $         741,148   $              -   $      2,318,961
       Licensing rights                              37,500                   -                  -             37,500
       Software license agreement                   150,000                   -                  -            150,000
       Distributorship agreement                          -                   -             25,000             25,000
       Trademark                                     42,000                   -             42,000             84,000
       Less: accumulated
         amortization                              (898,214)           (454,889)           (25,000)        (1,378,103)
                                          ------------------  ------------------  -----------------  -----------------
                                          $         909,099   $         286,259   $         42,000   $      1,237,358
                                          ==================  ==================  =================  =================
</TABLE>
     Estimated future amortization is as follows:

                                      F-12
<PAGE>
                         SEAVIEW VIDEO TECHNOLOGY, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (Unaudited)




         Year ending March 31,
                2005                            $         514,288
                2006                                      458,445
                2007                                       67,500
                2008                                       65,625
                2009                                       47,500
                                                ------------------
                                                $       1,153,358
                                                ==================
<PAGE>
                         SEAVIEW VIDEO TECHNOLOGY, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (Unaudited)



7.   Convertible debentures:

     2002 Securities Purchase Agreement:

     On September 20, 2002 (Commitment Date), the Company entered into a
     Securities Purchase Agreement that provided for the issuance of convertible
     notes payable up to an aggregate face value of $1,000,000 and warrants to
     acquire up to an aggregate 3,000,000 shares of the Company's common stock.
     The agreement provided for the funding of the notes in three traunches, of
     which the first two, amounting to $350,000 each with 1,050,000 warrants
     each were issued on September 20, 2002 and September 30, 2002,
     respectively. Each traunch matures on the one year anniversary date of
     issuance, assuming no conversion or prepayment. On February 7, 2003, the
     remaining traunch ($300,000 in convertible notes and warrants to acquire
     900,000 shares of common stock) was funded upon the effective registration
     of the common shares underlying the debt and warrants. The convertible
     notes bear interest at 12% and are payable in one year from the date of
     issuance; interest is payable quarterly.

     The convertible notes were convertible into shares of common stock solely
     at the creditor's option at a conversion rate amounting to the lower of (i)
     $0.075 or (ii) 50% of the average of the three lowest intraday trading
     prices for the Company's common stock for the 20 trading days before the
     conversion date. On the Commitment Date, the Company's closing market value
     was $0.13 and the three lowest intraday trading prices for the 20 trading
     days before the Commitment Date were all $0.12; thus the conversion rate on
     the Commitment Date amounted to $0.06 per common share. The warrants, which
     have an exercise price of $0.10 and a three-year term, were fully issued on
     the Commitment Date.

     The effective interest rate on the convertible notes payable issued in 2002
     amounted to 126%, assuming that the notes are held to maturity. The
     effective interest rate results from the amortization of discounts to the
     face value of the convertible notes payable, amortization of debt issue
     costs and the contractual interest rate over the term of the notes as
     follows:

                                      F-13
<PAGE>
                         SEAVIEW VIDEO TECHNOLOGY, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (Unaudited)



<TABLE>
<CAPTION>

7.   Convertible debentures (continued):
                                                               Amount              Percent
                                                         -------------------   -----------------
<S>                                                      <C>                          <C>
         Discounts to face value:
           Beneficial conversion feature                 $          583,000           83.0%
           Allocation to warrants                                   117,000           18.0%
                                                         -------------------   ------------------
                                                                    700,000          100.1%

         Other interest expense:
           Amortization of debt costs                                88,000           13.0%
           Contractual interest rate                                 84,000           12.0%
                                                         $          420,600          126.0%
                                                         ===================   ==================
</TABLE>
     During February 2003, the Company allocated the proceeds received from the
     third and final traunch of convertible notes and warrants between the
     securities based upon their relative fair values. Fair value for the
     warrants was determined using the Black-Scholes pricing model; the face
     value of the notes was considered by management to equal their respective
     fair values. As a result of this allocation, approximately $9,800 was
     recorded for the warrants as paid in capital in the month of February. The
     assumptions used to determine fair value under the Black-Scholes pricing
     model included an exercise price of $1.00, market price of $0.05, term of
     1,080 days, volatility of 50%, and interest rate of 16%. There was no
     beneficial conversion feature related to the third traunch of financing.
<PAGE>

     During the three months ended March 31, 2003, $56,000 of the face value of
     these debentures were converted into 2,252,217 shares of common stock at a
     conversion price of between $0.0238 and $0.026, which approximates a 50%
     discount to the market price.

     Amortization of the beneficial conversion feature and debt issue costs
     during the three months ended March 31, 2003 amounted to $213,000 and
     $23,000, respectively.

     2003 Securities Purchase Agreement:

     On May 9, 2003 (Commitment Date), the Company entered into a Securities
     Purchase Agreement that provided for the issuance of convertible notes
     payable up to an aggregate face value of $440,000 and warrants to acquire
     up to an aggregate 1,320,000 shares of the Company's common stock. The
     agreement provided for the funding of the notes in five traunches, of which
     the first two, amounting to $260,000 with 520,000 warrants were issued on
     May 9, 2003 and June 3, 2003, respectively. Each traunch matures on the
     one-year anniversary date of issuance, assuming no conversion or
     prepayment. On July 1, 2003, the third traunch of the May 10, 2003

7.   Convertible debentures (continued):

     Securities Purchase Agreement ($60,000 in convertible notes and warrants to
     acquire 180,000 shares of common stock) was funded. Each traunch matures on
     the one year anniversary date of issuance, The convertible notes bear
     interest at 12% and are payable in one year from the date of issuance;
     interest is payable quarterly.

     The convertible notes are convertible into shares of common stock solely at
     the creditor's option at a conversion rate amounting to the lower of (i)
     $0.05 or (ii) 50% of the average of the three lowest intraday trading
     prices for the Company's common stock for the 20 trading days before the
     conversion date. On the Commitment Date, the Company's closing market value
     was $0.06 and the three lowest intraday trading prices for the 20 trading
     days before the Commitment Date averaged $0.03 and $0.037 and $0.03 for
     Traunch 1, Traunch 2 and Traunch 3, respectively; thus the conversion rate
     on the Commitment Date amounted to $0.015, $0.0185 and $0.015 per common
     share, respectively. The warrants, which have an exercise price of $0.5 and
     a three-year term, were fully issued upon the funding of each respective
     traunch.

     During May, June and July 2003, the Company allocated the proceeds received
     from the first three traunches of convertible notes and warrants between
     the securities based upon their relative fair values. Fair value for the
     warrants was determined using the Black-Scholes pricing model; the face
     value of the notes was considered by management to equal their respective
     fair values. As a result of this allocation, approximately $22,100 and

                                      F-14
<PAGE>
     $2,600 was recorded for the warrants as paid-in capital in the second and
     third quarters of 2003, respectively. The assumptions used to determine
     fair value under the Black-Scholes pricing model included an exercise price
     of $0.05, market price of $0.06 and $0.04, respectively, term of 1,080
     days, volatility of 50%, and interest rate of 12%. In addition, the Company
     allocated the remaining proceeds of the convertible notes to the embedded
     beneficial conversion feature represented by the excess that the market
     value of the common stock on the commitment date exceeded the conversion
     rate. The debt has been accreted towards its face value through periodic
     charges to interest expense over the outstanding term of the underlying
     notes.

                                      F-15
<PAGE>
7.   Convertible debentures (continued):

     The effective interest rate on the first three traunches of convertible
     notes payable from the May 9, 2003 Securities Purchase Agreement amounts to
     131.4%, assuming that the notes are held to maturity. The effective
     interest rate results from the amortization of discounts to the face value
     of the convertible notes payable, amortization of debt issue costs and the
     contractual interest rate over the term of the notes as follows:
<TABLE>
<CAPTION>
                                                                                   Amount              Percent
                                                                             -------------------  -------------------
<S>                                                                          <C>                           <C>
         Discounts to face value:
           Beneficial conversion feature                                     $          295,300            92.3%
           Allocation to warrants                                                        24,700             7.7%
                                                                             -------------------  -------------------
                                                                                        320,000           100.0%

         Other interest expense:
           Amortization of debt costs                                                    62,200            19.4%
           Contractual interest rate                                                     38,400            12.0%
                                                                             -------------------  -------------------
                                                                             $          420,600           131.4%
                                                                             ===================  ===================
</TABLE>
     Cumulative amortization of the beneficial conversion feature and debt issue
     costs during the year ended December 31, 2003 for the 2002 and 2003
     Securities Transactions amounted to $526,000 and $63,000, respectively.

     During 2003, $1,000,000 of the face value of these debentures was converted
     into 45,748,151 shares of common stock at a conversion price of between
     $0.015 and $.0538. The shares issued were valued in accordance with the
     Securities Purchase Agreement dated September 20, 2002, which approximates
     a 50% discount to market price.

     On August 26, 2003, the Company repaid the remaining $320,000 face value of
     these debentures. In connection therewith, the Company paid $9,800 in
     interest and $148,000 in pre-payment penalty fees. The Company effectively
     terminated the agreement during August 2003, and accordingly, funding of
     the remaining two traunches is no longer required.

                                      F-16
<PAGE>

8.   Stockholders' equity:

     Series A Convertible Preferred Stock:

     Effective September 30, 2003, the Company designated 5,000,000 shares of
     authorized preferred stock as Series A Convertible Preferred Stock. There
     were no shares outstanding as of December 31, 2003. The Series A
     Convertible Preferred Stock has a liquidation preference of $1.00 per share
     and is non-voting. It is convertible into common stock only upon
     registration of the underlying common shares into which the preferred stock
     can be converted. The conversion rate is variable. During the first year
     following issuance, and assuming the registration described earlier, the
     preferred stock is convertible into the number of common shares that result
     from dividing the par value by the average market price of the common stock
     for a period of five days. Commencing the month following the first year of
     issuance, and again assuming the registration, the conversion methodology
     provides for a market discount of 20%, increasing 1% monthly thereafter, up
     to 130%.

     2004 Equity Unit Issuance:

     On March 31, 2004, the Company issued 228,190 units (the "equity units")
     for sale to accredited investors at a price of $8.00 per equity unit. Each
     equity unit consists of (i) 8 shares of Series A Convertible Preferred
     Stock; (ii) 2 shares of the Company's common stock; and (iii) three common
     stock purchase warrants. Each warrant is exercisable until May 15, 2006, at
     a price of $0.50. Proceeds from the equity unit offering were allocated
     first to common stock based on the market price per share on the date the
     offering was completed (the "measurement date"). The remaining proceeds
     were allocated to the Series A Convertible Preferred Stock and the common
     stock purchase warrants based on their relative fair values. The fair value
     of the preferred stock was based on the number of shares of common stock to
     be received upon conversion at the common stock market share price on the
     measurement date. The fair value of the warrants was determined using the
     Black-Scholes pricing model with the following inputs: exercise price of
     $0.50, market price of $0.19, days to expiration of 783, volatility of
     193%, and an interest rate of 4%.

     2004 Common Stock Issuances:

     During the three months ended March 31, 2004, the Company issued 456,380
     shares of common stock in connection with the equity unit issuance (see
     above).


8.   Stockholders' equity (continued):

     2004 Common Stock Issuances (continued):

                                      F-17
<PAGE>
     During the three months ended March 31, 2004, 107,500 shares of the
     Company's restricted common stock were sold through a private equity
     placement exempt from registration under Section 4(2) of the Securities Act
     of 1933, and Rule 506 of Regulation D, thereof. The placement was open to
     select officers, employees, representatives of the Company, and accredited
     investors for the purchase of restricted common stock. The Company received
     total proceeds from the offering of $10,750 in 2003. The $3,250 stock
     subscription receivable was from a 2003 private placement and it was paid
     in full as of March 31, 2004.

     During the three months ended March 31, 2004, the Company issued 900,000
     shares of restricted common stock to directors as compensation for
     services. The restricted common stock, which was fully vested upon
     issuance, was valued based upon the trading market prices on the dates of
     issuance, or $180,000 in the aggregate.

     During the three months ended March 31, 2004, the Company issued 223,897
     shares of free trading common stock to professional research and
     development consultants under an agreement to license certain patented
     technology. The common stock was valued based upon the trading market price
     on the date of issuance, or $75,000 which was recognized as royalties
     expense in connection with the issuance.

     During the three months ended March 31, 2004, the Company issued 441,176
     shares of restricted common stock in conjunction with the purchase of
     patents. The restricted common stock issued was valued based upon the
     previous 20 day average closing price prior to the date of the purchase
     agreement. The fair value of the patents was capitalized as intangible
     assets and is being amortized over estimated useful lives of five years.

     Compensation expense of $19,955 and $44,747 for the three months ended
     March 31, 2004 and 2003, respectively, was recognized in relation to
     amortization of unearned restricted stock compensation relating to common
     shares issued to consultants as compensation in previous years.

     2003 Transactions:

     During the three months ended March 31, 2003, 125,000 shares of the
     Company's restricted common stock were sold through a private equity
     placement exempt from registration under Section 4(2) of the Securities Act
     of 1933, and Rule 506 of

8.   Stockholders' equity (continued):

     2003 Transactions (continued):

                                      F-18
<PAGE>
     Regulation D, thereof. The placement was open to select officers,
     employees, representatives of the Company, and accredited investors for the
     purchase of restricted common stock. Proceeds from the offering amounted to
     $6,000.

     During the three months ended March 31, 2003, the Company issued 42,000
     shares of restricted common stock to employees and directors as
     compensation for services. The restricted common stock, which was fully
     vested upon issuance, was valued based upon the trading market prices on
     the dates of issuance, or $2,100 in the aggregate.

     During the three months ended March 31, 2003, the Company issued 2,252,217
     shares of free trading common stock in accordance with five conversion
     notices received by the Company from the holders of the Company's 12%
     convertible debentures. The shares issued were valued in accordance with
     the Securities Purchase Agreement dated September 20, 2002, which
     approximates a 50% discount to the market price. The average share price
     for the five conversions was $.0249 per share, or $56,000 in the aggregate.

     During the three months ended March 31, 2003, the Company issued 492,000
     shares of free trading common stock to professional research and
     development consultants as compensation for consulting services and
     royalties. The restricted common stock issued was valued based upon the
     trading market prices on the dates of issuance, or $25,520 in the
     aggregate.

     During the three months ended March 31, 2003, the Company issued 750,000
     and 500,000 shares of restricted common stock in conjunction with a
     licensing agreement and a distributorship agreement, respectively. The
     restricted common stock issued was valued based upon the trading market
     prices on the dates of issuance, or $37,500 and $25,000, respectively, in
     the aggregate. The fair value of the licensing rights and the
     distributorship agreement were capitalized as intangible assets and are
     being amortized over their estimated useful lives of five years. The
     Company recorded amortization expense of $1,875 and $1,250, respectively,
     in connection with these licensing rights and the distributorship agreement
     for the three months ended March 31, 2003.

     During the three months ended March 31, 2003, the Company issued 206,250
     shares of restricted common stock to investors for financing fees. The
     common stock was

8.   Stockholders' equity (continued):

     2003 Transactions (continued):

     valued based upon the trading market prices on the dates of issuance, or
     $10,313 in the aggregate.

                                      F-19
<PAGE>
     Common stock Warrants:

     During the years ended December 31, 2003 and 2002, the Company issued
     warrants to purchase 1,860,000 and 2,100,000 shares of common stock,
     respectively, in connection with the sale of the Convertible Debentures
     described in Note 6. The warrants have three-year terms and can be
     exercised at prices between $0.05 and $0.10. Warrants to purchase 960,000
     shares of common stock remain outstanding as of March 31, 2004 at a
     weighted average exercise price of $0.05. There were no warrants exercised
     during the three months ended March 31, 2004.

     Options granted to employees:

     The Company granted 7,422,635 stock options to employees during the year
     ended December 31, 2003. Stock options have terms of 10 years and exercise
     prices were equal to the closing market price on the day granted. All stock
     options issued in 2003 were fully vested on the date of grant. There were
     7,076,635 options outstanding at March 31, 2004 having a weighted average
     exercise price of $0.05. There were no options exercised during the three
     months ended March 31, 2004.

9.   Related party transaction:

     In 2001, the Company loaned $50,000 to two officers of the Company. The
     underlying notes do not bear interest. The officers repaid $10,000 and
     $20,000 during 2003 and 2002, respectively. The remainder is due in
     December 2004.

10.  Commitments and contingencies:

     License agreement and royalties:

     In December 2002, the Company entered into a licensing agreement with
     Satius, Inc. (formerly VideoCom, Inc. and Wire21 Inc.) for its powerline
     technologies, which are utilized in the SecureView product line. This
     agreement replaces the original license agreement entered into in October
     1999 in its entirety. The agreement is effective through the expiration of
     the patents licensed in the agreement (through October

10.  Commitments and contingencies (continued):

     License agreement and royalties (continued):

     2012). The agreement obligates the Company to pay royalties equal to
     between $1 and $3 per unit of licensed products sold, with minimum annual
     royalties of between $240,000 and $480,000. Expense of $75,000 and $40,000

                                      F-20
<PAGE>
     for the three months ended March 31, 2004 and 2003, respectively, was
     recognized relating to this agreement. Additionally, during 2003, the
     Company issued 750,000 shares of the Company's common stock in connection
     with this license and recorded an intangible asset for the estimated fair
     value of the shares ($37,500), which is being amortized over 5 years.
     Amortization charged to operations in relation to these licensing rights
     was $1,875 for the three months ended March 31, 2004 and 2003.

     Non-exclusive finder's agreements:

     The Company entered into three non-exclusive finder's agreements whereby
     the finders introduce potential investors to the Company. In return for
     these services the Company pays 5% of gross Offering proceeds received from
     introductions made that result in investment in the Company. As of March
     31, 2004, the finders had been paid cash amounts connected with the equity
     unit offering. In addition, according to the agreements, the finders were
     to receive warrants to purchase shares of common stock equal to 5% of the
     gross Offering proceeds raised by the finder divided by the exercise price
     of the warrants. The exercise price is equal to 120% of the 5 day average
     prior to closing, not to exceed $0.50 per share. As of March 31, 2004 the
     warrants had not been issued. As a result of the equity unit offering, the
     Company is committed to issue warrants to purchase 305,556 shares of common
     stock at an exercise price of $0.225 per share.

     Service agreement:

     The Company entered into an agreement on March 1, 2004 for professional
     services including but not limited to investor relations and financial
     media relations. The agreement calls for a cash payment, issuance of equity
     units under the equity unit offering (see Note 7) valued at $21,000 and
     50,000 shares of the Company's restricted common stock deliverable 180 days
     after the signing of the agreement. Term of the agreement is six months.

10.   Commitments and contingencies (continued):

     Litigation, claims and assessment:

     Class Action Lawsuit

     The Company was a defendant in a consolidated class action lawsuit that was
     pending in the United States District Court for the Middle District of
     Florida against the Company and Richard McBride, the Company's former chief

                                      F-21
<PAGE>
     executive officer. Commencing in May 2001, five nearly identical class
     action lawsuits were filed against the Company and McBride, and, on July
     24, 2001, those lawsuits were consolidated. In the five initial complaints,
     the plaintiffs thereto claimed violations of Sections 10(b) and 20(a) of
     the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
     In the five initial complaints, the plaintiffs to those actions alleged,
     among other things, that from March 30, 2000 to March 19, 2001, the Company
     and McBride misstated sales and revenue figures; improperly recognized
     revenues; misrepresented the nature and extent of the Company's dealer
     network; falsely touted purported sales contracts and agreements with large
     retailers; misrepresented the Company's ability to manufacture, or to have
     manufactured, its products; and misrepresented the Company's likelihood of
     achieving certain publicly announced sales targets. The consolidated
     amended class action complaint was filed in December 2001. As amended, the
     consolidated complaint seeks compensatory and other damages, and costs and
     expenses associated with the litigation and now also seeks relief against
     James Cox, former director, on the same grounds as the claims against the
     Company and McBride.

     In February 2002, the Company filed a motion to dismiss. The plaintiffs
     responded to the motion to dismiss in early April 2002. On May 17, 2002,
     the parties reached an agreement in principle, in the form of a Memorandum
     of Understanding, to settle the class action lawsuit. In the settlement,
     the Company will issue 6,000,000 shares our common stock to the class
     participants.

     During the 2nd and 3rd quarters of 2002, the Company and the plaintiffs'
     counsel agreed to prepare and execute a definitive Stipulation of
     Settlement and jointly seek preliminary and final Court approval. The
     Settlement would be conditional upon receiving final judicial approval of
     the Stipulation, among other things.

     At the end of the Company's 2nd fiscal quarter of 2002, management had
     determined that the impending settlement was highly probable. Accordingly,
     the Company accrued for the cost of the settlement by recording a liability
     of $1,200,000,

10.  Commitments and contingencies (continued):

     Litigation, claims and assessment (continued):

     which was equal to the current fair market value of the settlement shares
     at June 30, 2002, plus an estimated amount for expenses. On December 17,
     2002, the Joint Motion for Preliminary Approval of Settlement and the
     Amended Stipulation of Settlement was filed with the United States District
     Court of Florida, and approved by the residing justice. There were no
     significant amendments to the nature or terms of the Stipulation as

                                      F-22
<PAGE>
     outlined above. The actual liability, based on the value of the Company's
     stock as December 17, 2002, was $300,000 plus an estimated $125,000 in
     legal fees. The Company recorded its revised estimate of the liability in
     the fourth quarter and has disclosed this 2002 fourth quarter adjustment in
     the financial statements.

     On May 2, 2003, the United States District Court of Florida, through
     issuance of its Order and Final Judgment, approved the settlement.

     Pro-Marketing of Texas

     The Company is a defendant in a lawsuit filed by Pro-Marketing of Texas,
     Inc. in the Circuit Court of Pinellas County, Florida. The suit alleges
     breach of contract relating to a payment of a convertible debenture, with a
     maximum potential exposure of $100,000 plus interests costs and attorneys
     fees. The Company intends to vigorously contest the claim. As of March 31,
     2004, the matter is in the preliminary stages of discovery and it is too
     early to determine the ultimate outcome. Accordingly, no liability, if any,
     that might result from the resolution of this matter has been recorded in
     the financial statements.

     SEC Investigation

     The Securities and Exchange Commission's Division of Enforcement began an
     investigation in January 2001 relating to our financial results and common
     stock performance during 2000. As a result Richard McBride, former
     chairman, president and chief executive officer, resigned from all
     positions with the Company. Further, all executives involved with the
     allegations were replaced during 2001 and Mr. McBride passed away in
     October 2001. We have cooperated fully with the SEC, which included the
     testimony of former employees, Col. Larry Hoffman (retired), and Christy
     Mutlu. Current officers and employees Douglas Bauer, CFO, George
     Bernardich, CEO, and J. R. Cox, former director, have also testified before
     the SEC.

10.  Commitments and contingencies (continued):

     Litigation, claims and assessment (continued):

     On February 12, 2004, the SEC's staff advised the Company, through its
     counsel, that they intend to recommend that the SEC bring a civil
     injunctive action against the Company and certain of its current and former
     officers and/or directors. As it relates to the Company, the Staff alleges
     that the Company violated Section 17(a) of the Securities Act of 1933
     ("Securities Act") and Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B)
     of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5,
     13a-1, 13a-11, 13a-13, and 12b-20 thereunder, and is liable for civil
     penalties pursuant to Section 20(d) of the Securities Act and Section
     21(d)(3)(A) of the Exchange Act.

                                      F-23
<PAGE>
     The SEC's Staff, in accordance with Rule 5(c) of the Commission's Rules of
     Informal and Other Procedures, 17 C.F.R. ss.202.5(c), have afforded the
     Company the opportunity to make a "Wells Submission" regarding the Staff's
     intended recommendations. The Company has retained its current counsel to
     prepare such a Wells Submission on its behalf, and it believes that there
     are meritorious factual, legal and policy reasons why the Staff's
     recommendation should not be followed by the Commission. However, at this
     time, it is impossible to determine whether the Staff's recommendation will
     be adopted by the Commission, or will be modified in some fashion.

     If the Staff's present recommendation is accepted by the Commission and a
     civil injunctive action were to be subsequently filed against the Company,
     no decision has been made at this time as to whether the Company would
     vigorously defend that matter, or would seek to reach a negotiated
     settlement. The Staff has informally advised counsel of their belief that
     if they were successful in litigating this matter, a civil penalty in
     excess of $100,000 could be imposed against the Company. However, counsel
     believes that there are numerous mitigating factors, which could cause this
     amount to be reduced, even if the Company's efforts to defend the suit were
     unsuccessful. Therefore it is impossible at this time to estimate the
     likelihood of an unfavorable outcome, or to estimate the amount of any such
     loss from this matter. Accordingly, no liability, if any that might result
     from the resolution of this matter has been recorded in the financial
     statements.

11.   Subsequent events:

     In April 2004, the Company agreed to rent warehouse space from May 1, 2004
     through April 30, 2005 to be paid through issuance of 85,000 shares of the
     Company's common stock.

     On April 6, 2004, the Company issued 125,000 shares of restricted common
     stock to a director as compensation for services.

     On April 14, 2004, the Company executed stock purchase warrant agreements
     in connection with the purchase of a trademark. The warrants entitle the
     holders to purchase 50,000 shares of the Company's common stock at a
     purchase price of $0.25 per share until they expire on December 31, 2006.

                                      F-24
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

     Some of the information in this report contains forward-looking statements
that involve substantial risks and uncertainties. You can identify these
statements by forward-looking words such as "may," "expect," "anticipate,"
"believe," "estimate" and "continue," or similar words. You should read
statements that contain these words carefully because they:

     o    discuss our future expectations;
     o    contain projections of our future results of operations or of our
          financial condition; and
     o    state other "forward-looking" information

     We believe it is important to communicate our expectations. However, there
may be events in the future that we are not able to accurately predict or over
which we have no control. Our actual results and the timing of certain events
could differ materially from those anticipated in these forward-looking
statements as a result of certain factors.

OVERVIEW

For the quarter ended March 31, 2004, the Company was able to report its seventh
consecutive quarter of comparative sales growth along with several noteworthy
achievements in its quest to execute its business plan which is focused on
growth, profitability, and technological innovation.

During the quarter ended March 31, 2004, the Company was able to continue to
improve its balance sheet with the completion of a Convertible Preferred
Offering which began in the 4th quarter of 2003. The offering in total raised
$1,825,520, including warrants that would bring an additional $411,000 of
capital, if exercised. The securities underlying the offering were subsequently
registered on a Form SB-2 with the Securities & Exchange Commission. The
registration was filed on March 30, 2004 and became effective on April 9, 2004.
(See Note 10 to the financial statements). The Company has used a portion of the
proceeds to reduce trade debt, build inventory in its Power-line products, hire
an additional engineer for research & development, hire two new sales directors,
and establish new marketing relationships. These marketing relationships include
becoming a commercial member (#c10012) of the Family Motor Coach Association
(FMCA) and joining the National Truck Equipment Association (NTEA) to sell and
market its PowerLinx Vision Systems (PLVS).

Net Revenue increased 2% for the quarter ended March 31, 2004 compared to the
quarter ended March 31, 2003. It marks the 7th consecutive quarterly sales
increase on a quarterly comparative basis; and for the trailing four comparable
quarters net revenue has increased 49%.

Gross profit increased 65% for the quarter ended March 31, 2004 compared to the
quarter ended March 31, 2003. It marks the beginning of the effects of an
improved cost structure generated from the Company's overseas sourcing and the
strategic business alliance with China Silian Group Co., Ltd (SIC Group), of
Chongqing, China. The alliance established SIC as the primary supplier of our
power-line products and components and establishes a credit line for the Company
to procure inventory. The Company has also begun expanding the sourcing of its
products beyond China to include Hong Kong, Taiwan, and Korea. The ability to
source product overseas should continue to be a major strength of the Company in
an effort to improve gross profit margins in future reporting periods.

In late March, the Company's patented power-line SecureView(TM) "Camera in a
light bulb" returned to the airwaves on Shop At Home Network, LLC and is
expected to air on a regular basis through-out 2004. In addition, Home Shopping
Network has acquired inventory with expected airings sometime in the 2nd
quarter. The airings maintain Secure View's initial success in the direct
television retailing arena and the exposure should provide a continuing
opportunity to educate consumers on the advantages of SecureView and power-line
technology in general.

The Company continued development of its new mid-ware security solution for the
SOHO (Small Office Home Office) market in the quarter. This product, the PLVS
Plus Pro System(TM) and PLVS Plus System(TM) will focus on the
multi-camera/alarm/recording market which according to market research expects
products priced lower than one thousand dollars for a 3-4 node system. This
product will start at a basic system price of approximately $149.00 and will
allow the customer to purchase component system devices such as baby monitors,
sensors, alarms, and outdoor video cameras with recording capabilities all
priced from $49.00 - $199.00. This product will be focused on two levels of
application; the home DIY installation and the professionally installed systems.
The professionally installed system will come with many enhanced settings,
connectivity solutions, and attachment devices while the home DIY installed
units will focus on the ease of installation solution. As previously reported
the research and development began in July 2003 and the initial designs were
accomplished in the quarter. Product sourcing, tooling, dye and prototype
testing are expected to be completed in the 2nd quarter.

                                       3
<PAGE>
On January 20, 2004 the Company acquired multiple patents defining digital
transmission through regular power lines and as well as twisted pair wires. This
intellectual property supports the Company's digital power-line products
currently being developed for both the professional and commercial security
markets. Additional information regarding the Company's security products
currently offered and under development can be found in the Company's Form
10-KSB for the year ended December 31, 2003 filed with the Securities & Exchange
Commission on March 16, 2004.

Sales and installations of the Company's PowerLine Vision Systems (PLVS) (TM)
continued throughout the quarter ended March 31, 2004. Initially, as
communicated in previous filings, truck fleets including Ryder, Sysco Foods,
McKenzie Tank Lines, and McLane Trucking purchased and installed test units for
evaluation of performance and property loss savings. Of these fleets, Ryder and
Sysco have ordered and installed additional units while the remaining fleets and
new customers continue to purchase and evaluate the systems. The product is
proving to be extremely reliable as there have been no failures in any Company
installed systems to date and loss savings have been significant as there has
not been a back-up accident reported to the Company on any vehicle with a PLVS
system installed since the initial installations began in September 2003. The
Company continues to distribute product through SIA Truck Bodies, Inc., a
leading Ford(R) Truck Bailment Pool dealer in the Southeastern United States,
who sells the PowerLine Vision Systems (PLVS) (TM) technology as an option on
its truck body models and vans to Truck Dealers and its fellow National Truck
Equipment Association (NTEA) members. Through the quarter ended March 31, 2004,
the Company or the fleet owner has handled the installations of all PLVS
systems. However, in order to meet increasing sales demand, the Company is
currently in negotiations to contract with a nationwide installer to handle the
majority of future PLVS installations and maintenance. The Company is also
seeking preferred vendor status with several fleets.

The Company continued to market its marine products through participation in
regional boat shows. However, during the quarter ended March 31, 2004,
management finalized costing and manufacturing arrangements overseas for its
SealiteTM and Super-mini products. With significant cost reductions achieved,
management believes the products are now competitively priced for the mass
retail market; the sales effort for which will begin in the second quarter.

Also during the quarter ended March 31, 2004, the Company completed the
expansion of its Board of Directors with the appointment of Douglas A. McIntyre,
Chairman, President & CEO of On2 Technologies, Inc. (AMEX: ONT), effective March
1, 2004.

With the infusion of working capital as discussed above, management believes the
Company is in a better position to aggressively pursue the execution of its
business plan. The Company will, however, continue to pursue opportunities to
raise additional capital to fund expected growth.


SUBSEQUENT EVENTS

In April 2004, PowerLinx, Inc. launched a redesigned Web site at:
www.power-linx.com. The Company's recent name change from Seaview to PowerLinx,
as well as its redesigned Web site, reflects on its emphasis to continually
develop new powerline products for the consumer, transportation, and commercial
security markets.

In April of 2004 the Company began a comprehensive collaboration with Cenuco,
Inc. (CNUO, Trade) to deploy the first integrated CCTV solution utilizing the
Company's power line-based video transmission technologies and camera systems,
combined with Cenuco's mobile software technology to transmit live CCTV video
onto cellular phones, Pocket PC devices, and remote computers. As part of this
relationship, the Company has ordered 4,500 licenses of Cenuco's mobile remote
video viewing software, which will be inserted into the Company's SecureView(TM)
"Camera in a light bulb" systems. Distribution of this combined offering will
include selected catalogs and direct response retailers.

On May 10, 2004 the Company announced that it has entered into a strategic
alliance agreement with Choice Hotels International (CHH, Trade). The agreement
is an annual, renewable contract, which appoints the Company as a Choice
Endorsed Vendor offering the Company's high-speed internet access and
connectivity to Choice Hotels' United States franchisees. The Company becomes
one of only four Choice Endorsed Vendors offering these products, which have
been mandated for enterprise wide deployment by the end of 2007. Choice Hotels
International franchises more than 5,000 hotels, inns, all-suite hotels, and
resorts open and under development in 44 countries under the Comfort Inn,
Comfort Suites, Quality, Clarion, Sleep Inn, Roadway Inn, Econo Lodge, and
MainStay Suites brand names. For each property installation (average size of 70
guest rooms) the Company should generate initial revenue of approximately
$11,000 per hotel. In addition, the Company and Choice Hotels International will
begin cooperative efforts for the marketing, advertising, and promotion of the
Company's internet access solution to their franchisees at the Choice Hotels
national convention, May 12-14 in San Diego, CA.

                                       4
<PAGE>
RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2004 AND MARCH 31, 2003

NET REVENUE. Net revenue increased 2% from $345,601 for the three months ended
March 31, 2003 to $351,199 for the three months ended March 31, 2004. Marine
product segment sales were $87,599 or 25% of total revenues for the three months
ended March 31, 2004 compared to $137,890, or 40% of total revenues, for the
three months ended March 31, 2003. Overall, marine product sales decreased
$50,291, or 36%. Security product segment sales were $202,575 or 58% of total
revenues for the three months ended March 31, 2004 compared to $149,878, or 43%
of total revenues, for the three months ended March 31, 2003. Overall, security
product sales increased $52,697, or 35%. DC Transportation product segment sales
were $61,025, or 17% of total revenues for the three months ended March 31, 2004
compared to $57,833, or 17% of total revenues for the three months ended March
31, 2003. Overall, DC Transportation product segment sales increased $3,192 or
6%. The decrease in the marine product segment sales was due to a reduction in
the number of regional boat shows at which the Company participated in the
quarter ended March 31, 2004. The growth in the security products segment is due
primarily to the products exposure on various home shopping channels. The
revenues for the DC transportation product segment were derived primarily from
initial installations on new fleet customers.


COST OF GOODS SOLD. Cost of Goods sold decreased 18% from $262,833 (including
inventory write-down) for the three months ended March 31, 2003 to $214,366 for
the three months ended March 31, 2004. As a percentage of net revenue, cost of
goods sold decreased to 61% for the three months ended March 31, 2004 from 76%
(including inventory write-down) for the three months ended March 31, 2003. Cost
of goods sold for the marine products segment decreased $19,820 or 31%, from
$63,610 for the three months ended March 31, 2003 to $43,790 for the same period
ended in 2004. As a percentage of net revenue, cost of goods sold for the marine
product segment increased from 46% for the three months ended March 31, 2003 to
50% for same period ended in 2004. Cost of goods sold for the security products
segment decreased $35,885 or 20%, from $179,713 (including inventory write-down)
for the three months ended March 31, 2003 to $143,828 for the same period ended
in 2004. As a percentage of revenue, cost of goods sold for the security product
segment decreased from 120% (including inventory write-down) for the three
months ended March 31, 2003 to 71% for same period ended in 2004. Cost of goods
sold for the DC Transportation product segment increased $7,238 or 37% from
$19,510 for the three months ended March 31, 2003 to $26,748 for the same period
ended in 2004. As a percentage of net revenue, cost of goods sold for the DC
Transportation product segment increased from 34% for the three months ended
March 31, 2003 to 44% for same period ended in 2004.

The increase in the cost of goods sold as a percentage of net revenues for the
marine products segment was driven primarily by the product mix sold during the
period. The decrease in the cost of goods sold as a percentage of net revenues
for the security products segment was driven primarily by the reduction of raw
material and component costs, as the Company's higher cost domestic inventory
was liquidated by year ended December 31, 2003. The increase in the cost of
goods sold as a percentage of net revenues for the DC Transportation product
segment was due to management's decision to implement a volume discount pricing
structure.

GROSS PROFIT MARGIN. Gross profits on sales for the three months ended March 31,
2004 amounted to $136,833, or 39% of net revenues, compared to $82,768(including
inventory write-down), or 24% of net revenues, for the three months ended March
31, 2003. The marine products segment contributed $43,809 and $74,280 of the
total gross profit for the three months ended March 31, 2004 and 2003,
respectively. The security products segment contributed $58,746 and $(29,835)
(including inventory write-down) of the total gross profit for the three months
ended March 31, 2004 and 2003, respectively. The DC Transportation products
segment contributed $34,277 and $38,323 of the total gross profit for the three
months ended March 31, 2004 and 2003, respectively. The gross profit percentage
for the marine products segment decreased from 54% for the three months ended
March 31, 2003 to 50% for the three months ended March 31, 2004. The gross
profit percentage for the security products segment increased from
(20)%(including inventory write-down)for the three months ended March 31, 2003
to 29% for the three months ended March 31, 2004. The gross profit percentage
for the DC Transportation products segment decreased from 66% for the three
months ended March 31, 2003 to 56% for the three months ended March 31, 2004.

                                       5
<PAGE>
The decrease in the gross profit as a percentage of net revenues for the marine
products segment was driven primarily by the product mix sold during the period.
The increase in the gross profit as a percentage of net revenues for the
security products segment was driven primarily by the reduction of raw material
and component costs, as the Company's higher cost domestic inventory was
liquidated by year ended December 31, 2003. The decrease in the gross profit as
a percentage of net revenues for the DC Transportation product segment was due
to management's decision to implement a volume discount pricing structure.


SALARIES AND WAGES. Salaries and Wages increased 51% from $220,825 for the three
months ended March 31, 2003 to $333,736 for the three months ended March 31,
2004. The increase was due to two factors. The Company hired additional sales
staff effective January 1, 2004. In addition, $75,000 in non-cash stock based
compensation was recorded for Board of Directors compensation. Salary and Wages
is comprised of employee wages and stock compensation. During the three months
ended March 31, 2004, other than the Director compensation as outlined above,
there was no stock based compensation.

PROFESSIONAL FEES. Professional and consulting fees increased 21% from $140,253
for the three months ended March 31, 2003 to $169,492 for the three months ended
March 31, 2004. The increase was due to fees associated with the Company's 2003
year ended audit, the hiring of a lobbying group related to the promotion of the
Company's DC Transportation products, and consulting fees associated with the
improvement of the Company's IT infrastructure. Professional and consulting fees
include fees paid to attorneys, accountants, and business consultants. There was
no non-cash stock based compensation for the three months ended March 31, 2004.

DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization increased
14% from $130,318 for the three months ended March 31, 2003 to $147,932 for the
three months ended March 31, 2004. The increase is attributable to the
amortization of a new software license acquired on December 31, 2003, and the
acquisition of intellectual property relating to the Company's digital
technology on January 20, 2004 (See discussion below). On February 14, 2001, the
Company entered into a Licensing Agreement with the former Chairman, Richard
McBride that provided for a license to exploit certain patented technologies
owned by McBride that are associated with technologies under development in
connection with both the Company's marine and security products segments. The
Company exchanged 1,000,000 shares of restricted common stock having a value of
$2,130,000 for the license and related consulting services. The shares were
based upon quoted market prices on the date of the Agreement. The total value of
the arrangement was allocated between the consulting and license in the amounts
of $2,066,100 and $63,900, respectively, based upon the relative fair values of
the consulting services and license. The licensing rights are being amortized
over their estimated useful lives of five years. Annualized amortization of the
license rights is approximately $413,000. On December 12, 2002, the Company
entered into a Patent Assignment Agreement (the "2002 Agreement") with the
McBride Estate that provided for release of the Estate's obligations under the
2001 agreement in return for termination of the license and assignment of the
patents licensed in the 2001 agreement. In consideration of this assignment, the
Company exchanged $93,856 in receivables from the Estate and 100,000 shares of
restricted common stock having a value of $9,000, based upon quoted market
prices on the date of the 2002 Agreement. The total value of the arrangement and
the value of the licensing rights were allocated to patent costs and are being
amortized over the remaining useful life assigned to these intangible assets of
5 years. On December 31, 2003, the Company signed a software license agreement
with ON2 Technologies for the use of its proprietary CODEC software for
enhancing the video transmission in the Company's new digital power-line
products. On January 20, 2004 the Company acquired four patents relating to its
new digital power-line technology (See Note 6 to the Financial Statements).

                                       6
<PAGE>
RESEARCH & DEVELOPMENT. Research and development expense increased 35% from
$13,866 for the three months ended March 31, 2003, to $18,673 for the three
months ended March 31, 2004. The increase was attributable to increased funding
for the development of the Company's new PLVS+ consumer security system and
digital security system. Research and development costs consist of all
expenditures related to the improvement and development of the Company's current
product line, new product development, and engineering consulting fees
associated with licensed technology. Currently, substantially all of our
research and development costs and efforts are dedicated to the development of
our security (both analog and digital) and DC Transportation product segments.
For the three months ended March 31, 2004, of the total Research & Development
expenditures, $16,023 or 86% was for the development of the security product
segment, and $2,650 or 14% was for the development of the DC Transportation
product segment. The cost of our research and development activities is borne
directly by the Company; no amounts are borne by our customers, nor are any
contracts for customer funded research and development currently anticipated.
The Company plans to continue funding the security and DC transportation product
segments for the next several years.

ADVERTISING AND PROMOTION. Advertising and promotions decreased 18% from $30,204
for the three months ended, March 31, 2003 to $24,889 for the three months
ended, March 31, 2004. The decrease was due directly to a reduction in trade
show attendance in both the marine and security product segments. The amount
also includes portions of postage, printing, and travel that are attributable to
advertising and promotions. The Company expects advertising and promotions
expense to increase in future financial periods.


RENT AND UTILITIES. Rent and utilities decreased 11% from $25,913 for the three
months ended, March 31, 2003 to $23,055 for the three months ended, March 31,
2004. The Company leases approximately 2,600 square feet in Tierra Verde,
Florida that serves as its corporate headquarters. The lease is currently on a
month to month basis which began on July 1, 2003 after the original one year
lease expired. The Company also leases space in Clearwater, Florida, on a month
to month basis, for its distribution and warranty & repair center. The Company
also began sub-leasing office space in Pleasant Hill, California to house its
Research & Development staff. The sub-lease began in May of 2003, for a period
of one year, with yearly extensions available. Rent and utilities includes
office rent, warehouse rent, storage, telephone, and utilities.

POSTAGE & DELIVERY EXPENSE. Postage & delivery expense decreased 50% from
$41,693 for the three months ended March 31, 2003 to $20,982 for the three
months ended March 31, 2004. The decrease was attributed to a reduction in
expedited freight charges and an increase in the volume of product sold under
FOB Clearwater, FL terms. Freight & delivery expenses include packaging
supplies, postage, and freight costs associated with both administrative and
distribution functions.

ROYALTIES EXPENSE. Royalties' expense increased 88% from $40,000 for the three
months ended March 31, 2003 to $75,000 for the three months ended March 31,
2004. The increase is a result of a scheduled increase in minimum royalty fees
associated with the Company's license agreement with Satius, Inc. Royalties
expense includes royalty payments made to licensors under contractual license
agreements for the use of intellectual property.

FINANCING FEES EXPENSE. Financing fees expense increased 567% from $10,313 for
the three months ended March 31, 2003 to $68,750 for the three months ended
March 31, 2004. The increase was attributed to commissions earned by brokers in
conjunction with the Company's convertible preferred private equity offering
(See Note 8 to the financial statements).

OTHER EXPENSES. Other expenses increased 14% from $102,605 for the three months
ended March 31, 2003 to $116,569 for the three months ended March 31, 2004. The
increase was due to two factors. First, travel expenses increased due to the
additional sales staff added at the beginning of the fiscal period and
management travel to China and Korea for research & development and supplier
arrangements. Second, the Company incurred additional insurance premiums with
the addition of a directors & officers policy acquired in November of 2003.
Other expenses include travel, supplies, property taxes, insurance, bank
charges, and various other expenses that are classified as miscellaneous.


                                        7
<PAGE>
LIQUIDITY & CAPITAL RESOURCES

     The accompanying financial statements have been prepared assuming that the
     Company will continue as a going concern. However, the Company has incurred
     operating losses of $862,200 and $673,200 during the three months ended
     March 31, 2004 and 2003, respectively. In addition, during those periods,
     the Company has used cash of $927,100 and $179,400, respectively, in its
     operating activities. These conditions raise substantial doubt about the
     Company's ability to continue as a going concern.

     The Company has devoted significant efforts in the further development and
     marketing of products in its Security Products Segment, which, while now
     showing improved revenues cannot yet be characterized as sufficient to fund
     operations for any period of time.

     The Company's ability to continue as a going concern is dependent upon (i)
     raising additional capital to fund operations (ii) the further development
     of the Security and DC Transportation Products Segment products and (iii)
     ultimately the achievement of profitable operations. During the three
     months ended March 31, 2004, the Company raised $1,315,000 from the sale of
     convertible preferred securities. Management is currently addressing
     several additional financing sources to fund operations until profitability
     can be achieved. However, there can be no assurance that additional
     financing can be obtained on conditions considered by management to be
     reasonable and appropriate, if at all. The financial statements do not
     include any adjustments that might arise as a result of this uncertainty.

During the three months ended March 31, 2004 the Company funded its losses from
operations through the following vehicles:

     o    The receipt of $1,315,000 in proceeds through a convertible preferred
          private equity offering exempt from registration under Section 4(2) of
          the Securities Act of 1933, and Rule 506 of Regulation D, thereof. The
          private placement was conducted as a "Unit Offering" with each $8.00
          Unit consisting of 8 shares of Series A Convertible Preferred stock, 2
          shares of restricted common stock and a warrant to purchase an
          additional 3 shares of common stock at $.50 per share. In addition to
          a 6% coupon per share, the Series A Convertible Preferred stock has a
          $1.00 per share value which may be converted to shares of common stock
          at a variable rate but not less than $.25 or 4 shares of common stock.
          The securities underlying the offering were subsequently registered on
          Form SB-2 with the Securities & Exchange Commission. The registration
          was filed on March 30, 2004 and became effective on April 9, 2004 (See
          note 10 to the financial statements).

The Company has no material commitments for the purchase of raw materials or
components. The Company issues purchase orders for these items for the purposes
of fulfilling customer orders and maintaining reasonable levels of inventory.

Two integrated circuit semiconductor parts used in the manufacture of our
security and DC transportation products were discontinued in late 2001.
Management had subsequently learned that the assets for fabricating these
semiconductor parts had been purchased by a third party from the original
manufacturer, and these parts have again become available and our currently
being tested by the Company. The Company currently owns in inventory an adequate
supply of these parts to meet production needs for the entire 2004 fiscal year.
The Company has placed orders for additional semiconductor parts from the new
manufacturer to be able to meet production demand for fiscal year 2005, based on
management's forecasted sales projections.

                                        8
<PAGE>
Item 3.   CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Exchange Act
reports is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to the Company's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure based closely on the definition of "disclosure
controls and procedures" in Rule 13a-14(c). In designing and evaluating the
disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

An evaluation was carried out under the supervision and with the participation
of our management, including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule 13a-14(c) under the Securities
Exchange Act of 1934) as of March 31, 2004. Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that the design
and operation of these disclosure controls and procedures were effective. No
significant changes were made in our internal controls or in other factors that
could significantly affect these controls subsequent to the date of their
evaluation.


                                        9
<PAGE>
PART II.    OTHER INFORMATION


Item 1.   Legal Proceedings

Litigation, claims and assessment:


On October 28, 2002, the Company is a defendant in a lawsuit filed by
Pro-Marketing of Texas, Inc. in the Circuit Court of Pinellas County, Florida.
The suit alleges breach of contract relating to a payment of a convertible


                                       10
<PAGE>
debenture, with a maximum potential exposure of $100,000 plus interests costs
and attorneys fees. The Company intends to vigorously contest the claim. As of
March 31, 2004, the matter is in the preliminary stages of discovery and it is
too early to determine the ultimate outcome.

The Securities and Exchange Commission's Division of Enforcement began an
investigation in January 2001 relating to our financial results and common stock
performance during 2000. As a result Richard McBride, former chairman, president
and chief executive officer, resigned from all positions with the Company.
Further, all executives involved with the allegations were replaced during 2001
and Mr. McBride passed away in October 2001. We have cooperated fully with the
SEC, which included the testimony of former employees, Col. Larry Hoffman
(retired), and Christy Mutlu. Current officers and employees Douglas Bauer, CFO,
George Bernardich, CEO, and J. R. Cox, former director, have also testified
before the SEC.

On February 12, 2004, the SEC's staff advised the Company, through its counsel,
that they intend to recommend that the SEC bring a civil injunctive action
against the Company and certain of its current and former officers and/or
directors. As it relates to the Company, the Staff alleges that:

                                       11
<PAGE>
     The Company violated Section 17(a) of the Securities Act of 1933
     ("Securities Act") and Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B)
     of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5,
     13a-1, 13a-11, 13a-13, and 12b-20 thereunder, and is liable for civil
     penalties pursuant to Section 20(d) of the Securities Act and Section
     21(d)(3)(A) of the Exchange Act.

The SEC's Staff, in accordance with Rule 5(c) of the Commission's Rules of
Informal and Other Procedures, 17 C.F.R. ss.202.5(c), have afforded the Company
the opportunity to make a "Wells Submission" regarding the Staff's intended
recommendations. The Company has retained its current counsel to prepare such a
Wells Submission on its behalf, and it believes that there are meritorious
factual, legal and policy reasons why the Staff's recommendation should not be
followed by the Commission. However, at this time, it is impossible to determine
whether the Staff's recommendation will be adopted by the Commission, or will be
modified in some fashion.

If the Staff's present recommendation is accepted by the Commission and a civil
injunctive action were to be subsequently filed against the Company, no decision
has been made at this time as to whether the Company would vigorously defend
that matter, or would seek to reach a negotiated settlement. The Staff has
informally advised counsel of their belief that if they were successful in
litigating this matter, a civil penalty in excess of $100,000 could be imposed
against the Company. However, counsel believes that there are numerous
mitigating factors which could cause this amount to be reduced, even if the
Company's efforts to defend the suit were unsuccessful. Therefore it is
impossible at this time to estimate the likelihood of an unfavorable outcome, or
to estimate the amount of any such loss from this matter.

Item 2.   Changes in Securities and Use of Proceeds.

On January 20, 2004, the Company issued 441,176 shares of restricted common
stock for the acquisition of four patents solidifying the Company's digital
power line technology. The transaction was based on a 20 day average closing
price of the Company's common stock and was valued at $150,000 (See note 8 to
the financial statements). This sale was exempt under Section 4(2) of the
Securities Act of 1933. No advertising or general solicitation was employed in
offering the securities. Except as otherwise noted, the investors were
sophisticated investors and transfer was restricted by Powerlinx, Inc. in
accordance with the requirements of the Securities Act of 1933. In addition the
investors were provided with access to our Securities and Exchange Commission
filings

On February 26, 2004, the Company issued 900,000 shares of restricted common
stock to the members of the Board of Directors in accordance with the Board of
Directors compensation resolution approved on October 15, 2003. The value of the
compensation was $180,000, based on the closing market price of the Company's
common stock on the date of issuance. The cost is being amortized over the life
of each Board members term, which is one year. (See note 8 to the financial
statements). This sale was exempt under Section 4(2) of the Securities Act of
1933.


Item 3.     Defaults Upon Senior Securities.

            Not Applicable.

Item 4.     Submission of Matters to a Vote of Security Holders.

            None
                                       12
<PAGE>
Item 5.     Other Information

            None


Item 6.     Exhibits and Reports of Form 8-K


(a)      Exhibits:

31.1 Certification by Chief Financial Officer pursuant to Sarbanes -Oxley
     Section 302.
31.2 Certification by Chief Executive Officer pursuant to Sarbanes -Oxley
     Section 302.
32.1 Certification by Chief Financial Officer pursuant to 18 U.S. C. Section
     1350
32.2 Certification by Chief Executive Officer pursuant to 18 U.S. C. Section
     1350

(b)      Reports on Form 8-K

                                       13
<PAGE>
<TABLE>
<CAPTION>
 ------------------------------------ --------------------------------------------------------------------
 DATE OF REPORT                       ITEM REPORTED ON
 ------------------------------------ --------------------------------------------------------------------
 <S>                                    <C>
                                      On March 19, 2004, we concluded our series A convertible preferred
 March 24, 2004                       financing in which we issued 228,190 units consisting of (i)
                                      1,825,520 shares of series A convertible preferred stock; (ii) Class
                                      B warrants to purchase 684,570 shares of common stock; and (iii)
                                      456,380 shares of restricted common stock. We received an aggregate
                                      total of $1,825,520, which includes an aggregate of $260,520 in
                                      debt that was cancelled.

 ------------------------------------ --------------------------------------------------------------------
</TABLE>
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<PAGE>

                                   SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of St.
Petersburg, State of Florida on May 17, 2004.


                  POWERLINX, INC.




                  By: /s/ GEORGE S. BERNARDICH, III
                         ----------------------------
                          GEORGE S. BERNARDICH, III
                          Chief Executive Officer

                  By: /s/ DOUGLAS BAUER
                         ----------------------------
                          DOUGLAS BAUER
                          Chief Financial Officer



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